<PAGE> 1
As filed with the Securities and Exchange Commission on February 2, 1996
Registration No. 33-__________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ASSOCIATED BANC-CORP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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WISCONSIN 6711 39-1098068
(STATE OR OTHER JURISDICTION OF INCORPORATION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
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112 NORTH ADAMS STREET
P.O. BOX 13307
GREEN BAY, WISCONSIN 54307-3307
(414) 433-3166
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
HARRY B. CONLON
ASSOCIATED BANC-CORP
112 NORTH ADAMS STREET
P.O. BOX 13307
GREEN BAY, WISCONSIN 54307-3307
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS TO BE SENT TO:
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SHELDON I. SAITLIN, ESQ. FRANK J. PELISEK, ESQ.
ROBERT J. WILD, ESQ. MICHAEL, BEST & FRIEDRICH
SAITLIN, PATZIK, FRANK & SAMOTNY LTD. 100 EAST WISCONSIN AVENUE
150 SOUTH WACKER DRIVE, SUITE 900 SUITE 3300
CHICAGO, ILLINOIS 60606 MILWAUKEE, WISCONSIN 53202
(312) 551-8300 (414) 271-6560
(312) 551-1101 (FACSIMILE) (414) 277-0656 (FACSIMILE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this Registration Statement is declared effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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==============================================================================================================
PROPOSED
AMOUNT TO BE MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES REGISTERED OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED (1) (2) PER SHARE OFFERING PRICE FEE
- --------------------------------------------------------------------------------------------------------------
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Shares of Common Stock, $.01 par 967,725
value per share . . . . . . . . . shares Not Applicable Not Applicable $5,148 (3)
==============================================================================================================
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(1) This Registration Statement relates to securities of the registrant
issuable to holders of Common Stock of Greater Columbia Bancshares,
Inc. (the "Company") in the proposed merger of the Company with and
into a subsidiary of the registrant (the "Merger").
(2) Subject to increase in accordance with Rule 416(a) and (b) under the
Securities Act of 1933, as amended, pursuant to stock splits or stock
dividends.
(3) Pursuant to Rule 457(f)(2), the registration fee was computed on the
basis of $14,928,705, the book value of the Company Common Stock to be
exchanged in the Merger as of September 30, 1995, the latest
practicable date.
______________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
================================================================================
<PAGE> 2
ASSOCIATED BANC-CORP
Cross Reference Sheet
FORM S-4 ITEM NUMBER AND CAPTION PROXY STATEMENT/PROSPECTUS CAPTION
PART I
Information Required in the Prospectus
A. INFORMATION ABOUT THE TRANSACTION
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1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus . Facing Page of Registration Statement; Cross
Reference Sheet; Cover Page of Proxy
Statement/Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus . . . . . . . . . . . . . Table of Contents; Available Information;
Incorporation of Certain Documents by Reference
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information . . . . . Prospectus Summary
4. Terms of the Transaction . . . . . . . . The Merger; Certain Provisions of the Merger
Agreement; Certain Provisions of the Voting
Agreement
5. Pro Forma Financial Information . . . . Not Applicable
6. Material Contacts With the Company Being
Acquired . . . . . . . . . . . . . . . . Summary; The Merger; Certain Provisions of the
Voting Agreement
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters . . . . . . . . . . . Not Applicable
8. Interests of Named Experts and Counsel . Not Applicable
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . Not Applicable
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B. INFORMATION ABOUT THE REGISTRANT
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10. Information With Respect to S-3
Registrants . . . . . . . . . . . . . . Available Information; Prospectus Summary;
Associated Banc-Corp; Certain Information
Concerning Associated
11. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . Incorporation of Certain Documents by Reference
12. Information with Respect to S-2 or S-3
Registrants . . . . . . . . . . . . . . Not Applicable
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i
<PAGE> 3
FORM S-4 ITEM NUMBER AND CAPTION PROXY STATEMENT/PROSPECTUS CAPTION
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13. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . Not Applicable
14. Information with Respect to Registrants
other than S-2 or S-3 Registrants . . . Not Applicable
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C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
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15. Information with Respect to S-3
Companies . . . . . . . . . . . . . . . Not Applicable
16. Information with Respect to S-2 or S-3
Companies . . . . . . . . . . . . . . . Not Applicable
17. Information with Respect to Companies
other than S-2 or S-3 Companies . . . . Prospectus Summary; Certain Information Concerning
the Company; Exhibit D
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D. VOTING AND MANAGEMENT INFORMATION
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18. Information if Proxies, Consents or
Authorizations are to be Solicited . . . Cover Page of Proxy Statement/Prospectus;
Prospectus Summary; The Special Meeting; The
Merger; Certain Information Concerning the Company
19. Information if Proxies, Consents or
Authorizations are not to be Solicited or
in an Exchange Offer . . . . . . . . . . Not Applicable
</TABLE>
ii
<PAGE> 4
GREATER COLUMBIA BANCSHARES, INC.
222 EAST WISCONSIN STREET
PORTAGE, WISCONSIN 53901
February ___, 1996
Dear Fellow Shareholder:
Following this letter is a notice of a Special Meeting of the
Shareholders of Greater Columbia Bancshares, Inc. (the "Company"), a Proxy
Statement/Prospectus and a proxy card for the Special Meeting. The Special
Meeting will commence at _____ __.m. on _______________, 1996 at the principal
executive offices of the Company at 222 East Wisconsin Street, Portage,
Wisconsin.
The Company shareholders will be asked to vote on a proposal to
approve an Agreement and Plan of Merger among Associated Banc-Corp
("Associated"), Associated Banc-Shares, Inc. ("Holding"), a wholly-owned
subsidiary of Associated, and the Company dated as of December 22, 1995 (the
"Merger Agreement"). Associated is a Wisconsin bank holding company owning all
of the capital stock of eight commercial banks located in Wisconsin and
Illinois.
Subject to receipt of regulatory approval, approval by holders of a
majority of the shares of the Company Common Stock and satisfaction of other
conditions, the Merger Agreement provides that the Company will combine its
business and operations with those of Holding through a statutory merger (the
"Merger"), and will thereafter operate its banking business as "Associated Bank
Portage." As described in the accompanying Proxy Statement/Prospectus, each of
the directors of the Company has agreed to vote their shares in favor of
approval of the Merger Agreement. Assuming compliance with such agreement, and
provided the Merger Agreement has not been terminated prior to its being voted
upon by the Company shareholders, the approval of the Merger Agreement is
assured.
If the Merger becomes effective, each share of the Company Common
Stock will be converted into 1.0665 shares of Associated Common Stock. See
"The Merger - Merger Consideration" in the accompanying Proxy
Statement/Prospectus. Associated Common Stock trades on The Nasdaq Stock
Market and the shares of Associated Common Stock to be issued to you in the
Merger will offer greater liquidity than that of the Company Common Stock which
you presently own.
The Merger is intended to be tax-free for federal income tax purposes
to Company shareholders who receive Associated Common Stock in exchange for
Company Common Stock, except as discussed in "The Merger-Certain Material
Federal Income Tax Consequences" in the accompanying Proxy
Statement/Prospectus. No fractional shares of Associated Common Stock will be
issued in the Merger. Company shareholders entitled to a fractional share of
Associated Common Stock will receive an amount of cash calculated upon the
average closing prices as reported on The Nasdaq Stock Market for a specified
period. Company shareholders are advised to consult their tax advisors with
respect to income tax consequences of the transaction. Details of the Merger
are set forth in the accompanying Proxy Statement/Prospectus. We encourage you
to read it carefully.
The Board of Directors of the Company has unanimously approved the
Merger Agreement as being in the best interest of the Company and its
shareholders. Your Board recommends that the Company shareholders vote to
approve the Merger Agreement.
Whether or not you plan to attend the Special Meeting, holders of the
Company Common Stock are asked to please complete, date and sign the enclosed
proxy card, which is solicited by the Board of Directors of the Company, and
return it promptly in the accompanying envelope, which requires no postage if
mailed in the United States. If you later find that you may be present at the
Special Meeting or for any other reason desire to revoke your proxy, you may do
so at any time before it is voted.
IN ORDER TO APPROVE THE MERGER AGREEMENT, IT IS NECESSARY THAT HOLDERS
OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF THE COMPANY VOTE IN FAVOR
OF THE MERGER AGREEMENT.
Very truly yours,
/s/ Beryl G. Pascavis
-----------------------------------------------
Beryl G. Pascavis
Chairman, President and Chief Executive Officer
<PAGE> 5
GREATER COLUMBIA BANCSHARES, INC.
222 EAST WISCONSIN STREET
PORTAGE, WISCONSIN 53901
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD _______________, 1996
TO THE SHAREHOLDERS OF GREATER COLUMBIA BANCSHARES, INC.
A Special Meeting of Shareholders of Greater Columbia Bancshares, Inc.
(the "Company") will be held at the principal executive offices of the Company
at 222 East Wisconsin Street, Portage, Wisconsin, on _______________, 1996 at
______ __.m. for the purpose of voting on the following matters:
1. To approve the Agreement and Plan of Merger dated as of
December 22, 1995 among Associated Banc-Corp ("Associated"),
Associated Banc-Shares, Inc., a wholly-owned subsidiary of
Associated ("Holding"), and the Company (the "Merger
Agreement") providing for the merger of the Company with and
into Holding (the "Merger") (a copy of the Merger Agreement is
attached as Exhibit A hereto).
2. To transact such other business as may properly come before
the meeting.
THE DIRECTORS OF THE COMPANY HAVE UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND RECOMMEND THAT THE SHAREHOLDERS APPROVE THE MERGER AGREEMENT.
Any shareholder desiring to exercise dissenters' rights and be paid in
cash for the fair value of his or her shares of Company Common Stock in
accordance with the provisions of the Wisconsin Business Corporation Law (i)
must file a written objection to the Merger prior to the Special Meeting of
Shareholders, (ii) must not vote in favor thereof, and (iii) must otherwise
comply with the procedures set forth in Subchapter XIII of the Wisconsin
Business Corporation Law, a copy of which is attached as Exhibit C to the Proxy
Statement/Prospectus. See "The Merger-Dissenters' Rights" in the accompanying
Proxy Statement/Prospectus.
The Board of Directors has fixed the close of business on February
___, 1996 as the record date for the determination of Company shareholders
entitled to notice of and to vote at the Special Meeting and any adjournment
thereof.
Whether or not you plan to attend the Special Meeting, holders of the
Company Common Stock are asked to please complete, date and sign the enclosed
proxy card, which is solicited by the Board of Directors of the Company, and
return it promptly in the accompanying envelope. No postage is required if
mailed in the United States. The giving of such proxy does not affect your
right to vote in person in the event you attend the Special Meeting. You may
revoke the proxy at any time prior to its exercise in the manner described in
the Proxy Statement/Prospectus.
The Special Meeting may be postponed or adjourned from time to time
without any notice other than by announcement at the Special Meeting of any
postponements or adjournments thereof, and any and all business for which
notice is hereby given may be transacted at such postponed or adjourned Special
Meeting.
<PAGE> 6
THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES OF THE COMPANY COMMON STOCK IS REQUIRED FOR APPROVAL OF THE
MERGER AGREEMENT. YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES
YOU OWN.
Shareholders are invited to attend the Special Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Beryl G. Pascavis
----------------------------------------
Beryl G. Pascavis
Chairman, President and Chief Executive Officer
Portage, Wisconsin
February ___, 1996
PLEASE DO NOT SEND YOUR STOCK CERTIFICATES AT THIS TIME. IF THE MERGER IS
CONSUMMATED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR
STOCK CERTIFICATES.
<PAGE> 7
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THE PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF SUCH STATE.
PRELIMINARY COPY SUBJECT TO COMPLETION FEBRUARY 2, 1996
PROXY STATEMENT
GREATER COLUMBIA BANCSHARES, INC.
SPECIAL MEETING OF SHAREHOLDERS
--------------------
PROSPECTUS
ASSOCIATED BANC-CORP
COMMON STOCK
This Proxy Statement/Prospectus is being furnished to the shareholders
of Greater Columbia Bancshares, Inc., a Wisconsin corporation (the "Company"),
in connection with the solicitation of proxies by the Board of Directors of the
Company for use at its special meeting of shareholders (including any
adjournments or postponements thereof) to be held on __________,
_______________, 1996 (the "Special Meeting"). This Proxy Statement/Prospectus
relates to the proposed merger (the "Merger") of the Company with and into
Associated Banc-Shares, Inc. ("Holding"), a Wisconsin corporation and a
wholly-owned subsidiary of Associated Banc-Corp, a Wisconsin corporation
("Associated"), pursuant to the Agreement and Plan of Merger dated as of
December 22, 1995 (the "Merger Agreement"), a copy of which is attached hereto
as Exhibit A. FOR A MORE COMPLETE DESCRIPTION OF THE MERGER, THE MERGER
AGREEMENT AND CERTAIN RISK FACTORS ASSOCIATED THEREWITH, SEE "THE
MERGER-CERTAIN CONSIDERATIONS" AND "CERTAIN PROVISIONS OF THE MERGER
AGREEMENT."
Your Board recommends that the Company shareholders vote to approve
the Merger Agreement. As described herein, each of the directors of the
Company has agreed to vote their shares in favor of the approval of the Merger
Agreement pursuant to a Voting Agreement dated as of December 22, 1995 (the
"Voting Agreement"). Assuming compliance with the terms of the Voting
Agreement, and provided that the Merger Agreement has not been terminated prior
to its being voted upon the Company shareholders, the approval of the Merger
Agreement is assured.
This Proxy Statement/Prospectus constitutes a prospectus of Associated
with respect to shares of Associated Common Stock, par value $0.01 per share
("Associated Common Stock") issuable to holders of the Company Common Stock,
par value $1.00 per share ("Company Common Stock") pursuant to the Merger
Agreement. Pursuant to the Merger Agreement, each of the outstanding shares of
the Company Common Stock will be converted into 1.0665 shares of Associated
Common Stock. See "The Merger - Merger Consideration."
This Proxy Statement/Prospectus and the accompanying proxy materials
are first being mailed to shareholders on or about February ___, 1996.
Associated Common Stock trades on The Nasdaq Stock Market under the
symbol ASBC. The closing price of Associated Common Stock on The Nasdaq Stock
Market on January 30, 1996 was $36.88.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS FEBRUARY ___, 1996
<PAGE> 8
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED IN THIS PROXY
STATEMENT/PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY ASSOCIATED OR THE
COMPANY. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
EXCHANGE OR SELL, OR A SOLICITATION OF AN OFFER TO EXCHANGE OR PURCHASE, THE
SECURITIES OFFERED BY THIS PROXY STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A
PROXY, IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS
SPEAKS AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFICALLY INDICATED.
INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS REGARDING ASSOCIATED
HAS BEEN FURNISHED BY ASSOCIATED, AND INFORMATION HEREIN REGARDING THE COMPANY
HAS BEEN FURNISHED BY THE COMPANY.
AVAILABLE INFORMATION
Associated is subject to the informational reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference room of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and copies of such materials can be obtained by mail
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, at prescribed rates. In addition, copies
of such materials are available for inspection and reproduction at the public
reference facilities of the Commission at its New York regional office, 75 Park
Place, 14th Floor, New York, New York 10007 and at its Chicago regional office,
500 West Madison Street, Suite 1400, Chicago, Illinois 60621. The principal
market on which Associated Common Stock is traded, under the symbol "ASBC," is
The Nasdaq Stock Market. Material filed by Associated with the Commission can
also be inspected at the offices of the National Association of Securities
Dealers, Inc., Reports Section, 1735 K Street, N.W., Washington, D.C. 20006
("NASD").
Associated has filed with the Commission a Registration Statement on
Form S-4 (together with any amendments thereto, the "Registration Statement")
under the Securities Act of 1933, as amended (the "Securities Act"), relating
to the Associated Common Stock to be issued pursuant to the Merger Agreement.
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 Commission's principal office in
Washington, D.C. Statements contained in this Proxy Statement 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 reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or such other documents. Each such statement being qualified in all
respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by
Associated (File No. 0-5519) pursuant to Section 13 of the Exchange Act are
hereby incorporated by reference in this Proxy Statement/Prospectus:
(1) Associated's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994;
(2) Associated's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1995; and
2
<PAGE> 9
(3) The description of the Associated Common Stock set forth in
Associated's Registration Statement pursuant to Section 12 of
the Exchange Act, and any amendment or report filed for the
purpose of updating any such description.
In addition, all documents subsequently filed by Associated pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof
and prior to the date of the Special Meeting are hereby 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 statements
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 or 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 BY REFERENCE DOCUMENTS
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE
DOCUMENTS (OTHER THAN EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH INCORPORATED DOCUMENTS) ARE AVAILABLE
WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS
PROXY STATEMENT/PROSPECTUS IS DELIVERED, ON WRITTEN OR ORAL REQUEST TO
ASSOCIATED BANC-CORP, 112 NORTH ADAMS STREET, P.O. BOX 13307, GREEN BAY,
WISCONSIN 54307-3307 (TELEPHONE NUMBER (414) 433-3166), ATTENTION: BRIAN R.
BODAGER, ESQ., GENERAL COUNSEL & SECRETARY. IN ORDER TO ENSURE TIMELY DELIVERY
OF THE DOCUMENTS PRIOR TO THE SPECIAL MEETING, REQUESTS SHOULD BE MADE BY
_______________, 1996. PERSONS REQUESTING COPIES OF EXHIBITS TO SUCH DOCUMENTS
WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS WILL BE
CHARGED THE COSTS OF REPRODUCTION AND MAILING.
________________________
3
<PAGE> 10
GREATER COLUMBIA BANCSHARES, INC.
AND
ASSOCIATED BANC-CORP
PROXY STATEMENT/PROSPECTUS
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TABLE OF CONTENTS PAGE
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AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Status of Associated Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Required Vote; Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recommendation of the Company's Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Regulatory Approvals Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Certain Material Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Anticipated Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dissenting Shareholders' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Certain Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SELECTED FINANCIAL DATA OF ASSOCIATED BANC-CORP AND THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
COMPARATIVE STOCK PRICES AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Associated Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
The Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
COMPARATIVE UNAUDITED PER SHARE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
RECENT RESULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PROPOSED ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Historical and Pro Forma Selected Financial Contributions . . . . . . . . . . . . . . . . . . . . . . . . . 14
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ASSOCIATED BANC-CORP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Matters to Be Considered at the Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Required Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Voting of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Revocability of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
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Record Date; Stock Entitled to Vote; Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Recommendations of the Board of Directors of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 19
Certain Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Merger Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Regulatory Approvals Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
The Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Conversion of Shares; Procedures for Exchange of Certificates; Fractional Shares . . . . . . . . . . . . . . 22
Description of Associated Common Stock Issuable in the Merger . . . . . . . . . . . . . . . . . . . . . . . 24
Comparison of Shareholder Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Authorized Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Appraisal Rights and Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Required Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Classified Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Removal of Directors For "Cause" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Newly Created Directorships and Vacancies on the Board of Directors . . . . . . . . . . . . . . . . 27
Certain Business Combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Advance Notice of Proposals to Be Brought at the Annual Meeting . . . . . . . . . . . . . . . . . . 27
Resale of Associated Common Stock Issued Pursuant to the Merger . . . . . . . . . . . . . . . . . . . . . . 28
Pre-Merger Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Post-Merger Dividend Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Conduct of Business Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Certain Material Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Anticipated Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
The Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Other Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Management After the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
CERTAIN PROVISIONS OF THE MERGER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
No Solicitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Conditions to Consummation of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
CERTAIN PROVISIONS OF THE VOTING AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
CERTAIN INFORMATION CONCERNING ASSOCIATED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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CERTAIN INFORMATION CONCERNING THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Ownership of the Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Exhibit A: Agreement and Plan of Merger among Associated Banc-Corp,
Associated Banc-Shares, Inc. and Greater Columbia Capital Bancshares,
Inc. dated as of December 22, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B: Voting Agreement dated as of December 22, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C: Subchapter XIII of the Wisconsin Business Corporation Law . . . . . . . . . . . . . . . . . . . . . C-1
Exhibit D: Greater Columbia Bancshares, Inc. and Subsidiary Financial Statements
and Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
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PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere
in this Proxy Statement/Prospectus and is not intended to be complete. All
information concerning Associated included in this Proxy Statement/Prospectus
has been provided by Associated, and all information concerning the Company has
been provided by the Company. Reference is made to, and this summary is
qualified in its entirety by, the more detailed information contained or
incorporated by reference in this Proxy Statement/Prospectus and the Exhibits
attached hereto. Shareholders are urged to read this Proxy
Statement/Prospectus and the Exhibits attached hereto in their entirety.
Cross-references in this summary are to captions in this Proxy
Statement/Prospectus.
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THE COMPANIES: Associated. Associated Banc-Corp ("Associated") is a diversified multi-bank
holding company which owns eight commercial banks located in Wisconsin and
Illinois. Associated Banc-Shares, Inc. ("Holding") is a wholly-owned
subsidiary of Associated. As of September 30, 1995, Associated had total
assets of $3.54 billion. Associated Common Stock trades on The Nasdaq Stock
Market. The principal executive offices of Associated are located at 112
North Adams Street, P.O. Box 13307, Green Bay, Wisconsin 54307-3307 and its
telephone number is (414) 433-3166. See "Certain Information Concerning
Associated."
The Company. Greater Columbia Bancshares, Inc. (the "Company") is a one-bank
holding company which owns 100% of the stock of The First National Bank of
Portage (the "Bank"). The Bank has one wholly-owned subsidiary, Portage
Investments, Inc. As of September 30, 1995 the Company had total assets of
$210.7 million. The principal executive offices of the Company are located
at 222 East Wisconsin Street, Portage, Wisconsin 53901 and its telephone
number is (608) 742-4115. See "Certain Information Concerning the Company."
THE MERGER: Following the approval of the Merger Agreement by the shareholders of the
Company and the satisfaction or waiver of the other conditions to the
Merger, the Company will be merged with and into Holding, and each
outstanding share of the Company Common Stock will be converted into the
right to receive 1.0665 shares of Associated Common Stock (the "Exchange
Ratio"). The Merger will be effective on the date the Articles of Merger
are filed with the Secretary of State of the State of Wisconsin (the
"Effective Time"). At the Effective Time, the Company will be merged with
and into Holding and will not continue its separate existence or operations,
to which Holding as the surviving corporation will succeed. See "The Merger
- The Effective Time."
STATUS OF ASSOCIATED Other than shares of Associated Common Stock issued to "affiliates" of the
COMMON STOCK: Company (as defined under the federal securities laws), shares of Associated
Common Stock will be freely tradeable. See "The Merger - Resale of
Associated Common Stock Issuable in the Merger."
THE SPECIAL MEETING: A Special Meeting of the Shareholders of the Company will be held at 222
East Wisconsin Street, Portage, Wisconsin on _______________, 1996 at _____
__.m. (the "Special Meeting"). At the Special Meeting, holders of the
Company Common Stock entitled to vote at the meeting will consider and vote
upon a proposal to approve the Merger Agreement. Shareholders of Associated
are not required to approve the Merger Agreement. See "The Merger" and
"Certain Provisions of the Merger Agreement." The record date for the
Special Meeting is February ___, 1996 (the "Record Date").
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REQUIRED VOTE; The affirmative vote of the holders of a majority of the outstanding shares
VOTING AGREEMENT: of the Company Common Stock entitled to vote at the Special Meeting is
required to approve the Merger Agreement under the Wisconsin Business
Corporation Law (the "WBCL").
Associated has entered into a Voting Agreement dated as of December 22, 1995
(the "Voting Agreement") attached hereto as Exhibit B with each of the
directors of the Company pursuant to which the directors have agreed to vote
their shares (i) in favor of the adoption and approval of the Merger
Agreement and the Merger and (ii) against any Competing Transaction (as such
term is defined herein) which generally includes an acquisition of control
of, or a significant equity interest in or significant assets of, the
Company by a third party in the form of a merger, consolidation, share
exchange, business combination or other similar transaction, acquisition of
assets or shares or otherwise, or certain announcements, proposals or offers
with respect thereto. The directors of the Company hold 596,935 shares, or
approximately 65.8% of the Company Common Stock entitled to vote at the
meeting. Assuming compliance with the terms of the Voting Agreement and
provided the Merger Agreement has not been terminated prior to its being
voted upon by the Company shareholders, the approval and adoption of the
Merger Agreement are assured. The Voting Agreement also provides that
Associated has the exclusive right to purchase any or all of the shares of
Company Common Stock owned by the directors of the Company for $37.3275 per
share, payable in cash, subject to any necessary regulatory approval, after
a material breach of the Merger Agreement by the Company, a breach by a
Party Shareholder, or the acquisition or overtly threatened acquisition of
5% of the stock or a material portion of the assets of the Company or the
Bank. The purchase right is not exercisable as of the date hereof. The
purchase price per share under the Voting Agreement equalled the value of
the Company Common Stock based upon the trading price of Associated Common
Stock at the date that the Voting Agreement was requested by Associated.
The execution and delivery of the Voting Agreement was a condition to
Associated entering into the Merger Agreement. The Voting Agreement may
have the effect of discouraging persons who might now or in the future be
interested in acquiring all of or a significant interest in the Company from
considering or proposing such an acquisition, even if such persons were
prepared to pay a higher price per share for the Company Common Stock than
the price per share implicit in the Exchange Ratio. The Voting Agreement is
intended to increase the likelihood that the Merger will be consummated.
See "The Merger - The Voting Agreement."
REASONS FOR THE MERGER: The Board of Directors of the Company believes that the Merger will have a
positive impact on the customers and employees of the Company by providing
overall additional financial strength to the banking business of the Bank.
Shareholders of the Company will benefit as a result of the enhanced
liquidity, marketability and dividend paying capacity of the Associated
Common Stock to be received in the Merger. The Board of Directors of
Associated believes the Merger will enable Associated to increase its
presence and heighten its visibility in South Central Wisconsin. See "The
Merger - Reasons for the Merger."
RECOMMENDATION OF THE The Board of Directors of the Company, after consideration of the terms and
COMPANY'S BOARD OF conditions of the Merger Agreement and other factors deemed relevant by the
DIRECTORS: Board of Directors, believes that the Merger and the Exchange Ratio are fair
to
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and in the best interests of the shareholders of the Company. The Board
of Directors of the Company has approved the Merger Agreement and the
transactions contemplated thereby. See "The Merger-Background of the
Merger," "- Reasons for the Merger" and "- Recommendations of the Board of
Directors of the Company."
CONDITIONS TO THE The obligations of Associated and the Company to consummate the Merger are
MERGER: subject to various conditions, including, among other things, obtaining
requisite shareholder and regulatory approvals, the absence of any
materially burdensome restriction or condition imposed in connection with
obtaining such regulatory approvals, receipt of an opinion of independent
counsel to Associated at the closing of the Merger in respect of certain
federal income tax consequences of the Merger and that Associated and Mr.
Beryl G. Pascavis, Chairman, President and Chief Executive Officer of the
Company have entered into an employment agreement. Furthermore, the
obligation of Associated to consummate the Merger is subject to various
conditions, including, among other things, receipt of an opinion from the
independent public accountants of Associated that the Merger qualifies for
"pooling of interests" accounting treatment, that the aggregate of (i) the
fractional shares of Associated Common Stock paid in cash and (ii) the
number of shares of Associated Common Stock that is not issued in the Merger
due to the exercise of dissenters' rights, shall not be more than 10% of the
shares of Associated Common Stock which would otherwise have been issued
pursuant to the Merger, receipt by Associated of a written environmental
evaluation by Associated's environmental consultant of the Company's real
property stating that the Company's property complies with environmental
laws and that there are no material contingent liabilities, that the Company
shall have taken reasonably appropriate action in response to any
environmental condition identified by Associated's environmental consultant,
and that the Company's consolidated after-tax earnings for calendar year
1995 (with certain adjustments) were in excess of $2,500,000. See "Certain
Provisions of the Merger Agreement - Conditions to Consummation of the
Merger."
TERMINATION: The Merger Agreement may be terminated by the applicable Board of Directors
at any time prior to the Effective Time (whether before or after approval of
the Merger by the shareholders of the Company): (i) by mutual consent of
Associated and the Company; (ii) by Associated or the Company if there has
been a breach by the other party in any material respect of any
representation, warranty, covenant or agreement in the Merger Agreement, or
if any representation or warranty of the Company or Associated shall be
discovered to have become untrue in any material respect, in either case
which breach has not been cured within 10 business days following receipt by
the non-terminating party of notice of such breach; (iii) by Associated or
the Company if any permanent injunction preventing the consummation of the
Merger shall have become final and nonappealable; (iv) by Associated or the
Company if the Merger shall not have been consummated before July 30, 1996
for a reason other than the failure of the terminating party to comply with
its obligations under the Merger Agreement; (v) by Associated or the Company
if the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") or the Wisconsin Commissioner of Banking (the "Wisconsin
Commissioner") have denied approval of the Merger, and neither Associated
nor the Company has, within 30 days after the entry of such order, filed a
petition seeking review of such order as provided by applicable law; (vi) by
Associated if the Company
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fails to take reasonably appropriate action in
response to any environmental condition identified by Associated's
environmental consultant; or (vii) by Associated if dissenters' rights are
exercised with respect to in excess of 10% of the Company Common Stock. See
"Certain Provisions of the Merger Agreement - Termination."
REGULATORY APPROVALS The Merger is subject to prior approval by the Federal Reserve Board and the
REQUIRED: Wisconsin Commissioner. See "The Merger - Regulatory Approvals Required."
CERTAIN MATERIAL The Merger is conditioned upon Associated and the Company receiving an
FEDERAL INCOME opinion of independent counsel to Associated, subject to customary
TAX CONSEQUENCES: assumptions and representations, to the effect that the Merger will be a
tax-free reorganization for federal income tax purposes. Such opinion,
however, is not binding on the Internal Revenue Service. In the event that
the Merger qualifies as a tax-free reorganization, no gain or loss will be
recognized by holders of the Company Common Stock upon conversion of their
shares of stock into shares of Associated Common Stock, except to the extent
they receive cash in lieu of fractional share interests of Associated Common
Stock, and no gain or loss will be recognized by Associated, Holding or the
Company. See "The Merger - Certain Material Federal Income Tax
Consequences."
ANTICIPATED ACCOUNTING The Merger is expected to qualify as a "pooling of interests" for accounting
TREATMENT: and financial reporting purposes. The receipt of an opinion from KPMG Peat
Marwick LLP, the independent public accountants of Associated, confirming
that the Merger will qualify for "pooling of interests" accounting treatment
is a condition to consummation of the Merger. See "The Merger - Anticipated
Accounting Treatment."
DISSENTING SHAREHOLDERS' Holders of Company Common Stock who comply with the procedural requirements
RIGHTS: of the WBCL will have appraisal rights in connection with the Merger.
Pursuant to Section 180.1302(1) of the WBCL, holders of shares of stock
entitled to notice of a shareholders' meeting at which shareholders are to
vote on a merger are provided, subject to certain procedural requirements,
with statutory rights of appraisal pursuant to which such shareholders may
be entitled to receive cash in the amount of the "fair value" of their
shares (as determined pursuant to the WBCL) instead of the shares or cash
offered pursuant to the merger. See "The Merger - Dissenters' Rights" and
Exhibit C hereto.
CERTAIN CONSIDERATIONS: In deciding whether to vote in favor of the Merger Agreement, shareholders
of the Company should carefully evaluate the matters set forth in the
section herein entitled "The Merger - Certain Considerations." Shareholders
of the Company should consider that the exercise of dissenters' rights is
the only alternative to avoid conversion of Company Common Stock to shares
of Associated Common Stock as shareholder approval is assured pursuant to
the terms of the Voting Agreement, and the changing legislative and
regulatory environment affecting the banking and financial services
businesses in which Associated and the Company engage.
INTERESTS OF CERTAIN Associated (through the Bank as employer) will enter into a two year
PERSONS IN THE MERGER: employment agreement with Mr. Pascavis. See "The Merger - Interests of
Certain Persons in the Merger."
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SELECTED FINANCIAL DATA OF ASSOCIATED BANC-CORP AND THE COMPANY
(In thousands, except per share amounts)
The following table sets forth selected historical data as of and for
each of the years in the five year period ended December 31, 1994 derived from
the audited consolidated financial statements of Associated, including the
respective notes thereto, which should be read in conjunction therewith. The
audited consolidated financial statements of Associated as of and for each of
the years in the three year period ended December 31, 1994 are incorporated by
reference to this Proxy Statement/Prospectus. See "Incorporation of Certain
Documents by Reference." The Company's selected historical data as of and for
each of the years in the three year period ended December 31, 1994 and as of
and for each of the years in the two year period ended December 31, 1991 are
derived from the audited consolidated financial statements of the Company
attached hereto as Exhibit D and the unaudited consolidated financial
statements of the Company, respectively. The selected historical data as of
and for the nine months ended September 30, 1995 and 1994 are derived from the
unaudited consolidated financial statements of Associated and the Company
incorporated herein by reference and attached hereto as Exhibit D,
respectively. In the opinion of their respective managements, the accompanying
unaudited consolidated financial statements contain all adjustments necessary
to present fairly Associated's and the Company's financial position and results
of operations for the periods presented. All adjustments necessary to the fair
presentation of the financial statements are of a normal recurring nature.
Results for the nine months ended September 30, 1995 are not necessarily
indicative of the results which may be expected for the year as a whole.
<TABLE>
<CAPTION>
AS OF AND FOR THE
NINE MONTHS
ENDED SEPTEMBER 30, AS OF AND FOR THE YEAR ENDED DECEMBER 31,
------------------- -----------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
ASSOCIATED (1): (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONDENSED STATEMENT OF INCOME:
- ------------------------------
Interest Income . . . . . . . . . . . $ 195,472 $ 158,338 $ 219,351 $ 209,446 $ 226,817 $ 247,671 $ 250,031
Interest Expense . . . . . . . . . . 86,767 58,728 82,801 80,272 102,969 136,124 148,614
Less: Provision for Possible Loan 2,368 1,529 2,211 5,700 10,58 21,76 7,202
---------- --------- ---------- ---------- ---------- --------- ----------
Net Interest Income After Provision
for Possible Loan Losses . . . . . 106,337 98,081 134,339 123,474 113,267 89,779 94,215
Plus: Non-Interest Income . . . . . . 39,332 37,463 49,103 49,980 48,449 41,849 35,506
92,23 88,28 119,079 117,022 117,043 110,706 96,912
---------- --------- ---------- ---------- ---------- --------- ----------
Net Non-Interest Expense . . . . . . 52,900 50,821 69,976 67,042 68,594 68,857 61,406
Net Income . . . . . . . . . . . . . $ 34,122 $ 30,728 $ 41,66 37,398 $ 31,622 $ 12,918 $ 23,760
========== ========= ========== ========== ========== ========= ==========
PER COMMON SHARE DATA:
- ----------------------
Net Income Per Share (2)(3) . . . . . $ 2.07 $ 1.87 $ 2.53 $ 2.30 $ 1.99 $ 0.83 $ 1.52
Cash Dividends Per Share (2) . . . . 0.70 0.63 0.85 0.74 0.61 0.57 0.50
SELECTED BALANCE SHEET DATA:
- ----------------------------
Total Assets . . . . . . . . . . . . $3,540,384 $3,210,435 $3,418,330 $3,114,310 $3,100,879 $3,066,403 $2,854,323
Long-Term Borrowings . . . . . . . . 3,467 3,866 3,866 5,347 17,925 39,841 15,687
<CAPTION>
THE COMPANY:
(UNAUDITED)
CONDENSED STATEMENT OF INCOME:
- ------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Income . . . . . . . . . . . $ 11,730 $ 9,792 $ 13,475 $ 10,410 $ 11,011 $ 10,098 $ 9,960
Interest Expense . . . . . . . . . . 5,461 4,166 5,758 4,822 5,508 5,872 6,324
Less: Provision for Loan Losses . . . 35 -- -- 171 126 2 33
Net Interest Income After Provision
for Loan Losses . . . . . . . . . . . 6,234 5,626 7,717 5,417 5,377 4,224 3,603
661 628 947 975 624 371 407
Plus: Non-Interest Income . . . . . 4,583 4,406 5,972 4,332 3,870 2,994 2,626
---------- ---------- ---------- ---------- ---------- ---------- ----------
3,922 3,778 5,025 3,357 3,246 2,623 2,219
Net Income . . . . . . . . . . . . . $ 1,686 $ 1,458 $ 1,906 $ 1,474 $ 1,496 $ 1,134 $ 975
========== ========== ========== ========== ========== ========== ==========
PER COMMON SHARE DATA:
- ----------------------
Net Income Per Share (3)(4) . . . . . $ 1.86 $ 1.61 $ 2.10 $ 2.14 $ 2.31 $ 1.75 $ 1.51
Cash Dividends Per Share . . . . . . 1.26 1.26 1.26 0.60 0.45 0.39 0.35
SELECTED BALANCE SHEET DATA:
- ----------------------------
Total Assets . . . . . . . . . . . . $ 210,704 $ 208,696 $ 211,200 $ 152,386 $ 145,143 $ 110,634 $ 107,368
Long-Term Debt . . . . . . . . . . . 5,844 6,524 6,452 8,186 1,888 -- --
</TABLE>
______________________
(1) All information presented for Associated has been restated for the
merger of GN Bancorp, Inc. with and into a wholly-owned subsidiary of
Associated, which was accounted for as a pooling of interests, on
August 3, 1995 (the "GNB Acquisition").
(2) Per share data for Associated adjusted retroactively for the
five-for-four stock split effected as a stock dividend paid on June
15, 1995 (the "Stock Split") and stock dividends declared in 1993 and
1990.
(3) Earnings per share are calculated based upon the weighted average
shares outstanding.
(4) Per share data for the Company adjusted retroactively for the
four-for-one stock split effected as a stock dividend paid on
September 1, 1993 (the "Company Stock Split")
11
<PAGE> 18
COMPARATIVE STOCK PRICES AND DIVIDENDS
ASSOCIATED COMMON STOCK
Associated Common Stock trades on The Nasdaq Stock Market. The
following table sets forth, for the periods indicated, the high and low sales
prices per share as reported on The Nasdaq Stock Market and the regular cash
dividends declared for Associated Common Stock as adjusted to reflect the Stock
Split.
<TABLE>
<CAPTION>
ASSOCIATED COMMON STOCK
--------------------------------------------
HIGH LOW DIVIDEND
-------- ------- ----------
<S> <C> <C> <C>
1993
----
First Quarter . . . . . . . . . . . . . . . . $ 26.73 $ 23.46 $ 0.18
Second Quarter . . . . . . . . . . . . . . . $ 28.00 $ 25.64 $ 0.18
Third Quarter . . . . . . . . . . . . . . . . $ 32.00 $ 26.00 $ 0.18
Fourth Quarter . . . . . . . . . . . . . . . $ 31.00 $ 26.00 $ 0.20
1994
----
First Quarter . . . . . . . . . . . . . . . . $ 28.80 $ 25.00 $ 0.20
Second Quarter . . . . . . . . . . . . . . . $ 30.60 $ 25.00 $ 0.22
Third Quarter . . . . . . . . . . . . . . . . $ 30.20 $ 28.00 $ 0.22
Fourth Quarter . . . . . . . . . . . . . . . $ 28.40 $ 25.00 $ 0.22
1995
----
First Quarter . . . . . . . . . . . . . . . . $ 30.10 $ 27.40 $ 0.22
Second Quarter . . . . . . . . . . . . . . . $ 31.00 $ 28.40 $ 0.22
Third Quarter . . . . . . . . . . . . . . . . $ 37.25 $ 30.38 $ 0.27
Fourth Quarter . . . . . . . . . . . . . . . $ 40.94 $ 36.25 $ 0.27
1996
----
First Quarter (through January 30, 1996) . . $ 39.50 $ 36.75 $ 0.27
</TABLE>
On August 23, 1995, the last trading day before the announcement of
the signing of the letter of intent for the Merger, the last sale price of
Associated Common Stock as reported on The Nasdaq Stock Market was $33.00 per
share. On January 30, 1996 the last sale price of Associated Common Stock as
reported on The Nasdaq Stock Market was $36.88 per share. Shareholders are
urged to obtain current market prices for Associated Common Stock.
On the Record Date, there were approximately 5,000 holders of record
of Associated Common Stock.
THE COMPANY COMMON STOCK
The Company Common Stock is not listed on any exchange nor is there an
established trading market for Company Common Stock. Although it is quoted and
occasionally trades in the over-the-counter market, only sporadic "bid" or
"ask" prices are available. Since January 1993, the bid price has ranged from
$20 to $36.50 per share as reported by the National Quotation Bureau. Such
prices do not reflect retail mark-up, mark-down or commission. Management of
the Company does not have knowledge of the prices paid in all transactions
involving its shares. Because of the lack of an established public market for
shares of Company Common Stock, the range of prices indicated may not reflect
the prices which would be paid for such shares in an active market. On January
29, 1996, the quoted market price per share of Company Common Stock was $36.50
bid.
In November 1993, the Company completed a rights offering of 260,000
shares of Company Common Stock at a subscription price of $23.00 per share to
shareholders of the Company who were Wisconsin residents. Company shareholders
received nontransferable subscription rights to purchase Company Common Stock
at the rate of one share of Company Common Stock for each 2.4 shares of Company
Common Stock held of record.
The Board of Directors of the Company declared dividends in each of
1993, 1994 and 1995 of $0.60 per share, $1.26 per share and $1.26 per share,
respectively. Pursuant to the Merger Agreement, the ability of the Company to
pay dividends on the Company Common Stock prior to the Effective Time has been
restricted except that commencing February 15, 1996, the Company is permitted
to declare and pay a quarterly dividend not to exceed $0.32 per share. See
"The Merger - Pre-Merger Dividend Policy."
On the Record Date, there were 151 holders of record of the Company Common
Stock.
12
<PAGE> 19
COMPARATIVE UNAUDITED PER SHARE DATA
The following table sets forth for Associated Common Stock and the
Company Common Stock certain unaudited historical, pro forma and pro forma
equivalent per share financial information as of and for the nine months ended
September 30, 1995 and as of and for each of the years in the three year period
ended December 31, 1994. The following data assumes that each outstanding share
of Company Common Stock will be converted into 1.0665 shares of Associated
Common Stock. The information presented herein should be read in conjunction
with the financial statements of Associated incorporated by reference into this
Proxy Statement/Prospectus, and with the consolidated financial statements of
the Company, including the notes thereto, attached hereto as Exhibit D. See
"Incorporation of Certain Documents By Reference."
<TABLE>
<CAPTION>
AS OF AND FOR THE
NINE MONTHS ENDED AS OF AND FOR THE YEAR
SEPTEMBER 30, ENDED DECEMBER 31,
----------------- ---------------------------------------------
1995 1994 1993 1992
----------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
ASSOCIATED
Net Income Per Common Share (1): $ 2.07 $ 2.53 $ 2.30 $ 1.99
Historical . . . . . . . . . . . . 2.05 2.50 2.29 2.00
Pro forma (2) . . . . . . . . . . .
Dividends Per Common Share (1): $ 0.70 $ 0.85 $ 0.74 $ 0.61
Historical . . . . . . . . . . . . 0.70 0.85 0.74 0.61
Pro forma (3) . . . . . . . . . . .
Book Value Per Common Share: $ 19.09 $ 17.32 $ 16.23 $ 14.29
Historical . . . . . . . . . . . . 18.89 17.14 16.11 14.10
Pro forma (2) . . . . . . . . . . .
THE COMPANY
Net Income Per Common Share (5):
Historical . . . . . . . . . . . . $ 1.86 $ 2.10 $ 2.14 $ 2.31
Pro forma equivalent (4) . . . . . 2.19 2.67 2.44 2.13
Dividends Per Common Share (5):
Historical . . . . . . . . . . . . $ 1.26 $ 1.26 $ 0.60 $ 0.45
Pro forma equivalent (4) . . . . . 0.75 0.91 0.79 0.65
Book Value Per Common Share (5):
Historical . . . . . . . . . . . . $ 16.45 $ 15.03 $ 15.15 $ 10.34
Pro forma equivalent (4) . . . . . 20.15 18.28 17.18 15.04
- ----------------------
</TABLE>
(1) Per share data adjusted retroactively for the GNB Acquisition, the
Stock Split and the stock dividend declared in 1993. Earnings per
share are calculated based upon the weighted average shares
outstanding.
(2) The Associated pro forma per share amounts give effect to the Merger.
(3) The Associated pro forma dividends per share amounts represent
historical dividends of Associated as adjusted retroactively for
the Stock Split and the stock dividend declared in 1993.
(4) The Company pro forma equivalent per share amounts are calculated by
multiplying the Associated pro forma per share amounts by the Exchange
Ratio of 1.0665 shares.
(5) Per share data adjusted retroactively for the Company Stock Split.
RECENT RESULTS
For the year ended December 31, 1995, Associated reported net income
of $46.7 million up 12.0% compared to 1994. Net income for the fourth quarter
1995 was $12.5 million up 14.6% from the comparable prior period in 1994.
Earnings per share were $2.83 and $0.76 for the year ended December 31, 1995
and for the fourth quarter 1995, respectively. Total assets were $3.7 billion
at December 31, 1995 up 8.2% from reported assets at December 31, 1994. On
January 24, 1996, Associated declared a dividend of $0.27 per share payable
February 15, 1996 to shareholders of record as of February 5, 1996.
For the year ended December 31, 1995, the Company reported net income
of $1.4 million down 38.5% compared to 1994. Earnings per share were $1.52.
Net income decreased primarily because the Company recorded a provision for
loan loss of $1.1 million ($660,000 after tax), pursuant to the terms of the
Merger Agreement. Total assets were $210 million down 0.5% from reported
assets at December 31, 1994.
13
<PAGE> 20
PROPOSED ACQUISITIONS
On November 10, 1995 and January 23, 1996, Associated signed
definitive merger agreements for proposed stock-for-stock merger transactions
with SBL Capital Bank Shares, Inc. ("SBL") and F&M Bankshares of Reedsburg,
Inc. ("F&M"), respectively. SBL is a $63.4 million one bank holding company
with main offices in Lodi, Wisconsin. F&M is a $140 million one bank holding
company with main offices in Reedsburg, Wisconsin. SBL is expected to be
consummated during the first quarter of 1996 and F&M during the second quarter
of 1996. Each of these acquisitions is expected to be accounted for as a
pooling of interests. There is no assurance that such transactions will be
consummated or that if consummated, that the proposed terms will not be
modified. Moreover, Associated from time to time is engaged in preliminary
negotiations for potential acquisitions involving stock-for-stock mergers or
cash purchases. Such proposed acquisitions are announced when agreements in
principle have been reached.
HISTORICAL AND PRO FORMA SELECTED FINANCIAL CONTRIBUTIONS
The following table sets forth certain consolidated unaudited
financial data of Associated as of and for the nine months ended September 30,
1995 and the data on a pro forma combined basis after giving effect to the
acquisition of the Company and the proposed acquisitions of SBL and F&M. The
information is derived from the historical unaudited financial statements of
Associated, the Company, SBL and F&M. The unaudited consolidated financial
statements of Associated and the Company, including the related notes thereto,
are incorporated by reference and attached as Exhibit D, respectively, to this
Proxy Statement/Prospectus. See "Incorporation of Certain Documents by
Reference."
<TABLE>
<CAPTION>
PRO FORMA ASSOCIATED, THE
COMBINED COMPANY, SBL
ASSOCIATED SBL AND AND F&M
THE COMPANY AND THE F&M PRO FORMA
ASSOCIATED HISTORICAL COMPANY PRO FORMA COMBINED
---------- ---------- ------- --------- ------------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
For the nine months
ended
September 30, 1995:
Total revenue:
Amount . . . . . . . $ 234,804 $ 12,391 $ 247,195 $ 11,951 $ 259,146
Percentage of total . 90.6% 4.8% 95.4% 4.6% 100%
Net income:
Amount . . . . . . . $ 34,122 $ 1,686 $ 35,808 $ 1,637 $ 37,445
Percentage of total . 91.1% 4.5% 95.6% 4.4% 100%
At September 30, 1995:
Total assets:
Amount . . . . . . . $ 3,540,384 $ 210,704 $ 3,751,088 $206,221 $ 3,957,309
Percentage of total . 89.5% 5.3% 94.8% 5.2% 100%
Shareholders' equity:
Amount . . . . $ 315,063 $ 14,929 $ 329,992 $ 17,370 $ 347,362
Percentage of total . 90.7% 4.3% 95.0% 5.0% 100%
Shares of common stock:
Amount . . . . . . . 16,501,225 967,717(1) 17,468,942 868,000(1) 18,336,942
Percentage of total . 90.0% 5.3% 95.3% 4.7% 100%
- ------------
</TABLE>
(1) Assumes consummation of each proposed transaction and conversion to
shares of Associated Common Stock based upon the respective proposed
Exchange Ratios.
14
<PAGE> 21
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to holders of the
Company Common Stock in connection with the solicitation of proxies by the
Company's Board of Directors for use at the Special Meeting of Shareholders of
the Company and at any adjournment or postponement thereof. The Company
Meeting will be held at the principal executive offices of the Company at 222
East Wisconsin Street, Portage, Wisconsin on _______________, 1996. The
Special Meeting will commence at _______ ___.m.
At the Special Meeting, the shareholders of the Company will be asked
to approve the Merger Agreement attached hereto as Exhibit A, as more fully
described herein. See "The Special Meeting," "The Merger," and "Certain
Provisions of the Merger Agreement." The approximate date on which this Proxy
Statement/Prospectus is first being mailed to shareholders of the Company is on
or about February __, 1996.
ASSOCIATED BANC-CORP
Associated is a diversified multi-bank holding company registered with
the Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as
amended (the "BHC Act"). Associated owns directly or indirectly all of the
capital stock of eight commercial banks located in Wisconsin and Illinois, and
all of the capital stock of subsidiaries engaged in the following non-banking
businesses: personal property lease financing, commercial mortgage banking,
residential mortgage banking, trust services, reinsurance and general insurance
agency activities. As of September 30, 1995, Associated had total assets of
$3.54 billion. The principal executive offices of Associated are located at
112 North Adams Street, P.O. Box 13307, Green Bay, Wisconsin 54307-3307 and
its telephone number is (414) 433-3166. See "Certain Information Concerning
Associated."
THE SPECIAL MEETING
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
At the Special Meeting, holders of the Company Common Stock will
consider and vote upon a proposal to approve the Merger Agreement and any other
matters that may properly come before the Special Meeting. For a detailed
description of the Merger and the Merger Agreement, see "The Merger" and
"Certain Provisions of the Merger Agreement."
REQUIRED VOTE
The affirmative vote of the holders of a majority of the outstanding
shares of the Company Common Stock entitled to vote at the Special Meeting is
required to approve the Merger Agreement. Each share of the Company Common
Stock outstanding on the Record Date (as defined herein) is entitled to one
vote. Shareholders of Associated are not required to approve the Merger
Agreement and no further corporate authorization by Associated is required to
consummate the Merger.
Pursuant to the Voting Agreement, the directors who have voting power
with respect to a total of 596,935 shares or approximately 65.8% of the Company
Common Stock entitled to vote at the Special Meeting have agreed, among other
things, to vote their shares in favor of the approval and adoption of the
Merger Agreement and against certain other transactions. Assuming compliance
with the terms of the Voting Agreement and provided the Merger Agreement has
not been terminated prior to its being voted upon by the Company shareholders,
the approval and adoption of the Merger Agreement are assured. See "Certain
Provisions of the Voting Agreement." As of the Record Date, the Company's
directors and executive officers had voting power with respect to a total of
596,935 shares or approximately 65.8% of the Company Common Stock entitled to
vote at the Special Meeting.
15
<PAGE> 22
VOTING OF PROXIES
Shares represented by all properly executed proxies for the Company
Common Stock received in time for the Special Meeting will be voted at the
Special Meeting in the manner specified by the holders thereof. Proxies which
do not contain voting instructions will be voted FOR approval of the Merger
Agreement.
It is not expected that any matter other than that referred to herein
will be brought before the Special Meeting. If, however, other matters are
properly presented, the persons named as proxies will vote in accordance with
their judgment with respect to such matters.
REVOCABILITY OF PROXIES
The grant of a proxy on the enclosed form of proxy does not preclude a
shareholder from voting in person. A shareholder may revoke a proxy at any
time prior to its exercise by delivering to the Secretary of the Company a duly
executed proxy or revocation of proxy bearing a later date or by voting in
person at the Special Meeting. Attendance at the Special Meeting will not of
itself constitute revocation of a proxy.
RECORD DATE; STOCK ENTITLED TO VOTE; QUORUM
Only holders of record of the Company Common Stock at the close of
business on February ___, 1996 (the "Record Date") will be entitled to receive
notice of and to vote at the Special Meeting.
At the Record Date, 907,376 shares of the Company Common Stock were
outstanding. Shares representing a majority of the outstanding shares of the
Company Common Stock entitled to vote must be represented in person or by proxy
at the Company Meeting in order for a quorum to be present. Abstentions will
be treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the approval of the Merger Agreement. If a broker or other holder of record
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies from its
shareholders, except that Associated and the Company will share equally the
cost of printing this Proxy Statement/Prospectus and all regulatory filing fees
in connection therewith. In addition to solicitation by mail, the directors,
officers and employees of the Company may solicit proxies from shareholders of
the Company by telephone or telegram, or in person, but will receive no
additional compensation for such services.
SHAREHOLDERS SHOULD NOT RETURN THEIR STOCK CERTIFICATES WITH THEIR
PROXY CARDS. AS SOON AS PRACTICABLE FOLLOWING THE EFFECTIVE TIME, THE COMPANY
SHAREHOLDERS WILL BE PROVIDED WITH MATERIALS RELATING TO THE EXCHANGE OF THEIR
STOCK CERTIFICATES. SEE "THE MERGER - CONVERSION OF SHARES; PROCEDURES FOR
EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES."
THE MERGER
This section of the Proxy Statement/Prospectus describes certain
aspects of the proposed Merger. To the extent that it relates to the Merger
Agreement, the following description does not purport to be complete and is
qualified in its entirety by reference to the Merger Agreement which is
attached hereto as Exhibit A and is incorporated herein by reference. All
shareholders are urged to read the Merger Agreement and the other exhibits to
this Proxy Statement/Prospectus in their entirety.
16
<PAGE> 23
BACKGROUND OF THE MERGER
For the past several years, the Board of Directors of the Company has
monitored the future of independent banks in smaller communities in Wisconsin
such as Portage. The Board continually considered the potential increase in
banking competition in the Portage area, the need for large capital
expenditures required to provide desired customer service and the increased
rules and regulations imposed by regulatory authorities upon the banking
industry. The Board recognized the banking industry has substantially changed
in recent years with potential changes of equal or greater magnitude for the
industry foreseeable in the future.
As a result, the Board determined in late 1994 to formally consider
questions involving the future of the Company and the Bank. The Board
determined that affiliation with a large organization would aid the Company in
competitive compliance and managerial respects as well as provide shareholders
of the Company with greater liquidity and diversification of their investment.
The Board directed its counsel and independent accountants to prepare a
descriptive memorandum with respect to the Company and the Bank for
distribution to potential acquirors. Such memorandum was completed in February
1995 and counsel for the Company then solicited expressions of interest from
over a dozen bank holding companies operating in the State of Wisconsin. Those
solicitations produced three bona fide offers for acquisition of the Company
subject to due diligence review.
The solicitations of interest sought answers to specific questions
with regard to both the economic and social aspects of any proposed transaction
between the potential acquiror and the Company to determine not only the
financial aspects of the proposal but also the operational similarities between
the Company and each potential acquiror. Each of the three interested holding
companies also submitted specific listings of requested material for their
respective due diligence reviews. Following the due diligence, specific bids
for the Company were presented by each of the three holding companies which
included Associated. Counsel and the independent accountants of the Company
also discussed with each of the three bidders their specific bids. Following
receipt of these specific bids, the Board, assisted by counsel and independent
accountants, conducted an evaluation of each of the bids. One of the specific
bids included a cash proposal and an alternative part-cash, part-stock
proposal. Subsequent to this bidder's due diligence on the Company, such bid
was denominated in cash at $28.00 per share or in a part-cash, part-stock
structure at an implied value of an unspecified amount less than $28.00 per
share based upon the then current market price of the bidder's stock which was
publicly-traded. Neither the cash proposal nor the part-cash, part-stock
proposal (which was structured to be tax-free to shareholders who did not elect
cash consideration) were as attractive from an economic standpoint as the
tax-free proposals from the other two final bidders. As a result, the Board
determined not to pursue further discussions with the cash bidder. Additional
discussions were then conducted with each of the remaining two bidders. The
Board considered the other stock-for-stock bid and ultimately rejected it after
considering the past performance of bidder's publicly-traded stock and the
Board's perception of the long-range potential stock appreciation relative to
Associated. The Board also concluded that Associated would be a better merger
partner from the standpoint of various social issues and management philosophy.
These discussions resulted in the approval by the Board of the Associated
proposal and the execution of the Letter of Intent with Associated as of August
23, 1995. The terms of the letter of intent were embodied in the Merger
Agreement and Voting Agreement which were executed on December 22, 1995.
The Merger Agreement was entered into by the Company after full
consideration of the various factors having an effect upon a determination of
the fair value of the Company Common Stock in the context of a Merger. In
determining the amount of consideration to be received by the shareholders of
the Company, the Board considered the relative financial condition and earnings
and the history of dividend payments by Associated and the Company, the
benefits of diversification in banking environments in the stock price, as well
as the prospective growth potential of Associated and the Company based on
their respective businesses, locations and market areas.
The Directors of the Company concluded they would not engage an
investment banking firm to render an opinion that the Exchange Ratio is fair
from a financial point of view. As noted above, the Board concluded it would
recommend the Merger and Exchange Ratio as fair to, and in the best interests
of, the shareholders of the Company when the price of Associated Common Stock
ranged between $32 and $34 per share. Although the Board
17
<PAGE> 24
was aware that the price would continue to fluctuate until the Effective Time,
the Directors believed the benefit to the Company and its shareholders from a
fairness opinion would not be commensurate with the cost of such opinion. On
the date of the Company's execution of the Letter of Intent between Associated
and the Company on August 23, 1995, the aggregate consideration based on the
closing price of Associated Common Stock on that date as reported on The Nasdaq
Stock Market ($33.00 per share) was approximately $31.9 million or
approximately $35.19 per share of Company Common Stock. On December 22, 1995,
the date of execution of the Merger Agreement, the value of the transaction was
approximately $37.7 million or $41.59 per share based on the closing price of
Associated Common Stock on that date as reported on The Nasdaq Stock Market of
$39.00 per share.
The Board of Directors of the Company has approved the Merger
Agreement and believes the proposed Merger is in the best interest of the
Company and its shareholders. Accordingly, the Board recommends that the
shareholders of the Company vote in favor of adoption of the Merger Agreement
as discussed herein. The Merger will afford the Bank the advantage of joining a
multi-bank holding company while preserving the individual identity of the
Bank. Because of Associated's size and financial strength, it has a greater
range of financing alternatives available to raise any additional capital
necessary to meet the financial requirements of the Bank. The Merger will
permit the Bank to continue to function with a large degree of autonomy under
its own officers and its own Board of Directors and, in addition, will enable
the Bank through its affiliation with Associated to improve and expand its
services and to realize administrative economies through centralized operations
by more effectively utilizing its present personnel and by permitting the
deployment of additional skilled personnel on an economical basis, particularly
in the audit, trust, investment and data processing areas. The affiliation
with other banks owned by Associated will permit group participation and credit
extensions which will enable the Bank to effectively handle the credit needs of
businesses which might otherwise do their banking outside the service area of
the Bank. The outstanding shares of Associated Common Stock are, and the shares
of such stock to be issued in the Merger for Company Common Stock, will be,
actively traded on The Nasdaq Stock Market and hence enjoy greater liquidity
than shares of Company Common Stock which are not regularly traded in any
established market. The active trading of Associated Common Stock also
provides a means of accurately valuing the shares received in the Merger for
which valuation is not now available for shares of Company Common Stock.
REASONS FOR THE MERGER
The Company. In considering the Merger, the directors of the Company
reviewed the terms and conditions of the proposed Merger Agreement, along with
certain business and financial information relating to Associated and the
Company. In addition to the factors discussed above, the Board of Directors of
the Company determined to approve the proposed transaction primarily because
the Merger will increase the financial strength of the Bank by enabling it to
better serve its depositors and customers, to provide additional opportunities
for professional advancement for the Bank's employees, and to be more
competitive with other bank subsidiaries of large bank holding companies
currently doing business in South Central Wisconsin or which might locate in
the community. The directors of the Company also concluded that the Merger
will enhance both the long-term and short-term value of the Company
shareholders' investments. Among the additional factors important to the
directors of the Company in determining to approve the Merger, were: (i) the
increased opportunity and resources to serve the Bank's customers; (ii) the
possibility for career enhancement which employees of the Company and the Bank
might be provided as a result of the Merger; (iii) the increased resources and
expertise to keep the Bank competitive and meet the ever changing demands of
the banking industry; (iv) the marketability and liquidity of Associated Common
Stock and the consistent dividend history and rate of dividends of the
Associated Common Stock to be received in the Merger as compared to the
illiquidity and lack of marketability of the Company Common Stock and the
dividend history of the Company Common Stock; (v) the tax-free nature of the
Merger for federal income tax purposes which would permit the Company
shareholders who receive shares of Associated Common Stock to defer federal
income taxation under certain circumstances; (vi) the potential for future
appreciation of Associated Common Stock due to Associated's greater market
presence and financial resources and (vii) the financial terms of other recent
business combinations in the financial services industry. See "The Merger -
Certain Material Federal Income Tax Consequences."
18
<PAGE> 25
While each member of the Company's Board of Directors evaluated each
of the foregoing as well as other factors, the Board of Directors collectively
did not assign any specific or relative weights to the factors considered and
did not make any determination with respect to any individual factor. The
Company's Board of Directors collectively made its determination with respect
to the Merger based on its unanimous conclusion that the Merger, in light of
the factors that each of them individually considered as appropriate, is fair
and in the best interests of the Company's shareholders.
Associated. Prior to authorizing the Merger, Associated's Board of
Directors considered, among other things, the improving financial performance
and condition, business operations, capital levels, asset quality and future
growth prospects of the Company. The Board also considered the benefits to
Associated of expanding in South Central Wisconsin by acquisition of the
Company as opposed to the opening of a new branch bank, the positive impact of
the Merger on Associated by enhancing its visibility in the region and the
terms of the Merger Agreement.
Associated's Board of Directors believes the Merger will, (i) result
in operational and managerial efficiencies which will better enable the Company
to contain costs and grow more rapidly than historic growth rates; (ii) result
in the Company having greater financial strength, increased competitiveness and
market diversification, thereby also benefiting Associated and its customers;
and (iii) result in an increase in long-term shareholder value for the
shareholders of Associated.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors of the Company has determined that the terms of
the Merger are fair to, and in the best interests of, the Company, and its
shareholders for the reasons stated immediately above.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND RECOMMENDS A VOTE FOR APPROVAL OF THE MERGER AGREEMENT.
CERTAIN CONSIDERATIONS
In deciding whether to vote in favor of the Merger, the Company
shareholders should consider the following factors, in addition to the other
matters set forth herein:
Anticipated Shareholder Approval of Merger. Assuming compliance with
the terms of the Voting Agreement and provided the Merger Agreement has not
been terminated prior to its being voted upon by the Company shareholders, the
approval and adoption of the Merger Agreement are assured. Accordingly,
shareholders of the Company who do not wish to have their shares of Company
Common Stock converted into the right to receive shares of Associated Common
Stock pursuant to the Merger Agreement, must in addition to voting against the
Merger or abstaining from the vote, also exercise Dissenters' Rights. See "The
Merger - Dissenters' Rights" and Exhibit C hereto.
Uncertain Legislative and Regulatory Environment. The banking and
financial services businesses in which the Company and Associated engage are
highly regulated. The laws and regulations affecting such businesses may be
changed dramatically in the near future. Such changes could affect the ability
of banks to engage in nationwide branch banking and the ability of bank holding
companies to engage in non-banking businesses, such as securities underwriting
and insurance, in which they have been allowed to engage only on a limited
basis. Such changes may also affect the capital that banks and bank holding
companies are required to maintain, the premiums paid for or the availability
of deposit insurance or other matters directly affecting earnings. Neither the
Company nor Associated can predict what changes will occur or the effect that
any such changes would have on the ability of the combined entity to compete
effectively or to take advantage of new opportunities after the Merger.
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Competition. The markets in which the Company and Associated operate
are highly competitive. Competition in such markets is likely to increase in
light of the changing legislative and regulatory environment in which the
Company and Associated operate. In addition, consolidation and mergers in the
banking industry are expected to continue, resulting in stronger and more
effective competitors. Neither the Company nor Associated can predict the
degree to which competition in the industry will increase in the future or the
effect any such increased competition will have on the combined entity.
Rapid Technological Changes. Evolving technology will play a major
role in the processing and delivery of financial services. The effective use
of new technology will enable banking and financial service businesses to
improve information concerning their customers and markets. It will also
enable them to reduce overhead expenses while improving the quality of service
to customers. Communications technology will substantially improve the ability
of financial institutions to exchange information with their customers and
employees. Banks and financial institutions that are unwilling or unable to
access this evolving new technology could experience lower earnings and a loss
of competitiveness.
Uncertain Economic Environment. Until recently, banks and financial
service companies in the Midwest have experienced a relatively long period of
price stability and a growing economy. Price stability enables banks to better
protect themselves against interest rate risks. A strong economy enhances the
opportunity of the commercial sector of the economy to improve earnings and
performance. It also provides an environment for financial institutions to
experience positive and profitable growth. Recent economic changes present
additional risks for all banks and financial service companies.
Nature of Business. The financial performance of the Company results
primarily from its retail banking activities located in the City of Portage,
Wisconsin and surrounding markets in South Central Wisconsin. Company
shareholders who receive shares of Associated Common Stock will own an interest
in a diversified multi-bank holding company with 85 banking offices,
substantially all of which are located in various communities throughout
Wisconsin, which is engaged in several non-banking businesses including
personal property lease financing, commercial and residential mortgage banking,
trust services, reinsurance and general insurance agency activities. Financial
performance of Associated is accordingly dependent on its activities and the
economic factors in such markets and businesses. See "Certain Information
Concerning Associated."
Business Combinations. Associated seeks additional expansion
opportunities and accordingly may enter into business combinations with banking
and non-banking entities involving the issuance of its shares or payment of
cash consideration which may not require a vote of holders of Associated Common
Stock.
Share Price Fluctuation. The price of shares of Company Common Stock
is based upon the financial condition of the Company and the market value for
similar non-publicly traded bank holding companies and other factors. The
share price of Associated Common Stock on The Nasdaq Stock Market is by nature
subject to the general price fluctuations in the market for publicly-traded
equity securities. Such fluctuations are not necessarily related to a change
in the financial performance or condition of Associated.
MERGER CONSIDERATION
Upon consummation of the Merger, each share of the Company Common
Stock outstanding at the Effective Time will be converted (subject to the
provisions with respect to fractional shares described below) into the right to
receive 1.0665 shares of Associated Common Stock. See "Certain Provisions of
the Merger Agreement - Termination."
Based upon the capitalization of Associated and the Company as of the
Record Date, the shareholders of the Company will own Associated Common Stock
representing approximately 5.5% of the outstanding voting shares of Associated
following consummation of the Merger (assuming no exercise of dissenters'
rights).
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REGULATORY APPROVALS REQUIRED
Federal. The Merger is subject to prior approval by the Federal
Reserve Board under the BHC Act, which requires that the Federal Reserve Board
take into consideration, among other factors, the financial and managerial
resources and future prospects of the respective institutions and the
convenience and needs of the communities to be served. The BHC Act prohibits
the Federal Reserve Board from approving the Merger if it would result in a
monopoly or be in furtherance of any combination or conspiracy to monopolize or
to attempt to monopolize the business of banking in any part of the United
States, or if its effect in any section of the country may be to substantially
lessen competition or to tend to create a monopoly, or if it would in any other
manner be a restraint of trade, unless the Federal Reserve Board finds that the
anticompetitive effects of the Merger are clearly outweighed in the public
interest by the probable effect of the transaction in meeting the convenience
and needs of the communities to be served. It is highly improbable that the
Merger poses any antitrust issues. The Federal Reserve Board also has the
authority to deny an application if it concludes that the combined organization
would have an inadequate capital position. Furthermore, the Federal Reserve
Board must also assess the records of the bank subsidiaries of Associated and
the Company under the Community Reinvestment Act of 1977, as amended (the
"CRA"). The CRA requires that the Federal Reserve Board analyze, and take into
account when evaluating an application, each bank's record of meeting the
credit needs of its local communities, including low and moderate income
neighborhoods, consistent with safe and sound operation.
Under the BHC Act, the Merger may not be consummated until up to 30
days following the date of Federal Reserve Board approval, during which time
the United States Department of Justice may challenge the Merger on antitrust
grounds. Although a challenge is highly improbable, there can be no assurance
that the Department of Justice will not challenge the Merger or, if such a
challenge is made, as to the result thereof. The commencement of an antitrust
action would stay the effectiveness of the Federal Reserve Board's approval
unless a court specifically orders otherwise. The BHC Act provides for the
publication of notice and public comment on the applications and authorizes the
regulatory agency to permit interested parties to intervene in the proceedings.
Associated filed an application with the Federal Reserve Bank of
Chicago (the "Federal Reserve Bank") that was accepted for filing by the
Federal Reserve Bank on December 29, 1995.
Associated has been advised that the Federal Reserve Bank has accepted
the application for processing under delegated authority from the Federal
Reserve Board on January 29, 1996. Under the regulations of the Federal
Reserve Board, the Federal Reserve Bank will act on the application within the
30-day period that began on the date the application was accepted for filing (a
period that will be tolled by any public comments or other circumstances that
may trigger further requests for information from the Federal Reserve Bank).
There can be no assurance that the Federal Reserve Bank will continue
processing the application under delegated authority.
There can be no assurance that the Federal Reserve Board will approve
the Merger, and if the Merger is approved, there can be no assurance as to the
date of such approval.
Wisconsin. The Merger is also subject to the prior approval by the
Wisconsin Commissioner of Banking (the "Wisconsin Commissioner") under Section
221.59 of the Wisconsin Statutes which requires that the Wisconsin Commissioner
take into consideration (i) the financial and managerial resources and future
prospects of the respective institutions and whether the transaction would be
contrary to the best interests of the shareholders or customers of the bank or
bank holding company to be acquired; (ii) whether the action would be
detrimental to the safety and soundness of the respective institutions or any
subsidiary or affiliate of the respective institutions; (iii) the record of
performance, management, financial responsibility and integrity, and the CRA
rating of the applicant; and (iv) whether, upon consummation of the
transaction, the applicant would control in excess of 30% of the total amount
of deposits of insured depository institutions in Wisconsin as specified under
federal banking law.
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Associated filed an application with the Wisconsin Commissioner on
January 2, 1996 which was accepted for processing on the date filed. There can
be no assurance that the Wisconsin Commissioner will approve the Merger, and if
the Merger is approved, there can be no assurance as to the date of such
approval. The Merger may be consummated at any time within one year of the
date approval was granted by the Wisconsin Commissioner (subject to the
foregoing federal approvals).
General. The Merger cannot proceed in the absence of all requisite
regulatory approvals. See "Conditions to Consummation of the Merger." In the
Merger Agreement, Associated and the Company have agreed to take all reasonable
actions necessary to comply promptly with all legal requirements which may be
imposed with respect to the Merger, including furnishing information to the
Federal Reserve Board or in connection with approvals or filings with other
governmental entities. Associated and the Company have also agreed to take all
reasonable action necessary to obtain approvals of the Federal Reserve Board,
the Wisconsin Commissioner and other governmental entities. However, the
obligation to take reasonable actions is not to be construed as including an
obligation to accept any terms or conditions to an agreement or other approval
of, or any exemption by, any party that are not customarily contained in
approvals of similar transactions granted by such regulators or if Associated
in good faith determines that such terms or conditions would have a material
adverse effect on its business or financial condition or would materially
detract from the value of the Company to Associated. There can be no assurance
that any regulatory approvals will not contain a term or condition that causes
such approvals to fail to satisfy the conditions described above under
"Conditions to Consummation of the Merger."
Associated and the Company are not aware of any other governmental
approvals or actions that are required for consummation of the Merger except as
described above. Should any other approval or action be required, it is
presently contemplated that such approval or action would be sought. There can
be no assurance that any such approval or action, if needed, could be obtained
and, if such approvals or actions are obtained, there can be no assurance as to
the timing thereof.
THE EFFECTIVE TIME
The Merger will be consummated and will become effective as of the
date Articles of Merger are filed with the Secretary of State of the State of
Wisconsin (the "Effective Time"). The filing with respect to the Merger will
occur as promptly as practicable after the satisfaction or, if permissible,
waiver of the conditions to the Merger as set forth in the Merger Agreement.
The Merger Agreement may be terminated by either party if, among other reasons,
the Merger shall not have been consummated on or before July 30, 1996. Upon
consummation of the Merger, the Company will be merged into Holding and will
not continue its separate existence or operations, to which Holding as the
surviving corporation will succeed. See "Certain Provisions of the Merger
Agreement - Conditions to Consummation of the Merger" and "Certain Provisions
of the Merger Agreement - Termination."
CONVERSION OF SHARES; PROCEDURES FOR EXCHANGE OF CERTIFICATES; FRACTIONAL
SHARES
At the Effective Time and without any action on the part of
Associated, the Company or the holders of the Company Common Stock, each share
of the Company Common Stock issued and outstanding immediately prior to the
Effective Time (other than shares held by Company shareholders exercising their
dissenters' rights under the WBCL) shall be converted into the right to receive
shares of Associated Common Stock. See "The Merger - Dissenters' Rights."
All such shares of the Company Common Stock shall no longer be outstanding and
shall automatically be cancelled and retired and shall cease to exist, and each
stock certificate previously representing any such shares of the Company Common
Stock (other than shares held by dissenting shareholders as described above)
shall thereafter represent the right to receive a certificate representing
shares of Associated Common Stock into which such the Company Common Stock has
been converted. Certificates previously representing shares of the Company
Common Stock shall be exchanged for certificates representing whole shares of
Associated Common Stock upon the surrender of such certificates as provided
below. No fractional share of Associated Common Stock shall be issued, and, in
lieu thereof, a cash payment shall be made as provided below.
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As of the Effective Time, Associated shall deposit, or cause to be
deposited, with Harris Trust and Savings Bank, Chicago, Illinois (the "Exchange
Agent"), for the benefit of the holders of shares of the Company Common Stock
and for exchange in accordance with the terms of the Merger Agreement,
certificates representing the shares of Associated Common Stock (such
certificates for shares of Associated Common Stock to be exchanged for the
Company Common Stock, together with any dividends or distributions with respect
thereto (the "Company Exchange Fund") issuable pursuant to the terms of the
Merger Agreement in exchange for outstanding shares of the Company Common
Stock.
As soon as reasonably practicable after the Effective Time, the
Exchange Agent shall mail to each holder of record of a certificate which
immediately prior to the Effective Time represented outstanding shares of the
Company Common Stock whose shares were converted into the right to receive
shares of Associated Common Stock, (i) a letter of transmittal and (ii)
instructions for use in effecting the surrender of the Company Certificates in
exchange for certificates representing shares of Associated Common Stock. Upon
surrender of a certificate previously representing shares of the Company Common
Stock to the Exchange Agent together with such duly executed letter of
transmittal, the holder of such certificate shall receive in exchange therefor
a certificate representing that number of whole shares of Associated Common
Stock to which such holder is entitled and the certificate so surrendered shall
forthwith be cancelled. In the event of a transfer of ownership of shares
which is not registered in the transfer records of the Company, a certificate
representing the proper number of shares of Associated Common Stock may be
issued to a transferee if the certificate representing such shares is presented
to the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by evidence that any applicable stock transfer taxes
have been paid. Until surrendered, each certificate previously representing
shares of the Company Common Stock shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender a
certificate representing shares of Associated Common Stock and cash in lieu of
any fractional shares of Associated Common Stock as described below.
THE COMPANY SHAREHOLDERS SHOULD NOT FORWARD THEIR STOCK CERTIFICATES
TO THE EXCHANGE AGENT WITHOUT A LETTER OF TRANSMITTAL NOR RETURN THEIR STOCK
CERTIFICATES WITH THE ENCLOSED PROXY.
No dividends or other distributions declared or made after the
Effective Time with respect to Associated Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered certificate
with respect to the shares of Associated Common Stock represented thereby, and
no cash payment in lieu of fractional shares shall be paid to any such holder,
until such certificate is surrendered. Subject to the effect of applicable
laws, following surrender of any such certificate, there shall be paid to the
holder of said certificate, which represent whole shares of Associated Common
Stock issued in exchange therefor, without interest, (i) promptly, the amount
of cash payable with respect to a fractional share of Associated Common Stock
to which such holder is entitled and the amount of dividends or other
distributions with a record date after the Effective Time paid with respect to
such whole shares of Associated Common Stock, and (ii) at the appropriate
payment date, the amount of dividends or other distributions, with a record
date after the Effective Time, but prior to surrender and a payment date
occurring after surrender, payable with respect to such whole shares of
Associated Common Stock.
All shares of Associated Common Stock issued upon conversion of the
shares of the Company Common Stock (including any cash paid for fractional
shares) shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of the Company Common Stock.
No certificates or scrip representing fractional shares of Associated
Common Stock shall be issued upon the surrender for exchange of the
certificates, and such fractional share interest will not entitle the owner
thereof to vote or to any rights of a shareholder of Associated. Each holder
of a fractional share interest shall be paid an amount in cash equal to the
product obtained by multiplying such fractional share interest to which such
holder would otherwise be entitled by the closing price of a share of
Associated Common Stock as quoted on The Nasdaq Stock Market on the first
business day following the date the Federal Reserve Board issues an order
approving consummation of the Merger. As soon as practicable after the
determination of the amount of cash, if any, to be
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paid to holders of fractional share interests, the Exchange Agent shall notify
Associated and Associated shall make available such amounts to such holders of
such factional share interests subject to and in accordance with the terms of
the Merger Agreement, as relevant.
Any portion of the Exchange Fund which remains undistributed to the
shareholders of the Company for six months after the Effective Time shall be
delivered to Associated, upon demand, and any shareholders of the Company who
have not theretofore complied with the procedures described above shall
thereafter look only to Associated for payment of their claim for Associated
Common Stock, any cash in lieu of fractional shares of Associated Common Stock
and any dividends or distributions with respect to Associated Common Stock.
Neither Associated nor the Company shall be liable to any holder of
shares of the Company Common Stock for any such shares of the Company Common
Stock (or dividends or distributions with respect thereto) or cash delivered to
a public official pursuant to any abandoned property, escheat or similar law.
Associated shall be entitled to deduct and withhold from any cash
consideration payable pursuant to the Merger Agreement to any holder of shares
of the Company Common Stock such amounts as Associated is required to deduct
and withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the "Code"), or any provision of state, local
or foreign tax law.
At the Effective Time, the stock transfer books of the Company shall
be closed, and there shall be no further registration of transfers of shares of
the Company Common Stock, thereafter on said record books. From and after the
Effective Time, the holders of certificates shall cease to have any rights with
respect to such shares of the Company Common Stock except as otherwise provided
in the Merger Agreement, or by law. On or after the Effective Time, any
certificates presented to the Exchange Agent or Associated for any reason shall
be converted into shares of Associated Common Stock in accordance with the
terms of the Merger Agreement as described above.
DESCRIPTION OF ASSOCIATED COMMON STOCK ISSUABLE IN THE MERGER
The following description of Associated Common Stock issuable in the
Merger is a summary and is qualified in its entirety by reference to the terms
of such security, which is incorporated by reference herein and is set forth in
full in Article III of Associated's Articles of Incorporation (the "Associated
Articles"). The description set forth below is subject in all respects to the
WBCL and the Associated Articles.
Harris Trust and Savings Bank is the transfer agent and registrar for
all outstanding Associated Common Stock.
THE FOLLOWING DESCRIPTION OF ASSOCIATED COMMON STOCK SHOULD BE READ
CAREFULLY BY THE COMPANY SHAREHOLDERS SINCE, AT THE EFFECTIVE TIME, EACH ISSUED
AND OUTSTANDING SHARE OF THE COMPANY COMMON STOCK WILL BE CONVERTED INTO THE
RIGHT TO RECEIVE SHARES OF ASSOCIATED COMMON STOCK AT THE EXCHANGE RATIO.
General. Associated has one class of common stock, the Associated
Common Stock. Of the 48,000,000 shares of Associated Common Stock authorized,
16,518,145 shares were outstanding as of the Record Date, exclusive of shares
held in its treasury. Of the 750,000 shares of Associated preferred stock with
a par value of $1.00 per share authorized, none were issued and outstanding as
of the Record Date.
Dividend Rights. Dividends on Associated Common Stock will be payable
out of the assets of Associated legally available therefor as, if and when
declared by the Associated Board of Directors. No share of Associated Common
Stock is entitled to any preferential treatment with respect to dividends.
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Voting Rights. Each holder of Associated Common Stock will be
entitled at each shareholders' meeting of Associated, as to each matter to be
voted upon, to cast one vote, in person or by proxy, for each share of
Associated Common Stock registered in his or her name on the stock transfer
books of Associated. Such voting rights are not cumulative.
Rights Upon Liquidation. Subject to the rights of holders of any
Associated preferred stock which may be issued from time to time, in the event
of liquidation, dissolution or winding up of Associated, whether voluntary or
involuntary, the holders of Associated Common Stock will be entitled to receive
all assets of Associated remaining for distribution to its shareholders, on a
pro rata basis.
Miscellaneous. Shares of Associated Common Stock are not convertible
into shares of any other class of capital stock. Shares of Associated Common
Stock are not and will not be entitled to any preemptive or subscription
rights. The issued and outstanding shares of Associated Common Stock are fully
paid and nonassessable (except as otherwise provided under the WBCL).
COMPARISON OF SHAREHOLDER RIGHTS
The following is a summary of material differences between the rights
of holders of Company Common Stock and Associated Common Stock. As the Company
and Associated are both incorporated under the laws of the State of Wisconsin,
rights of shareholders are substantially similar. Differences in the rights of
shareholders of the Company and Associated arise from differences between the
provisions of the Associated Articles and By-laws and those of the Company.
Shareholders of the Company, whose rights are governed by the Company's
Articles of Incorporation, By-laws and the WBCL will, on consummation of the
Merger, become shareholders of Associated. Their rights as Associated
shareholders will then be governed by Associated's Articles of Incorporation
and By-laws and by the WBCL. The following is a summary of the material
differences between the rights of shareholders of the Company and the rights of
shareholders of Associated.
AUTHORIZED CAPITAL STOCK
The Company. Under the Company's Articles of Incorporation, the
aggregate number of shares which it is authorized to issue is 2,000,000 shares
of one class of common stock, $1.00 par value. All shares of the Company
Common Stock are identical in rights and have one vote. The holders of the
Company Common Stock are entitled to such dividends as may be declared from
time to time by the Board of Directors of the Company from funds available
therefor and upon liquidation are entitled to receive pro rata all assets of
the Company available for distribution to such holders. The Company has no
authorized shares of preferred stock and, accordingly, the rights of holders of
Company Common Stock to receive dividends or payment in the event of voluntary
or involuntary dissolution, liquidation or winding up of the Company are not
subject to the prior satisfaction of the rights of any other shareholders.
Associated. Under Associated's Articles of Incorporation, Associated
is authorized to issue 48,000,000 shares of common stock, par value $0.01 per
share and 750,000 shares of preferred stock, $1.00 par value. All shares of
Associated Common Stock are identical in rights and have one vote. For a
description of Associated Common Stock, see "Description of Associated Common
Stock Issuable in the Merger." The preferred stock shall be cumulative and
dividends shall accrue thereon. The Board of Directors may divide the
preferred stock into series and establish the relative rights and preferences
of preferred stock issued in the future as specified in the Articles without
shareholder action and issue such stock in series. As of the date hereof, no
shares of any series of Associated preferred stock are issued and outstanding.
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APPRAISAL RIGHTS AND DISSENTERS' RIGHTS
The Company. Under the WBCL, a shareholder of a corporation is
generally entitled to receive payment of the fair value of such shareholder's
stock if such shareholder dissents from a proposed merger or share exchange or
a sale or exchange of all or substantially all of the property and assets of
the corporation.
Associated. Dissenters' rights under the WBCL are not available to
holders of shares, such as shares of Associated Common Stock, which are
registered on a national securities exchange or quoted on Nasdaq on the record
date fixed to determine shareholders entitled to notice of the meeting at which
shareholders are to vote on the proposed corporate action. Associated Common
Stock is quoted on The Nasdaq Stock Market.
REQUIRED VOTE
The Company. Pursuant to the WBCL, the affirmative vote of a majority
of the shares of the Company Common Stock is required to adopt amendments to
the Company's Articles of Incorporation or approve mergers and certain other
extraordinary transactions.
Associated. Pursuant to 180.1706(1) of the WBCL, except as otherwise
provided in a corporation's articles of incorporation or bylaws, any amendment
to the articles of incorporation, merger or certain other extraordinary events
involving a corporation organized before January 1, 1973, which did not
expressly elect before January 1, 1991 to be governed by a majority or greater
voting requirement, must be approved by the affirmative vote of two-thirds of
the shares entitled to vote at a meeting called for that purpose. The
Associated articles were amended in 1992 to reduce the vote required pursuant
to Section 180.1706(1) of the WBCL to a majority vote. Thus, the affirmative
vote of a majority of the shares of Associated is required to adopt amendments
to the Associated Articles which create dissenters' rights or approve mergers
and certain other extraordinary transactions other than those in "Comparison of
Shareholder Rights - Takeover Provisions."
CLASSIFIED BOARD OF DIRECTORS
The Company. The Company's Board of Directors consists of a single
class of directors, not less than five nor more than twenty-five in number.
The Company currently has seven directors, each of whom serves for one year or
until his or her successor is elected and qualified. The By-laws require that
a director resign from the Board on the first day of the month in which such
director attains the age of 72 years.
Associated. The Board of Directors of Associated is divided into
three classes as nearly equal in number as possible, with the directors in each
class serving for staggered three-year terms. However, the By-laws require
that a director retire as of the first annual meeting of shareholders
subsequent to the director's 65th birthday unless such director's term is
extended for a one-year term by a two-thirds vote of Associated's Board. At
each annual meeting of Associated's shareholders, the successors to the class
of directors whose term expires at the time of such meeting are elected by a
majority of the votes cast, assuming a quorum is present. Associated's Board
consists of ten directors.
REMOVAL OF DIRECTORS FOR "CAUSE"
The Company. The Company's By-laws provide that a director may be
removed from office "with or without cause" by a vote of shareholders where the
votes cast to remove the director exceed the number of votes cast not to remove
the director.
Associated. Shareholders of Associated may remove a director only for
"cause." "Cause" is defined as conviction of a felony, declaration of unsound
mind by an order of a court of competent jurisdiction, gross
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dereliction of duty or commission of an action which constitutes intentional
misconduct or a knowing violation of law and that results in both an improper
substantial personal benefit and a material injury to Associated.
NEWLY CREATED DIRECTORSHIPS AND VACANCIES ON THE BOARD OF DIRECTORS
The Company. Pursuant to 180.0810 of the WBCL, unless otherwise
provided in a corporation's Articles, shareholders may fill vacancies on a
corporation's Board of Directors. The Company's By-laws authorize the Board of
Directors by the affirmative vote of the directors then in office, though less
than a quorum, to fill vacancies on the Company's Board of Directors until the
next succeeding election of directors. In the case of a vacancy created by the
removal of a director by vote of shareholders, the shareholders shall have the
right to fill such vacancy.
Associated. The Associated's Articles provide that newly created
directorships and any vacancies on Associated's Board of Directors may only be
filled by the Board of Directors. Associated's By-laws provide that the
remaining members of the Board shall appoint a director in accordance with the
WBCL.
CERTAIN BUSINESS COMBINATIONS
The Company. The Company's Articles of Incorporation and By-laws do
not contain any supermajority voting provisions relating to the approval by
holders of the Company Common Stock of mergers or other business combinations.
Associated. Article VII of Associated's Articles provides that an
affirmative vote of 80% of Associated's outstanding shares is required to
approve a merger or other business combination involving a beneficial owner of
10% or more of Associated's outstanding voting shares (an "interested
shareholder"). In addition, if the consideration offered in connection with
such transaction does not satisfy certain "fair price" requirements, the
affirmative vote of 80% of the "non-interested outstanding shares" (defined as
voting shares not beneficially owned by an interested shareholder) of
Associated will also be required to approve such a transaction. These
requirements do not apply if (a) the board of directors approves the
transaction and a majority of the directors voting to approve the transaction
are "continuing directors" (defined as a director who was either (i) a director
at the time the interested shareholder became "interested" and who is not
otherwise affiliated with such shareholder, or (ii) a director designated
(prior to his or her initial election as a director) as a continuing director
by a majority of the then continuing directors) or (b) the transaction is
between Associated and a subsidiary of Associated and no interested shareholder
(together with such shareholder's affiliates and associates) owns any of the
outstanding shares of the subsidiary. The foregoing provision may only be
amended, modified or repealed by the affirmative vote of not less than 80% of
the outstanding shares and the non-interested outstanding shares of Associated.
ADVANCE NOTICE OF PROPOSALS TO BE BROUGHT AT THE ANNUAL MEETING
The Company. The Company's Articles and By-laws do not contain any
provisions relating to advance notice of proposals to be brought before an
annual meeting.
Associated. Pursuant to Article II, Section 5 of Associated's
By-laws, any shareholder who intends to bring business before an annual meeting
of shareholders (other than nominations for directors) must provide Associated
with notice of such intention, the nature of such proposal and certain other
information regarding the shareholder bringing the proposal, not less than 60
nor more than 75 days prior to the meeting, or within 10 days from the date
notice or public disclosure of the date of such meeting is given, if such
announcement date is less than 70 days before the meeting date.
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RESALE OF ASSOCIATED COMMON STOCK ISSUED PURSUANT TO THE MERGER
The Associated Common Stock issued pursuant to the Merger will be
registered under the Securities Act and be freely tradeable under the
Securities Act except for shares issued to any shareholder of the Company who
may be deemed to be an "affiliate" of the Company for purposes of Rule 145
under the Securities Act. Each affiliate identified by the Company will enter
into an agreement with Associated providing that such affiliate will be subject
to Rule 145(d) of the Securities Act, shall not transfer any Associated Common
Stock received in the Merger except in compliance with the Securities Act. In
order to comply with pooling of interests requirements, such persons shall
agree to make no disposition of any shares of the Company Common Stock or
Associated Common Stock (or any interests therein) during the period beginning
30 days before the Effective Time and ending when the financial results for at
least 30 days of combined operations of the Company and Associated after the
Effective Time have been published. This Proxy Statement/Prospectus does not
cover resales of Associated Common Stock received by any person who may be
deemed to be an affiliate of the Company.
PRE-MERGER DIVIDEND POLICY
The Company. Pursuant to the Merger Agreement, except for a quarterly
dividend commencing February 15, 1996 not to exceed $0.32 per share, the
Company is prohibited from declaring or paying any dividend on, or making any
other distribution in respect of, its outstanding shares of capital stock
without the prior written consent of Associated. The Company does not
anticipate paying any other dividends on shares of the Company Common Stock
prior to the Effective Time.
Associated. Associated expects to continue to declare, until the
Effective Time, its regularly scheduled dividends.
POST-MERGER DIVIDEND POLICY
It is the current intention of the Board of Directors of Associated to
continue to declare cash dividends on the Associated Common Stock following the
Merger. The dividend is currently in the amount of $0.27 per quarter or $1.08
per year, in each case per share. Shareholders should note that no such
dividends payable following the date hereof have currently been declared and
that future dividends will be determined by the Associated Board of Directors
in light of the earnings and financial condition of Associated and its
subsidiaries and other factors, including applicable governmental regulations
and policies. In that regard, Associated is a legal entity separate and
distinct from its banking and non-banking subsidiaries, and the principal
sources of Associated's income are dividends and interest from such
subsidiaries. The payment of dividends by Associated's banking subsidiaries is
subject to certain restrictions under applicable governmental regulations. See
also "The Merger - Pre-Merger Dividend Policy."
CONDUCT OF BUSINESS PENDING THE MERGER
Pursuant to the Merger Agreement, the Company has agreed to carry on
its business, and the business of its subsidiaries, in the usual, regular and
ordinary course in substantially the same manner as conducted prior to the
execution of the Merger Agreement, subject to certain covenants and other
agreements agreed to by the Company in the Merger Agreement. See "Certain
Provisions of the Merger Agreement - Certain Covenants."
CERTAIN MATERIAL FEDERAL INCOME TAX CONSEQUENCES
Associated and the Company have received an opinion of KPMG Peat
Marwick LLP that the Merger will qualify as a tax-free reorganization under
Section 368(a)(1)(A) of the Code and that each of Associated and the Company
will be a party to such reorganization within the meaning of Section 368(b) of
the Code. Accordingly, the Company, Associated and Holding will recognize no
gain or loss for federal income tax purposes as a result
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of the Merger and no gain or loss will be recognized by any holder of the
Company Common Stock upon receipt of Associated Common Stock pursuant to the
Merger (except upon the receipt of cash in lieu of fractional shares of
Associated Common Stock). This discussion of federal income tax consequences
of the Merger assumes that none of the holders of Company Common Stock will
exercise dissenters' rights. The Internal Revenue Service ("Service") has not
been asked to rule upon the tax consequences of the Merger and such request
will not be made. The opinion of KPMG Peat Marwick LLP is based entirely upon
the Code, regulations now in effect thereunder, current administrative rulings
and practice, and judicial authority, all of which are subject to change.
Unlike a ruling from the Service, an opinion of an advisor is not binding on
the Service and there can be no assurance, and none is hereby given, that the
Service will not take a position contrary to one or more positions reflected
herein or that the opinion will be upheld by the courts if challenged by the
Service.
EACH SHAREHOLDER OF THE COMPANY IS URGED TO CONSULT HIS OR HER OWN TAX AND
FINANCIAL ADVISORS AS TO THE EFFECT OF SUCH FEDERAL INCOME TAX CONSEQUENCES ON
HIS OR HER OWN PARTICULAR FACTS AND CIRCUMSTANCES AND ALSO AS TO ANY STATE,
LOCAL, FOREIGN OR OTHER TAX CONSEQUENCES ARISING OUT OF THE MERGER.
Based upon the opinion of KPMG Peat Marwick LLP, which in turn is
based upon various representations and subject to various assumptions and
qualifications, the following federal income tax consequences to the
shareholders of the Company will result from the Merger:
(i) Provided that the Merger of the Company with and into
Holding qualifies as a statutory merger under applicable law, the
Merger will qualify as a reorganization within the meaning of Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code, and the Company, Associated
and Holding will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code for purposes of this
reorganization.
(ii) No gain or loss will be recognized by the holders of
the Company Common Stock upon the exchange of the Company Common Stock
solely for Associated Common Stock pursuant to the Merger, except with
respect to cash received in lieu of fractional shares of Associated
Common Stock.
(iii) A Company shareholder's aggregate basis in the
Associated Common Stock (including any fractional share interest to
which he or she may be entitled) received in the Merger will be the
same as the aggregate basis of the Company Common Stock exchanged
therefor.
(iv) The holding period of the Associated Common Stock
received by a holder of Company Common Stock pursuant to the Merger
will include the period during which the Company Common Stock
exchanged therefor was held, provided that the Company Common Stock
surrendered was held as a capital asset as of the time of the Merger.
(v) The receipt by a holder of Company Common Stock of
cash in lieu of a fractional share of Associated Common Stock will be
treated as if he or she received such fractional share from Associated
and then had it redeemed for cash. Such receipt of cash will be
treated under Section 302(b)(1) of the Code as full payment in
exchange for the fractional share.
The foregoing is only a general description of certain material
federal income tax consequences of the Merger for holders of the Company Common
Stock who are citizens or residents of the United States and who hold their
shares as capital assets, without regard to the particular facts and
circumstances of the tax situation of each holder of the Company Common Stock.
It does not discuss all of the consequences that may be relevant to holders of
the Company Common Stock entitled to special treatment under the Code (such as
insurance companies, financial institutions, dealers in securities, tax-exempt
organizations or foreign persons). The summary set forth above does not
purport to be a complete analysis of all potential tax effects of the
transactions contemplated by the Merger
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Agreements or the Merger itself. No information is provided herein with
respect to the application and effect of state, local and foreign tax laws and
the possible effects of changes in federal laws or other tax laws.
ANTICIPATED ACCOUNTING TREATMENT
The business combination resulting from the Merger is expected to
qualify as a "pooling of interests" for accounting and financial reporting
purposes. Under this method of accounting, the recorded assets and liabilities
of Associated and the Company will be carried forward to the combined
corporation at their recorded amounts; income of the combined corporation will
include income of Associated and the Company for the entire fiscal year in
which the combination occurs.
The Merger Agreement provides that a condition to the consummation of
the Merger is the receipt of the opinion of the independent public accountants
of Associated to the effect that the Merger qualifies for "pooling of
interests" accounting treatment. IN THE EVENT SUCH CONDITION IS NOT MET, THE
MERGER WOULD NOT BE CONSUMMATED UNLESS THE CONDITION WERE WAIVED BY ASSOCIATED.
DISSENTERS' RIGHTS
Under the provisions of Subchapter XIII of the WBCL, a copy of which
is attached to this Proxy Statement/Prospectus as Exhibit C and which
provisions are incorporated herein by reference, any holder of record or
beneficial holder of Company Common Stock has the right to dissent from the
Merger and demand payment of the "fair value" of his or her shares in cash as
determined pursuant to Subchapter XIII of the WBCL ("Dissenters' Rights"). Set
forth below is a summary of the procedures relating to the exercise of
Dissenters' Rights. This summary does not purport to be a complete statement
of the provisions of Subchapter XIII of the WBCL. Any shareholder who wishes
to assert Dissenters' Rights must deliver a written notice of his or her intent
to exercise such right to Greater Columbia Bancshares, Inc., 222 East Wisconsin
Street, Portage, Wisconsin 53901, Attention Ms. Mary E. Coddington, Secretary,
before the vote on the Merger Agreement is taken at the special meeting. A
PROXY OR VOTE AGAINST THE MERGER AGREEMENT WILL NOT, BY ITSELF, BE REGARDED AS
A WRITTEN NOTICE OF INTENT TO DEMAND PAYMENT FOR PURPOSES OF ASSERTING
DISSENTERS' RIGHTS.
A record holder of Company Common Stock may assert Dissenters' Rights
as to fewer than all shares registered in that shareholder's name only if the
holder dissents with respect to all shares beneficially owned by any one person
and notifies the Company in writing of the name and address of each person on
whose behalf the shareholder asserts such Dissenters' Rights.
A beneficial shareholder may assert Dissenters' Rights as to shares
held on the shareholder's behalf only if, in addition to meeting the other
requirements to dissent, the beneficial shareholder (i) submits to the Company
the record shareholder's written consent to the dissent not later than the time
the beneficial shareholder asserts Dissenters' Rights and (ii) asserts
Dissenters' Rights with respect to all shares of which the shareholder is the
beneficial shareholder or over which the beneficial shareholder has power to
direct the vote.
If the Merger Agreement is approved by the requisite vote of holders
of the Company Common Stock, the Company is required to send a notice (the
"Dissenters' Notice") to all dissenting shareholders containing payment demand
and stock certificate surrender information (the "Payment Demand") within 10
days after such approval. The return date (the "Payment Demand Date")
specified by the Company for receiving the Payment Demand from dissenting
shareholders may not be less than 30 nor more than 60 days after the date on
which the Dissenters' Notice was first sent. Upon receipt of the Dissenters'
Notice, each dissenting shareholder must return his Payment Demand and
Certificate no later than the Payment Demand Date as provided in the
Dissenters' Notice and certify whether he or she acquired beneficial ownership
of the shares prior to the first public announcement of the terms of the Merger
on August 24, 1995. A Payment Demand may not be withdrawn without the
Company's consent.
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Upon effecting the Merger, within 60 days after the Payment Demand
Date, the Company will pay each dissenting shareholder who properly complied
with the statutory requirements of Subchapter XIII of the WBCL, the amount that
the Company estimates to be the fair value of such dissenting shareholder's
shares, plus accrued interest from the Effective Time; provided that, with
respect to shares acquired after the first public announcement of the Merger,
the Company may elect to withhold payment until either such shareholder accepts
the Company's offer of fair value or a court determines the fair value of such
shares.
If the Merger is not effected within 60 days of the Payment Demand
Date, the Company will return all deposited certificates to dissenting
shareholders. If the Merger is thereafter effected, the Company will send a
new Dissenters' Notice within 10 days of effecting the Merger and repeat the
payment demand procedure described above.
If any dissenting shareholder is dissatisfied with the Company's
determination of "fair value," such dissenting shareholder may notify the
Company in writing of his or her own estimate of the fair value of his or her
shares and the amount of interest due. A dissenting shareholder must assert
this right within 30 days after the Company makes or offers payment for his or
her shares or the right is waived. The Company may either accept such
dissenting shareholder's estimate of fair value or commence a proceeding in the
Wisconsin Circuit Court of Columbia County to determine the fair value of the
shares of all dissenting shareholders whose own estimates of fair value are not
accepted by the Company.
In the event any holder of the Company Common Stock fails to perfect
his or her rights to dissent by failing to comply strictly with the applicable
statutory requirements of Subchapter XIII of the WBCL, he or she will be bound
by the terms of the Merger Agreement and will not be entitled to payment for
his or her shares under Subchapter XIII of the WBCL. ANY HOLDER OF COMPANY
COMMON STOCK WHO WISHES TO OBJECT TO THE TRANSACTION AND DEMAND PAYMENT IN CASH
FOR HIS OR HER SHARES SHOULD CONSIDER CONSULTING HIS OR HER OWN LEGAL ADVISOR.
Because an executed proxy relating to Company Common Stock on which no
voting direction is made will be voted at the Special Meeting in favor of the
Merger, a dissenting shareholder who wishes to have his or her shares of
Company Common Stock represented by proxy at the Special Meeting but preserve
his or her dissenters' rights must mark his or her proxy either to vote against
the Merger or to abstain from voting thereon, in addition to the foregoing
requirements.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Associated (through the Bank as employer) will enter into an
Employment and Non-Competition Agreement with Mr. Pascavis providing for the
employment of Mr. Pascavis by the Bank as President and Chief Executive Officer
of the Bank or in such other management capacity as may be determined by
Associated, for the period commencing on the Effective Time of the Merger and
continuing, unless sooner terminated as provided in the agreement, until the
second anniversary of said date. Pursuant to the agreement, Mr. Pascavis will
receive an annual base salary of $120,000 together with employee benefits
generally made available to the President by the Bank. In addition, Mr.
Pascavis shall have the opportunity to participate in a discretionary bonus
plan established by Associated and shall have the opportunity to earn an annual
bonus of up to 25% of his annual base salary. Upon the termination of Mr.
Pascavis' employment, in addition to any other retirement benefits payable, Mr.
Pascavis will be paid a supplemental retirement annuity of $25,000 per year for
ten years payable monthly. During the term of the agreement, unless terminated
pursuant to its provisions prior thereto, and for two years following the
termination of the agreement, Mr. Pascavis has agreed not to compete with any
commercial banking operations of the Bank within 50 miles of the Bank's main
banking office.
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THE VOTING AGREEMENT
Pursuant to the Voting Agreement, attached hereto as Exhibit B, the
execution of which was a condition to Associated entering into the Merger
Agreement, the directors of the Company have agreed to vote their shares (i) in
favor of the adoption and approval of the Merger Agreement and the Merger and
(ii) against any Competing Transaction. The Voting Agreement also provides
that Associated has the exclusive right to purchase any or all of the shares of
Company Common Stock owned by the directors for $37.3275 per share, payable in
cash, subject to any necessary regulatory approval, after a material breach of
the Merger Agreement by the Company or any events or circumstances that lead
Associated reasonably to believe that the Company is likely to materially
breach the Merger Agreement, a breach by a Party Shareholder, or the
acquisition or overtly threatened acquisition of 5% of the stock or a material
portion of the assets of the Company or the Bank. The purchase right is not
exercisable as of the date hereof. The purchase price per share under the
Voting Agreement equalled the value of the Company Common Stock based upon the
trading price of Associated Common Stock at the date that the Voting Agreement
was requested by Associated. See "Certain Provisions of the Voting Agreement."
Anti-Takeover Effect of the Voting Agreement. The Voting Agreement
may have the effect of discouraging persons who might now or in the future be
interested in acquiring all of or a significant interest in the Company from
considering or proposing such an acquisition, even if such persons were
prepared to pay a higher price per share for the Company Common Stock than the
price per share implicit in the Exchange Ratio. Certain attempts to acquire
the Company or an interest in the Company would cause Associated's right to
purchase such shares and to receive any premium offered to the directors of the
Company.
OTHER RELATED PARTY TRANSACTIONS
In the ordinary course of conducting their banking and financial
services businesses, each of Associated, the Company and their respective
subsidiaries, may do business and engage in banking transactions with the other
party and its subsidiaries, which may include but not be limited to interests
or participation in loans and interbank advances.
MANAGEMENT AFTER THE MERGER
In the Merger, the Company will be merged into Holding and the
separate corporate existence of the Company will cease. Associated will
thereby acquire control of the Bank through Holding and the Bank will operate
under the name "Associated Bank Portage."
The officers and directors of Holding prior to the Merger will
continue as officers and directors of the surviving corporation. The directors
of the Bank prior to the Effective Time will continue as directors after the
Effective Time until their successors shall have been duly elected and
qualified.
CERTAIN PROVISIONS OF THE MERGER AGREEMENT
The following is a brief summary of certain provisions of the Merger
Agreement, which is attached as Exhibit A to this Proxy Statement/Prospectus
and is incorporated herein by reference. Such summary is qualified in its
entirety by reference to the Merger Agreement.
THE MERGER
The Merger Agreement provides that, following the approval of the
Merger Agreement by the shareholders of the Company and the satisfaction or
waiver of the other conditions to the Merger, the Company will be merged with
and into Holding. If the Merger Agreement is approved by the shareholders of
the Company, the Merger will become effective upon the Effective Time.
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At the Effective Time, pursuant to the Merger Agreement, each
outstanding share of the Company Common Stock will be converted into the right
to receive 1.0665 shares of Associated Common Stock. With regard to the
treatment of fractional share interests, see "The Merger - Conversion of
Shares; Procedures for Exchange of Certificates; Fractional Shares."
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains customary representations and warranties
relating to, among other things, (i) each of Associated's and the Company's and
their respective subsidiaries' organization and similar corporate matters; (ii)
each of Associated's and the Company's capital structure; (iii) authorization,
execution, delivery, performance and enforceability of the Merger Agreement and
other related matters; (iv) documents filed by Associated with the Commission
and each of Associated and the Company with the Federal Reserve Board and state
banking authorities and the accuracy of information contained therein; (v) the
accuracy of information supplied by each of Associated and the Company in
connection with the Registration Statement and this Proxy Statement/Prospectus;
(vi) compliance with laws including employment and lending laws; (vii) no
material pending or threatened litigation except as otherwise disclosed in
filings by Associated with the Commission and the Company in the regulatory
reports; (viii) filing of tax returns and payment of taxes; (ix) certain
material contracts and contracts relating to certain employment, consulting and
benefits matters of the Company; (x) retirement and other employee plans and
matters of the Company relating to ERISA; (xi) the absence of any burdensome
contracts, agreements or restrictions; (xii) absence of certain material
changes or events since December 31, 1994, relating to the incurrence of a
material adverse effect in the business operations, properties (including
intangible properties), condition (financial or otherwise), assets or
liabilities (including contingent liabilities) of Associated or its
subsidiaries, taken as a whole, and the Company or its subsidiaries, taken as a
whole; (xiii) maintenance of books of account and accounting controls, loan
documentation and disclosure; (xiv) no action taken that would prevent using
the "pooling of interests" method to account for the Merger or which would
prevent the Merger from qualifying as a tax-free reorganization under the Code;
(xv) certain environmental matters relating to the properties of the Company;
(xvi) good title to the properties of the Company and its subsidiaries, free of
liens except as specified; and (xvii) certain insurance matters.
CERTAIN COVENANTS
Pursuant to the Merger Agreement, Associated and the Company have each
agreed that prior to the Effective Time (and unless the prior written consent
of the other shall have been obtained) each of them and their respective
subsidiaries will operate their respective businesses in a manner that does not
violate any law. In addition, the Company has agreed that prior to the
Effective Time, the Company will not propose or adopt any amendments to its
corporate charter or bylaws in any way materially adverse to Associated.
Pursuant to the Merger Agreement, the Company has also agreed that
prior to the Effective Time (and unless the prior written consent of Associated
shall have been obtained) the Company and its subsidiaries will (i) carry on
business in the usual, regular and ordinary course consistent with past
practice, (ii) use reasonable efforts to preserve intact their business
organization and assets (and all rights associated therewith), (iii) use
reasonable efforts to maintain and keep their properties in good repair and
condition, (iv) use reasonable efforts to keep all insurance and bonds in full
force and effect, (v) perform in all material respects all obligations under
all material contracts, leases and documents relating to or affecting the
assets, properties and business of the Company and its subsidiaries, (vi)
purchase and sell securities in accordance with Associated's guidelines, (vii)
maintain as of December 31, 1995 and until the Effective Time, a loan loss
reserve of not less than 1.69% of period ending loans, (viii) comply with
capital requirements specified by Associated, (ix) fully expense on its
calendar year 1995 financial statement all expenses payable as a result of the
following: consummation of the Merger, settlement of certain litigation, a
certain employee severance agreement, all organizational expenses incurred in
connection with certain bank acquisitions, and all losses incurred in
connection with the closing of the East Bristol branch; (x) obtain an
independent audit of its financial statements for the year ended December 31,
1995; (xi) terminate the Company's pension plan in accordance with Financial
Accounting Standards 88 in a manner which will not result in an
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aggregate loss exceeding $50,000; and (xii) comply with and perform in all
material respects all obligations and duties imposed by all applicable laws.
The Company has also agreed that prior to the Effective Time (and unless the
prior written consent of Associated shall have been obtained), neither the
Company nor its subsidiaries will: (i) grant any increase in compensation or
bonuses (other than as specified in the Merger Agreement) or retirement
benefits to any employee or otherwise adopt, enter into, amend or modify any
employee benefit plan, or enter into or amend any employment, severance or
similar agreement with any director or officer (other than as is consistent
with the normal severance policy of the Company); (ii) except for quarterly
dividends commencing February 15, 1996 not to exceed $0.32 per share, declare
or pay any dividend on its outstanding shares of capital stock; (iii) redeem,
purchase or otherwise acquire any shares of the Company capital stock; (iv)
merge or consolidate with or into any other corporation or bank; (v) purchase
or otherwise acquire any assets or stock of any corporation, bank or other
business; (vi) liquidate, sell, dispose of, or encumber any assets or acquire
any assets, other than in the ordinary course of business consistent with past
practice; (vii) split, combine or reclassify any of the capital stock of the
Company or issue, authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock;
(viii) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale of, any shares of any class of the
Company Common Stock or any rights, warrants or options to acquire, any such
shares; (ix) purchase any shares of Associated Common Stock (except in a
fiduciary capacity for the account of its customers); (x) change any of its
methods of accounting, or methods of reporting income or deductions for federal
income tax purposes, in effect at December 31, 1994, except as may be required
by law or generally accepted accounting principles; (xi) except for the
required loan loss reserve, change any lending, investment, liability
management or other material policies concerning the business or operations of
the Company or any subsidiary in any material respect; (xii) organize any new
subsidiaries or enter into any new non-bank line of business or make any
material changes in its operations; (xiii) take any action which is or is
reasonably likely to adversely effect the ability of Associated or Holding to
obtain any necessary approvals of governmental authorities required for the
transactions contemplated hereby, adversely affect the Company's ability to
perform its covenants and agreements under the Merger Agreement or result in
any of the conditions to the Merger not being satisfied; (xiv) incur or assume
any material obligation or liability, or make any loan (excluding loan renewals
of a loan not then classified as "substandard," "doubtful," "loss," "other
loans especially mentioned" or any comparable classifications by the Company,
the Bank or banking regulators) or investment in an amount greater than
$100,000; (xv) assume, guarantee, endorse or otherwise become liable or
responsible for the obligations of any other person or entity; (xvi) mortgage,
license, pledge or grant a security interest in any of its material assets or
allow to exist any material lien thereon, except (A) liabilities and
obligations incurred in the ordinary course of business consistent with past
practices and in amounts not material to the Company or its subsidiaries taken
as a whole, and (B) as may be required under existing agreements to which the
Company or any subsidiary is a party; (xvii) acquire assets (including
equipment) or securities in excess of $25,000 in the aggregate (excluding loans
to customers and investments permitted above); (xviii) enter into any other
contract or agreement involving annual payments by the Company or a subsidiary
or the other party or parties thereto in excess of $20,000; (xix) pay,
discharge, or satisfy any debts or claims not in the ordinary course of
business and consistent with past practices and in no event with a value in
excess of $20,000 individually; (xx) settle any claim, action, suit,
litigation, proceeding, arbitration, investigation or controversy of any kind,
for any amount in excess of $25,000 or in any manner which would restrict in
any material respect the operations or business of the Company or its
subsidiaries; (xxi) purchase any new financial product or instrument which
involves entering into a contract with a term of six months or longer; or
(xxii) take any action or fail to take any action which individually or in the
aggregate can be expected to have a material adverse effect (as defined in the
Merger Agreement) on the Company or its subsidiaries, taken as a whole.
NO SOLICITATION OF TRANSACTIONS
The Merger Agreement provides that the Company and its respective
subsidiaries will not initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to any Competing Transaction or negotiate with any person
in furtherance of such inquiries or to obtain a Competing Transaction, or agree
to or endorse any Competing Transaction, or authorize or permit any of its
officers, directors or employees
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or any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to take any such
action. The Company must promptly notify Associated orally and in writing of
all of the relevant details relating to all inquiries and proposals which it
may receive relating to any of such matters. Notwithstanding the foregoing,
the Board of Directors of the Company is not prohibited from (i) furnishing or
permitting any of its officers, directors, employees, investment bankers,
financial advisors, attorneys, accountants or other representatives to furnish
information to any party that requests information as to the Company if the
Board of Directors of the Company, after consultation with and based upon the
written advice of independent legal counsel, determines in good faith that such
action is required for the Board of Directors of the Company to comply with its
fiduciary duties to shareholders imposed by law, and if prior to furnishing
such information to such party, the Company receives from such party an
executed confidentiality agreement in reasonably customary form.
For purposes of the Merger Agreement, a "Competing Transaction" shall
mean any of the following involving the Company or any of the Company's
subsidiaries: (i) any merger, consolidation, share exchange, business
combination, or other similar transactions; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 10% or more of assets in a
single transaction or series of transactions, excluding from the calculation of
such percentage any such transactions undertaken in the ordinary course of
business and consistent with past practice; (iii) any sale of 10% or more of
shares of capital stock (or securities convertible or exchangeable into or
otherwise evidencing, or any agreement or instrument evidencing, the right to
acquire capital stock); (iv) any tender offer or exchange offer for 10% or more
of outstanding shares of capital stock; (v) any solicitation of proxies in
opposition to approval by the Company's shareholders of the Merger; (vi) the
filing of an acquisition application (or the giving of acquisition notice)
whether in draft or final form under the BHC Act or the Change in Bank Control
Act with respect to the Company or its subsidiaries; (vii) any person shall
have acquired beneficial ownership or the right to acquire beneficial ownership
of, or any "group" (as such term is defined under Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) shall have been
formed which beneficially owns or has the right to acquire beneficial ownership
of, 10% or more of the then outstanding shares of capital stock; or (viii) any
public announcement of a proposal, plan or intention to do any of the
foregoing.
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party to effect the Merger is
subject to various conditions which include, in addition to other customary
closing conditions, the following: (i) the Merger shall have been approved by
the holders of the Company Common Stock; (ii) the Registration Statement shall
have been declared effective by the Commission under the Securities Act (and no
stop order suspending the effectiveness of the Registration Statement shall
have been issued) and Associated shall also have received all other federal and
state securities permits and authorizations necessary to issue Associated
Common Stock pursuant to the Merger Agreement; (iii) the Merger shall have been
approved by the Federal Reserve Board, which approval shall not contain any
condition which is not reasonably satisfactory to Associated or the Company,
and any waiting periods with respect to the Merger shall have expired; and (iv)
there shall not be any injunction or restraining order preventing the
consummation of the Merger in effect.
In addition, Associated's or the Company's respective obligation to
effect the Merger is subject to one or more of the following additional
conditions (any of which may be waived by such party): (i) the representations
and warranties of the other party to the Merger Agreement shall be true and
correct in all material respects and the other party shall have performed in
all material respects all agreements and covenants required to be performed by
it under the Merger Agreement and any agreements entered into in connection
therewith, and the other party shall have obtained all material consents and
approvals required to consummate the Merger; (ii) there shall not be any
pending action, proceeding or investigation before any court or administrative
agency or by any government agency or any other person (a) challenging or
seeking material damages in connection with the Merger, or the conversion of
the Company Common Stock into Associated Common Stock pursuant to the Merger,
or (b) seeking to restrain, prohibit or limit the exercise of full rights of
ownership or operation by Associated or its subsidiaries of all or any portion
of the business or assets of the Company or any of its subsidiaries, which in
either case is reasonably likely to have a material adverse effect on either
the Company and its subsidiaries, taken as a whole, or Associated and
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its subsidiaries, taken as a whole; (iii) the parties shall have received the
opinion of independent counsel to Associated that the Merger will be treated
for federal income tax purposes as a "reorganization" within the meaning of
Section 368(a) of the Code (see "The Merger - Certain Material Federal Income
Tax Consequences," above); (iv) Associated shall have received an opinion from
KPMG Peat Marwick LLP to the effect that the Merger qualifies for "pooling of
interests" accounting treatment; (v) the aggregate of (a) fractional share
interests in Associated Common Stock to be paid in cash pursuant to the Merger
Agreement and (b) the number of shares of Associated Common Stock which would
have been issuable pursuant to the Merger Agreement that will not be issued due
to the exercise of dissenters' rights is not more than 10% of the maximum
aggregate number of shares of Associated Common Stock which could be issuable
as a result of the Merger; (vi) Associated and the Company shall have received
the opinion of counsel regarding certain issues under the Securities Act and
the WBCL; (vii) Associated shall have received from each affiliate of the
Company a signed letter regarding certain restrictions on the resale of
Associated Common Stock under Rule 145 of the Securities Act; (vii) receipt by
Associated of a written environmental evaluation by Associated's environmental
consultant of the Company's real property stating that the Company's property
complies with environmental laws and that there are no material contingent
liabilities; (viii) that the Company shall have taken reasonably appropriate
action in response to any environmental condition identified by Associated's
environmental consultant; (ix) that Associated and Mr. Pascavis shall have
entered into an employment agreement; and (x) that the Company's consolidated
after-tax earnings for calendar year 1995 (with certain adjustments) were in
excess of $2,500,000.
TERMINATION
The Merger Agreement may be terminated at any time prior to the
Effective Time by the applicable Board of Directors, whether before or after
approval of the matters presented in connection with the Merger by the
shareholders of the Company: (i) by mutual consent of Associated and the
Company; (ii) by either the Company or Associated (x) if there has been a
breach in any material respect of any representation, warranty, covenant or
agreement on the part of the Company, on the one hand, or Associated, on the
other hand, respectively, set forth in the Merger Agreement, or (y) if any
representation or warranty of the Company, on the one hand, or Associated, on
the other hand, respectively, shall be discovered to have become untrue in any
material respect, in either case which breach or other condition has not been
cured within 10 business days following receipt by the non-terminating party of
notice of such breach or other condition (provided that the Merger Agreement
may not be terminated by the breaching party or party making any representation
or warranty which shall have become untrue in any material respect); (iii) by
either Associated or the Company if any permanent injunction preventing the
consummation of the Merger shall have become final and nonappealable; (iv) by
either Associated or the Company if the Federal Reserve Board or the Wisconsin
Commissioner denied approval of the Merger and neither Associated nor the
Company has, within 30 days after the entry of such order denying approval,
filed a petition seeking review of such order as provided by applicable law;
(v) by either Associated or the Company if the Merger has not been consummated
by July 30, 1996 for a reason other than the failure of the terminating party
to comply with its obligations under the Merger Agreement; (vi) by Associated
if the Company fails to take reasonably appropriate action in response to any
environmental condition identified by Associated's environmental consultant; or
(vii) by Associated if dissenters' rights are exercised with respect to in
excess of 10% of the Company Common Stock.
In the event of termination of the Merger Agreement by either the
Company or Associated, other than as a result of a material breach by the
non-terminating party, each party will pay its own expenses and the Merger
Agreement will become void and there will be no liability or obligation on the
part of Associated or the Company other than under certain specified provisions
of the Merger Agreement dealing with confidential treatment of non-public
information. In the event of termination of the Merger Agreement by a material
breach, in addition to other remedies at law or equity for breach, the party to
have breached will reimburse the non-breaching parties their expenses under the
Merger Agreement.
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AMENDMENT AND WAIVER
The Merger Agreement may be amended at any time prior to the Effective
Time by action taken or authorized by the respective Boards of Directors of
Associated and the Company (except that after the Merger Agreement shall have
been approved by the shareholders of the Company, no amendment may be entered
into which would reduce the amount or change the consideration into which each
share of the Company Common Stock shall be converted upon consummation of the
Merger without further shareholder approval). At any time prior to the
Effective Time, the parties, may extend the time for the performance of any of
the obligations or other acts of the other party hereto, waive any inaccuracies
in the representations and warranties contained in the Merger Agreement or in
any document delivered pursuant to the Merger Agreement and waive compliance
with any of the agreements or conditions contained in the Merger Agreement.
EXPENSES
Whether or not the Merger is consummated, all costs and expenses
incurred in connection with the Merger Agreement and the transactions
contemplated thereby shall be paid by the party incurring such expense (except
that the parties shall share equally in the expense of printing and reproducing
for filing the Registration Statement and this Proxy Statement/Prospectus and
all Commission and other regulatory filing fees incurred in connection with the
Merger Agreement), except if the Merger Agreement is terminated due to the
breach of the Merger Agreement by either party thereto, then, in addition to
other remedies at law or equity for breach of the Merger Agreement, the party
so found to have breached the Merger Agreement shall indemnify the other
parties for their respective expenses.
CERTAIN PROVISIONS OF THE VOTING AGREEMENT
The following is a brief summary of certain provisions of the Voting
Agreement, which is attached as Exhibit B to this Proxy Statement/Prospectus
and is incorporated herein by reference. The following summary is qualified in
its entirety by reference to the Voting Agreement.
Associated has entered into the Voting Agreement with directors of the
Company. The directors hold 596,935 shares representing approximately 65.8% of
the total voting power of Company Common Stock. The Voting Agreement provides
that the directors, in consideration of the substantial expenses incurred by
Associated in connection with the Merger Agreement and as a condition to
Associated entering into the Merger Agreement, shall vote or cause to be voted
or express a written consent with respect to all of such director's shares:
(a) in favor of adoption and approval of the Merger
Agreement and the Merger at every meeting of shareholders of the
Company at which such matters are considered and at every adjournment
thereof and in connection with every proposal to take action by
written consent with respect thereto, and
(b) against any other Competing Transaction at every
meeting of shareholders of the Company at which such matters are
considered and at every adjournment thereof and in connection with
every proposal to take action by written consent with respect thereto.
The Voting Agreement also provides that Associated has the exclusive
right to purchase any or all of the shares of Company Common Stock owned by
each director for $37.3275 per share, payable in cash, subject to any necessary
regulatory approval, after a material breach of the Merger Agreement by the
Company or any events or circumstances that lead Associated reasonably to
believe that the Company is likely to materially breach the Merger Agreement, a
breach by a director, or the acquisition or overtly threatened acquisition of
5% of the stock or a material portion of the assets of the Company or the Bank.
The purchase right is not exercisable as of the date hereof. The purchase
price per share under the Voting Agreement equalled the value of the Company
Common
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Stock based upon the trading price of Associated Common Stock at the date that
the Voting Agreement was requested by Associated.
The Voting Agreement also provides that:
(a) Each of the directors agrees that such director will
not, nor will such director permit any entity under such director's
control, to deposit any of such director's shares in a voting trust or
subject any of their shares to any agreement, arrangement or
understanding with respect to the voting of such shares inconsistent
with the Voting Agreement.
(b) During the term of the Voting Agreement, each
director agrees not to sell, assign, transfer or dispose of such
director's shares.
The Voting Agreement shall terminate upon the earlier of (a) the
Effective Time of the Merger and (b) the date on which the Merger Agreement is
terminated in accordance with its terms. Upon such termination, no party shall
have any further obligations or liabilities under the Voting Agreement;
provided that termination shall not relieve any party from liability for any
breach of the Voting Agreement prior to such termination.
The Voting Agreement binds the actions of the signatories thereto only
in their capacity as shareholders of the Company, and such
shareholders/directors of the Company were not and could not be contractually
bound to abrogate their fiduciary duties as directors of the Company.
Accordingly, while such shareholders/directors are, under the Voting Agreement,
contractually bound to vote as a shareholder in favor of the Merger and against
a Competing Transaction should one be presented, their fiduciary duties as
directors nevertheless require them to act, in their capacity as directors, in
the best interests of the Company when they decided to approve and adopt the
Merger Agreement. In addition, such shareholders/directors will continue to be
bound by their fiduciary duties as directors of the Company with respect to any
decisions they may take in connection with the Merger of otherwise.
Assuming compliance with the terms of the Voting Agreement, and
provided the Merger Agreement has not been terminated prior to its being voted
upon by the shareholders of the Company, the approval and adoption of the
Merger Agreement are assured.
CERTAIN INFORMATION CONCERNING ASSOCIATED
Associated is a registered bank holding company pursuant to the BHC
Act. It was incorporated in Wisconsin in 1964 and was inactive until 1969,
when permission was received from the Federal Reserve Board to acquire three
banks. Associated currently owns eight commercial banks located in Wisconsin
and Illinois serving their local communities and, measured by total assets held
at September 30, 1995 was the third largest commercial bank holding company
headquartered in Wisconsin. Associated also owns all of the capital stock of
subsidiaries engaged in the following non-banking businesses: personal property
lease financing, commercial and residential mortgage banking, trust services,
reinsurance and general insurance agency activities.
Associated provides advice and specialized services to its bank and
nonbank subsidiaries (the "Associated Affiliates") in various areas of banking
policy and operations, including auditing, data processing,
marketing/advertising, investments, personnel services, trust services and
other financial services functionally related to banking. Responsibility for
the management of the Associated Affiliates remains with their respective
Boards of Directors and officers. Services rendered to the Associated
Affiliates by Associated are intended to assist the local management of these
banks to expand the scope of the banking services offered by them. At
September 30, 1995 the Associated Affiliates operated a total of 85
full-service banking offices in 55 communities throughout Wisconsin and in
Chicago, Illinois.
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Associated, through the Associated Affiliates, provides a complete
range of retail banking services to individuals and small-to-medium-size
businesses. These services include checking and savings accounts, NOW, Super
NOW and money market deposit accounts, business loans, personal loans,
residential and condominium mortgage loans, loans for education, MasterCard,
VISA and other consumer-oriented financial services, including IRA and Keogh
accounts, safe deposit and night depository facilities. Automated teller
machines, which provide 24 hour banking services to customers of the Associated
Affiliates, have been installed in many locations in the Associated Affiliates'
service areas. The Associated Affiliates are members of an interstate shared
automated teller machine ("ATM") network which allows their customers to
perform banking transactions from their checking, savings or credit card
accounts at ATM terminals in a multi-state environment. Among the services
designed specifically to meet the needs of small- and medium-size businesses
are various types of specialized financing, cash management services and
transfer/collection facilities.
The Associated Affiliates provide lending, depository and related
financial services to commercial, industrial, financial and governmental
customers. In the lending area, these include term loans, revolving credit
arrangements, letters of credit, inventory and accounts receivable financing
and real estate construction lending.
Additional emphasis is given to non-credit services for commercial
customers, such as advice and assistance in the placement of securities,
corporate cash management and financial planning. The Associated Affiliates
make available check clearing, safekeeping, loan participation, lines of
credit, portfolio analyses, data processing and other services to over 140
correspondent banking institutions.
Five of the Associated Affiliates offer a wide variety of fiduciary,
investment management, advisory and corporate agency services to individuals,
corporations, charitable trusts, foundations and institutional investors. They
also administer (as trustee and in other fiduciary and representative
capacities) pension, profit sharing and other employee benefit plans, and
personal trusts and estates.
The Associated Affiliates also provide certain mortgage banking
services including the origination, underwriting, closing, and the temporary
warehousing of mortgage loans and the sale of loans to investors. The primary
focus is on one-to-four-family residential and multi-family properties, all of
which the mortgage loans are saleable into the secondary mortgage market.
Associated and the Associated Affiliates are not dependent upon a
single or a few customers, the loss of which would have a material adverse
effect on Associated. No material portion of Associated's or the Associated
Affiliates' business is seasonal.
At September 30, 1995 Associated and the Associated Affiliates, as a
group, employed approximately 1,733 full-time equivalent employees.
CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a bank holding company incorporated under the laws of
the State of Wisconsin with its principal office in Portage, Wisconsin. The
Company owns all the issued and outstanding stock of the Bank, a Wisconsin
banking corporation. The Bank owns all the issued and outstanding stock of
Portage Investments, Inc., a Delaware corporation ("Investments"). As of
September 30, 1995, the Company had total assets of approximately $210.7
million and the Bank had deposits of approximately $170.0 million.
The Bank is a full service bank serving the banking needs of the South
Central Wisconsin communities of Portage and surrounding Columbia County. The
Bank provides commercial banking services and products, including savings and
demand deposits, real estate, commercial and consumer loans, collection and
safe deposit facilities and other services tailored to meet the needs of the
individual and business customer. The Company owns
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the Bank's main banking premises located at 222 East Wisconsin Street, Portage,
Wisconsin. Investments was formed to market investments to the Bank's
customers.
The Company and the Bank are not dependent upon a single or a few
customers, the loss of which would have a material adverse effect on the
Company or the Bank. No material portion of the Company or the Bank's business
is seasonal.
At September 30, 1995, the Company and Bank employed approximately 84
full-time and 20 part-time employees.
OWNERSHIP OF THE COMPANY COMMON STOCK
The following table sets forth information regarding the beneficial
ownership of the Company Common Stock as of the Record Date by each director,
certain executive officers, all directors and executive officers of the Company
as a group and each person who is known by the Company to be the beneficial
owner of more than 5% of the Company Common Stock. Directors and executive
officers are deemed to own all shares of Company Common Stock which may be
owned in joint tenancy, by a spouse, in the names of minor children or in
revocable trusts for which the individual has voting and investment power. The
address for each of the directors is the executive offices of the Company.
<TABLE>
<CAPTION>
NAME OF NUMBER PERCENT
BENEFICIAL OWNER OF SHARES OF CLASS
------------------------------ --------- --------
<S> <C> <C>
Hubert H. Hill................ 130,478 14.4%
Beryl G. Pascavis............. 115,283 12.7%
John R. Miller................ 101,365 11.2%
Ray C. Dorn................... 80,488 8.9%
Donald Lee.................... 73,369 8.1%
Earl R. Brancel............... 49,053 5.4%
Larry L. Larrabee............. 46,899 5.2%
All Directors and executive
officers as a group (7 persons) 596,935 65.8%
</TABLE>
EXPERTS
The consolidated financial statements and schedules of Associated as
of December 31, 1994 and 1993, and for each of the years in the three-year
period ended December 31, 1994, have been incorporated by reference herein and
in the registration statement in reliance upon the report of KPMG Peat Marwick
LLP, independent certified public accountants, incorporated herein by
reference, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of the Company as of December
31, 1994 and 1993, and for each of the years in the three-year period ended
December 31, 1994, have been included in this Proxy Statement/Prospectus and in
the registration statement in reliance upon the report of Conley McDonald LLP,
independent certified public accountants, and upon the authority of said firm
as experts in accounting and auditing.
Associated has retained KPMG Peat Marwick LLP to render an opinion on
the federal income tax consequences of the Merger and in connection therewith,
KPMG Peat Marwick LLP has reviewed the discussion
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herein entitled "The Merger - Certain Material Federal Income Tax
Consequences." Such opinion has been included in the registration statement in
reliance upon the authority of said firm as experts in tax accounting.
LEGAL OPINIONS
The validity of the shares issued in connection with the Merger will
be passed upon for Associated by Saitlin, Patzik, Frank & Samotny Ltd.,
Chicago, Illinois. Certain legal matters in connection with the Merger will be
passed upon for Associated by Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c., Milwaukee, Wisconsin, and for the Company by Michael, Best &
Friedrich, Milwaukee, Wisconsin.
SHAREHOLDER PROPOSALS
If the Merger is consummated, shareholders of the Company will become
shareholders of Associated. Pursuant to Rule 14a-(8) promulgated under the
Exchange Act, Associated shareholders may present proper proposals for
inclusion in Associated's proxy statement for consideration at the next annual
meeting of its shareholders by submitting their proposals to Associated in a
timely manner. Shareholders of the Company who become shareholders of
Associated may present proposals for inclusion in Associated's proxy statement
for its 1997 Annual Meeting as the date for inclusion in the proxy statement
for the 1996 Annual Meeting has already passed.
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EXHIBIT A
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
AMONG
ASSOCIATED BANC-CORP,
ASSOCIATED BANC-SHARES, INC.
AND
GREATER COLUMBIA BANCSHARES, INC.
DECEMBER 22, 1995
<PAGE> 49
TABLE OF CONTENTS
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ARTICLE I: THE MERGER
SECTION 1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
SECTION 1.02. Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
SECTION 1.03. Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
SECTION 1.04. Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
SECTION 1.05. Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-2
SECTION 1.06. Conversion of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
SECTION 1.07. Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-3
SECTION 1.08. Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-5
SECTION 1.09. Anti-Dilution Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-5
ARTICLE II: REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 2.01. Organization and Qualification of the Company; Subsidiaries . . . . . . . . . . . . . . . A-6
SECTION 2.02. Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
SECTION 2.03. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-6
SECTION 2.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-7
SECTION 2.05. No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . A-7
SECTION 2.06. Compliance; Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-8
SECTION 2.07. Banking Reports and Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . A-8
SECTION 2.08. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
SECTION 2.09. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-9
SECTION 2.10. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
SECTION 2.11. Employment Contracts; Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . A-11
SECTION 2.12. Registration Statement; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . A-12
SECTION 2.13. Title to Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
SECTION 2.14. Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
SECTION 2.15. Absence of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
SECTION 2.16. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
SECTION 2.17. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
SECTION 2.18. Absence of Adverse Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
SECTION 2.19. Internal Controls and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
SECTION 2.20. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
SECTION 2.21. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-15
SECTION 2.22. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
SECTION 2.23. Accounting and Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
SECTION 2.24. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
SECTION 2.25. Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
ARTICLE III: REPRESENTATlONS AND WARRANTlES OF ASSOCIATED
SECTION 3.01. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-16
SECTION 3.02. Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
SECTION 3.03. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
SECTION 3.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-17
SECTION 3.05. No Conflict; Required Filings and Consents . . . . . . . . . . . . . . . . . . . . . . . A-17
SECTION 3.06. Compliance; Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
SECTION 3.07. Securities Reports; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . A-18
</TABLE>
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<S> <C>
SECTION 3.08. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
SECTION 3.09. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
SECTION 3.10. Registration Statement; Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . A-19
SECTION 3.11. Absence of Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-19
SECTION 3.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
SECTION 3.13. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
SECTION 3.14. Accounting and Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
SECTION 3.15. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
ARTICLE IV: COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-20
SECTION 4.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-22
SECTION 4.03. (Intentionally left blank) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
SECTION 4.04. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-24
SECTION 4.05. Affiliates; Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . A-24
SECTION 4.06. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
SECTION 4.07. Delivery of Shareholder List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
ARTICLE V: COVENANTS OF ASSOCIATED
SECTION 5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
SECTION 5.02. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
SECTION 5.03. Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
ARTICLE VI: ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
SECTION 6.02. Meetings of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
SECTION 6.03. Appropriate Action; Consents; Filings . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
SECTION 6.04. Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
SECTION 6.05. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
SECTION 6.06. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
ARTICLE VII: CONDITIONS OF MERGER
SECTION 7.01. Conditions to Obligation of Each Party to Effect the Merger . . . . . . . . . . . . . . . A-28
SECTION 7.02. Additional Conditions to Obligations of Associated . . . . . . . . . . . . . . . . . . . A-28
SECTION 7.03. Additional Conditions to Obligations of the Company . . . . . . . . . . . . . . . . . . . A-30
ARTICLE VIII: TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-31
SECTION 8.02. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
SECTION 8.03. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
SECTION 8.04. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-32
</TABLE>
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<S> <C>
ARTICLE IX: GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . A-32
SECTION 9.02. Disclosure Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-33
SECTION 9.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-33
SECTION 9.04. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-33
SECTION 9.05. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
SECTION 9.06. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
SECTION 9.07. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
SECTION 9.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-34
SECTION 9.09. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
SECTION 9.10. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
SECTION 9.11. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-35
</TABLE>
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of December 22, 1995 (the
"Agreement"), among ASSOCIATED BANC-CORP, a Wisconsin corporation
("Associated"), ASSOCIATED BANC-SHARES, INC., a Wisconsin corporation
("Holding") and GREATER COLUMBIA BANCSHARES, INC., a Wisconsin corporation
("Company").
W I T N E S S E T H:
WHEREAS, the Company is a bank holding company, the wholly-owned
subsidiary of which is The First National Bank of Portage, a national bank
located in Portage, Wisconsin (the "Bank"); and
WHEREAS, the Bank has only one wholly-owned subsidiary, Portage
Investments, Inc. ("Portage"). The Bank and Portage are sometimes individually
referred to herein as a "Subsidiary" and collectively as the "Subsidiaries;"
and
WHEREAS, the Company upon the terms and subject to the conditions of
this Agreement and in accordance with the Wisconsin Business Corporation Act
("Wisconsin Law"), will merge with and into Holding, a wholly-owned subsidiary
of Associated (the "Merger"); and
WHEREAS, the Company and its Board of Directors have determined that
the Merger will enhance the ability of the Bank to better serve its existing
depositors and customers in Portage, Wisconsin, and increase the financial
strength of the Bank; and
WHEREAS, the Board of Directors of the Company believes that the
Merger with Holding will benefit the shareholders and the employees of the
Company and the Subsidiaries; and
WHEREAS, the respective Boards of Directors of Associated, Holding and
the Company have (i) determined that the Merger and the exchange of newly
issued shares of Associated Common Stock (as defined in Section 1.06) for
shares of the Company's Common Stock (as defined in Section 1.06) pursuant and
subject to the terms and conditions of this Agreement are fair to and in the
best interests of the respective corporations and their shareholders, and (ii)
approved and adopted this Agreement and the transactions contemplated hereby;
and
WHEREAS, the Board of Directors of the Company has, subject to its
fiduciary duties under applicable law, resolved to recommend approval of the
Merger by the shareholders of the Company; and
WHEREAS, Associated, Holding and the Company intend to effect a merger
that qualifies for pooling-of-interests accounting treatment and as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended (the
"Code"); and
WHEREAS, as a condition and inducement to Associated's willingness to
enter into this Agreement, Associated and certain shareholders of the Company
are entering into concurrently with the execution and delivery hereof, a Voting
Agreement dated as of the date hereof (the "Voting Agreement"), pursuant to
which such shareholders shall make certain agreements with respect to the
voting of their shares of Company Common Stock.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Associated, Holding and the Company hereby agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with Wisconsin Law,
at the Effective Time (as defined in Section 1.02) the Company shall be merged
with and into Holding. As a result of the Merger, the separate corporate
existence of the Company shall cease and Holding shall continue as the
surviving corporation of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time. The parties hereto shall cause the
Merger to be consummated by filing Articles of Merger (the "Articles of
Merger") with the Secretary of State of the State of Wisconsin, in such form as
required by, and executed in accordance with the relevant provisions of
Wisconsin Law (a) after the satisfaction, or if permissible, waiver of
conditions set forth in Article VII, and (b) as promptly as possible within the
sixty (60) day period commencing with the latest of the following dates:
(i) The 30th calendar day after the date of approval of
the Merger by the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board");
(ii) Such date as may be prescribed by the Federal Reserve
Board or any other agency or authority pursuant to applicable law,
rules or regulations, prior to which consummation of the transaction
described and referred to herein may not be effected;
(iii) The date of the shareholders' meeting of the Company
to vote upon the Merger pursuant to Section 6.02; or
(iv) If the transaction contemplated by this Agreement is
being contested in any legal proceeding and Associated or the Company
has elected to contest the same, the date that such legal proceeding
has been brought to a conclusion favorable, in the judgment of
Associated or the Company, to the consummation of the transaction
contemplated hereby.
The date and time of the filing of the Articles of Merger is
hereinafter referred to as the "Effective Time." Anything to the contrary
notwithstanding, the Effective Time shall not under any circumstances occur
prior to February 15, 1996.
SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Wisconsin Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of Holding and the Company
shall vest in the Surviving Corporation, and all debts, liabilities and duties
of Holding and the Company shall become the debts, liabilities and duties of
the Surviving Corporation.
SECTION 1.04. Articles of Incorporation and Bylaws. At the Effective
Time, the Articles of Incorporation and the Bylaws of Holding, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
and the Bylaws of the Surviving Corporation.
SECTION 1.05. Directors and Officers. The directors of Holding
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, and the officers of
Holding immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors
are duly elected or appointed and qualified.
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SECTION 1.06. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Associated, Holding,
the Company, or the holders of any of the following securities:
(a) each Share of common stock, par value $1 per share,
of the Company (the "Company Common Stock") (all issued and
outstanding shares of the Company Common Stock being hereinafter
collectively referred to as the "Shares") issued and outstanding
immediately prior to the Effective Time (other than any Shares to be
cancelled pursuant to Section 1.06(b) and other than any Dissenting
Shares, as defined in Section 1.06(c)) shall be converted, in
accordance with Section 1.07, into the right to receive 1.0665 shares
of common stock, par value $.01 per share, of Associated ("Associated
Common Stock"). As of the Effective Time, all such shares of the
Company Common Stock shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and
each certificate previously representing any such Shares shall
thereafter represent the right to receive a certificate representing
shares of Associated Common Stock into which such Company Common Stock
is convertible. Certificates previously representing shares of
Company Common Stock shall be exchanged for certificates representing
whole shares of Associated Common Stock issued in consideration
therefor upon the surrender of such certificates in accordance with
the provisions of Section 1.07, without interest. No fractional
shares of Associated Common Stock shall be issued, and, in lieu
thereof, a cash payment shall be made pursuant to Section 1.07 hereof.
(b) each Share held in the treasury of the Company and
each Share owned by Associated or any direct or indirect wholly-owned
subsidiary of Associated immediately prior to the Effective Time shall
be cancelled and extinguished without any conversion thereof and no
payment shall be made with respect thereto.
(c) each Share of the Company Common Stock which shall be
issued and outstanding as of the Effective Time and held by a
shareholder who has validly perfected dissenter's rights in accordance
with Wisconsin Law, shall not be converted into and shall not become
Associated Common Stock hereunder (all such shares of the Company
Common Stock are hereinafter called "Dissenting Shares"). The Company
shall give Associated prompt notice upon receipt by the Company of any
written notice from any such shareholder of the Company ("Dissenting
Shareholder"). The Company agrees that prior to the Effective Time,
it will not, except with prior written consent of Associated,
voluntarily make any payment with respect to, or settle or offer to
settle, any request for withdrawal pursuant to the exercise of
dissenter's rights. Each Dissenting Shareholder who becomes entitled,
pursuant to the provisions of applicable law, to payment for his or
her shares of the Company Common Stock shall receive payment therefor
from Associated (but only after the amount thereof shall be agreed
upon or finally determined pursuant to the provisions of applicable
law). If any Dissenting Shareholder shall fail to perfect or shall
effectively withdraw or lose his or her right to receive the value of
his or her shares of Associated Common Stock, his or her shares shall
be thereupon converted into Associated Common Stock in accordance with
the provisions of Section 1.06(a) and, if applicable, cash under
Section 1.07(e).
SECTION 1.07. Exchange of Certificates.
(a) Exchange Agent As of the Effective Time, Associated
shall deposit, or shall cause to be deposited, with Harris Trust &
Savings Bank (the "Exchange Agent"), and such deposit shall be solely
for the benefit of the holders of Shares, for exchange in accordance
with this Article I through the Exchange Agent, certificates
representing the shares of Associated Common Stock (such certificates
for shares of Associated Common Stock, and cash in lieu of fractional
shares (if any), together with any dividends or distributions with
respect thereto, being hereinafter
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<PAGE> 55
referred to as the "Exchange Fund") issuable pursuant to Section 1.06
in exchange for outstanding Shares.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall mail or
personally deliver to each holder of record (or his or her
attorney-in-fact) of a certificate or certificates which immediately
prior to the Effective Time represented outstanding Shares (the
"Certificates"), whose Shares were converted into the right to receive
shares of Associated Common Stock pursuant to Section 1.06 and cash in
lieu of fractional shares (if any), (i) 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 delivery of the
Certificates to the Exchange Agent and shall be in such form and have
such other provisions as Associated may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Associated Common
Stock. Upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to receive
in exchange therefor a certificate representing that number of whole
shares of Associated Common Stock which such holder has the right to
receive in respect of the Certificate surrendered pursuant to the
provisions of this Article I (after taking into account all Shares
then held by such holder) and cash in lieu of fractional shares (if
any), and the Certificate so surrendered shall forthwith be cancelled.
In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company, a certificate
representing the proper number of shares of Associated Common Stock
may be issued to a transferee if the Certificate representing such
Shares is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by
evidence that any applicable stock transfer taxes have been paid.
Certificates surrendered for exchange by any affiliate of the Company
shall not be exchanged for certificates representing shares of
Associated Common Stock until Associated has received a written
agreement from such person as provided in Section 4.05 hereof. Until
surrendered as contemplated by this Section 1.07, each Certificate
shall be deemed at any time after the Effective Time to represent only
the right to receive upon such surrender the certificate representing
shares of Associated Common Stock and cash in lieu of any fractional
shares of Associated Common Stock as contemplated by Section 1.07(e).
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective
Time with respect to Associated Common Stock with a record date after
the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Associated Common Stock
represented thereby, and no cash payment in lieu of fractional shares
shall be paid to any such holder pursuant to Section 1.07(e), until
the holder of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any
such Certificate, there shall be paid to the holder of the
certificates representing whole shares of Associated Common Stock
issued in exchange therefor, without interest, (i) promptly, the
amount of any cash payable with respect to a fractional share of
Associated Common Stock to which such holder is entitled pursuant to
Section 1.07(e) and the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with
respect to such whole shares of Associated Common Stock, and (ii) at
the appropriate payment date, the amount of dividends or other
distributions, with a record date after the Effective Time but prior
to surrender and a payment date occurring after surrender, payable
with respect to such whole shares of Associated Common stock.
(d) No Further Rights in the Shares. All shares of
Associated Common Stock issued upon conversion of the Shares in
accordance with the terms hereof (including any cash paid pursuant to
Section 1.07(e)) shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares.
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<PAGE> 56
(e) No Fractional Shares No certificates or scrip
representing fractional shares of Associated Common Stock shall be
issued upon the surrender for exchange of Certificates, and such
fractional share interest will not entitle the owner thereof to vote
or to any rights of a shareholder of Associated. Each holder of a
fractional share interest shall be paid an amount in cash equal to the
product obtained by multiplying such fractional share interest to
which such holder (after taking into account all fractional share
interests then held by such holder) would otherwise be entitled by the
"Order Date Price." For purposes hereof, the "Order Date Price" shall
mean the closing price of a share of Associated Common Stock as quoted
on the NASDAQ National Market on the first business day following the
date the Federal Reserve Board issues an order approving consummation
of the Merger.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the shareholders of the
Company for six months after the Effective Time shall be delivered to
Associated, upon demand, and any shareholders of the Company who have
not theretofore complied with this Article I shall thereafter look
only to Associated for payment of their claim for Associated Common
Stock, any cash in lieu of fractional shares of Associated Common
Stock and any dividends or distributions with respect to Associated
Common Stock.
(g) No Liability. Neither Associated, Holding or the
Company shall be liable to any holder of Shares for any such Shares
(or dividends or distributions with respect thereto) or cash delivered
to a public official pursuant to any abandoned property, escheat or
similar law.
(h) Withholding Rights. Associated shall be entitled to
deduct and withhold from any cash consideration payable pursuant to
this Agreement to any holder of Shares such amounts as Associated is
required to deduct and withhold with respect to the making of such
payment under the Code, or any provision of state, local or foreign
tax law. To the extent that amounts are so withheld by Associated,
such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the holder of the Shares in respect
of which such deduction and withholding was made by Associated.
SECTION 1.08. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of the Company's Common Stock thereafter on
the records of the Company. From and after the Effective Time, the holders of
certificates evidencing ownership of shares of the Company's Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided herein or by
law. On or after the Effective Time, any Certificates presented to the
Exchange Agent or Associated for any reason shall be converted into shares of
Associated Common Stock in accordance with this Article I.
SECTION 1.09. Anti-Dilution Adjustment. If, subsequent to the date
hereof and prior to the Effective Time, Associated shall pay a stock dividend
or make a distribution on Associated Common Stock in shares of Associated
Common Stock or any security convertible into Associated Common Stock or shall
combine or subdivide its stock, then in each such case, from and after the
record date for determining the shareholders entitled to receive such dividend
or distribution or the securities resulting from such combination or
subdivision, an appropriate adjustment shall be made to the conversion ratio
set forth in Section 1.06 above, for purposes of determining the number of
shares of Associated Common Stock into which the Company's Common Stock shall
be converted. For purposes hereof, the payment of a dividend in Associated
Common Stock, or the distribution on Associated Common Stock in securities
convertible into Associated Common Stock, shall be deemed to have effected an
increase in the number of outstanding shares of Associated Common Stock equal
to the number of shares of Associated Common Stock into which such securities
shall be initially convertible without the payment by the holder thereof of any
consideration other than the surrender for cancellation of such convertible
securities. Notwithstanding the foregoing, this
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<PAGE> 57
Section shall not apply to any stock options issued under option plans of
Associated existing as of the date of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule attached hereto (the
"Company Disclosure Schedule"), the Company hereby represents and warrants to
Associated and Holding that:
SECTION 2.01. Organization and Qualification of the Company;
Subsidiaries. The Company is a corporation duly organized and validly existing
under the laws of the State of Wisconsin. The Bank is a duly organized and
validly existing national banking association. Portage is duly organized,
validly existing and in good standing under the laws of Delaware. The Bank has
been the only subsidiary of the Company. Portage has been the only subsidiary
of the Bank. The Company and Subsidiaries each has the requisite corporate
power and authority and is in possession of all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates, approvals
and orders ("Company Approvals") necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing and in good standing or to have
such power, authority and Company Approvals would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below) on the Company and
the Subsidiaries, taken as a whole. The term "Material Adverse Effect" as used
in this Agreement shall mean any change or effect that is or is reasonably
likely to be materially adverse to a party's business, operations, properties
(including intangible properties), condition (financial or otherwise), assets
or liabilities (including contingent liabilities). Neither the Company nor any
Subsidiary has received notice of proceedings relating to the revocation or
modification of any Company Approvals. The Company, the Bank and Portage are
duly qualified or licensed as a foreign corporations to do business, and are in
good standing, in each jurisdiction where the character of their properties
owned, leased or operated by them or the nature of their activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not, either individually
or in the aggregate, have a Material Adverse Effect on the Company or the
Subsidiaries, taken as a whole. The Company is registered with the Federal
Reserve Board as a one bank holding company under the Bank Holding Company Act
of 1956, as amended (the "BHCA"). Except for the Subsidiaries, the Company
holds no interest, either directly or indirectly, in any other entity.
SECTION 2.02. Articles of Incorporation and Bylaws. The Company has
heretofore furnished to Associated a complete and correct copy of the Articles
of Incorporation and the Bylaws, as amended or restated, of the Company and the
Subsidiaries and such Articles of Incorporation and Bylaws of the Company and
the Subsidiaries are in full force and effect and neither the Company nor the
Subsidiaries is in violation of any of the provisions of its Articles of
Incorporation or Bylaws.
SECTION 2.03. Capitalization.
(a) Capitalization of the Company. The authorized
capital stock of the Company consists of 2,000,000 shares of Common
Stock, par value $ 1 per share. As of the date of this Agreement, (i)
907,376 shares of the Company's Common Stock are issued and
outstanding, all of which are validly issued, fully paid and
non-assessable (except as provided in section 180.0622(2)(b) of the
Wisconsin Business Corporation Law), and all of which have been issued
in compliance with applicable securities laws, and (ii) no shares of
the Company's Common Stock are held in the Company's treasury. Except
as set forth in the Company's Disclosure Schedule at Section 2.03(a),
as of the date of this Agreement, there are no options, warrants or
other rights, agreements, arrangements or commitments of any character
relating to the issued or
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unissued capital stock of the Company or obligating the Company to
issue or sell any shares of capital stock of, or other equity
interests in the Company. There are no obligations, contingent or
otherwise, of the Company to repurchase, redeem or otherwise acquire
any shares of the Company's Common Stock or to provide funds to or
make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity.
(b) Capitalization of the Bank. The authorized capital
stock of the Bank consists of 288,750 shares of common stock, par
value $ 1 per share. As of the date of this Agreement, (i) 288,750
shares of the Bank's common stock are issued and outstanding, all of
which are validly issued, fully paid and non-assessable, and all of
which have been issued in compliance with applicable securities laws,
and (ii) the Company owns all of the Bank's capital stock. Except as
set forth in the Company's Disclosure Schedule at Section 2.03(b), as
of the date of this Agreement, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock of the Bank or
obligating the Bank to issue or sell any shares of capital stock of,
or other equity interests in the Bank. There are no obligations,
contingent or otherwise, of the Bank to repurchase, redeem or
otherwise acquire any shares of the Bank's capital stock or to provide
funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any other entity.
(c) Capitalization of Portage. The authorized capital
stock of Portage consists of 100 shares of common stock, par value $ 1
per share. As of the date of this Agreement, (i) 100 shares of
Portage's common stock are issued and outstanding, all of which are
validly issued, fully paid and non-assessable, and all of which have
been issued in compliance with applicable securities laws, and (ii)
the Bank owns all of Portage's capital stock. Except as set forth in
the Company's Disclosure Schedule at Section 2.03(c), as of the date
of this Agreement, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to
the issued or unissued capital stock of Portage or obligating Portage
to issue or sell any shares of capital stock of, or other equity
interests in Portage. There are no obligations, contingent or
otherwise, of Portage to repurchase, redeem or otherwise acquire any
shares of Portage's capital stock or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise)
in any other entity.
SECTION 2.04. Authority. The Company has the requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby (other
than, with respect to the Merger, the approval and adoption of this Agreement
by the holders of a majority of the outstanding shares of the Company's Common
Stock in accordance with Wisconsin Law and the Company's Articles of
Incorporation and Bylaws). This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by Associated and Holding, constitutes the legal, valid and binding
obligation of the Company enforceable in accordance with its terms.
SECTION 2.05. No Conflict; Required Filings and Consents.
(a) To the best knowledge of the Company, after inquiry
of its executive officers, the execution and delivery of this
Agreement by the Company does not, and the performance of this
Agreement by the Company shall not, (i) conflict with or violate the
Articles of Incorporation or Bylaws of the Company or the
Subsidiaries, (ii) conflict with or violate any domestic (federal,
state or local) or foreign law, statute, ordinance, rule, regulation,
order, judgment or decree (collectively, "Laws") applicable to the
Company or the Subsidiaries, or by which their respective
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<PAGE> 59
properties are bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the properties or
assets of the Company or the Subsidiaries pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or
any Subsidiary is a party or by which the Company or any Subsidiary or
its or any of their respective properties are bound or affected,
except for any such breaches, defaults or other occurrences that would
not, individually or in the aggregate, have a Material Adverse Effect
on the Company or the Subsidiaries, taken as a whole. The Board of
Directors of the Company has taken all actions necessary under
Wisconsin Law, including approving the transactions contemplated
herein, to insure that none of the restrictions set forth in Wisconsin
Law do or will apply to the transactions contemplated herein.
(b) To the best knowledge of the Company, after inquiry
of its executive officers, the execution and delivery of this
Agreement by the Company does not, and the performance of this
Agreement by the Company shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Securities Act of 1933, as
amended (the "Securities Act"), and the Securities Exchange of 1934,
as amended (the "Exchange Act"), state securities or blue sky laws
("Blue Sky Laws"), BHCA, the banking laws and regulations of the State
of Wisconsin (the "WBL"), and the filing and recordation of
appropriate merger or other documents as required by Wisconsin Law and
(ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of the Merger, or otherwise
prevent the Company from performing its obligations under this
Agreement, and would not have a Material Adverse Effect on the Company
or the Subsidiaries, taken as a whole.
SECTION 2.06. Compliance; Permits. To the best knowledge of the
Company after inquiry of its executive officers, neither the Company nor any
Subsidiary is in conflict with, or in default or violation of, (a) any law
applicable to the Company or any Subsidiary or by which any of their respective
properties are bound or affected, or (b) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any of their respective properties are bound or
affected, except for any such conflicts, defaults or violations which would
not, individually or in the aggregate, have a Material Adverse Effect on the
Company or the Subsidiaries, taken as a whole.
SECTION 2.07. Banking Reports and Financial Statements.
(a) The Company and the Subsidiaries have timely filed
all forms, reports and documents required to be filed with the Federal
Reserve Board, the Wisconsin Commissioner and any other applicable
federal or state securities or banking authorities (all such reports
and statements are collectively referred to as the "Company Reports").
The Company Reports, including all Company Reports filed after the
date of this Agreement, (i) were or will be prepared in accordance
with the requirements of applicable law and (ii) did not at the time
they were filed, or will not at the time they are filed, contain any
untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(b) Each of the consolidated financial statements of the
Company (including, in each case, any related notes thereto) delivered
to Associated whether or not contained in the Company Reports (the
"Financial Statements"), including, but not limited to, any Company
Reports filed since the date of this Agreement and prior to or at the
Effective Time, have been prepared in
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accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods involved (except as may be
indicated in the notes thereto) and each fairly presents the
consolidated financial position of the Company and the Subsidiaries as
of the respective dates thereof and the consolidated results of its
operations and changes in financial position for the periods
indicated, except that any unaudited interim financial statements were
or are subject to normal and recurring year-end adjustments which were
not or are not expected to be material in amount.
(c) Except as and to the extent set forth on the
consolidated balance sheet of the Company and the Subsidiaries as of
December 31, 1994, including all notes thereto (the "Company Balance
Sheet"), neither the Company nor any of the Subsidiaries has any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with
generally accepted accounting principles, except (i) for liabilities
or obligations incurred in the ordinary course of business since
December 31, 1994, that would not, individually or in the aggregate
have a Material Adverse Effect on the Company or the Subsidiaries,
taken as a whole, or (ii) as otherwise reflected in the reports
referred to in Section 2.07(a) hereof.
SECTION 2.08. Absence of Certain Changes or Events. Except as
disclosed in the Financial Statements since December 31, 1994, to the date of
this Agreement, the Company and the Subsidiaries have conducted their
businesses only in the ordinary course and in a manner consistent with past
practice and, since December 31, 1994, there has not been (a) any change in the
financial condition, results of operations or business of the Company or the
Subsidiaries having a Material Adverse Effect on the Company or the
Subsidiaries, taken as a whole, (b) any damage, destruction or loss (whether or
not covered by insurance) with respect to any assets of the Company or the
Subsidiaries having a Material Adverse Effect on the Company or the
Subsidiaries, taken as a whole, (c) any change by the Company or the
Subsidiaries in their accounting methods, principles or practices, except for
compliance with applicable new requirements of the Financial Accounting
Standards Board, (d) any revaluation by the Company or the Subsidiaries of any
of their material assets in any material respect, (e) any entry by the Company
or any Subsidiary into any commitment or transactions material to the Company
or the Subsidiaries, taken as a whole, (f) any declaration, setting aside or
payment of any dividends or distributions in respect of shares of the Company's
Common Stock or any redemption, purchase or other acquisition of any of its
securities or any of the securities of any Subsidiary, or (g) any increase in
or establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in compensation payable or to
become payable to any officers or key employees of the Company or any of the
Subsidiaries.
SECTION 2.09. Absence of Litigation. Except as disclosed in the
Company Reports filed prior to the date of this Agreement: (a) neither the
Company nor any Subsidiary is subject to any continuing order of, or written
agreement or memorandum of understanding with, or continuing material
investigation by, any federal or state banking authority or other governmental
entity, or any judgment, order, writ, injunction, decree or award of any
governmental entity or arbitrator, including, without limitation,
cease-and-desist or other orders of any bank regulatory authority, (b) there is
no claim of any kind, action, suit, litigation, proceeding, arbitration,
investigation, or controversy affecting the Company or any Subsidiary pending
or, to the knowledge of the Company, threatened, except for matters which
individually seek damages not in excess of $20,000 and which otherwise will not
have, and cannot reasonably be expected to have, a Material Adverse Effect on
the Company or the Subsidiaries taken as a whole, and (c) there are no uncured
material violations, or violations with respect to which material refunds or
restitutions may be required, cited in any compliance report to the Company or
any Subsidiary as a result of the examination by any regulatory authority. The
Terra litigation has been settled by means of a
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$120,000 payment by the Bank and a $135,000 reimbursement to the Bank from
Cincinnati Insurance, the Bank's insurance carrier, for the claim and related
costs.
SECTION 2.10. Employee Benefit Plans.
(a) The Company Disclosure Schedule at Section 2.10 lists
all "employee pension benefit plans," as such term is defined in
section 3(2) of the Employee Retirement Income Security Act of 1974
("ERISA") without regard to any exemptions from any requirements
thereunder issued by the United States Department of Labor in
regulations or otherwise, maintained, sponsored or contributed to by
the Company or any Subsidiary (the "Pension Plans"). The term
"Pension Plan" shall also include any terminated "employee pension
benefit plan" previously maintained, sponsored or contributed to by
the Company or any Subsidiary which, as of the Effective Time, has not
distributed all of its assets in full satisfaction of accrued benefits
and/or obligations.
(b) The Company Disclosure Schedule at Section 2.10 lists
all "employee welfare benefit plans," as defined in ERISA section 3(1)
without regard to any exemptions from any requirements thereunder
issued by the United States Department of Labor in regulations or
otherwise, maintained, sponsored or contributed to by the Company or
any Subsidiary (the "Welfare Plans"). The term "Welfare Plans" shall
also include any terminated employee welfare benefit plan previously
maintained, sponsored or contributed to by the Company or any
Subsidiary which, as of the Effective Time, has not distributed all of
its assets and/or satisfied all of its obligations.
(c) The Company has made available to Associated true and
complete copies of the documents governing each of the Pension Plans
and Welfare Plans as in effect at the Effective Time.
(d) The Company Disclosure Schedule at Section 2.10 lists
all plans or programs to provide fringe benefits to the Company's and
Subsidiaries' employees (other than Pension Plans and Welfare Plans)
including, but not limited to, vacation, sick leave, disability,
medical, hospitalization, life insurance and other insurance plans or
related benefits (the "Fringe Benefit Plans").
(e) The Company has made available to Associated true and
complete copies of the documents governing each Fringe Benefit Plan.
(f) The Company has no direct or indirect, formal or
informal, plan, fund or program to change any Pension Plan, Welfare
Plan or Fringe Benefit Plan that would affect any of the Company's or
any Subsidiary's employees. Neither the Company nor any Subsidiary
has made a material modification, within the meaning of ERISA section
102 and the regulations thereunder, to any existing Pension Plan,
Welfare Plan or Fringe Benefit Plan which is not set forth in the
Pension Plan, Welfare Plan or Fringe Benefit Plan documents provided
to Associated.
(g) For purposes of this Section 2.10, "Company" shall
include the Company, the Subsidiaries and all members of any
controlled group of corporations (within the meaning of Code section
414(b), relevant Treasury Regulations and Pension Benefit Guaranty
Corporation regulations issued pursuant to ERISA section 4001), any
group of trades or businesses under common control (within the meaning
of Code section 414(c), relevant Treasury Regulations and Pension
Benefit Guaranty Corporation regulations issued pursuant to ERISA
section 4001) and any affiliated service group (within the meaning of
Code section 414(m) and relevant Treasury Regulations and proposed
Treasury Regulations) of which the Company or any Subsidiary is a
member.
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(h) Neither the Company nor any Subsidiary has ever been
obligated to contribute to any multi-employer plan within the meaning
of ERISA section 3(37).
(i) To the Company's knowledge, the Pension Plans,
Welfare Plans and Fringe Benefit Plans and the trusts and other
funding vehicles related to the Pension Plans, Welfare Plans and
Fringe Benefit Plans have been administered in all respects in
compliance with the applicable requirements of ERISA, the Code, the
plan documents and all other applicable rules, regulations and laws.
The Pension Plans, Welfare Plans and Fringe Benefit Plans and the
trusts or other funding vehicles related to the Pension Plans, Welfare
Plans and Fringe Benefit Plans meet all applicable requirements, in
form and in operation, for favorable tax treatment under the Code.
All required contributions pursuant to the Pension Plans, Welfare
Plans and Fringe Benefit Plans for all periods prior to the Effective
Time have been made or will be made prior to the Effective Time.
There are no pending or, to the Company's knowledge, threatened
claims, lawsuits or arbitrations which have been asserted or
instituted against the Pension Plans, Welfare Plans or Fringe Benefit
Plans or any fiduciaries thereof with respect to their duties to the
Pension Plans, Welfare Plans or Fringe Benefit Plans or the assets of
any of the trusts under any Pension Plans, Welfare Plans or Fringe
Benefit Plans. No representations or communications with respect to
participation, eligibility for benefits, vesting, benefit accrual or
coverage under the Pension Plans, Welfare Plans or Fringe Benefit
Plans have been made to the Company's or Subsidiaries' employees other
than those which are in accordance with the terms of such Pension
Plans, Welfare Plans or Fringe Benefit Plans in effect immediately
prior to the Effective Time.
(j) With respect to any Welfare Plan which is a "group
health plan" as defined in Code section 4980B, the Company or
Subsidiary in question has complied with the continuation coverage
requirements of Code section 4980B for any periods prior to the
Effective Time.
(k) The Company has furnished to Associated copies of all
documents relating to the Pension Plans, Welfare Plans or Fringe
Benefit Plans, including, but not limited to, the following: any
service provider agreements, any investment management agreements,
fiduciary insurance policies, fidelity bonds, rules, regulations or
policies of the trustees or any committee thereunder, all of which are
true and complete.
(l) Since December 31, 1974, no fiduciary of the Pension
Plans or Welfare Plans has engaged in any "prohibited transaction" (as
defined in ERISA section 406 or Code section 4975) nor has any
fiduciary breached any fiduciary responsibility, as described in Part
4 of Title I of ERISA with respect to such Pension Plans or Welfare
Plans.
(m) The Company has no knowledge of the occurrence of any
event with respect to any Pension Plan which could result in a
liability of the Company, any Subsidiary or any member of the
Company's controlled group to the Pension Benefit Guaranty Corporation
("PBGC"), other than the timely payment of premiums pursuant to
section 4007 of ERISA. All required PBGC premiums have been paid for
the periods through the Effective Time.
(n) No Welfare Plan or Fringe Benefit Plan provides any
form of post-retirement health benefits to retired employees of the
Company or any Subsidiary, other than benefits required to be provided
pursuant to Code section 4980B.
SECTION 2.11. Employment Contracts; Material Contracts. Except as
set forth in the Company Disclosure Schedule at Section 2.11, neither the
Company nor any Subsidiary is a party to or bound by (a) any employment or
consulting contract that is not terminable without penalty by the Company or
such Subsidiary on 60 days' or less notice, (b) any contract or commitment for
capital expenditures in excess of
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$10,000.00 for any one (1) project, or (c) contracts or commitments for the
purchase of materials or supplies or for the performance of services over a
period of more than 60 days from the date of this Agreement.
SECTION 2.12. Registration Statement; Proxy Statement. None of the
information supplied or to be supplied by the Company for inclusion in (a) the
Registration Statement (as defined in Section 6.01), (b) the Proxy Statement/
Prospectus (as defined in Section 6.01), or (c) any other document to be filed
with the Securities and Exchange Commission (the "SEC") or other regulatory
authority in connection with the transactions contemplated hereby, at the
respective times such documents are filed and, in the case of the Registration
Statement, when it becomes effective and at the Effective Time, and with
respect to the Proxy Statement/Prospectus, when mailed, shall be false or
misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein not misleading. In the
case of the Proxy Statement/Prospectus or any amendment thereof or supplement
thereto, none of such information at the time of the Company's shareholders
meeting (pursuant to Section 6.02) (the "Meeting") shall be false or misleading
with respect to any material fact or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Meeting.
SECTION 2.13. Title to Property. The Company Disclosure Schedule at
Section 2.13 correctly identifies all real property owned and leased by the
Company and the Subsidiaries. The Company and each of the Subsidiaries has
good and defensible title to all of their properties and assets, real and
personal, tangible and intangible free and clear of all mortgage liens, and
free and clear of all other liens, charges and encumbrances except liens for
taxes not yet due and payable, pledges to secure deposits and such minor
imperfections of title, if any, as to not materially detract from the value of
or interfere with the present use of the property affected thereby or which,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company or the Subsidiaries, taken as a whole; and all leases pursuant to
which the Company or any Subsidiary leases from others real or personal
property including, without limitation, leases for branch offices are in good
standing, valid and effective in accordance with their respective terms, and
there is not, under any of such leases, any existing material default or event
of default (or event which with notice or lapse of time, or both, would
constitute a material default and in respect of which the Company or any
Subsidiary has not taken adequate steps to prevent such a default from
occurring). The Company's and each Subsidiary's buildings and equipment in
regular use have been reasonably maintained and are in good and serviceable
condition, reasonable wear and tear excepted. None of the buildings,
structures or appurtenances owned or leased by the Company or any Subsidiary
for their operation or maintenance as now operated or maintained, contravenes
any zoning ordinances or other administrative regulations (whether or not
permitted because of prior non-conforming use) or violates any restrictive
covenant or any provision of law, the effect of which would materially
interfere with or prevent the continued use of such properties for the purposes
for which they are now being used or would materially and adversely affect the
value thereof.
SECTION 2.14. Compliance with Environmental Laws.
(a) The term "Company's Property" shall mean any real
property and improvements currently owned, leased, used, operated or
occupied by the Company or any Subsidiary, including properties
acquired by foreclosure, properties which the Bank has a present right
to acquire upon foreclosure and which are owned by customers of the
Bank who have received written notification of default, or properties
held or operated in a fiduciary or managerial capacity;
(b) The term "Environmental Claims" shall mean any and
all administrative, regulatory or judicial actions, suits, demands,
demand letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental
Law or Environmental Permit;
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(c) The term "Environmental Laws" shall mean all federal,
state and local laws including statutes, regulations and other
governmental restrictions and requirements relating to the discharge
of air pollutants, water pollutants or process wastewater or the
disposal of solid or hazardous waste or otherwise relating to the
environment or hazardous substances or employee health and safety.
(d) The term "Environmental Permits" shall mean all
permits, approvals, identification numbers, licenses and other
authorizations required under any applicable Environmental Law.
(e) The term "Hazardous Substances" shall mean all
hazardous and toxic substances, wastes and materials; any pollutants
or contaminants (including, without limitation, petroleum products,
asbestos and raw materials which include hazardous constituents); and
any other similar substances or materials which are regulated under
Environmental Laws.
(f) The Environmental Permits (if any) are in full force
and effect and, to the Company's knowledge, constitute all permits,
licenses, approvals and consents relating to Environmental Laws or
Hazardous Substances required for the conduct of the Company's and
Subsidiaries' businesses and the use of the Company's Property (as
presently conducted and used) in compliance with Environmental Laws.
(g) The Company and the Subsidiaries have filed all
reports, returns and other filings required to be filed with respect
to the Company's Property under Environmental Laws and the
Environmental Permits except where the failure to do so would not have
a material adverse effect on the Company's or Subsidiaries' businesses
or financial condition, taken as a whole. The Company and/or the
Subsidiaries have made no environmental filings after January 1, 1995.
(h) To the Company's knowledge, the business of the
Company and the Subsidiaries and the Company's Property have been and
are being operated by the Company in accordance with all Environmental
Laws and Environmental Permits. Neither the Company nor any of the
Subsidiaries has received any written notice nor does the Company or
any of the Subsidiaries have knowledge that the Company's Property is
not in material compliance with all Environmental Laws and
Environmental Permits and no proceeding for the suspension, revocation
or cancellation of any Environmental Permit is pending or, to the
Company's knowledge, threatened.
(i) There are no actions pending, or to the Company's
knowledge, threatened against the Company or any of the Subsidiaries
(naming the Company or any Subsidiary), which in any case assert or
allege (i) the Company or any Subsidiary (naming the Company or any
Subsidiary) violated any Environmental Law or Environmental Permit or
are in default with respect to any Environmental Permit or any order,
writ, judgment, variance, award or decree of any government authority;
(ii) the Company or any of the Subsidiaries is required to clean up or
take remedial or other response action due to the disposal, discharge
or other release of any Hazardous Substance on the Company's Property
or elsewhere; or (iii) the Company or any of the Subsidiaries is
required to contribute to the cost of any past, present or future
cleanup or remedial or other response action which arises out of or is
related to the disposal, discharge or other release or any Hazardous
Substance by the Company, the Subsidiaries or others. The Company,
the Subsidiaries and the Company's Property are not subject to any
judgment, stipulation, order, decree or agreement arising under
Environmental Laws.
(j) With respect to the period during which the Company
or any of the Subsidiaries occupied the Company's Property (i) no
Hazardous Substances have been treated, recycled or disposed of by the
Company or any of the Subsidiaries (intentionally or unintentionally)
on, under
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or at the Company's Property; (ii) there has been no release or
threatened release by the Company or any of the Subsidiaries of any
Hazardous Substance from the Company's Property; (iii) to the
Company's knowledge, there have been no activities on the Company's
Property which would subject Associated, Holding, the Subsidiaries, or
any subsequent occupier of the Company's Property to damages,
penalties, injunctive relief or cleanup costs under any Environmental
Laws or common law theory of liability.
SECTION 2.15. Absence of Agreements. Neither the Company nor any
Subsidiary is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter which restricts materially the conduct of its business
(including any contract containing covenants which limit the ability of the
Company or any Subsidiary to compete in any line of business or with any person
or which involve any restriction of the geographical area in which, or method
by which, the Company or any Subsidiary may carry on its business), or in any
manner relates to its capital adequacy, its credit policies or its management
nor has the Company or any Subsidiary been advised that any federal, state or
governmental agency is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar submission.
SECTION 2.16. Taxes. The Company and the Subsidiaries have timely
filed all Tax Returns (as defined below) required to be filed by them, and the
Company and the Subsidiaries have timely paid and discharged all Taxes (as
defined below) due in connection with or with respect to the filing of such Tax
Returns and have timely paid all other Taxes as are due, except such as are
being contested in good faith by appropriate proceedings and with respect to
which the Company is maintaining reserves adequate for their payment. To the
best knowledge of the Company, the liability for Taxes set forth on each such
Tax Return adequately reflects the Taxes required to be reflected on such Tax
Return. For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
charges, fees levies, and other governmental assessments and impositions of any
kind, payable to any federal, state, local or foreign governmental entity or
taxing authority or agency, including, without limitation, (a) income,
franchise, profits, gross receipts, estimated, ad valorem, value added, sales,
use, service, real or personal property, capital stock, license, payroll,
withholding, disability, employment, social security, workers compensation,
unemployment compensation, utility, severance, production, excise, stamp,
occupation, premiums, windfall profits, transfer and gains taxes, (b) customs
duties, imposts, charges, levies or other similar assessments of any kind, and
(c) interest, penalties and additions to tax imposed with respect thereto, and
"Tax Returns" shall mean returns, reports, and information statements with
respect to Taxes required to be filed with the United States Internal Revenue
Service (the "IRS") or any other governmental entity or taxing authority or
agency, domestic or foreign, including, without limitation, consolidated,
combined and unitary tax returns. Neither the IRS nor any other governmental
entity or taxing authority or agency is now asserting, either through audits,
administrative proceedings, court proceedings or otherwise, or, to the best of
the Company's knowledge, threatening to assert against the Company or any
Subsidiary any deficiency or claim for additional Taxes. Neither the Company
nor any Subsidiary has granted any waiver of any statute of limitations with
respect to, or any extension of a period for the assessment of, any Tax. There
are no tax liens on any assets of the Company or any Subsidiary. Neither the
Company nor any Subsidiary has received a ruling or entered into an agreement
with the IRS or any other governmental entity or taxing authority or agency
that would have a Material Adverse Effect on the Company or the Subsidiaries,
taken as a whole, after the Effective Time. The accruals and reserves for
taxes reflected in the Company's Balance Sheet are adequate to cover all Taxes
accruable by the Company and the Subsidiaries on a consolidated basis through
the date thereof (including Taxes being contested) in accordance with generally
accepted accounting principles. Except as may be set forth in the Company
Disclosure Schedule at Section 2.16, no agreements relating to allocating or
sharing of Taxes exist between the Company and the Subsidiaries.
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SECTION 2.17. Insurance. Complete and correct copies of all material
policies of fire, product or other liability, workers' compensation and other
similar forms of insurance owned or held by the Company and the Subsidiaries
have been delivered to Associated. Subject to expirations and renewals of
insurance policies in the ordinary course of business, all such policies are in
full force and effect, all premiums with respect thereto covering all periods
up to and including the date as of which this representation is being made have
been paid (other than retrospective premiums which may be payable with respect
to workers' compensation insurance policies), and no notice of cancellation or
termination has been received with respect to any such policy. Such policies
are and shall remain valid, outstanding and enforceable policies, and will not
be terminated prior to the Effective Time. To the best knowledge of the
Company, the insurance policies to which the Company or the Subsidiaries are
parties are sufficient for compliance with all material requirements of law and
all material agreements to which the Company or the Subsidiaries are parties
and will be maintained by the Company and the Subsidiaries until the Effective
Time. Neither the Company nor any Subsidiary has been refused any insurance
with respect to any material assets or operations, nor has coverage been
limited in any respect material to their operations by any insurance carrier to
which they have applied for any such insurance or with which they have carried
insurance during the last five (5) years.
SECTION 2.18. Absence of Adverse Agreements. Neither the Company nor
any Subsidiary is a party to any agreement or instrument or any judgment, order
or decree or any rule or regulation of any court or other governmental agency
or authority which materially and adversely affects or in the future may have a
Material Adverse Effect on the financial condition, results or operations,
assets, business or prospects of the Company or the Subsidiaries, taken as a
whole.
SECTION 2.19. Internal Controls and Records. The Company and each
Subsidiary maintain books of account which accurately and validly reflect, in
all material respects, all loans, mortgages, collateral and other business
transactions and maintain accounting controls sufficient to ensure that all
such transactions are (a) in all material respects, executed in accordance with
its management's general or specific authorization, and (b) recorded in
conformity with generally accepted accounting principles. There is no
amendment to any ending agreement, collateral document or security which is not
fully reflected in the books and records of the Company or the Subsidiaries.
SECTION 2.20. Loans. Except as disclosed in the Company Disclosure
Schedule at Section 2.20, (a) the Bank is not a party to any written or oral
loan agreement, note or borrowing arrangement which has been classified as
"substandard," "doubtful," "loss," "other loans especially mentioned" or any
comparable classifications by the Company or the Subsidiaries or banking
regulators; (b) neither the Company nor any Subsidiary is a party to any
written or oral loan agreement, note, or borrowing arrangement, including any
loan guaranty, with any director or executive officer of the Company or any
Subsidiary, or any person, corporation or enterprise controlling, controlled by
or under common control with any of the foregoing; or (c) neither the Company
nor any Subsidiary is a party to any written or oral loan agreement, note or
borrowing arrangement in violation of any law, regulation or rule of any
governmental authority and which violation could have a Material Adverse Effect
on the Company or the Subsidiaries, taken as a whole.
SECTION 2.21. Labor Matters. Except as will not cause a Material
Adverse Effect to the Company or the Subsidiaries (a) the Company and the
Subsidiaries are in compliance with all applicable laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, and are not engaged in any unfair labor practice; (b) there is no unfair
labor practice complaint against the Company or any Subsidiary pending before
the National Labor Relations Board; (c) there is no labor strike, dispute,
slowdown, representation campaign or work stoppage actually pending or
threatened against or affecting the Company or any Subsidiary; (d) no grievance
or arbitration proceeding arising out of or under collective bargaining
agreements is pending and no claim therefor has been asserted against the
Company or any Subsidiary; and (e) neither the Company nor any Subsidiary is
experiencing any material work stoppage.
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SECTION 2.22. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company or the Subsidiaries.
SECTION 2.23. Accounting and Tax Matters.
(a) To the best knowledge of the Company, neither the
Company nor any of its affiliates has through the date of this
Agreement taken or agreed to take any action that would prevent
Associated from accounting for the business combinations to be
effected by the Merger as a pooling-of-interests or would prevent the
Merger from qualifying as a reorganization under Section 368(a)(1)(A)
of the Code.
(b) To the best knowledge of the Company, there is no
plan or intention on the part of shareholders of the Company who will
receive Associated Common Stock to sell or otherwise dispose of an
amount of Associated Common Stock to be received in the Merger which
would reduce their ownership of Associated Common Stock to a number of
shares having in the aggregate a value at the time of the Merger of
less than fifty percent (50%) of the total value of the Company's
Common Stock outstanding immediately prior to the Merger.
SECTION 2.24. Full Disclosure. No statement contained in any
document, certificate, or other writing furnished or to be furnished by or at
the direction of the Company to Associated in, or pursuant to the provisions
of, this Agreement contains or shall contain any untrue statement of a material
fact or omits or shall omit to state any material fact necessary, in light of
the circumstances under which it was made, in order to make the statements
herein or therein not misleading.
SECTION 2.25. Vote Required. The affirmative vote of a majority of
the votes that holders of the outstanding shares of the Company's Common Stock
are entitled to cast is the only vote of the holders of any class or series of
the Company's capital stock necessary to approve the Merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ASSOCIATED
Except as set forth in the Disclosure Schedule attached hereto (the
"Associated Disclosure Schedule"), Associated hereby represents and warrants to
the Company that:
SECTION 3.01. Organization and Qualification. Associated and Holding
are bank holding companies duly organized and validly existing under the laws
of the State of Wisconsin. Associated and Holding are registered with the
Federal Reserve Board as bank holding companies under the BHCA. Associated and
Holding have the requisite corporate power and authority and are in possession
of all franchises, grants, authorizations, licenses, permits, easements,
consents, certificates, approvals and orders (the "Associated Approvals")
necessary to own, lease and operate their properties and to carry on their
businesses as they are now being conducted, including appropriate
authorizations from the Federal Reserve Board, except where the failure to be
so organized and existing or to have such power, authority and Associated
Approvals would not, individually or in the aggregate, have a Material Adverse
Effect on Associated or Holding, taken as a whole. Associated has not received
any notice of proceedings relating to the revocation or modification of any
such Associated Approvals. Associated and Holding are duly qualified or
licensed as foreign corporations to do business, and are in good standing, in
each jurisdiction where the character of properties owned, leased or operated
by them or the nature of their activities makes such qualification or licensing
necessary, except for such failures to be so duly qualified or licensed and in
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good standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on Associated or Holding taken as a whole.
SECTION 3.02. Articles of Incorporation and Bylaws. Associated and
Holding have heretofore furnished to the Company a complete and correct copy of
their respective Articles of Incorporation and the Bylaws, as amended or
restated. Such Articles of Incorporation and Bylaws are in full force and
effect. Associated and Holding are not in violation of any of the provisions
of their Articles of Incorporation or Bylaws.
SECTION 3.03. Capitalization. The outstanding capital stock of
Associated is, and the shares of Associated Common Stock to be issued pursuant
to the Merger, when so issued, will be, duly authorized, validly issued, fully
paid and non-assessable (except as provided in section 180.0622(2)(b) of
Wisconsin Business Corporation Law) and have not, and will not have, been
issued in violation of the preemptive rights of any person.
SECTION 3.04. Authority. Associated and Holding have the requisite
corporate power and authority to execute and deliver this Agreement and to
perform their obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by
Associated and Holding and the consummation by Associated and Holding of the
transactions contemplated hereby have been duly and validly authorized by all
necessary corporate action on the part of Associated and Holding and no other
corporate proceedings on the part of Associated or Holding are necessary to
authorize this Agreement or to consummate the transactions so contemplated
hereby. This Agreement has been duly and validly executed and delivered by
Associated and Holding and, assuming the due authorization, execution and
delivery by the Company, constitutes the legal, valid and binding obligation of
Associated and Holding.
SECTION 3.05. No Conflict; Required Filings and Consents.
(a) To the best knowledge of Associated, the execution
and delivery of this Agreement by Associated and Holding does not, and
the performance of this Agreement by Associated and Holding shall not,
(i) conflict with or violate the Articles of Incorporation or Bylaws
of Associated or Holding, (ii) conflict with or violate any laws
applicable to Associated or Holding or by which their properties are
bound or affected, or (iii) result in any breach of or constitute a
default (or an event that with notice or lapse of time or both would
become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation
of a lien or encumbrance on any of the properties or assets of
Associated or Holding pursuant to any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Associated or Holding is a party or
by which Associated, Holding or their properties are bound or
affected, except for any such breaches, defaults or other occurrences
that would not, individually or in the aggregate, have a Material
Adverse Effect on Associated or Holding, taken as a whole.
(b) To the best knowledge of Associated, the execution
and delivery of this Agreement by Associated and Holding do not, and
the performance of this Agreement by Associated and Holding shall not,
require any consent, approval, authorization or permit of, or filing
with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any,
of the Securities Act, the Exchange Act, Blue Sky Laws, the BHCA, the
WBL, and the filing and recordation of appropriate merger or other
documents as required by Wisconsin Law, and (ii) where the failure to
obtain such consents, approvals, authorizations or permits, or to make
such filings or notifications, would not prevent or delay consummation
of the Merger, or otherwise prevent Associated and Holding from
performing their
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obligations under this Agreement, and would not have a Material
Adverse Effect on Associated or Holding, taken as a whole.
SECTION 3.06. Compliance; Permits. To the best knowledge of
Associated, neither Associated nor Holding is in conflict with, or in default
or violation of (a) any Law applicable to Associated or Holding or by which
their property is bound or affected, or (b) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Associated or Holding is a party or by which
Associated or Holding or any of their properties are bound or affected, except
for any such conflicts, defaults or violations which would not, individually or
in the aggregate, have a Material Adverse Effect on Associated or Holding,
taken as a whole.
SECTION 3.07. Securities Reports; Financial Statements.
(a) As of the date of this Agreement, Associated has
delivered to the Company in the form filed with the SEC (x)(i) its
Annual Reports on Form 10-K for the fiscal years ended December 31,
1991, 1992, 1993, and 1994, respectively, (ii) its Quarterly Reports
on Form 10-Q for the periods ended March 31, 1995, and June 30, 1995,
(iii) all definitive proxy statements relating to Associated's
meetings of shareholders (whether annual or special) held since
December 31, 1990, (iv) all Reports on Form 8-K filed by Associated
with the SEC since December 31, 1990, (v) all other reports or
registration statements (other than Reports on Form 10-Q not referred
to in clause (ii) above and registration statements on Form S-8 filed
by Associated with the SEC since December 31, 1990) and (vi) all
amendments and supplements to all such reports and registration
statements filed by Associated with the SEC since December 31, 1990
(collectively, the "Associated SEC Reports"). The Associated SEC
Reports, including all Associated SEC Reports filed after the date of
this Agreement, (y)(i) were or will be prepared in accordance with the
requirements of applicable law and (ii) did not at the time they were
filed, or will not at the time they are filed, contain any untrue
statement of material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the
Associated SEC Reports, including any Associated SEC Reports filed
since the date of this Agreement and prior to or on the Effective
Time, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the
periods involved (except as may be indicated in the notes thereto) and
each fairly presents the consolidated financial position of Associated
and its subsidiaries as of the respective dates thereof and the
consolidated results of its operations and changes in financial
position for the periods indicated, except that any unaudited interim
financial statements were or are subject to normal and recurring
year-end adjustments which were not or are not expected to be material
in amount.
(c) Except as and to the extent set forth on the
consolidated balance sheet of Associated and its subsidiaries as of
December 31, 1994, including all notes thereto (the "Associated
Balance Sheet"), neither Associated nor its subsidiaries have any
liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with
generally accepted accounting principles, except (i) for liabilities
or obligations incurred in the ordinary course of business since
December 31, 1994, that would not, individually or in the aggregate,
have a Material Adverse Effect on Associated or its subsidiaries,
taken as a whole, or (ii) as otherwise reflected in the reports
referred to in clause (x)(ii) of Section 3.07(a) hereof.
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SECTION 3.08. Absence of Certain Changes or Events. Except as
disclosed in the Associated SEC Reports filed prior to the date of this
Agreement, since December 31, 1994, to the date of this Agreement, Associated
and its subsidiaries have conducted their businesses only in the ordinary
course and in a manner consistent with past practice and, since December 31,
1994, there has not been (a) any change in the financial condition, results of
operations or business of Associated or its subsidiaries having a Material
Adverse Effect on Associated or its subsidiaries, taken as a whole, (b) any
damage, destruction or loss (whether or not covered by insurance) with respect
to any assets of Associated or its subsidiaries having a Material Adverse
Effect on Associated or its subsidiaries, taken as a whole, (c) any change by
Associated in its accounting methods, principles or practices, (d) any
revaluation by Associated of any of its material assets in any material
respect, or (e) to the date of this Agreement, any entry by Associated or any
of its subsidiaries into any commitment or transactions material to Associated
or its subsidiaries, taken as a whole.
SECTION 3.09. Absence of Litigation. Except as disclosed in the
Associated Disclosure Schedule at Section 3.09 and in the Associated SEC
Reports filed prior to the date of this Agreement, there is no claim, action,
suit, litigation, proceeding, arbitration, investigation, or controversy of any
kind affecting Associated or any of Associated's subsidiaries pending or, to
the knowledge of Associated, threatened, except for matters which individually
seek damages not in excess of $100,000 and which otherwise will not have, and
cannot reasonably be expected to have, a Material Adverse Effect on Associated
or its subsidiaries taken as a whole, and there are no uncured material
violations, or violations with respect to which material refunds or
restitutions may be required, cited in any compliance report to Associated or
any of Associated's subsidiaries as a result of an examination by any bank
regulatory authority.
SECTION 3.10. Registration Statement; Proxy Statement. None of the
information supplied or to be supplied by Associated for inclusion in (a) the
Registration Statement (as defined in Section 6.01) (b) the Proxy Statement/
Prospectus (as defined in Section 6.01), or (c) any other document to be filed
with the SEC or other regulatory authority in connection with the transactions
contemplated hereby, at the respective time such documents are filed and, in
the case of the Registration Statement, when it becomes effective and at the
Effective Time, and with respect to the Proxy Statement/Prospectus, when
mailed, shall be false or misleading with respect to any material fact, or omit
to state any material fact necessary in order to make the statements therein
not misleading. In the case of the Proxy Statement/Prospectus or any amendment
thereof or supplement thereto, none of such information at the time of the
Meeting (as provided for in Section 6.02) shall be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Meeting. All documents filed with the SEC or
other regulatory authority by Associated in connection with the Merger shall
comply as to form in all material respects with the provisions of applicable
law.
SECTION 3.11. Absence of Agreements. Neither Associated nor Holding
is a party to any written agreement or memorandum of understanding with, or a
party to any commitment letter or similar undertaking to, or is subject to any
order or directive by, or is a recipient of any extraordinary supervisory
letter which restricts materially the conduct of its business (including any
contract containing covenants which limit the ability of Associated or Holding
to compete in any line of business or with any person or which involve any
restriction of the geographical area in which, or any method by which,
Associated or Holding may carry on its business (other than as may be required
by Law or applicable regulatory authorities)), or in any manner relates to its
capital adequacy, its credit policies or its management, except for those the
existence of which has been disclosed to the Company prior to the date of this
Agreement, nor has Associated or Holding been advised that any federal, state
or governmental agency is contemplating issuing or requesting (or is
considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory
letter, commitment letter or similar submission, except as may be disclosed by
Associated in the Associated Disclosure Schedule at Section 3.11.
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SECTION 3.12. Taxes. Associated and its subsidiaries have timely
filed all Tax Returns required to be filed by them, and Associated and its
subsidiaries have timely paid and discharged all Taxes due in connection with
or with respect to the filing of such Tax Returns and have timely paid all
other Taxes as are due, except such as are being contested in good faith by
appropriate proceedings and with respect to which Associated is maintaining
reserves adequate for their payment. To the best knowledge of Associated, the
liability for Taxes set forth on each such Tax Return adequately reflects the
Taxes required to be reflected on such Tax Return. For purposes of this
Section 3.12, references to Associated and its subsidiaries include former
subsidiaries of Associated for the periods during which any such corporations
were owned, directly or indirectly, by Associated. Neither the IRS nor any
other governmental entity or taxing authority or agency is now asserting,
either through audits or administrative proceedings, court proceedings or
otherwise, or, to the best of Associated's knowledge, threatening to assert
against Associated or any of its subsidiaries any deficiency or claim for
additional Taxes. Neither Associated nor any of its subsidiaries has granted
any waiver of any statute of limitations with respect to, or any extension of a
period for the assessment of, any Tax. There are no tax liens on any assets of
Associated or any of its subsidiaries. Neither Associated nor any of its
subsidiaries has received a ruling or entered into an agreement with the IRS or
any other governmental entity or taxing authority or agency that would have a
Material Adverse Effect on Associated or its subsidiaries, taken as a whole,
after the Effective Time. The accruals and reserves for taxes reflected in the
Associated Balance Sheet are adequate to cover all Taxes accruable through the
date thereof (including Taxes being contested) in accordance with generally
accepted accounting principles. No agreements relating to allocating or
sharing of Taxes exist among Associated and its subsidiaries and no tax
indemnities given by Associated or its subsidiaries in connection with a sale
of stock or assets remain in effect. Neither Associated nor any of its
subsidiaries is required to include in income either (i) any amount in respect
of any adjustment under Section 481 of the Code, or (ii) any installment sale
gain. Neither Associated nor any of its subsidiaries has made an election
under Section 341(f) of the Code.
SECTION 3.13. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Associated.
SECTION 3.14. Accounting and Tax Matters. To the best knowledge of
Associated, neither Associated nor any of its affiliates has through the date
of this Agreement taken or agreed to take any action that would prevent
Associated from accounting for the business combinations to be effected by the
Merger as a pooling-of-interests or would prevent the Merger from qualifying as
a reorganization under Section 368(a)(1)(A) of the Code.
SECTION 3.15. Full Disclosure. No statement contained in any
document, certificate, or other writing furnished or to be furnished by or at
the direction of Associated to the Company, in or pursuant to the provisions
of, this Agreement contains or shall contain any untrue statement of a material
fact or omits or shall omit to state any material fact necessary, in the light
of the circumstances under which it has been made, in order to make the
statements herein or therein not misleading.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. The Company hereby covenants
and agrees with Associated and Holding that prior to the Effective Time, unless
the prior written consent of Associated shall have been obtained and except as
otherwise contemplated herein, it will and/or it will cause each Subsidiary to:
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(a) operate its business only in the usual, regular and
ordinary course consistent with past practices;
(b) terminate the Company's pension plan in accordance
with FAS 88 in a manner which will not result in an aggregate loss
exceeding $50,000;
(c) prior to December 31, 1995, and subject to
Associated's approval, expense the Terra litigation settlement amount
and all related fees and expenses, which settlement amount and related
fees and expenses shall not exceed $200,000 in the aggregate;
(d) use reasonable efforts to preserve intact its
business organization and assets, maintain its rights and franchises,
retain the services of its officers and key employees and maintain its
relationships with customers;
(e) use reasonable efforts to maintain and keep its
properties in as good repair and condition as at present, ordinary
wear and tear excepted;
(f) use reasonable efforts to keep in full force and
effect insurance and bonds comparable in amount and scope of coverage
to that now maintained by it;
(g) perform in all material respects all obligations
required to be performed by it under all material contracts, leases,
and documents relating to or affecting its assets, properties, and
business;
(h) purchase and sell securities in accordance with the
guidelines set forth on the Schedule at Section 4.01;
(i) with respect to the Bank, maintain as of December 31,
1995 and thereafter a loan loss reserve of not less than 1.69 percent
of period ending loans;
(j) comply with and perform in all material respects all
obligations and duties imposed upon it by all applicable laws;
(k) obtain an independent audit of its financial
statements for the year ended December 31, 1995; and
(l) comply with the capital requirements set forth on the
Schedule to Section 4.01;
(m) recognize in 1995 any and all loss incurred in
connection with the closing of the East Bristol branch;
(n) fully expense in 1995 all amounts payable to Donald
Adams under the severance agreement between the Company and Mr. Adams;
(o) fully expense in 1995 all expenses (including fees)
incurred in connection with the consummation of the transaction
contemplated hereby;
(p) fully expense in 1995 all organizational expenses
incurred in connection with the acquisition of banks in Columbus,
Wisconsin and Pittsville, Wisconsin.
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SECTION 4.02. Negative Covenants. Except as specifically
contemplated by this Agreement, from the date of this Agreement until the
Effective Time, the Company shall not do, or permit the Subsidiaries to do,
without the prior written consent of Associated, any of the following:
(a) (i) grant any increase in compensation or grant any
bonuses (incentive or special) to its employees as a class, or to its
officers or directors, (ii) effect any change in retirement benefits
to any class of employees or officers (unless any such change shall be
required by applicable law) which would increase its retirement
benefit liabilities, (iii) subject to Section 4.01(b), adopt, enter
into, amend or modify any employee benefit plan or make any
adjustments pursuant to any employee benefit plan, or (iv) enter into
or amend any employment, severance or similar agreements or
arrangements with any directors or officers, other than as is
consistent with the normal severance policies of the Company and the
Subsidiaries in effect on the date of this Agreement;
(b) declare or pay any dividend on, or make any other
distribution in respect of, its outstanding shares of capital stock;
provided, however, that, commencing February 15, 1996, the Company may
pay quarterly dividends at the rate of $.32 per share;
(c) (i) redeem, purchase or otherwise acquire any shares
of its capital stock or any securities or obligations convertible into
or exchangeable for any shares of its capital stock, or any options,
warrants, conversion or other rights to acquire any shares of its
capital stock or any such securities or obligations; (ii) merge with
or into any other corporation or bank, permit any other corporation or
bank to merge into it or consolidate with any other corporation or
bank, or effect any reorganization or recapitalization; (iii) purchase
or otherwise acquire any assets or stock of any corporation, bank or
other business; (iv) liquidate, sell, dispose of, or encumber any
assets or acquire any assets, other than in the ordinary course of its
business consistent with past practice; or (v) split, combine or
reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(d) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of
any class of its capital stock (including shares held in treasury) or
any rights, warrants or options to acquire, any such shares;
(e) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to
facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Competing
Transaction (as such term is defined below), or negotiate with any
person in furtherance of such inquiries or to obtain a Competing
Transaction, or agree to or endorse any Competing Transaction, or
authorize or permit any of its officers, directors or employees or any
investment banker, financial advisor, attorney, accountant or other
representative retained by it or any Subsidiary to take any such
action, and the Company shall promptly notify Associated orally and in
writing of all of the relevant details relating to all inquiries and
proposals which it may receive relating to any of such matters;
provided, however, that nothing contained in this subsection (e) shall
prohibit the Board of Directors of the Company from furnishing or
permitting any of its officers, directors, employees, investment
bankers, financial advisors, attorneys, accountants or other
representative to furnish information to any party that requests
information as to the Company and the Subsidiaries if (i) the Board of
Directors of the Company, after consultation with and based upon the
written advice of independent legal counsel, determines in good faith
that such action is required for the Board of Directors of the Company
to comply with its fiduciary duties to shareholders imposed by law and
(ii) prior to furnishing such information to such party, the Company
receives from such party an executed confidentiality agreement in
reasonably customary form. For purposes of this Agreement,
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"Competing Transaction" shall mean any of the following involving the
Company or any Subsidiary: (i) any merger, consolidation, share
exchange, business combination, or other similar transactions; (ii)
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of ten percent or more of assets in a single transaction
or series of transactions, excluding from the calculation of the
percentage hereunder any such transactions undertaken in the ordinary
course of business and consistent with past practice; (iii) any sale
of ten percent or more of shares of capital stock (or securities
convertible or exchangeable into or otherwise evidencing, or any
agreement or instrument evidencing, the right to acquire capital
stock); (iv) any tender offer or exchange offer for ten percent or
more of outstanding shares of capital stock; (v) any solicitation of
proxies in opposition to approval by the Company's shareholders of the
Merger; (vi) the filing of an acquisition application (or the giving
of acquisition notice) whether in draft or final form under the BHCA
or the Change in Bank Control Act with respect to the Company or the
Subsidiaries; (vii) any person shall have acquired beneficial
ownership or the right to acquire beneficial ownership of, or any
"group" (as such term is defined under Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder) shall have
been formed which beneficially owns or has the right to acquire
beneficial ownership of, 10% or more of the then outstanding shares of
capital stock; or (viii) any public announcement of a proposal, plan
or intention to do any of the foregoing;
(f) propose or adopt any amendments to the corporate
charter or Bylaws in any way materially adverse to Associated;
(g) except in their fiduciary capacities for the account
of customers, purchase any shares of Associated Common Stock;
(h) change any of its methods of accounting in effect at
December 31, 1994, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year
ending December 31, 1994, except as may be required by law or
generally accepted accounting principles;
(i) subject to Section 4.01(h), change any lending,
investment, liability management or other material policies concerning
the business or operations of the Company or any Subsidiary in any
material respect; organize any new subsidiaries or enter into any new
non-banking line of business whether or not permissible under
applicable Federal or state law, or make any material changes in its
operations;
(j) (i) incur or assume any material obligation or
liability, including without limitation any obligation for borrowed
money, whether or not evidenced by a note, bond, debenture or similar
instrument and whether or not being incurred to reduce other existing
liabilities, or make any loan (not including any loan renewal of a
loan not then classified as "substandard," "doubtful," "loss," "other
loans especially mentioned" or any comparable classifications by the
Company, the Subsidiaries or banking regulators) or investment
(including U.S. Treasury Securities) in an amount greater than
$100,000.00, (ii) assume, guarantee, endorse or otherwise become
liable or responsible (whether directly, contingent or otherwise) for
the obligations of any other person or entity; (iii) mortgage,
license, pledge or grant a security interest in any of its material
assets or allow to exist any material lien thereon; except (A) for
liabilities and obligations (including corporate debt issuances)
incurred in the ordinary course of business consistent with past
practices and in amounts not material to the Company or the
Subsidiaries; and (B) as may be required under existing agreements to
which the Company or any Subsidiary is a party; (iv) acquire assets
(including equipment) or securities in excess of $25,000 in the
aggregate (excluding loans to customers and investments permitted in
(i) above; (v) enter into any other contract or agreement involving
annual payments by the Company or any Subsidiary or the other party or
parties thereto in excess of
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$20,000; (vi) pay, discharge, or satisfy any debts or claims not in
the ordinary course of business and consistent with past practices and
in no event with a value in excess of $20,000.00 individually; (vii)
settle any claim, action, suit, litigation, proceeding, arbitration,
investigation or controversy of any kind, for any amount in excess of
$25,000.00 or in any manner which would restrict in any material
respect the operations or business of the Company or the Subsidiaries;
(viii) purchase any new financial product or instrument which involves
entering into a contract with a term of six months or longer; or (ix)
take any action or fail to take any action which individually or in
the aggregate can be expected to have a Material Adverse Effect on the
Company or the Subsidiaries, taken as a whole; or
(k) agree in writing or otherwise to do any of the
foregoing.
SECTION 4.03. Intentionally left blank.
SECTION 4.04. Access and Information.
(a) Upon reasonable notice, and without unreasonable
disruption to the business carried on by the Company or the
Subsidiaries, the Company shall (and shall cause the Subsidiaries to)
afford to Associated's officers, employees, accountants, legal counsel
and other representatives access, during normal business hours, to all
its properties, books, contracts, commitments and records. Prior to
the Effective Time, the Company shall (and shall cause each Subsidiary
to) furnish promptly to Associated (i) a copy of each Company Report
filed by it (to the extent permitted by Law) after the date of this
Agreement and prior to the Effective Time pursuant to the requirements
of federal or state securities laws, the BHCA, any other federal or
state banking laws or any other applicable laws promptly after such
documents are available; (ii) the monthly consolidated financial
statements of the Company and the Subsidiaries; (iii) the audited
consolidated financial statements of the Company and the Subsidiaries
for the year ended December 31, 1995; (iv) a summary of any action
taken by the Board of Directors, or any committee thereof, of the
Company and the Subsidiaries; and (v) all other information concerning
the business, properties and personnel of the Company or the
Subsidiaries as Associated may reasonably request.
(b) Any information provided to Associated by the Company
or the Subsidiaries, whether prior to or subsequent to the date of
this Agreement, shall be kept confidential by the representatives of
Associated (and shall be used by them only in connection with this
Agreement and the transactions contemplated hereby) except to the
extent that (i) it was already known to such representatives when
received, (ii) it hereafter becomes lawfully obtainable from other
sources, or (iii) it is required to be disclosed by Associated in any
document required to be filed with any government agency. Upon any
termination of this Agreement pursuant to Section 8 hereof, Associated
agrees to promptly return all information and documents that it has
obtained from the Company in connection herewith.
SECTION 4.05. Affiliates; Accounting and Tax Treatment. Within
thirty (30) days after the date of this Agreement, (a) the Company shall
deliver to Associated a letter identifying all persons who are then
"affiliates" of the Company, including, without limitation, all directors and
executive officers of the Company for purposes of Rule 145 promulgated under
the Securities Act and (b) the Company shall advise the persons identified in
such letter of the resale restrictions imposed by applicable securities laws
and required to cause the Merger to qualify for pooling-of-interests
accounting treatment, and shall use reasonable efforts to obtain from each
person identified in such letter a written agreement, substantially in the form
attached hereto as Exhibit 4.05. The Company shall use reasonable efforts to
obtain from any person who becomes an affiliate of the Company after the
Company's delivery of the letter referred to above, and on or prior to the
Effective Time, a written agreement substantially in the form attached hereto
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as Exhibit 4.05 as soon as practicable after attaining such status. The
Company will use its best efforts to cause the Merger to qualify for
pooling-of-interests accounting treatment and as a reorganization under Section
368(a)(1)(A) of the Code.
SECTION 4.06. Expenses.
(a) Except as provided in Section 8.02, below, all
Expenses (as described below) incurred by Associated and the Company
shall be borne solely and entirely by the party which has incurred the
same, except that the parties shall share equally in the expense of
printing and filing the Registration Statement and the Proxy
Statement/Prospectus and all SEC and other regulatory filing fees
incurred in connection herewith.
(b) "Expenses" as used in this Agreement shall include
all reasonable out-of-pocket expenses (including without limitation,
all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to the party and its affiliates) incurred by a
party or on its behalf in connection with or related to the
authorization, preparation and execution of this Agreement, the
solicitation of shareholder approvals and all other matters related to
the closing of the transactions contemplated hereby.
SECTION 4.07. Delivery of Shareholder List. The Company shall
arrange to have its transfer agent deliver to Associated or its designee, from
time to time prior to the Effective Time, a true and complete list setting
forth the names and addresses of the shareholders of the Company, their
holdings of stock as of the latest practicable date, and such other shareholder
information as Associated may reasonably request.
ARTICLE V
COVENANTS OF ASSOCIATED
SECTION 5.01. Affirmative Covenants. Associated hereby covenants and
agrees with the Company that prior to the Effective Time, unless the prior
written consent of the Company shall have been obtained, and except as
otherwise contemplated herein it will and will cause Holding to:
(a) maintain its corporate existence in good standing and
maintain all books and records in accordance with accounting
principles and practices as utilized in Associated's financial
Statements applied on consistent basis;
(b) conduct its business in a manner that does not
violate any law, except for possible violations which individually or
in the aggregate do not, and insofar as reasonably can be foreseen, in
the future will not, have a Material Adverse Effect on Associated or
its subsidiaries, taken as a whole; and
(c) will, to the best of its ability and in all material
respects, (i) comply with applicable Blue Sky Laws and regulations,
the Securities Act, and the Exchange Act, and (ii) remain qualified
under the Exchange Act and the rules and regulations thereunder.
SECTION 5.02. Access and Information.
(a) After the date of this Agreement and prior to the
Effective Time, upon reasonable notice, Associated shall (and shall
cause each of its subsidiaries to) furnish promptly to the Company (i)
a copy of each Associated SEC Report filed by it or received by it (to
the extent permitted by law) after the date of this Agreement and
prior to the Effective Time pursuant to the
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requirements of federal or state securities laws, the BHCA, any other
federal or state banking laws or any other applicable laws promptly
after such documents are available, and (ii) all other information
concerning the business, properties and personnel of Associated or its
subsidiaries as the Company may reasonably request.
(b) Any information provided to the Company by Associated
whether prior to or subsequent to the date of this Agreement shall be
kept confidential by the representatives of the Company (and shall be
used by them only in connection with this Agreement and the
transactions contemplated hereby) except to the extent that (i) it was
already known to such representatives when received, (ii) it hereafter
becomes lawfully obtainable from other sources, or (iii) it is
required to be disclosed by the Company in any document required to be
filed with the Company or any government authority or agency.
SECTION 5.03. Accounting and Tax Treatment. Associated will use its
best efforts to cause the Merger to qualify for pooling-of-interests accounting
treatment and as a reorganization under Section 368(a)(1)(A) of the Code.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement. As promptly as practicable
after the execution of this Agreement, Associated shall prepare and file a
registration statement on Form S-4 (the registration statement together with
the amendments thereto are defined as the "Registration Statement" and the
prospectus and proxy materials contained therein are defined as the "Proxy
Statement/Prospectus") with the SEC covering the Associated Common Stock to be
issued in the Merger (subject to the immediately following sentence), with a
view toward permitting the Registration Statement to become effective as soon
as reasonably practicable. Associated does not undertake to file
post-effective amendments to Form S-4 or to file a separate registration
statement to register the sale of Associated Common Stock by affiliates of the
Company pursuant to Rule 145 promulgated under the Securities Act. The Company
will furnish to Associated all information concerning the Company and the
Subsidiaries required to be set forth in the Registration Statement and
Associated will provide the Company and its counsel the opportunity to review
and approve such information as set forth in the Registration Statement and
Proxy Statement/Prospectus. Associated and the Company will each render to the
other its full cooperation in preparing, filing, prosecuting the filing of, and
amending the Registration Statement such that it comports at all times with the
requirements of the Securities Act and the Exchange Act. Specifically, but
without limitation, each will promptly advise the other if at any time before
the Effective Time any information provided by it for inclusion in the
Registration Statement appears to have been, or shall have become, incorrect or
incomplete and will furnish the information necessary to correct such
misstatements or omissions. As promptly as practicable after the effective
date of the Registration Statement, the Company will mail to its shareholders
(a) the Proxy Statement/Prospectus, and (b) as promptly as practicable after
approval thereof by Associated, such other supplementary proxy materials as may
be necessary to make the Proxy Statement/Prospectus comply with the
requirements of the Securities Act and the Exchange Act. Except as provided
above and except with the prior written consent of Associated, the Company will
not mail or otherwise furnish or publish to shareholders of the Company any
proxy solicitation material or other material relating to the Merger that
constitutes a "prospectus" within the meaning of the Securities Act.
Associated shall also take any action required to be taken under any applicable
Blue Sky Laws in connection with the issuance of the shares of Associated
Common Stock to be issued as set forth in this Agreement and the Company and
the Subsidiaries shall furnish all information concerning the Company and the
Subsidiaries, and the holders of the Company's Common Stock and other
assistance as Associated may reasonably request in connection with such action.
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SECTION 6.02. Meeting of Shareholders. The Company and its officers
and directors shall: (a) cause the Company's shareholders meeting to be duly
called and held as soon as practicable to consider and vote upon the Merger and
any related matters in accordance with the applicable provisions of applicable
law, (b) submit this Agreement to the Company's shareholders together with a
unanimous recommendation for approval by the Board of Directors of the Company,
(c) solicit the approval thereof by the Company's shareholders by mailing or
delivering to each shareholder a combined Prospectus/Proxy Statement, and (d)
use their best efforts to obtain the approval and adoption of the Merger by the
requisite percentage of the Company's shareholders.
SECTION 6.03. Appropriate Action; Consents; Filings. The Company and
Associated and Holding shall use all reasonable efforts to (a) take, or cause
to be taken, all appropriate action, and do, or cause to be done, all things
necessary, proper or advisable under applicable law to consummate and make
effective the transactions contemplated by this Agreement; (b) obtain all
consents, licenses, permits, waivers, approvals, authorizations or orders
required under Law (including, without limitation, all foreign and domestic
(federal, state and local) governmental and regulatory rulings and approvals
and parties to contracts) in connection with the authorization, execution and
delivery of this Agreement and the consummation by them of the transactions
contemplated hereby and thereby, including, without limitation, the Merger; and
(c) make all necessary filings, and thereafter make any other required
submissions, with respect to this Agreement and the Merger required under (i)
the Securities Act and the Exchange Act and the rules and regulations
thereunder, and any other applicable federal or state securities laws, (ii) any
applicable federal or state banking laws and (iii) any other applicable law;
provided that Associated and the Company shall cooperate with each other in
connection with the making of all such filings, including providing copies of
all such documents to the non-filing party and its advisors prior to filing
and, if requested, to accept all reasonable additions, deletions or changes
suggested in connection therewith. The Company and Associated shall furnish
all information required for any application or other filing to be made
pursuant to the rules and regulations of any applicable law (including all
information required to be included in the Proxy Statement/Prospectus and the
Registration statement) in connection with the transactions contemplated by
this Agreement. In case at any time after the Effective Time any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall use all
reasonable efforts to take all such necessary action.
SECTION 6.04. Notification of Certain Matters. The Company shall
give prompt notice to Associated, and Associated shall give prompt notice to
the Company, of (a) the occurrence, or non-occurrence, of any event the
occurrence, or non-occurrence, of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate, and (b) any failure of the Company or Associated, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the
delivery of any notice pursuant to this Section 6.04 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 6.05. Public Announcements. Associated and the Company shall
consult with each other before issuing any press release or otherwise making
any public statements with respect to the Merger and shall not issue any such
press release or make any such public statement prior to such consultation and
with mutual consent of both parties, except as may be required by law or any
listing agreement with the National Association of Securities Dealers.
SECTION 6.06. Environmental Matters. In the event Ramaker &
Associates, Inc. (the "Environmental Consultant") discovers or determines the
existence of any environmental condition (including, without limitation, a
spill, discharge, or contamination) the result of which may require
investigative or remedial action pursuant to any federal, state, or local law,
statute or regulation or may be the basis for the assertion of any third-party
claims, including the claims of governmental entities,
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Associated shall promptly notify the Company thereof and the Company shall, at
its sole cost and expense, proceed with due diligence to take reasonably
appropriate action in response thereto.
ARTICLE VII
CONDITIONS OF MERGER
SECTION 7.01. Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Effectiveness of the Registration Statement. The
Registration Statement shall have been declared effective by the SEC
under the Securities Act. No stop order suspending the effectiveness
of the Registration Statement shall have been issued by the SEC and no
proceedings for that purpose shall, on or prior to the Effective Time,
have been initiated or, to the knowledge of Associated or the Company,
threatened by the SEC. Associated shall have received all other
federal or state securities permits and other authorizations necessary
to issue Associated Common Stock in exchange for the Company Common
Stock and to consummate the Merger.
(b) Shareholder Approvals. This Agreement and the Merger
shall have been approved and adopted by the requisite vote of the
shareholders of the Company.
(c) Regulatory Approvals. The Merger shall have been
approved by the Federal Reserve Board, which approval shall not
contain any condition which is not reasonably satisfactory to
Associated or the Company, all conditions required to be satisfied
prior to the Effective Time imposed by the terms of such approvals
shall have been satisfied and all waiting periods relating to such
approvals shall have expired.
(d) No Order. No federal or state governmental or
regulatory authority or other agency or commission, or federal or
state court of competent jurisdiction, shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation,
executive order, decree, injunction or other order (whether temporary,
preliminary or permanent) which is in effect restricting, preventing
or prohibiting consummation of the transactions contemplated by this
Agreement.
(e) Employment Agreement. Associated and Beryl G.
Pascavis shall have entered into an Employment Agreement in
substantially the form of Exhibit 7.01.
SECTION 7.02. Additional Conditions to Obligations of Associated.
The obligations of Associated to effect the Merger are also subject to the
following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of the Company contained in this
Agreement shall be complete and correct in all material respects
(except that where any statement in a representation or warranty
expressly includes a standard of materiality, such statement shall be
true and correct in all respects) as of the Effective Time as though
made at the Effective Time with the same force and effect as if made
on and as of the Effective Time. Associated shall have received a
certificate of the Chief Executive Officer of the Company to that
effect.
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(b) Agreements and Covenants. The Company shall have
performed or complied in all material respects with all agreements and
covenants required by this Agreement to be performed or complied with
by it on or prior to the Effective Time.
(c) Consents Obtained. All material consents, waivers,
approvals, authorizations or orders required to be obtained, and all
filings required to be made by the Company for the authorization,
execution and delivery of this Agreement and the consummation by it of
the transactions contemplated hereby shall have been obtained and made
by the Company.
(d) No Challenge. There shall not be pending any action,
proceeding or investigation before any court or administrative agency
or by any government agency or any other person (i) challenging or
seeking material damages in connection with the Merger or the
conversion of the Company Common Stock into Associated Common Stock
pursuant to the Merger, or (ii) seeking to restrain, prohibit or limit
the exercise of full rights of ownership or operation by Associated or
its subsidiaries of all or any portion of the business or assets of
the Company or any of the Subsidiaries, which in either case is
reasonably likely to have a Material Adverse Effect on either the
Company or the Subsidiaries, taken as a whole, or Associated or its
subsidiaries, taken as a whole.
(e) Opinion of Counsel. Associated shall have received
from Michael, Best & Friedrich or other independent counsel for the
Company reasonably satisfactory to Associated, an opinion dated the
Effective Time, in form and substance reasonably satisfactory to
Associated, covering the matters set forth in Annex B hereto, which
opinion shall be based on such assumptions and containing such
qualifications and limitations as are appropriate and reasonably
satisfactory to Associated.
(f) Tax Opinion. An opinion of independent counsel for
Associated, to the effect that the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section
368(a) of the Code, and that Associated, Holding and the Company will
each be a party to that reorganization within the meaning of Section
368(b) of the Code, dated on or about the date that is two business
days prior to the date the Proxy Statement/Prospectus is first mailed
to shareholders of the Company, shall have been delivered and shall
not have been withdrawn or modified in any material respect.
(g) Intentionally left blank.
(h) Pooling Opinions. Associated shall have received an
opinion from KPMG Peat Marwick LLP to the effect that the Merger
qualifies for pooling-of-interests accounting treatment if consummated
in accordance with this Agreement.
(i) Affiliate Agreements. Associated shall have received
from each person who is identified in the affiliate letter as an
"affiliate" of the Company a signed affiliate agreement in the form
attached hereto as Exhibit 4.05.
(j) Burdensome Condition. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Merger, by any federal or state
governmental entity which, in connection with the grant of any
regulatory approval, imposes any condition or restriction upon the
Company or Associated or their respective subsidiaries (or the
Surviving Corporation or its subsidiaries after the Effective Time),
including, without limitation, any requirement to raise additional
capital, which would so materially adversely impact the economic or
business benefits of the transactions contemplated by this Agreement
as to render inadvisable the consummation of the Merger.
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(k) Fractional Shares; Dissenters. The aggregate of (i)
the fractional share interests in Associated Common Stock to be paid
in cash pursuant to Section 1.07 of this Agreement and (ii) the shares
of Associated Common Stock that would be issuable by virtue of the
Merger with respect to shares of the Company's Common Stock
outstanding on the record date for the meeting of the Company's
shareholders to consider the Merger that will not be converted into
Associated Common Stock due, directly or indirectly, to the exercise
of dissenters' rights, if available under Wisconsin Law, shall not be
more than 10% of the maximum aggregate number of shares of Associated
Common Stock which could be issued as a result of the Merger.
(l) Voting Agreement. Concurrently with the execution
and delivery of this Agreement, Associated and certain shareholders of
the Company shall have executed and delivered the Voting Agreement in
the form of Annex C.
(m) Environmental Report. Associated shall have received
from the Environmental Consultant a written environmental evaluation
of the Company's Property evidencing that:
(i) the Company's Property complies with all
Environmental Laws;
(ii) no capital improvements should be reasonably
required to maintain compliance with all Environmental Laws; and
(iii) there are no material contingent liabilities
affecting the Company's Property arising under Environmental Laws or
under Environmental Permits;
or the Company shall have complied with all of its obligations under
Section 6.06.
(n) Earnings. The Company's consolidated after-tax
earnings for calendar year 1995 less any earnings as a result of FDIC
return of premium plus the sum of (i) the amount expensed pursuant to
section 4.01(c) in connection with the Terra litigation, (ii) the
additional amount of loan loss reserve established as a result of
section 4.01(i), (iii) the amount of the loss in connection with the
termination of the Company's pension plan pursuant to section 4.01(b),
(iv) the amount of the loss in connection with the closing of the East
Bristol branch pursuant to section 4.01(m), (v) the amount expensed
pursuant to section 4.01(n), (vi) the amount expensed pursuant to
section 4.01(o) and (vii) the amount expensed pursuant to section
4.01(p) shall be at least $2,500,000.
SECTION 7.03. Additional Conditions to Obligations of the
Company. The obligation of the Company to effect the Merger is also subject to
the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Associated contained in this
Agreement shall be complete and correct in all material respects
(except that where any statement in a representation or warranty
expressly includes a statement of materiality, such statement shall be
true and correct in all respects) as of the Effective Time as though
made on and as of the Effective Time with the same force and effect as
if made on and as of the Effective Time. The Company shall have
received a certificate of the President of Associated to that effect.
(b) Agreements and Covenants. Associated and Holding
shall have performed or complied in all material respects with all
agreements and covenants required by this Agreement to be performed or
complied with by them on or prior to the Effective Time.
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(c) Consents Obtained. All material consents, waivers,
approvals, authorizations or orders required to be obtained, and all
filings required to be made by Associated and Holding for the
authorization, execution and delivery of this Agreement and the
consummation by it of the transactions contemplated hereby shall have
been obtained and made by Associated.
(d) Opinion of Counsel. The Company shall have received
from Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c. or other
independent counsel for Associated reasonably satisfactory to the
Company, an opinion dated the Effective Time, in form and substance
reasonably satisfactory to the Company, covering the matters set forth
in Annex D, which opinions shall be based on such assumptions and
contain such qualifications and limitations as are appropriate and
reasonably satisfactory to the Company.
(e) Tax Opinion. An opinion of independent counsel for
Associated, to the effect that the Merger will be treated for federal
income tax purposes as a reorganization within the meaning of Section
368(a) of the Code, and that Associated, Holding and the Company will
each be a party to that reorganization within the meaning of Section
368(b) of the Code, dated on or about the date that is two business
days prior to the date the Proxy Statement/Prospectus is first mailed
to shareholders of the Company, shall have been delivered and shall
not have been withdrawn or modified in any material respect.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the shareholders of the Company:
(i) by mutual written consent of Associated and the
Company;
(ii) by the Company or Associated (A) if there has been a
breach in any material respect (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall have been breached in any respect) of any representation,
warranty, covenant or agreement on the part of the Company, on the one hand, or
Associated, on the other hand, respectively, set forth in this Agreement, or
(B) if any representation or warranty of the Company, on the one hand, or
Associated, on the other hand, respectively, shall be discovered to have become
untrue in any material respect (except that where any statement in a
representation or warranty expressly includes a standard of materiality, such
statement shall have become untrue in any respect), in either case which breach
or other condition has not been cured within 10 business days following receipt
by the nonterminating party of notice of such breach or other condition;
provided, however, this Agreement may not be terminated pursuant to this clause
(ii) by the breaching party or party making any representation or warranty
which shall have become untrue in any material respect;
(iii) by either Associated or the Company if any permanent
injunction preventing the consummation of the Merger shall have become final
and nonappealable;
(iv) by either Associated or the Company if the Merger
shall not have been consummated before July 30, 1996, for a reason other than
the failure of the terminating party to comply with its obligations under this
Agreement;
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(v) by either Associated or the Company if the Federal
Reserve Board or the Wisconsin Commissioner has denied approval of the Merger
and neither Associated nor the Company has, within thirty (30) days after the
entry of such order denying approval, filed a petition seeking review of such
order as provided by applicable law;
(vi) by Associated if the Company fails to perform all of
its obligations under Section 6.06.
(vii) by Associated, if the Dissenting Shares exceed ten
percent (10%) of the Shares.
(b) In the event of termination and abandonment by any party as
provided above, written notice shall forthwith be given to the other parties,
which notice shall specifically describe the basis for such termination.
SECTION 8.02. Effect of Termination.
(a) If the Merger is not consummated as the result of termination
of this Agreement caused otherwise than by breach of a party hereto, the
Company and Associated each shall pay its own Expenses (as defined in Section
4.06 above) and this Agreement shall immediately terminate, except as set forth
in Section 9.01 hereof, and neither the Company nor Associated shall have any
liability under this Agreement for damages or otherwise.
(b) If termination of this Agreement shall have been caused by
breach of this Agreement by any party hereto, then, in addition to other
remedies at law or equity for breach of this Agreement, the party so found to
have breached this Agreement shall indemnify and reimburse the other parties
for their respective expenses.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time; provided, however, that,
after approval of the Merger by the shareholders of the Company, no amendment
may be made which would reduce the amount or change the type of consideration
into which each Share shall be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any
party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto and (c) waive compliance with any of the agreements
or conditions contained herein. Any such extension or waiver shall be valid if
set forth in an instrument in writing signed by the party or parties to be
bound thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Article VIII, except that the agreements set forth in Article I
shall survive the Effective Time indefinitely and those set forth in Sections
4.04(b), 4.06, 5.02(b), 8.02 and Article IX hereof shall survive termination
indefinitely.
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SECTION 9.02. Disclosure Schedules. The schedules and information
set forth in the Disclosure Schedules specifically refer to the Section (and
paragraph, if applicable) of this Agreement to which such schedule and
information is responsive. The Disclosure Schedules shall not vary, change or
alter the literal meaning of the representations and warranties of the parties
contained in this Agreement, other than creating exceptions thereto which are
directly responsive to the language of the representations and warranties
contained in this Agreement.
SECTION 9.03. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered or mailed if delivered personally or
mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address) and shall be
effective upon receipt:
(a) If to Associated or Holding:
Associated Banc-Corp
112 North Adams Street
P.O. Box 13307
Green Bay, WI 54307-3307
Telecopier: (414) 433-3261
Attention: H. B. Conlon
With a copy to:
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
Telecopier: (414) 298-8097
Attention: Richard W. Graber
(b) If to Company:
Greater Columbia Bancshares, Inc.
P.O. Box 365
Portage, WI 53901-0365
Telecopier: 608-742-8201
Attention: Beryl G. Pascavis
With a copy to:
Michael, Best & Friedrich
100 East Wisconsin Avenue, Suite 3300
Milwaukee, WI 53202
Telecopier: (414) 277-0656
Attention: Frank J. Pelisek
SECTION 9.04. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first mentioned
person; including, without limitation, any partnership or joint
venture in which the Company (either
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alone, or through or together with any Subsidiary) has, directly or
indirectly, an interest of 5% or more;
(b) "beneficial owner" with respect to any Shares, means
a person who shall be deemed to be the beneficial owner of such Shares
(i) which such person or any of its affiliates or associates
beneficially owns, directly or indirectly, (ii) which such person or
any of its affiliates or associates (as such term defined in Rule
12b-2 of the Exchange Act) has, directly or indirectly, (A) the right
to acquire (whether such right is exercisable immediately or subject
only to the passage of time), pursuant to any agreement, arrangement
or understanding or upon the exercise of consideration rights,
exchange rights, warranties or options, or otherwise, or (B) the right
to vote pursuant to any agreement, arrangement or understanding, (iii)
which are beneficially owned, directly or indirectly, by any other
persons with whom such person or any of its affiliates or associates
has any agreement, arrangement or understanding for the purposes of
requiring, holding, voting or disposing of any Shares or (iv) pursuant
to Section 13(d) of the Exchange Act and any rules or regulations
promulgated thereunder;
(c) "business day" means any day other than a day on
which banks in Wisconsin are required or authorized to be closed;
(d) "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause
the direction of the management or policies of a person, whether
through the ownership of stock or as trustee or executor, by contract
or credit arrangement or otherwise; and
(e) "person" means an individual, corporation,
partnership, association, trust, unincorporated organization, other
entity or group (as defined in Section 13(d) of the "Exchange Act);
and
SECTION 9.05. Headings. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
SECTION 9.07. Entire Agreement. This Agreement together with the
Disclosure Schedules and Exhibits hereto constitutes the entire agreement of
the parties and supersedes all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof and, except as otherwise expressly provided herein, are not
intended to confer upon any other person any rights or remedies hereunder.
SECTION 9.08. Assignment. This Agreement shall not be assigned by
operation of law or otherwise, except that Associated may assign all or any of
its rights hereunder to any affiliate provided that no such assignment shall
relieve the assigning party of its obligations hereunder, and the assignee
agrees to be bound by the terms and conditions of this Agreement including the
requirement of conversion and delivery of shares of Associated Common Stock
pursuant to Section 1.06 hereof.
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SECTION 9.09. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 9.10. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Wisconsin,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of law.
SECTION 9.11. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Associated, Holding and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
ASSOCIATED BANC-CORP
By: /s/ H. B. Conlon
---------------------------------------
Name: H. B. Conlon
Title: Chairman, President, and Chief
Executive Officer
ASSOCIATED BANC-SHARES, INC.
By: /s/ H. B. Conlon
---------------------------------------
Name: H. B. Conlon
Title: Chairman, President, and Chief
Executive Officer
GREATER COLUMBIA BANCSHARES, INC.
By: /s/ Beryl G. Pascavis
---------------------------------------
Name: Beryl G. Pascavis
Title: Chairman and Chief Executive Officer
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EXHIBIT B
CONFORMED COPY
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Agreement"), dated as of December
22, 1995, among the undersigned shareholders (the "Shareholders") of GREATER
COLUMBIA BANCSHARES, INC., a Wisconsin corporation (the "Company"), and
ASSOCIATED BANC-CORP, a Wisconsin corporation ("Associated").
RECITAL
The Shareholders, the Company and Associated acknowledge the
following:
A. Concurrent with the execution of this Agreement, the
Company, Associated and Associated Banc-Shares, Inc., a Wisconsin corporation
and a wholly owned subsidiary of Associated ("Holding"), have entered into an
Agreement and Plan of Merger (the "Merger Agreement"), providing for the
business combination transaction contemplated therein pursuant to which the
Company will merge with and into Holding pursuant to the terms and conditions
of the Merger Agreement ("Merger").
B. Upon consummation of the Merger, the Shareholders
will receive shares of Associated Common Stock for each share of Company Common
Stock, par value $1 per share (the "Company Common Stock"), owned by them.
C. The Shareholders own the shares of Company Common
Stock set forth opposite such Shareholder's respective names on Exhibit A
hereto (such shares set forth on Exhibit A, and together with all shares of
Company Common Stock subsequently acquired by any Shareholder during the term
of this Agreement, being referred to as the "Shares").
D. In order to induce Associated to enter into the
Merger Agreement and in consideration of the substantial expenses incurred and
to be incurred by Associated in connection therewith, the Shareholders have
agreed to enter into and perform this Voting Agreement.
AGREEMENTS
In consideration of the Recitals and the mutual agreements
which follow, Shareholders, the Company and Associated agree as follows:
1. Agreement to Vote Shares. Each of the Shareholders
shall vote or cause to be voted, or express a written consent with respect to,
all of such Shareholder's Shares (a) in favor of adoption and approval of the
Merger Agreement and the Merger at every meeting of the Shareholders of the
Company at which such matters are considered and at every adjournment thereof
and in connection with every proposal to take action by written consent with
respect thereto and (b) against any proposal for a Competing Transaction (as
such term is defined in the Merger Agreement) at every meeting of the
shareholders of the Company at which such matters are considered and at every
adjournment thereof and in connection with every proposal to take action by
written consent with respect thereto.
2. No Voting Trusts. Each of the Shareholders agrees
that such Shareholder will not, nor will such Shareholder permit any entity
under such Shareholder's control to, deposit any of such Shareholder's Shares
in a voting trust or subject any of their Shares to any agreement, arrangement
or understanding with respect to the voting of such Shares inconsistent with
this Agreement.
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3. Limitation on Sales. During the term of this
Agreement, each Shareholder agrees not to sell, assign, transfer or dispose of
any such Shareholder's Shares. Notwithstanding the foregoing, any Shareholder
may, during the term of this Agreement, make gifts of Shares to the charitable
organization(s) of his or her choice or to members of his or her immediate
family provided any such charitable organization or family member agrees in
writing to be bound to the terms of this Agreement.
4. Purchase Right. The Shareholders hereby grants to
Associated the exclusive right ("Purchase Rights") to purchase any or all of
such Shareholders' Shares for a price of $37.3275 per share, payable in cash.
The exercise of the Purchase Rights by Associated, with respect to any amount
of Shares that exceeds 5% of the outstanding voting stock of the Company is
subject to the approval of the Board of Governors of the Federal Reserve System
and any other necessary regulatory approvals. The Purchase Rights are
exercisable at any time prior to the earlier of the Effective Time, as defined
in the Merger Agreement, or the termination of the Merger Agreement and only
after (a) a material breach by the Company of the Merger Agreement, which
breach is not cured to the reasonable satisfaction of Associated within 10
business days following receipt by the Company of notice of such breach; (b) a
breach by a Shareholder of this Agreement which breach is not cured to the
reasonable satisfaction of Associated within 10 business days following receipt
by such Shareholder of notice of such breach; or (c) the acquisition or overtly
threatened acquisition by any person not related to the current Shareholders of
the Company of more than 5% of the stock of the Company or its subsidiary, The
First National Bank of Portage or of a material portion of the assets of the
Company or The First National Bank of Portage.
5. Shareholders' Representations. Each Shareholder severally
represents that: (a) such Shareholder has the complete and unrestricted power
and unqualified right to enter into and perform the terms of this Agreement;
(b) this Agreement constitutes a valid and binding agreement with respect to
such Shareholder, enforceable against such Shareholder in accordance with its
terms and (c) such Shareholder owns the number of Shares indicated opposite
such Shareholder's name on Exhibit A hereto, has the sole and unrestricted
voting power with respect to such Shares and such Shares are all of the Shares
directly or indirectly held by such Shareholder.
6. Specific Performance and Remedies. The parties hereto
acknowledge that it will be impossible to measure in money the damage to the
other party(ies) if a party hereto fails to comply with the obligations imposed
by this Agreement and that, in the event of such failure, the other party(ies)
will not have an adequate remedy at law or in damages. Accordingly, each party
hereto agrees that injunctive relief or other equitable remedy, in addition to
remedies at law or in damages, is the appropriate remedy for any such failure.
No party will oppose the granting of such relief on the basis that the other
party(ies) have an adequate remedy at law. Each party hereto agrees that it
will not seek, and agrees to waive any requirement for, the securing or posting
of a bond in connection with any other party's seeking or obtaining such
equitable relief. In addition to all other rights or remedies which any party
hereto may have against any other party hereto who defaults in the performance
of such party's obligations under the Agreement, such defaulting party shall be
liable to the nondefaulting party for all litigation costs and attorneys' fees
incurred by the nondefaulting party(ies) in connection with the enforcement of
any of the nondefaulting party's rights or remedies against the defaulting
party.
7. Term of the Agreement; Termination. The term of this
Agreement shall commence on the date hereof and such term and this Agreement
shall terminate upon the earlier to occur of (a) the Effective Time (as defined
in the Merger Agreement) and (b) the date on which the Merger Agreement is
terminated in accordance with its terms. Upon such termination, no party shall
have any further obligations or liabilities hereunder; provided, that such
termination shall not relieve any party from liability for any breach of this
Agreement prior to such termination.
8. Entire Agreement. This Agreement supersedes all prior
agreements, written or oral, among the parties hereto with respect to the
subject matter hereof and contains the entire agreement among the parties
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with respect to the subject matter hereof. This Agreement may not be amended,
supplemented or modified, and no provisions hereof may be modified or waived,
except by an instrument in writing signed by all parties hereto. No waiver of
any provisions hereof by any party shall be deemed a waiver of any other
provisions hereof by any such party, nor shall any such waiver be deemed a
continuing waiver of any provision hereof by such party.
9. Notices. All notices, requests, claims, demands or other
communications hereunder shall be in writing and shall be deemed given when
delivered personally, upon receipt of a transmission confirmation if sent by
telecopy or like transmission and on the next business day when sent by Federal
Express, Express Mail or other reputable overnight courier service to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If to Associated or Holding:
Associated Banc-Corp
112 North Adams Street
P.O. Box 13307
Green Bay, WI 54307-3307
Telecopier: 414-433-3261
Attn: H.B. Conlon
With a copy to:
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street
Suite 2100
Milwaukee, WI 53202
Telecopier: 414-298-8097
Attn: Richard W. Graber, Esq.
If to a Shareholder, to the address or telecopy number set forth for
such Shareholder on the signature page hereof:
With a copy to:
Michael Best & Friedrich
100 East Wisconsin Avenue, Suite 3300
Milwaukee, WI 53202
Telecopier: 414-277-0656
Attn: Frank J. Pelisek, Esq.
10. Miscellaneous.
(a) This Agreement shall be deemed a contract made under,
and for all purposes shall be construed in accordance with, the laws of the
State of Wisconsin, without reference to its conflicts of law principles.
(b) If any provision of this Agreement or the application
of such provision to any person or circumstances shall be held invalid or
unenforceable by a court of competent jurisdiction, such provision or
application shall be unenforceable only to the extent of such invalidity or
unenforceability, and the remainder
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of the provision held invalid or unenforceable and the application of such
provision to persons or circumstances, other than the party as to which it is
held invalid, and the remainder of this Agreement, shall not be affected.
(c) This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
(d) All Section headings herein are for convenience of
reference only and are not part of this Agreement, and no construction or
reference shall be derived therefrom.
(e) In the event any Shareholder acquires any additional
Shares during the term of this Agreement, then such Shareholder agrees that the
provisions of this Agreement shall apply to such additional Shares.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first written above.
ASSOCIATED BANC-CORP
By: /s/ H. B. Conlon
-----------------------
Its: Chairman, President and
Chief Executive Officer
/s/ Earl Brancel /s/ Ray Dorn
- --------------------- ------------------
Earl Brancel Ray Dorn
/s/ Hubert Hill /s/ Larry Larrabee
- --------------------- ------------------
Hubert Hill Larry Larrabee
/s/ Don Lee /s/ John R. Miller
- --------------------- ------------------
Don Lee John R. Miller
/s/ Beryl G. Pascavis
- ---------------------
Beryl G. Pascavis
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EXHIBIT A
<TABLE>
<CAPTION>
Number of
Shareholder Notice Address Common Shares
- ----------- -------------- -------------
<S> <C> <C>
Earl Brancel (Addresses Omitted) 49,053 shares
Ray Dorn 80,488 shares
Hubert Hill 130,478 shares
Larry Larrabee 46,899 shares
Don Lee 73,369 shares
John R. Miller 101,365 shares
Beryl G. Pascavis 115,283 shares
--------------
Total 596,935 shares
==============
</TABLE>
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EXHIBIT C
SUBCHAPTER XIII OF THE WISCONSIN BUSINESS CORPORATION LAW
DISSENTERS' RIGHTS
180.1301 DEFINITIONS.
In Section Section 180.1301 to 180.1331:
(1) "Beneficial shareholder" means a person who is a
beneficial owner of shares held by a nominee as the shareholder.
(lm) "Business combination" has the meaning given in
Section 180.1130(3).
(2) "Corporation" means the issuer corporation or, if the
corporate action giving rise to dissenters' rights under Section 180.1302 is a
merger or share exchange that has been effectuated, the surviving domestic
corporation or foreign corporation of the merger or the acquiring domestic
corporation or foreign corporation of the share exchange.
(3) "Dissenter" means a shareholder or beneficial
shareholder who is entitled to dissent from corporate action under Section
180.1302 and who exercises that right when and in the manner required by
Section Section 180.1320 to 180.1328.
(4) "Fair value", with respect to a dissenter's shares
other than in a business combination, means the value of the shares immediately
before the effectuation of the corporate action to which the dissenter objects,
excluding any appreciation or depreciation in anticipation of the corporate
action unless exclusion would be inequitable. "Fair value", with respect to a
dissenter's shares in a business combination, means market value, as defined in
Section 180.1130(9)(a) 1 to 4.
(5) "Interest" means interest from the effectuation date
of the corporate action until the date of payment, at the average rate
currently paid by the corporation on its principal bank loans or, if none, at a
rate that is fair and equitable under all of the circumstances.
(6) "Issuer corporation" means a domestic corporation
that is the issuer of the shares held by a dissenter before the corporate
action.
180.1302 RIGHT TO DISSENT.
(1) Except as provided in sub. (4) and Section
180.1008(3), a shareholder or beneficial shareholder may dissent from, and
obtain payment of the fair value of his or her shares in the event of, any of
the following corporate actions:
(a) Consummation of a plan of merger to which the
issuer corporation is a party if any of the following applies:
1. Shareholder approval is required for
the merger by Section 180.1103 or by the articles of
incorporation.
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2. The issuer corporation is a
subsidiary that is merged with its parent under Section
180.1104.
(b) Consummation of a plan of share exchange if
the issuer corporation's shares will be acquired, and the shareholder
or the shareholder holding shares on behalf of the beneficial
shareholder is entitled to vote on the plan.
(c) Consummation of a sale or exchange of all, or
substantially all, of the property of the issuer corporation other
than in the usual and regular course of business, including a sale in
dissolution, but not including any of the following:
1. A sale pursuant to court order.
2. A sale for cash pursuant to a plan
by which all or substantially all of the net proceeds of the
sale will be distributed to the shareholders within one year
after the date of sale.
(d) Except as provided in sub. (2), any other
corporate action taken pursuant to a shareholder vote to the extent
that the articles of incorporation, bylaws or a resolution of the
board of directors provides that the voting or nonvoting shareholder
or beneficial shareholder may dissent and obtain payment for his or
her shares.
(2) Except as provided in sub. (4) and Section
180.1008(3), the articles of incorporation may allow a shareholder or
beneficial shareholder to dissent from an amendment of the articles of
incorporation and obtain payment of the fair value of his or her shares if the
amendment materially and adversely affects rights in respect of a dissenter's
shares because it does any of the following:
(a) Alters or abolishes a preferential right of
the shares.
(b) Creates, alters or abolishes a right in
respect of redemption, including a provision respecting a sinking fund
for the redemption or repurchase, of the shares.
(c) Alters or abolishes a preemptive right of the
holder of shares to acquire shares or other securities.
(d) Excludes or limits the right of the shares to
vote on any matter or to cumulate votes, other than a limitation by
dilution through issuance of shares or other securities with similar
voting rights.
(e) Reduces the number of shares owned by the
shareholder or beneficial shareholder to a fraction of a share if the
fractional share so created is to be acquired for cash under Section
180.0604.
(3) Notwithstanding sub. (1)(a) to (c), if the issuer
corporation is a statutory close corporation under Section Section 180.1801 to
180.1837, a shareholder of the statutory close corporation may dissent from a
corporate action and obtain payment of the fair value of his or her shares, to
the extent permitted under sub. (1)(d) or (2) or Section 180.1803,
180.1813(1)(d) or (2)(b), or 180.1829(1)(c).
(4) Except in a business combination or unless the
articles of incorporation provide otherwise, subs. (1) and (2) do not apply to
the holders of shares of any class or series if the shares of the class or
series are registered on a national securities exchange or quoted on the
National Association of Securities Dealers, Inc., automated quotations system
on the record date fixed to determine the shareholders entitled to notice of a
shareholders meeting at which shareholders are to vote on the proposed
corporate action.
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(5) Except as provided in Section 180.1833, a shareholder
or beneficial shareholder entitled to dissent and obtain payment for his or her
shares under Section Section 180.1301 to 180.1331 may not challenge the
corporate action creating his or her entitlement unless the action is unlawful
or fraudulent with respect to the shareholder, beneficial shareholder or issuer
corporation.
180.1303 DISSENT BY SHAREHOLDERS AND BENEFICIAL SHAREHOLDERS.
(1) A shareholder may assert dissenters' rights as to
fewer than all of the shares registered in his or her name only if the
shareholder dissents with respect to all shares beneficially owned by any one
person and notifies the corporation in writing of the name and address of each
person on whose behalf he or she asserts dissenters' rights. The rights of a
shareholder who under this subsection asserts dissenters' rights as to fewer
than all of the shares registered in his or her name are determined as if the
shares as to which he or she dissents and his or her other shares were
registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters'
rights as to shares held on his or her behalf only if the beneficial
shareholder does all of the following:
(a) Submits to the corporation the shareholder's
written consent to the dissent not later than the time that the
beneficial shareholder asserts dissenters' rights.
(b) Submits the consent under par. (a) with
respect to all shares of which he or she is the beneficial
shareholder.
180.1320 NOTICE OF DISSENTERS' RIGHTS.
(1) If proposed corporate action creating dissenters' rights
under Section 180.1302 is submitted to a vote at a shareholders' meeting, the
meeting notice shall state that shareholders and beneficial shareholders are or
may be entitled to dissenters' rights under Section Section 180.1301 to
180.1331 and shall be accompanied by a copy of those sections.
(2) If corporate action creating dissenters' rights under
Section 180.1302 is authorized without a vote of shareholders, the corporation
shall notify, in writing and in accordance with Section 180.0141, all
shareholders entitled to assert dissenters' rights that the action was
authorized and send them the dissenters' notice described in Section 180.1322.
180.1321 NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If proposed corporate action creating dissenters'
rights under Section 180.1302 is submitted to a vote at a shareholders'
meeting, a shareholder or beneficial shareholder who wishes to assert
dissenters' rights shall do all of the following:
(a) Deliver to the issuer corporation before the
vote is taken written notice that complies with Section 180.0141 of
the shareholder's or beneficial shareholder's intent to demand payment
for his or her shares if the proposed action is effectuated.
(b) Not vote his or her shares in favor of the
proposed action.
(2) A shareholder or beneficial shareholder who fails to
satisfy sub. (1) is not entitled to payment for his or her shares under Section
Section 180.1301 to 180.1331.
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180.1322 DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters'
rights under Section 180.1302 is authorized at a shareholders' meeting, the
corporation shall deliver a written dissenters' notice to all shareholders and
beneficial shareholders who satisfied Section 180.1321.
(2) The dissenters' notice shall be sent no later than 10 days
after the corporate action is authorized at a shareholders' meeting or without
a vote of shareholders, whichever is applicable. The dissenters' notice shall
comply with Section 180.0141 and shall include or have attached all of the
following:
(a) A statement indicating where the shareholder
or beneficial shareholder must send the payment demand and where and
when certificates for certificated shares must be deposited.
(b) For holders of uncertificated shares, an
explanation of the extent to which transfer of the shares will be
restricted after the payment demand is received.
(c) A form for demanding payment that includes
the date of the first announcement to news media or to shareholders of
the terms of the proposed corporate action and that requires the
shareholder or beneficial shareholder asserting dissenters' rights to
certify whether he or she acquired beneficial ownership of the shares
before that date.
(d) A date by which the corporation must receive
the payment demand, which may not be fewer than 30 days nor more than
60 days after the date on which the dissenters' notice is delivered.
(e) A copy of Section Section 180.1301 to
180.1331.
180.1323 DUTY TO DEMAND PAYMENT.
(1) A shareholder or beneficial shareholder who is sent a
dissenters' notice described in Section 180.1322, or a beneficial shareholder
whose shares are held by a nominee who is sent a dissenters' notice described
in Section 180.1322, must demand payment in writing and certify whether he or
she acquired beneficial ownership of the shares before the date specified in
the dissenters' notice under Section 180.1322(2)(c). A shareholder or
beneficial shareholder with certificated shares must also deposit his or her
certificates in accordance with the terms of the notice.
(2) A shareholder or beneficial shareholder with
certificated shares who demands payment and deposits his or her share
certificates under sub. (1) retains all other rights of a shareholder or
beneficial shareholder until these rights are canceled or modified by the
effectuation of the corporate action.
(3) A shareholder or beneficial shareholder with
certificated or uncertificated shares who does not demand payment by the date
set in the dissenters' notice, or a shareholder or beneficial shareholder with
certificated shares who does not deposit his or her share certificates where
required and by the date set in the dissenters' notice is not entitled to
payment for his or her shares under Section Section 180.1301 to 180.1331.
180.1324 RESTRICTIONS ON UNCERTIFICATED SHARES.
(1) The issuer corporation may restrict the transfer of
uncertificated shares from the date that the demand for payment for those
shares is received until the corporate action is effectuated or the
restrictions released under Section 180.1326.
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(2) The shareholder or beneficial shareholder who asserts
dissenters' rights as to uncertificated shares retains all of the rights of a
shareholder or beneficial shareholder, other than those restricted under sub.
(1), until these rights are canceled or modified by the effectuation of the
corporate action.
180.1325 PAYMENT.
(1) Except as provided in Section 180.1327, as soon as
the corporate action is effectuated or upon receipt of a payment demand,
whichever is later, the corporation shall pay each shareholder or beneficial
shareholder who has complied with Section 180.1323 the amount that the
corporation estimates to be the fair value of his or her shares, plus accrued
interest.
(2) The payment shall be accompanied by all of the
following:
(a) The corporation's latest available financial
statements, audited and including footnote disclosure if available,
but including not less than a balance sheet as of the end of a fiscal
year ending not more than 16 months before the date of payment, an
income statement for that year, a statement of changes in
shareholders' equity for that year and the latest available interim
financial statements, if any.
(b) A statement of the corporation's estimate of
the fair value of the shares.
(c) An explanation of how the interest was
calculated.
(d) A statement of the dissenter's right to
demand payment under Section 180.1328 if the dissenter is dissatisfied
with the payment.
(e) A copy of Section 180.1301 to Section
180.1331.
180.1326 FAILURE TO TAKE ACTION.
(1) If an issuer corporation does not effectuate the
corporate action within 60 days after the date set under Section 180.1322 for
demanding payment, the issuer corporation shall return the deposited
certificates and release the transfer restrictions imposed on uncertificated
shares.
(2) If after returning deposited certificates and releasing
transfer restrictions, the issuer corporation effectuates the corporate action,
the corporation shall deliver a new dissenters' notice under Section 180.1322
and repeat the payment demand procedure.
180.1327 AFTER-ACQUIRED SHARES.
(1) A corporation may elect to withhold payment required
by Section 180.1325 from a dissenter unless the dissenter was the beneficial
owner of the shares before the date specified in the dissenters' notice under
Section 180.1322(2)(c) as the date of the first announcement to news media or
to shareholders of the terms of the proposed corporate action.
(2) To the extent that the corporation elects to withhold
payment under sub. (1) after effectuating the corporate action, it shall
estimate the fair value of the shares, plus accrued interest, and shall pay
this amount to each dissenter who agrees to accept it in full satisfaction of
his or her demand. The corporation shall send with its offer a statement of
its estimate of the fair value of the shares, an explanation of how the
interest was calculated, and a statement of the dissenter's right to demand
payment under Section 180.1328 if the dissenter is dissatisfied with the offer.
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180.1328 PROCEDURE IF DISSENTER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may, in the manner provided in sub. (2),
notify the corporation of the dissenter's estimate of the fair value of his or
her shares and amount of interest due, and demand payment of his or her
estimate, less any payment received under Section 180.1325, or reject the offer
under Section 180.1327 and demand payment of the fair value of his or her
shares and interest due, if any of the following applies:
(a) The dissenter believes that the amount paid
under Section 180.1325 or offered under Section 180.1327 is less than
the fair value of his or her shares or that the interest due is
incorrectly calculated.
(b) The corporation fails to make payment under
Section 180.1325 within 60 days after the date set under Section
180.1322 for demanding payment.
(c) The issuer corporation, having failed to
effectuate the corporate action, does not return the deposited
certificates or release the transfer restrictions imposed of
uncertificated shares within 60 days after the date set under Section
180.1322 for demanding payment.
(2) A dissenter waives his or her right to demand payment
under this section unless the dissenter notifies the corporation of his or her
demand under sub. (1) in writing within 30 days after the corporation made or
offered payment for his or her shares. The notice shall comply with Section
180.0141.
180.1330 COURT ACTION.
(1) If a demand for payment under Section 180.1328
remains unsettled, the corporation shall bring a special proceeding within 60
days after receiving the payment demand under Section 180.1328 and petition the
court to determine the fair value of the shares and accrued interest. If the
corporation does not bring the special proceeding within the 60-day period, it
shall pay each dissenter whose demand remains unsettled the amount demanded.
(2) The corporation shall bring the special proceeding in
the circuit court for the county where its principal office or, if none in this
state, its registered office is located. If the corporation is a foreign
corporation without a registered office in this state, it shall bring the
special proceeding in the county in this state in which was located the
registered office of the issuer corporation that merged with or whose shares
were acquired by the foreign corporation.
(3) The corporation shall make all dissenters, whether or
not residents of this state, whose demands remain unsettled parties to the
special proceeding. Each party to the special proceeding shall be served with
a copy of the petition as provided in Section 801.14.
(4) The jurisdiction of the court in which the special
proceeding is brought under sub. (2) is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. An appraiser has the power described
in the order appointing him or her or in any amendment to the order. The
dissenters are entitled to the same discovery rights as parties in other civil
proceedings.
(5) Each dissenter made a party to the special proceeding
is entitled to judgment for any of the following:
(a) The amount, if any, by which the court finds
the fair value of his or her shares plus interest, exceeds the amount
paid by the corporation.
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(b) The fair value, plus accrued interest, of his or
her shares acquired on or after the date specified in the dissenters'
notice under Section 180.1322(2)(c), for which the corporation elected
to withhold payment under Section 180.1327.
180.1331 COURT COSTS AND COUNSEL FEES.
(1) (a) Notwithstanding Section Section 814.01 to
814.04, the court in a special proceeding brought under Section
180.1330 shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the
court and shall assess the costs against the corporation, except as
provided in par. (b).
(b) Notwithstanding Section Section 814.01 and
814.04, the court may assess costs against all or some of the
dissenters, in amounts that the court finds to be equitable, to the
extent that the court finds the dissenters acted arbitrarily,
vexatiously or not in good faith in demanding payment under Section
180.1328.
(2) The parties shall bear their own expenses of the
proceeding, except that, notwithstanding Section Section 814.01 to 814.04, the
court may also assess the fees and expenses of counsel and experts for the
respective parties, in amounts that the court finds to be equitable, as
follows:
(a) Against the corporation and in favor of any
dissenter if the court finds that the corporation did not
substantially comply with Section Section 180.1320 to 180.1328.
(b) Against the corporation or against a
dissenter, in favor of any other party, if the court finds that the
party against whom the fees and expenses are assessed acted
arbitrarily, vexatiously or not in good faith with respect to the
rights provided by this chapter.
(3) Notwithstanding Section Section 814.01 to 814.04, if
the court finds that the services of counsel and experts for any dissenter were
of substantial benefit to other dissenters similarly situated, the court may
award to these counsel and experts reasonable fees to be paid out of the
amounts awarded the dissenters who were benefited.
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EXHIBIT D
GREATER COLUMBIA BANCSHARES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis provides information regarding
the financial condition and historical results of operations of Greater
Columbia Bancshares, Inc. (the "Company") for the nine months ended September
30, 1995 and 1994 and for the years ended December 31, 1994, 1993 and 1992.
During 1993, the Company declared a 4 for 1 stock split effected as a 300%
stock dividend. Comparative data for previous years has been restated to
retroactively reflect the stock split. Consolidated earnings are derived
primarily from the operations of its wholly-owned subsidiary, The First
National Bank of Portage (the "Bank"). This discussion and analysis should be
read in conjunction with the related financial statements and notes thereto and
the other financial information included herein.
The selected financial data presented on the following page for the
Company for each of the years in the five year period ended December 31, 1994
are derived from the financial statements of the Company and should be read in
conjunction with other financial information presented elsewhere in this Proxy
Statement/Prospectus. The financial statements of the Company for each of the
years in the three year period ended December 31, 1994 have been audited by
Conley McDonald & Co., Certified Public Accountants, to the extent and for the
periods indicated in their report thereon. The selected financial data for the
years ended December 31, 1991 and 1990 and the nine month periods ended
September 30, 1995 and 1994 are unaudited, but in the opinion of the Company's
management, reflect all adjustments, consisting of normal recurring accruals,
considered necessary for a fair presentation. The information presented below
should be read in conjunction with the separate financial statements and notes
thereto of the Company included elsewhere in this Proxy Statement/Prospectus.
D-1
<PAGE> 100
Earnings Summary and Selected Financial Data
<TABLE>
<CAPTION>
Nine
Months ended
September 30, Years ended December 31,
------------------------------------------------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
------------------------------------------------------------------------------------------------------
(dollars in thousands, except per share and ratio data)
------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
--------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Interest income $ 11,730 $ 9,792 $ 13,475 $ 10,410 $ 11,011 $ 10,098 $ 9,960
Interest expense 5,461 4,166 5,758 4,822 5,508 5,872 6,324
------------------------------------------------------------------------------------------------------
Net interest income 6,269 5,626 7,717 5,588 5,503 4,226 3,636
Provision for loan losses 35 - - 171 126 2 33
------------------------------------------------------------------------------------------------------
Net interest income
after provision
for loan losses 6,234 5,626 7,717 5,417 5,377 4,224 3,603
Non-interest income 661 628 947 975 624 371 407
Non-interest expense 4,583 4,406 5,972 4,332 3,870 2,994 2,626
------------------------------------------------------------------------------------------------------
Income before income taxes 2,312 1,848 2,692 2,060 2,131 1,601 1,384
Provision for income taxes 626 390 786 586 635 467 409
------------------------------------------------------------------------------------------------------
Net income $ 1,686 $ 1,458 $ 1,906 $ 1,474 $ 1,496 $ 1,134 $ 975
======================================================================================================
Balance sheet data:
Total assets $ 210,704 $ 208,969 $ 211,200 $ 152,386 $ 145,143 $ 110,634 $ 107,368
Net loans 142,309 124,442 131,744 78,130 78,423 71,015 72,907
Securities 51,965 67,815 61,074 62,047 49,295 20,855 24,429
Total deposits 170,027 170,248 173,128 126,417 131,105 101,433 97,622
Total stockholders' equity 14,929 13,500 13,640 13,745 6,693 5,489 4,608
Per common share data:
Net income $ 1.86 $ 1.61 $ 2.10 $ 2.14 $ 2.31 $ 1.75 $ 1.51
Period end book value $ 16.45 $ 14.88 $ 15.03 $ 15.15 $ 10.34 $ 8.48 $ 7.12
Weighted average common
shares outstanding 907,379 907,376 907,376 680,143 647,376 647,376 647,376
Key Financial Ratios:
Return on average assets 1.05 1.00 0.96 1.01 1.12 1.07 0.96
Return on average equity 15.66 14.33 14.36 19.44 24.55 22.47 25.24
Average equity to average
total assets
6.68 6.94 6.71 5.19 4.55 4.76 3.80
Dividend payout ratio 67.82 78.43 60.00 26.35 19.48 22.12 23.45
</TABLE>
D-2
<PAGE> 101
Financial Condition
Total assets of $210,704,000 at September 30, 1995 declined $496,000, or
0.2%, from $211,200,000 at December 31, 1994.
Total deposits of $170,027,000 at September 30, 1995 reflects a decrease
of $3,101,000, or 1.8%, from December 31, 1994. Interest-bearing and
noninterest-bearing deposit accounts had both decreased approximately 1.8%
Capital
Total stockholders' equity increased from $13,640,000 to $14,929,000 at
September 30, 1995 due to income of $1,686,000 a reduction in unrealized losses
on investment securities available for sale of $746,000 reduced by a payment of
dividends of $1,143,000.
Capital requirements set by federal regulatory agencies establish minimum
capital levels for the Bank. These guidelines require minimum Tier I capital
of 4%, a Tier I leverage ratio of 4% and total risk-based capital of 8% of
risk-weighted assets. The Bank was in compliance with all such minimum capital
guidelines at September 30, 1995.
Set forth below is a comparison of the Bank's September 30, 1995 actual
capital levels with the minimum requirements for well-capitalized and
adequately capitalized banks, as defined by the federal regulatory agencies'
Prompt Corrective Action Rules:
<TABLE>
<CAPTION>
Minimum Requirements
---------------------------------
Well Adequately
Actual capitalized capitalized
------ -------------------- -----------
<S> <C> <C> <C>
Tier 1 risk-based capital 9.63% 6.00% 4.00%
Total risk-based capital 10.66% 10.00% 8.00%
Leverage ratio 6.51% 5.00% 4.00%
</TABLE>
D-3
<PAGE> 102
Asset Quality
The Company continued its commitment to credit quality in 1994. Net
charge-offs as a percentage of average loans were 0.19%. Accrual of interest
is discontinued on a loan when management believes, after considering economic
and business conditions and collection efforts, that the borrower's financial
condition is such that collection of interest is doubtful. As of September 30,
1995, non-accrual loans totaled $255,000 or 0.17% of gross loans.
As of December 31, 1994, 9.9% of total gross loans or $13,186,000 were
secured by commercial real estate in the Wisconsin Dells area. All of the
credits in the Wisconsin Dells portfolio are performing according to the
original note terms and management does not anticipate any loan loss exposure.
Total gross loans increased to $143,663,000 at September 30, 1995 or 7.89%
from December 31, 1994. The growth was primarily attributable to growth in
loans secured by real estate. Loans for commercial and agricultural production
totaled $28,727,000 at September 30, 1995, a 2.7% increase from December 31,
1994. Within the real estate loan classification, loans to finance
construction totaled $9,003,000, an 82% increase from December 31, 1994.
Residential loans increased 7.3% from December 31, 1994 to $42,615,000. All
other loan categories were relatively unchanged at September 30, 1995 compared
to December 31, 1994.
At December 31, 1994, the allowance for possible loan losses was
$1,417,000 or 1.06% of gross loans compared with $749,000 or 0.95% of gross
loans on December 31, 1993. Management considers the allowance more than
adequate to cover possible loan losses in the loan portfolio. Management
performs a quarterly analysis to reassess the adequacy of the reserve in order
to maintain the allowance at an adequate level to absorb possible future
charge-offs of existing loans.
Asset /Liability Management
The principal function of asset/liability management is to manage the
balance sheet mix, maturities, repricing characteristics and pricing components
to provide an adequate and stable net interest margin with an acceptable level
of risk over time through interest rate cycles.
Interest-sensitive assets and liabilities are those that are subject to
repricing within a specific relevant time horizon. The Bank measures
interest-sensitive assets and liabilities, and their relationship with each
other at terms of immediate, quarterly intervals up to one year, and over one
year.
Changes in net interest income, other than volume-related, arise when
interest rates on assets reprice in a time frame or interest rate environment
that is different from the repricing period for liabilities. Changes in net
interest income also arise from changes in the mix of interest earning assets
and interest-bearing liabilities.
The Bank's strategy with respect to asset/liability management is to
maximize net interest income while limiting its exposure to a potential
downward movement in net margin. This strategy is implemented by the Bank's
management which takes action based upon its analysis of the Bank's present
positioning, its desired future positioning, economic forecasts, and its goals.
D-4
<PAGE> 103
Asset/Liability Management (continued)
The following table summarizes the repricing opportunities as of September
30, 1995 for each major category of interest earning assets and
interest-bearing liabilities.
<TABLE>
<CAPTION>
0-89 90-179 180-359 Over 360
Days Days Days Days Total
---- ---- ---- ---- -----
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Investments $ 9 $ 4 $ 6 $ 33 $ 52
Loans $ 23 $ 16 $ 40 $ 62 $141
----- ----- ----- ---- ----
Total rate sensitive assets $ 32 $ 20 $ 46 $ 95 $193
===== ===== ===== ==== ====
Rate sensitive liability
(1) $ 103 $ 10 $ 25 $ 33 $171
===== ===== ===== ==== ====
Gap $ (71) $ 10 $ 21 $ 62
===== ===== ===== ====
Cumulative gap $ (71) $ (61) $ (40) $ 22
===== ===== ===== ====
</TABLE>
(1) Bank management believes that Regular Savings, Money Market, and
NOW Accounts are stable core deposits. Although these accounts can
be repriced at any time, management feels a more appropriate treatment
is to treat these accounts as "90-179 Days" rate sensitive
liabilities.
Liquidity
The liquidity position of the Bank is managed to insure that sufficient
funds are available to meet customers' needs for loans and deposit withdrawals.
Liquidity to meet demand is provided by maintaining marketable investment
securities. At December 31, 1994, available for sale securities were
$36,098,000. At September 30, 1995, available for sale securities were
$30,762,000. The Bank is a member of the Federal Home Loan Bank system which
provides the Bank with an additional source of liquidity. During 1991, the
Bank entered into a master contract agreement with the Federal Home Loan Bank
which provides for borrowings up to a maximum of 35% of assets subject to
certain restrictions.
The loan to deposit ratio for the Bank was 76.1% at December 31, 1994
and 83.7% at September 30, 1995.
Management is unaware of any recommendations by regulatory authorities,
known trends, events or uncertainties that will have or that are reasonably
likely to have a material effect on the Bank's liquidity.
D-5
<PAGE> 104
RESULTS OF OPERATIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 1995 COMPARED WITH
THE NINE MONTHS ENDED SEPTEMBER 30, 1994
Results of Operations Overview
For the nine months ended September 30, 1995, the Bank's net income
increased from the same period in 1994 by $228,000 or 15.6% to $1,686,000 which
was attributable to operating The First National Bank of Columbus for the
complete nine month period of 1995 and only seven months in 1994.
Net Interest Revenue
Net interest revenue increased by $643,000 or 11.4% to $6,269,000
principally due to an increase in earning assets and rate sensitive liabilities
of approximately 10%. The operations of the first national Bank of Columbus,
which was acquired in March 1994, contributed to the increase as 1994 revenue
includes seven months of additional revenue compared to nine months in 1995.
Allowance for Loan Losses
The amount charged to allowance for loan losses is based on management's
evaluation of the loan portfolio. Management determines the adequacy of the
allowance for loan losses based on past loan loss experience, current economic
conditions, composition of the loan portfolio and the potential for future
loss. A total of $35,000 was provided for loan losses in the first nine months
of 1995. No provision was made in the same period in 1994. Total
non-performing loans decreased $117,000 at September 30, 1995 from a year
earlier. Non-performing loans totaled $255,000 at September 30, 1995 and
$372,000 at September 30, 1994. Net charge-offs decreased to $30,735 in 1995
from $226,806 a year earlier due to the first national Bank of Columbus loans
charged-off in 1994 after the merger.
Other Operating Revenue and Expenses
Other operating revenue increased slightly between periods. Other
operating expenses increased $177,000 or 4% to $4,583,000 for the nine months
ended September 30, 1995 compared to the same period in 1994. Included in the
increase in other operating expenses were increases in salaries and employee
benefits of $85,000 due primarily to the acquisition of The First National Bank
of Columbus and inflationary adjustments to compensation. All other expenses
increased $92,000 or 4%. The acquisition of The First National Bank of
Columbus contributed to increases in other revenue and other expense. The
modest increases relative to the change in net interest revenue were due to the
economies of scale achieved by the acquisition.
Income Taxes
Income tax expense increased $236,000 in the first nine months of 1995
compared to the same period in 1994 due to increase in pretax net income of
$464,000 and decreased nontaxable municipal investments and loan income.
D-6
<PAGE> 105
RESULTS OF OPERATIONS FOR YEARS ENDED 1994, 1993 AND 1992
Results of Operations Overview
For the year ended December 31, 1994, net income was $1,906,000, an
increase of $432,000, or 29.3%, from 1993. In March 1994, earning assets
increased 36% as a result of the acquisition of the first national Bank of
Columbus.
For the year ended December 31, 1993, net income was $1,474,000, a
decrease of $22,000, or 1.5%, from the net income of $1,496,000 a year
earlier.
Net Interest Revenue
Net interest revenue increased by $2,129,000, or 38.1%, to $7,717,000 in
1994. Total interest income increased 29.4% to $13,475,000 in 1994. Average
earning assets increased $49,018,000 while average yield decreased from 8.02%
in 1993 to 7.62% in 1994. Interest expense increased 19.4% to $5,758,000.
Interest-bearing liabilities increased 34.9% to $164,574. Average rates paid
on such balances fell from 3.95% to 3.5%. Volume increases are due to the
acquisition of the first national Bank of Columbus.
Net interest revenue increased by $85,000, or 1.5%, to $5,588,000 in 1993.
Total interest income decreased $601,000 in 1993. Average earning assets
increased $11,487,000 while average yield decreased from 9.24% in 1992 to 8.02%
in 1993. Interest expense decreased $686,000 to $4,822,000 in 1993. While
deposits were rather constant, average rates paid fell rapidly from 4.81% in
1992 to 3.95% in 1993.
Interest rate spread is the difference between the tax equivalent rate
earned on average earning assets and the rate paid on average interest-bearing
liabilities. The rate spread was flat improving only 2 basis points in 1994 to
4.06%. The average yield on earning assets was 7.56% a decrease of 43 basis
points from 1993, however repricing liabilities also decreased the average cost
of interest bearing liabilities to 3.50% in 1994 from 3.95% in 1993, resulting
in the slightly improved spread.
The interest rate spread decreased of 34 basis points to 4.04% in 1993
compared to 1992. The average yield on earning assets was 7.99% a decrease of
120 basis points from 1992 due primarily to falling rates. Repricing
liabilities also decreased the average cost of interest-bearing liabilities to
3.95% in 1993 a decrease of 86 basis points from 1992.
D-7
<PAGE> 106
Allowance for Loan Losses
The Bank's management evaluates the adequacy of the allowance for loan
losses based on an analysis of specific problem loans, as well as on an
aggregate basis. Provisions charged to expense were none, $171,000 and
$126,000 in 1994, 1993 and 1992 respectively. The allowance for loan loss
balance as a percent of gross loans was 1.06%, 0.95% and 0.90% at December 31,
1994, 1993 and 1992 respectively. Management reviews the calculation of the
allowance for loan losses on a quarterly basis and believes that the allowance
for loan losses is adequate. The allowance for loan losses is maintained at a
level considered adequate to provide for potential future losses. The level of
the allowance is based on management's periodic and comprehensive evaluation of
the loan portfolio, including past loan experience; current and projected
economic trends; the volume, growth, and composition of the loan portfolio; and
other relevant factors. Reports of examinations furnished by state and federal
banking authorities are also considered by management in this regard.
The Bank's management has established the allowance for loan losses to
reduce the gross level of loans outstanding by an estimate of uncollectible
loans. As loans are deemed uncollectible, they are charged against the
allowance. A provision for loan losses is expensed against current income on a
monthly basis. This provision acts to replenish the allowance for loan losses
to accommodate charge-offs and growth in the loan portfolio, thereby
maintaining the allowance at an adequate level.
Other Operating Revenue
Other operating revenue decreased by $28,000 to $947,000 in 1994. The
Bank incurred losses in its securities of $135,658 in 1994 compared with gains
of $397,705 in 1993. Service fees increased by $227,000 attributable to the
acquisition of the first national Bank of Columbus, while other income
increased by $278,000 due to gains realized on the sale of other real estate in
1994.
Other operating revenue increased by $351,000 to $975,000 in 1993.
Securities gains increased in 1993 by $290,000 from 1992. Proceeds from sale
of securities held for investment were $18,064,000 during 1993 which resulted
in realized gross gains of $398,000 compared to gross gains of $108,000 in 1992
on proceeds of sales of $2,729,000. Service fees increased by $30,000
resulting primarily from a $19,000 increase in safe deposit rental and $10,000
in commissions related to sales of annuities which were introduced in 1993.
Other income increased by $31,000 due to increases in NSF and returned check
charges which increased $29,000 in 1993.
D-8
<PAGE> 107
Other Operating Expenses
Other operating expenses increased by $1,640,000, or 37.9%, to $5,972,000
in 1994. Salaries and employee benefits increased $954,000 which relates to
additional staff from the acquisition of the first national Bank of Columbus.
Computer services expenses increased $7,000 or 2.2%. Furniture and equipment
expenses increased $74,000 as a result of increased depreciation on assets
acquired from The First National Bank of Columbus. All other expenses
increased an aggregate of $510,000 or 43.6% due to the acquisition which
included the following: amortization of goodwill and other intangibles
increased $236,000; FDIC insurance increased $91,000; and other expenses
increased $183,000.
Other operating expenses increased by $462,000, or 11.9%, to $4,332,000 in
1993. Salaries and employee benefits increased 12.3% which related to
increases in compensation and increased staffing level requirements. Computer
services expenses decreased $9,000 or 2.7%. Occupancy, furniture and equipment
expense increased to $662,000 in 1993 from $537,000 in 1992. The increase is
attributable to various factors including increases in depreciation, repairs,
personal property taxes, utilities, and insurance. All other expenses
increased $105,000, or 9.9% attributable to Company legal and accounting costs
relating to its stock offering and increased FDIC assessment costs.
Income Taxes
Income tax expense increased $200,000 in 1994 compared to 1993 primarily
due to the increase in pretax income of $632,000. Tax exempt income increased
by $242,000 along with an increase in nondeductible expenses of $236,000
related to the acquisition of The First National Bank of Columbus.
D-9
<PAGE> 108
Current Accounting Issues
1) Fair value of financial instruments
The Financial Accounting Standards Board (FASB) Statement No. 107,
Disclosures About Fair Value of Financial Instruments, requires
disclosure of fair value information about financial instruments, whether
or not recognized on the balance sheet, for which it is practical to
estimate that value. Statement No. 107 excludes certain financial
instruments and all nonfinancial instruments from its disclosure
requirements. This statement is effective for the Bank's year ending
December 31, 1995.
2) Impairment of loans
The FASB has issued Statement No. 114, Accounting by Creditors for
Impairment of a Loan. Statement No. 114 requires that impaired loans
that are within the scope of this statement be measured based on the
present value of expected future cash flows discounted at the loan's
effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair value of the collateral if the loan
is collateral dependent. A loan is impaired when it is probable the
creditor will be unable to collect all contractual principal and interest
payments due in accordance with the terms of this loan agreement. This
statement is effective for the Bank's year ending December 31, 1995.
Management has determined this Statement will have no material effect on
the financial statements.
3) Accounting by creditors for impairment of a loan-income recognition and
disclosures
The FASB has issued FASB Statement No. 118 which amends certain
provisions of FASB Statement No. 114 relating to income recognition and
other required disclosures of impaired loans. This statement is
effective for the Bank's year ending December 31, 1995. Management has
determined this Statement will have no material effect on the financial
statements.
4) Accounting for Mortgage Servicing Rights
FASB has issued Statement No. 122, Accounting for Mortgage Servicing
Rights. Statement No. 122 amends certain provisions of Statement No. 65
to eliminate the accounting distinction between rights to service
mortgage loans for others that are acquired through loan origination
activities and those acquired through purchase transactions. If a
mortgage banking enterprise sells or securitizes mortgage loans and
retains the mortgage servicing rights, the enterprise should allocate the
total cost of mortgage loans to the mortgage servicing rights and the
loans (without the mortgage servicing rights) based on their relative
fair values. Any costs allocated to mortgage servicing rights should be
recognized as a separate asset. This Statement is effective for the
Company's year ending December 31, 1996. Management has determined this
Statement will have no material effect on the financial statements.
D-10
<PAGE> 109
<TABLE>
Average Balance Sheets
<CAPTION>
1994 1993 1992
--------------------------------------
(In thousands)
<S> <C> <C> <C>
Cash and due from banks $ 4,340 $ 5,695 $ 4,979
Federal funds sold 360 3,158 3,217
--------------------------------------
Total cash and cash equivalents 4,700 8,853 8,196
Interest bearing deposits in banks 287 239 1,736
Investments (taxable) 46,653 37,322 28,207
Investments (nontaxable) 26,006 16,952 12,816
Loans (a) 111,271 77,170 77,348
Less allowance for loan losses 1,417 699 669
--------------------------------------
Net loans 109,854 76,471 76,679
Office building and equipment 5,379 3,664 3,370
Accrued interest receivable and other assets 4,851 2,554 2,872
--------------------------------------
Total Assets $ 197,730 $ 146,055 $ 133,876
======================================
Deposits:
Non-interest bearing $ 19,040 $ 15,135 $ 11,895
NOW accounts 23,394 16,233 13,457
Money market demand accounts 12,166 10,362 9,800
Savings 39,730 26,031 21,629
Time, $100,000 and over 5,328 3,454 3,532
Other Time 65,006 56,601 60,332
--------------------------------------
Total deposits 164,664 127,816 120,645
Short-term borrowings 11,641 6,023 4,294
Long-term borrowings 7,309 3,327 1,435
Accrued interest payable and other liabilities 846 1,307 1,411
--------------------------------------
Total Liabilities 184,460 138,473 127,785
Equity capital 13,270 7,582 6,091
--------------------------------------
Total Liabilities and Capital $ 197,730 $ 146,055 $ 133,876
======================================
</TABLE>
(a) Non-accrual loans have been included in the average balance.
D-11
<PAGE> 110
<TABLE>
<CAPTION>
Three Year Summary of Interest Rates and Interest Differential
1994 1993 1992
-------------------------------------------------------------------------------------------------------
Average Related Yield Average Related Yield Average Related Yield
Balance Interest Rate Balance Interest Rate Balance Interest Rate
-------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Interest bearing
deposits in bank $ 287 $ 8 2.79% $ 239 $ 20 8.37% $ 1,736 $ 121 6.97%
Investments
(taxable) 46,653 2,275 4.88 37,322 1,995 5.35 28,207 1,888 6.69
Investments
(nontaxable) (a) 26,006 1,395 5.36 16,952 1,029 6.07 12,816 941 7.34
Funds sold 360 21 5.83 3,158 92 2.91 3,217 114 3.54
Loans (b) (c) 111,271 10,251 9.21 77,170 7,623 9.88 77,348 8,269 10.69
-------------------------------------------------------------------------------------------------------
Total earning
assets $ 184,577 $ 13,950 7.56% $ 134,841 $ 10,759 7.99% $ 123,324 $ 11,333 9.19%
=======================================================================================================
Interest bearing
liabilities
NOW accounts $ 23,394 $ 500 2.14% $ 16,233 $ 407 2.51% $ 13,457 $ 437 3.25%
Money market demand
accounts 12,166 292 2.40 10,362 291 2.81 9,800 333 3.40
Savings 39,730 919 2.31 26,031 716 2.75 21,629 731 3.38
Time, $100,000 and
over 5,328 228 4.28 3,454 153 4.43 3,532 219 6.20
Other time 65,006 2,887 4.44 56,601 2,805 4.96 60,332 3,481 5.77
Short-term
borrowings 11,641 496 4.26 6,023 216 3.59 4,294 223 5.19
Long-term borrowings 7,309 436 5.97 3,327 234 7.03 1,435 84 5.85
-------------------------------------------------------------------------------------------------------
Total interest
bearing
liabilities $ 164,574 5,758 3.50% $ 122,031 4,822 3.95% $ 114,479 5,508 4.81%
==========--------------------------==========-------------------------==========----------------------
Interest spread $ 8,192 4.06% $ 5,937 4.04% $ 5,825 4.38%
================== ================ ==================
Net yield on earning
assets $ 8,192 4.44% $ 5,937 4.40% $ 5,825 4.72%
================== ================ ==================
</TABLE>
(a) The interest and average yield for nontaxable securities are presented on a
federal taxable equivalent basis assuming a 34% tax rate.
(b) Loans placed on non-accrual status have been included in average balances
used to determine average rates.
(c) Interest income includes net loan fees.
D-12
<PAGE> 111
<TABLE>
<CAPTION>
Two Year Summary of Rate and Volume Variances
1994 Compared to 1993
Increase (Decrease) Due to
------------------------------------
Volume Rate (a) Net
------------------------------------
(In thousands)
<S> <C> <C> <C>
Interest Income:
Interest bearing deposits in banks $ 4 $ (16) $ (12)
Investments (taxable) 499 (219) 280
Investments (nontaxable) (b) 550 (184) 366
Funds sold (82) 11 (71)
Loans (c) (d) 3,369 (741) 2,628
------------------------------------
Total Interest bearing assets 4,340 (1,149) 3,191
------------------------------------
Interest Expense:
NOW accounts 180 (87) 93
Money market demand accounts 51 (50) 1
Savings 377 (174) 203
Time, $100,000 and over 83 (8) 75
Other time 416 (334) 82
Short-term borrowings 201 79 280
Long-term borrowings 280 (78) 202
------------------------------------
Total Interest bearing liabilities 1,588 (652) 936
------------------------------------
Net Interest Income $ 2,752 $ (497) $ 2,255
====================================
<CAPTION>
1993 Compared to 1992
Increase (Decrease) Due to
------------------------------------
Volume Rate (a) Net
------------------------------------
(In thousands)
<S> <C> <C> <C>
Interest Income:
Interest bearing deposits in banks $ (104) $ 3 $ (101)
Investments (taxable) 610 (503) 107
Investments (nontaxable) (b) 304 (216) 88
Funds sold (2) (20) (22)
Loans (c) (d) (19) (627) (646)
------------------------------------
Total Interest bearing assets 789 (1,363) (574)
------------------------------------
Interest Expense:
NOW accounts 90 (120) (30)
Money market demand accounts 19 (61) (42)
Savings 149 (164) (15)
Time, $100,000 and over (5) (61) (66)
Other time (215) (461) (676)
Short-term borrowings 90 (97) (7)
Long-term borrowings 111 39 150
------------------------------------
Total Interest bearing liabilities 239 (925) (686)
------------------------------------
Net interest income $ 550 $ (438) $ 112
====================================
</TABLE>
(a) The allocation of the rate/volume variance has been allocated in full to
the rate variance.
(b) The interest and average yield for nontaxable securities are presented on a
federal taxable equivalent basis assuming a 34% tax rate.
(c) Loans placed on non-accrual status have been included in average balances
used to determine average rates.
(d) Interest income includes net loan fees.
D-13
<PAGE> 112
<TABLE>
Book Value of Investment Portfolio
<CAPTION>
1994 1993 1992
-----------------------------------
(In thousands)
<S> <C> <C> <C>
Available for sale: (a)
U.S. Treasury securities $ 33,914 $ 15,701 $ 30,260
Obligations of other U.S. government
agencies and corporations 975 2,066 3,758
Mutual funds - 25,867 -
Other securities 1,209 947 647
Held to maturity: (a)
Obligations of states and
political subdivisions 24,951 17,466 14,630
Other securities 25 - -
-----------------------------------
Total $ 61,074 $ 62,047 $ 49,295
===================================
</TABLE>
(a) Prior to January 1, 1994 and the implementation of FASB 115, all securities
were classified as securities held for investment.
D-14
<PAGE> 113
<TABLE>
Maturity Schedule of Investments by Book Value
<CAPTION>
December 31, 1994
---------------------------------------------------------------------
After After
1 Year 5 Years
1 Year Through Through After 10
or Less 5 Years 10 Years Years Total
---------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C>
Available for sale:
U.S. Treasury securities $ 15,010 $ 18,904 $ - $ - $ 33,914
Weighted average
yield 4.52% 4.99% - - 4.78%
Obligations of other U.S.
government agencies
and corporations 477 498 - - 975
Weighted average
yield 4.10% 4.99% - - 4.55%
Other securities (b) 1,209 1,209
Held to maturity:
Obligations of states and
political subdivisions (a) 7,830 16,601 520 - 24,951
Weighted average
yield 5.80% 5.77% 5.92% - 5.78%
Other securities 25 - - 25
---------------------------------------------------------------------
Total $ 24,551 $ 36,003 $ 520 $ - $ 61,074
=====================================================================
</TABLE>
(a) The interest and weighted average yield for nontaxable securities are
presented on a federal taxable equivalent basis assuming a 34% tax rate.
(b) Other securities consist primarily of Federal Reserve Bank stock and
Federal Home Loan Bank stock.
The following schedule details the issuer, aggregate book and approximate
market value of securities included in the investment portfolio which exceeds
10% of stockholders' equity at December 31, 1994.
<TABLE>
<CAPTION>
December 31, 1994
-------------------------
Issuer Book Market
- --------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Pewaukee, Wisconsin Waterworks $ 1,500 $ 1,494
Portage Community School District 2,270 2,270
</TABLE>
D-15
<PAGE> 114
Loan Composition
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------------------
1994 1993 1992 1991 1990
--------------------------------------------------------------
(In thousands)
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial $ 23,359 $ 9,042 $ 10,197 $ 8,531 $ 7,821
Agricultural 4,612 1,716 2,056 1,236 1,289
Real Estate:
Construction 4,938 3,127 2,400 1,869 2,013
Commercial 39,131 25,737 22,121 23,367 23,100
Agricultural 7,648 3,868 3,360 2,005 2,613
Residential 39,694 28,888 32,409 28,571 30,763
Installment and
consumer 7,330 5,165 5,858 5,591 5,214
Municipal 6,449 1,336 737 417 680
--------------------------------------------------------------
133,161 78,879 79,138 71,587 73,493
Less allowance for
loan losses 1,417 749 715 572 586
--------------------------------------------------------------
Net Loans $ 131,744 $ 78,130 $ 78,423 $ 71,015 $ 72,907
==============================================================
</TABLE>
D-16
<PAGE> 115
LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATE
AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
Loan Maturities
---------------------------------------------------
After 1
1 Year Through After 5
or Less 5 Years Years Total
---------- ---------- ---------- ---------
(In thousands)
<S> <C> <C> <C> <C>
Commercial and agricultural $ 15,375 $ 10,357 $ 2,239 $ 27,971
Real estate - construction 4,938 - - 4,938
---------- ---------- ---------- ---------
Total $ 20,313 $ 10,357 $ 2,239 $ 32,909
========== ========== ========== =========
Amount over one year with:
Predetermined rates $ 12,596
=========
Floating or adjustable rates $ -
=========
</TABLE>
D-17
<PAGE> 116
Nonaccrual, Past Due and Restructured Loans
<TABLE>
<CAPTION>
December 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- -------- -------- -------- -------
(In thousands)
<S> <C> <C> <C> <C> <C>
Nonaccrual loans (a) (b) $ 368 $ 152 $ 69 $ - $ -
Accruing loans past due
90 days or more (c) 209 242 82 782 186
</TABLE>
Notes:
(a) Accrual of interest is discontinued on a loan when management
believes, after considering economic and business decisions and
collection efforts, that the borrower's financial condition is such
that collection of interest is doubtful.
(b) If interest on the nonaccrual loans had been accrued, such income
would have approximated $60,896, $5,157, $7,807, $-0- and $-0- at
December 31, 1994, 1993, 1992, 1991 and 1990 respectively. There was
no interest income on these loans, which is recorded only when
received.
(c) As of December 31, 1994, management, to the best of its knowledge, is
not aware of any significant loans or segments of the loan portfolio
not included above, where there are serious doubts as to ability of
the borrowers to comply with the present loan repayment terms. There
were no restructured loans for each of the presented years.
D-18
<PAGE> 117
<TABLE>
Analysis of the Allowance for Loan Losses
<CAPTION>
December 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
------- -------- -------- ------- -------
(In thousands)
<S> <C> <C> <C> <C> <C>
Balance of allowance for
loan losses at
beginning of period $ 749 $ 715 $ 572 $ 586 $ 551
Charge-offs:
Commercial 249 88 118 14 -
Agricultural - - - - -
Real estate:
Construction - - - - -
Commercial 40 51 - - -
Agricultural - 2 - - -
Residential 5 5 12 3 -
Installment and
consumer 14 10 10 19 10
Municipal - - - - -
Recoveries:
Commercial 86 13 54 - 5
Agricultural - - - - -
Real estate:
Construction - - - - -
Commercial 6 - - - -
Agricultural 10 - - - -
Residential - 2 12 - -
Installment and
consumer - 4 9 20 7
Municipal - - - - -
-------------------------------------------------------
Net charge-offs 206 137 65 16 (2)
Amount acquired from
acquisition of
The First National Bank
of Columbus 874 - - - -
Amount acquired from
acquisition of the
Peoples State Bank
of Pittsville - - 82 - -
Additions charged to
operations (a) - 171 126 2 33
------------------------------------------------------
Balance at end of period $ 1,417 $ 749 $ 715 $ 572 $ 586
======================================================
Net charge-offs as a
percent of average
loans outstanding .18% .18% .08% .02% .00%
========= ======= ======= ======= =======
</TABLE>
(a) For each year ending December 31, the determination of the additions to
allowance for loan losses charged to operating expenses was based on the
consideration of 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 borrowers' ability to pay.
D-19
<PAGE> 118
<TABLE>
Allocation of Allowance for Loan Losses
<CAPTION>
December 31,
---------------------------------------------------
1994 1993 1992 1991 1990
------- ------- ------- ------- -------
(In thousands)
<S> <C> <C> <C> <C> <C>
Commercial $ 654 $ 253 $ 285 $ 238 $ 219
Agricultural 139 51 62 40 41
Real estate:
Construction 17 10 8 6 7
Commercial 136 90 77 81 81
Agricultural 27 13 11 7 9
Residential 138 101 113 100 108
Installment and
consumer 7 5 6 5 5
Municipal
Unallocated 299 226 153 95 116
------- ------- ------- ------- -------
$ 1,417 $ 749 $ 715 $ 572 $ 586
======= ======= ======= ======= =======
</TABLE>
D-20
<PAGE> 119
Three Year Summary of Average Deposits
<TABLE>
1994 1993 1992
-------------------------------------------------------------
Average Yield Average Yield Average Yield
Balance Rate Balance Rate Balance Rate
-------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Non-interest
bearing $ 19,040 -% $ 15,135 - $ 11,895 -%
NOW accounts 23,394 2.14 16,233 2.51% 13,457 3.25
Money market
demand
accounts 12,166 2.40 10,362 2.81 9,800 3.40
Savings 39,730 2.31 26,031 2.75 21,629 3.38
Time, $100,000
and over 5,328 4.28 3,454 4.43 3,532 6.20
Other Time 65,006 4.44 56,601 4.96 60,332 5.77
-------------------------------------------------------------
$ 164,664 2.93% $ 127,816 3.42% $ 120,645 5.85%
=============================================================
</TABLE>
Maturity Schedule for Time Deposits of $100,000 or More
<TABLE>
<CAPTION>
December 31, 1994
-----------------
(In thousands)
<S> <C>
Certificates of deposit, $100,000 or more (a):
3 Months or less $ 924
Over 3 months through 6 months 1,007
Over 6 months through 12 months 2,579
Over 12 months 1,843
--------
Balance Outstanding December 31, 1994 $ 6,353
========
</TABLE>
(a) There are no other time deposits of $100,000 or more.
D-21
<PAGE> 120
Three Year Summary of Return on Equity and Assets
<TABLE>
<CAPTION>
December 31,
------------------------------------
1994 1993 1992
-------- -------- -------
<S> <C> <C> <C>
Return on average assets 0.96% 1.01% 1.12%
Return on average equity 14.36% 19.44% 24.55%
Dividend payout ratio on common stock 60.00% 26.35% 19.48%
Average equity to average assets 6.71% 5.19% 4.55%
</TABLE>
Short-Term Borrowings
Securities sold under agreements to repurchase
<TABLE>
<CAPTION>
December 31,
---------------------------------
1994 1993 1992
-------- --------- --------
(Dollars in thousands)
<S> <C> <C> <C>
End of Year:
Amount outstanding $ 16,110 1,882 $ -
Weighterd average interst rate on amount outstanding 4.09% 3.36% -%
For the Year:
Maximum amount outstanding at month-end $ 18,541 $ 7,350 $ 1,950
Average amount outstanding 11,043 2,554 592
Weighted average interest rate 4.29% 3.36% 3.30%
</TABLE>
D-22
<PAGE> 121
Greater Columbia Bancshares, Inc. and Subsidiary
Consolidated Financial Statements
Table of Contents
<TABLE>
<S> <C>
FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 31, 1994, 1993 AND 1992:
Report of independent certified public accountants D-24
Consolidated balance sheets D-25
Consolidated statements of income D-26
Consolidated statements of changes in stockholders' equity D-27
Consolidated statements of cash flows D-28 - D-30
Notes to consolidated financial statements D-31 - D-52
FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1995 AND 1994 (unaudited):
Consolidated balance sheet D-53
Consolidated statements of income D-54
Consolidated statements of cash flows D-55 - D-56
Notes to consolidated financial statements D-57 - D-58
</TABLE>
D-23
<PAGE> 122
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
Greater Columbia Bancshares, Inc.
Portage, Wisconsin
We have audited the accompanying consolidated balance sheets of
Greater Columbia Bancshares, Inc. and subsidiary as of December 31, 1994 and
1993, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for the years ended December 31, 1994,
1993 and 1992. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Greater Columbia Bancshares, Inc. and subsidiary at December 31, 1994 and 1993,
and the results of its operations, and its cash flows for the years ended
December 31, 1994, 1993 and 1992, in conformity with generally accepted
accounting principles.
As described in Note B to the consolidated financial statements, on
January 1, 1994, the Company changed its method of accounting for investments
in debt and marketable equity securities.
CONLEY McDONALD & CO.
January 7, 1995
D-24
<PAGE> 123
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
December 31, 1994 and 1993
ASSETS
------
<TABLE>
<CAPTION>
1994 1993
----------- -----------
<S> <C> <C>
Cash and due from banks (Note C) $ 6,994,494 6,484,589
Available for sale securities (Note D) 36,098,223 -
Held to maturity securities (Note E) 24,976,275 -
Securities held for investment (Note F) - 62,046,536
Loans, less allowance for loan losses of $1,417,056
and $749,195 in 1994 and 1993 respectively
(Notes G and H) 131,744,087 78,130,447
Office building and equipment, net (Note I) 5,491,559 3,952,326
Accrued interest receivable and other assets
(Notes J, K and O) 5,895,218 1,771,902
----------- -----------
Total assets $ 211,199,856 152,385,800
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities
- -----------
Deposits:
Non-interest bearing $ 23,078,276 16,116,467
NOW accounts 25,396,424 17,313,660
Money market demand accounts 11,677,412 9,766,912
Savings 39,272,000 27,677,837
Time, $100,000 and over 6,353,233 2,827,826
Other Time 67,350,804 52,714,153
----------- -----------
Total deposits 173,128,149 126,416,855
Short-term borrowings (Note M) 16,882,633 2,986,770
Long-term borrowings (Note N) 6,452,253 8,185,591
Accrued interest payable and other liabilities
(Note O) 1,096,601 1,051,456
----------- -----------
Total liabilities 197,559,636 138,640,672
----------- -----------
Commitments, contingencies and credit risk (Note Q)
- ------------------------------------------
Stockholders' equity
- --------------------
Common stock, $1 par value - 2,000,000 shares
authorized, 907,376 shares issued and outstanding
at December 31, 1994 and 1993 (Note R) 907,376 907,376
Surplus 5,705,904 5,705,904
Retained earnings (Notes S and T) 7,894,153 7,131,848
----------- -----------
14,507,433 13,745,128
Unrealized loss on available for sale
securities, net (867,213) -
----------- -----------
Total stockholders' equity 13,640,220 13,745,128
----------- -----------
Total liabilities and stockholders' equity $ 211,199,856 152,385,800
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
D-25
<PAGE> 124
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Interest income
- ---------------
Interest and fees on loans (Note G) $ 10,251,121 7,622,970 8,268,810
Interest on investment securities:
U.S. Treasury and U.S. Government
agencies and corporations 1,960,633 1,644,272 1,783,403
States and political subdivisions 920,605 678,627 620,516
Other 313,960 350,706 104,204
Interest on federal funds sold 21,151 92,406 113,580
Interest on deposits in banks 7,743 20,467 120,710
---------- ---------- ----------
Total interest income 13,475,213 10,409,448 11,011,223
---------- ---------- ----------
Interest expense
- ----------------
Interest on deposits (Note L) 4,826,057 4,371,483 5,201,418
Interest on short-term borrowings
(Note M) 496,433 215,790 223,068
Interest on long-term borrowings
(Note N) 435,513 234,445 84,212
---------- ---------- ----------
Total interest expense 5,758,003 4,821,718 5,508,698
---------- ---------- ----------
Net interest income 7,717,210 5,587,730 5,502,525
Provision for loan losses (Note H) - 171,000 126,000
---------- ---------- ----------
Net interest income after provision
for loan losses 7,717,210 5,416,730 5,376,525
---------- ---------- ----------
Other operating income
- ----------------------
Service fees 723,105 496,415 465,919
Other income 359,398 80,936 50,348
Securities gains (losses), net
(Notes D and F) (135,658) 397,705 107,837
---------- ---------- ----------
Total other operating income 946,845 975,056 624,104
---------- ---------- ----------
Other operating expenses
- ------------------------
Salaries 2,445,049 1,694,131 1,497,990
Pensions and other employee benefits
(Note P) 693,347 490,280 446,207
Occupancy expense 496,863 402,198 316,938
Furniture and equipment expenses 333,594 259,565 219,586
Computer services 324,430 317,307 326,165
Other expenses 1,678,424 1,168,320 1,063,208
---------- ---------- ----------
Total other operating expenses 5,971,707 4,331,801 3,870,094
---------- ---------- ----------
Income before income taxes 2,692,348 2,059,985 2,130,535
Less applicable income taxes (Note O) 786,749 585,800 634,975
---------- ---------- ----------
Net income $ 1,905,599 1,474,185 1,495,560
---------- ========== ========== ==========
Earnings per share $ 2.10 2.14 2.31
==== ==== ====
Weighted average shares outstanding 907,376 680,143 647,376
======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
D-26
<PAGE> 125
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Unrealized
loss on
available Total
Common Retained for sale stockholders'
stock Surplus earnings securities equity
------- --------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1991
- --------
(as originally stated) $161,844 - 5,327,380 - 5,489,224
Stock split (Note R) 485,532 - (485,532) - -
------- --------- --------- ------- ----------
Balances, December 31, 1991
- --------
(restated) 647,376 - 4,841,848 - 5,489,224
Cash dividends - $.45
per share - - (291,319) - (291,319)
Net income - 1992 - - 1,495,560 - 1,495,560
------- --------- --------- ------- ----------
Balances, December 31, 1992 647,376 - 6,046,089 - 6,693,465
- --------
Cash dividends - $.60 per share - - (388,426) - (388,426)
Net income - 1993 - - 1,474,185 - 1,474,185
Proceeds from stock offering
(net) (Note R) 260,000 5,705,904 - - 5,965,904
------- --------- --------- ------- ----------
Balances, December 31, 1993 907,376 5,705,904 7,131,848 - 13,745,128
- --------
Cash dividends - $1.26 per share - - (1,143,294) - (1,143,294)
Net income - 1994 - - 1,905,599 - 1,905,599
Change in unrealized loss on
available for sale
securities, net - - - (867,213) (867,213)
------- --------- --------- ------- ----------
Balances, December 31, 1994 $907,376 5,705,904 7,894,153 (867,213) 13,640,220
- -------- ======= ========= ========= ======= ==========
</TABLE>
See Notes to Consolidated Financial Statements.
D-27
<PAGE> 126
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31, 1994, 1993 and 1992
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from operating activities
- ------------------------------------
Net income $ 1,905,599 1,474,185 1,495,560
---------- ---------- ----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 343,206 261,001 219,189
Provision for loan losses - 171,000 126,000
Amortization and accretion of bond
premiums and discounts - net 379,703 258,879 350,088
Provision for deferred taxes 23,860 47,019 (17,211)
(Gain) loss on sale of investment
securities 135,658 (397,705) (107,837)
Change in assets and liabilities, net of
effects from purchase of The First
National Bank of Columbus in 1994 and
effects from purchase of Peoples State
Bank of Pittsville in 1992:
(Increase) decrease in interest
receivable (735,577) 520,247 223,048
Decrease in other assets 771,784 3,151 82,826
Increase (decrease) in taxes payable 92,813 (95,668) 21,410
Decrease in interest payable (89,143) (154,212) (433,381)
Decrease in other liabilities (441,619) (71,370) (6,960)
---------- ---------- ----------
Total adjustments 480,685 542,342 457,172
---------- ---------- ----------
Net cash provided by operating
activities 2,386,284 2,016,527 1,952,732
---------- ---------- ----------
Cash flows from investing activities
- ------------------------------------
Proceeds from sales of available for
sale securities 29,276,009 - -
Proceeds from maturities of available for
sale securities 16,732,032 - -
Purchase of available for sale securities (16,165,704) - -
Proceeds from maturities of held to
maturity securities 5,944,161 - -
Purchase of held to maturity securities (12,836,688) - -
Proceeds from sales of securities held
for investment - 18,063,877 2,729,123
Proceeds from maturities of securities
held for investment - 12,080,266 15,291,082
Purchase of securities held for investment - (43,356,276) (26,655,881)
Net decrease in interest bearing deposits
in banks - 469,683 1,485,408
Net (increase) decrease in loans (27,012,754) 720,909 3,148,674
Purchase of office buildings and equipment (234,005) (620,527) (322,291)
Purchase of The First National Bank of
Columbus, net of cash and cash equivalents (2,497,343) - -
Purchase of Peoples State Bank of Pittsville,
net of cash and cash equivalents - - (4,879,781)
---------- ---------- ----------
Net cash used in investing activities (6,794,292) (12,642,068) (9,203,666)
---------- ---------- ----------
</TABLE>
D-28
<PAGE> 127
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
Years ended December 31, 1994, 1993 and 1992
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Cash flows from financing activities
- ------------------------------------
Net decrease in deposits $ (6,101,318) (4,688,329) 2,782,858
Net decrease in U.S. Treasury note account (332,275) (76,162) 703,196
Net increase in Federal Funds purchased
and securities sold under agreement
to repurchase 14,228,138 1,882,242 (1,950,000)
Principal payments on Federal Home Loan
Bank advances (283,338) (152,003) (57,406)
Proceeds from Federal Home Loan Bank
advances - 3,500,000 1,945,000
Proceeds from notes payable - bank - 2,950,000 1,500,000
Principal payment on notes payable -
bank (1,450,000) (2,950,000) (550,000)
Dividends paid (1,143,294) (388,426) (291,319)
Proceeds from stock offering (net) - 5,965,904 -
---------- ---------- ----------
Net cash provided by financing
activities 4,917,913 6,043,226 4,082,329
---------- ---------- ----------
Net increase (decrease) in cash
and cash equivalents 509,905 (4,582,315) (3,168,605)
Cash and cash equivalents
at beginning of year 6,484,589 11,066,904 14,235,509
---------- ---------- ----------
Cash and cash equivalents
at end of year $ 6,994,494 6,484,589 11,066,904
========== ========== ==========
Supplemental disclosures of cash flow
- -------------------------------------
information
-----------
Cash paid during the year for:
Interest $ 5,847,146 4,975,930 5,942,079
========== ========== ==========
Income taxes $ 760,230 651,523 629,776
========== ========== ==========
</TABLE>
D-29
<PAGE> 128
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(concluded)
Years ended December 31, 1994, 1993 and 1992
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Supplemental schedule of non-cash investing
- -------------------------------------------
and financing activities
------------------------
Securities held for investment
reclassified to:
Available for sale securities $ 44,556,167 - -
========== ========== ==========
Held to maturity securities $ 17,490,369 - -
========== ========== ==========
Net change in unrealized loss on
available for sale securities $ (867,213) - -
========== ========== ===========
Acquisition of The First National Bank
of Columbus:
Cash purchase price $ 10,797,150 - -
========== ========== ==========
Assets acquired:
Cash and cash equivalents $ 8,299,807 - -
Investments 23,807,093 - -
Loans, net of reserve of $874,521 26,600,886 - -
Office building and equipment, net 1,661,434 - -
Other assets 3,591,776 - -
Liabilities assumed:
Deposits (52,812,612) - -
Other liabilities (351,234) - -
---------- ---------- ----------
$ 10,797,150 - -
========== ========== ==========
Acquisition of Peoples State Bank
of Pittsville:
Cash purchase price $ - - 6,363,840
========== ========== ==========
Assets acquired:
Cash and cash equivalents $ - - 1,484,059
Interest bearing certificate
of deposit in bank - - 1,955,091
Investments - - 20,365,982
Loans, net of reserve of $81,849 - - 10,364,075
Office building and equipment, net - - 519,769
Other assets - - 1,041,460
Liabilities assumed:
Deposits - - (26,888,569)
Securities sold under agreement
to repurchase - - (1,950,000)
Other liabilities - - (528,027)
---------- ---------- ----------
$ - - 6,363,840
========== ========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
D-30
<PAGE> 129
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1994, 1993 and 1992
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting principles of Greater Columbia Bancshares, Inc. conform to those
generally accepted and to general practices within the banking industry.
The significant accounting policies affecting the consolidated financial
statements are summarized below to assist the reader in understanding the
financial information presented in this report.
1. Consolidation
The consolidated financial statements of Greater Columbia Bancshares, Inc.
include the accounts of its wholly owned subsidiary, The First National Bank of
Portage. The First National Bank of Portage includes the accounts of its
wholly owned subsidiary, Portage Investments, Inc. All significant
intercompany accounts and transactions have been eliminated in the consolidated
financial statements.
2. Nature of banking activities
The consolidated income of Greater Columbia Bancshares, Inc. is principally
from income of its wholly owned subsidiary. The subsidiary Bank grants
agribusiness, commercial and residential loans to customers throughout the
State of Wisconsin, concentrating in the counties surrounding the Bank's eleven
locations. Although the Bank has a diversified loan portfolio, the ability of
its debtors to honor their contracts is dependent on the economic conditions of
the counties surrounding the subsidiary Bank.
3. Cash and cash equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, amounts due from banks, federal funds sold, and investments with original
maturities of three months or less. Generally, federal funds are sold for
one-day periods. Cash flows from loans, federal funds purchased, deposits and
other short-term borrowings are reported net.
The Bank maintains amounts due from banks which, at times, may exceed federally
insured limits. The Bank has not experienced any losses in such accounts.
D-31
<PAGE> 130
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. Investment in debt and marketable equity securities
The Company accounts for debt and equity securities in accordance with FASB
Statement No. 115. This statement requires that management determine the
appropriate classification of securities at the date of adoption and thereafter
as each individual security is acquired. In addition, the appropriateness of
such classification should be reassessed at each balance sheet date. The
classifications and related accounting policies under FASB Statement No. 115
are as follows:
Available for sale securities:
Securities classified as available for sale are those debt securities
that the Company intends to hold for an indefinite period of time, but
not necessarily to maturity. Available for sale securities also
includes equity securities. Any decision to sell a security classified
as available for sale would be based on various factors, including
significant movements in interest rates, changes in the maturity mix of
the Company's assets and liabilities, liquidity needs, regulatory
capital considerations, and other similar factors. Securities available
for sale are carried at fair value. Unrealized gains or losses net of
the related deferred tax effect are reported as increases or decreases
in stockholders' equity. Realized gains or losses, determined on the
basis of the cost of specific securities sold, are included in earnings.
Held to maturity securities:
Securities classified as held to maturity are those debt securities the
Company has both the intent and ability to hold to maturity regardless
of changes in market conditions, liquidity needs or changes in general
economic conditions. These securities are carried at cost adjusted for
amortization of premium and accretion of discount, computed by the
interest method over their contractual lives.
Transfers of debt securities into the held to maturity classification
(if any) from the available for sale classification are made at fair
value on the date of transfer. The unrealized holding gain or loss on
the date of transfer is retained in the separate component of
stockholders' equity and in the carrying value of the held to maturity
securities. Such amounts are amortized over the remaining contractual
lives of the securities by the interest method.
Securities held for investment:
Prior to the accounting change discussed in Note B, securities held for
investment were stated at cost adjusted for amortization of premiums and
accretion of discounts which were recognized as adjustments to interest
income. Gains or losses on disposition were based on the net proceeds
and the adjusted carrying amount of the securities sold, using the
specific identification method. Mutual funds were carried at the lower
of their aggregate cost or market value, determined as of the report
date. Any unrealized loss was credited to a valuation allowance for
marketable equity securities and charged to a separate account within
the equity section.
D-32
<PAGE> 131
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. Loans
Loans are stated at the amount of unpaid principal, reduced by the allowance
for loan losses. Interest on loans is calculated by using the simple interest
method on daily balances of the principal amount outstanding. Accrual of
interest is discontinued on a loan when management believes, after considering
economic and business condi-tions and collection efforts, that the borrower's
financial condition is such that collection of interest is doubtful. Interest
on these loans is recognized only when actually paid by the borrower if
collection of the principal is likely to occur. Accrual of interest is
generally resumed when the customer is current on all principal and interest
payments and has been paying on a timely basis for a period of time.
6. Allowance for loan losses
The allowance for loan losses is established through a provision for loan
losses charged to expense. Loans are charged against the allowance for loan
losses when management believes that the collectibility of the principal is
unlikely. The allowance is an amount that management believes will be adequate
to absorb possible losses on existing loans that may become uncollectible,
based on evaluation of the collectibility of loans and prior loan loss
experience. The evaluations take into consideration such factors as changes in
the nature and volume of the loan portfolio, overall portfolio quality, review
of specific problem loans, and current economic conditions that may affect the
borrowers' ability to pay. While management uses the best information
available to make its evaluation, future adjustments to the allowance may be
necessary if there are significant changes in economic conditions.
7. Office buildings and equipment
Depreciable assets are stated at cost less accumulated depreciation.
Provisions for depreciation are computed on straight-line and accelerated
methods over the estimated useful lives of the assets, which are 30 years for
office buildings and 3 to 20 years for equipment.
8. Income taxes
The Company uses the asset and liability approach to financial accounting and
reporting for income taxes. Deferred income tax assets and liabilities are
computed annually for differences between the financial statement and tax bases
of assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. The differences
relate principally to the reserve for loan losses, the accruals for deferred
compensation expense, fixed assets and unrealized gains and losses on available
for sale securities. Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be realized.
9. Earnings per share
Earnings per share are based on the Company's weighted average number of shares
outstanding during the year.
D-33
<PAGE> 132
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
10. Emerging accounting standards
Fair value of financial instruments:
Financial Accounting Standards Board (FASB) Statement No. 107,
Disclosures About Fair Value of Financial Instruments, requires
disclosure of fair value information about financial instruments,
whether or not recognized on the balance sheet, for which it is
practicable to estimate that value. Statement No. 107 excludes certain
financial instruments and all nonfinancial instruments from its
disclosure requirements. This statement is effective for the Company's
year ending December 31, 1995.
Impairment of loans:
The FASB has issued Statement No. 114, Accounting by Creditors for
Impairment of a Loan. Statement No. 114 requires that impaired loans
that are within the scope of this statement be measured based on the
present value of expected future cash flows discounted at the loan's
effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair value of the collateral if the loan
is collateral dependent. A loan is impaired when it is probable the
creditor will be unable to collect all contractual principal and
interest payments due in accordance with the terms of the loan
agreement. This statement is effective for the Company's year ending
December 31, 1995. Management has determined this Statement will have
no material effect on the financial statements.
Accounting by creditors for impairment of a loan-income recognition and
disclosures:
The FASB has issued FASB Statement No. 118 which amends certain
provisions of FASB Statement No. 114 relating to income recognition and
other required disclosures of impaired loans. This statement is
effective for the Company's year ending December 31, 1995. Management
has determined this Statement will have no material effect on the
financial statements.
Accounting for Mortgage Servicing Rights:
FASB has issued Statement No. 122, Accounting for Mortgage Servicing
Rights. Statement No. 122 amends certain provisions of Statement No. 65
to eliminate the accounting distinction between rights to service
mortgage loans for others that are acquired through loan origination
activities and those acquired through purchase transactions. If a
mortgage banking enterprise sells or securitizes mortgage loans and
retains the mortgage servicing rights, the enterprise should allocate
the total cost of mortgage loans to the mortgage servicing rights and
the loans (without the mortgage servicing rights) based on their
relative fair values. Any costs allocated to mortgage servicing rights
should be recognized as a separate asset. This Statement is effective
for the Company's year ending December 31, 1996. Management has
determined this Statement will have no material effect on the financial
statements.
D-34
<PAGE> 133
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
11. Reclassifications
Certain of the 1993 and 1992 amounts have been reclassified to conform with the
1994 presentation. These reclassifications had no effect on net income or
stockholders' equity.
NOTE B - ACCOUNTING CHANGE
As of January 1, 1994, the Company changed its method for accounting for debt
and equity securities in accordance with FASB Statement No. 115. As provided
by this statement, 1993 comparative financial statements have not been restated
for the change in accounting principle. The January 1, 1994 balance of
stockholders' equity was increased by $135,255, net of the $69,677 related tax
effect, to recognize the net unrealized holding gain on securities at that
date.
NOTE C - CASH AND DUE FROM BANKS
The Company's bank subsidiary is required to maintain certain vault cash and
reserve balances with the Federal Reserve Bank based upon a percentage of
deposits. These requirements approximated $1,182,000 and $740,000 at December
31, 1994 and 1993 respectively.
NOTE D - AVAILABLE FOR SALE SECURITIES
Amortized costs and fair values of available for sale securities as of December
31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1994
---------------------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 35,205,369 - 1,290,741 33,914,628
Obligations of other U.S. government
agencies and corporations 997,864 - 23,219 974,645
---------- ----- --------- ----------
36,203,233 - 1,313,960 34,889,273
Bankers Bank stock 39,150 - - 39,150
Federal Reserve Bank stock 411,300 - - 411,300
Federal Home Loan Bank stock 758,500 - - 758,500
---------- ----- --------- ----------
$ 37,412,183 - 1,313,960 36,098,223
========== ===== ========= ==========
</TABLE>
D-35
<PAGE> 134
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE D - AVAILABLE FOR SALE SECURITIES (continued)
The amortized cost and fair value of available for sale securities as of
December 31, 1994, by contractual maturity, are shown below:
<TABLE>
<CAPTION>
Amortized Fair
cost value
---------- ----------
<S> <C> <C>
Due in one year or less $ 15,740,587 15,510,279
Due after one year through 5 years 20,462,646 19,378,994
---------- ----------
$ 36,203,233 34,889,273
========== ==========
</TABLE>
Realized gains and losses on sale of available for sale securities for the
year ended December 31, 1994 are as follows:
<TABLE>
<S> <C>
Gross gains $ 6,066
Gross losses (141,724)
-------
$ (135,658)
=======
</TABLE>
Available for sale securities with a carrying amount of $10,652,126 as of
December 31, 1994 were pledged as collateral on public deposits and for
other purposes as required or permitted by law.
D-36
<PAGE> 135
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE E - HELD TO MATURITY SECURITIES
Amortized costs and fair values of held to maturity securities as of December
31, 1994 are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1994
----------------------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Obligations of states and political
subdivisions $ 24,951,275 17,201 438,419 24,530,057
Bankers Bank debenture 25,000 - - 25,000
---------- ------ ------- ----------
$ 24,976,275 17,201 438,419 24,555,057
========== ====== ======= ==========
</TABLE>
The amortized cost and fair value of securities held to maturity as of
December 31, 1994, by contractual maturity, are shown below.
<TABLE>
<CAPTION>
Amortized Fair
cost value
---------- ----------
<S> <C> <C>
Due in one year or less $ 7,829,773 7,788,832
Due after one year through 5 years 16,600,998 16,260,958
Due after 5 years through 10 years 545,504 505,267
---------- ----------
$ 24,976,275 24,555,057
========== ==========
</TABLE>
D-37
<PAGE> 136
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE F - SECURITIES HELD FOR INVESTMENT
Amortized costs and fair values of securities held for investment as of
December 31, 1993 are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1993
-------------------------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 15,701,077 187,838 - 15,888,915
Obligations of other
U.S. government agencies
and corporations 2,065,722 39,843 - 2,105,565
Obligations of states
and political subdivisions 17,465,369 189,553 29,878 17,625,044
Bankers Bank debenture 25,000 - - 25,000
---------- ------- ------ ----------
35,257,168 417,234 29,878 35,644,524
Mutual funds 25,866,818 - - 25,866,818
Federal Home Loan Bank stock 676,400 - - 676,400
Federal Reserve Bank stock 207,000 - - 207,000
Bankers Bank stock 39,150 - - 39,150
---------- ------- ------ ----------
$ 62,046,536 417,234 29,878 62,433,892
========== ======= ====== ==========
</TABLE>
Proceeds from the sale of securities held for investment were $18,063,877 and
$2,729,123 during 1993 and 1992 respectively. Realized gains and losses on
securities held for investment for the years ended December 31, 1993 and 1992
were as follows:
<TABLE>
<CAPTION>
December 31,
------------------------
1993 1992
------- -------
<S> <C> <C>
Gross gains $ 397,705 108,803
Gross losses - (966)
------- -------
$ 397,705 107,837
======= =======
</TABLE>
Securities being held for investment with a carrying amount of $14,707,681 as
of December 31, 1993 were pledged as collateral on public deposits and for
other purposes as required or permitted by law.
D-38
<PAGE> 137
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE G - LOANS
Major classifications of loans are as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------
1994 1993
----------- ----------
<S> <C> <C>
Commercial $ 23,358,753 9,042,273
Agricultural production 4,612,452 1,716,243
Real estate:
Construction 4,938,419 3,126,612
Commercial 39,131,224 25,736,909
Agricultural 7,647,657 3,867,931
Residential 39,693,761 28,889,112
Installment and consumer 7,330,361 5,164,559
Municipal loans 6,448,516 1,336,003
----------- ----------
133,161,143
78,879,642
Allowance for loan losses (1,417,056) (749,195)
----------- ----------
Net loans $ 131,744,087 78,130,447
=========== ==========
</TABLE>
Loans on which the accrual of interest has been discontinued or reduced
amounted to $368,140 and $151,689 at December 31, 1994 and 1993
respectively. If interest on those loans had been accrued, such income
would have approximated $60,896, $5,157 and $7,807 for 1994, 1993 and 1992
respectively. There was no interest income on these loans, which is
recorded only when received.
Certain directors, executive officers, and principal shareholders of the
Company and their related interests, had loans outstanding in the aggregate
amounts of $1,597,618 and $1,732,326 at December 31, 1994 and 1993
respectively. During 1994, $306,094 of new loans were made and repayments
totaled $440,802. These loans were made on substantially the same terms,
including interest rates and collateral, as those prevailing at the same
time for comparable transactions with other persons and did not involve more
than normal risks of collectibility or present other unfavorable features.
NOTE H - ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses reflected in the consolidated financial
statements represents the allowance available to absorb loan losses. An
analysis of changes in the allowance is presented in the following
tabulation:
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
1994 1993 1992
--------- ------- -------
<S> <C> <C> <C>
Balance, beginning of year $ 749,195 715,046 572,707
Charge-offs (307,660) (155,851) (140,510)
Recoveries 101,000 19,000 75,000
Provision charged to operations - 171,000 126,000
Amount acquired from acquisition of
The First National Bank of Columbus 874,521 - -
Amount acquired from acquisition of
Peoples State Bank of Pittsville - - 81,849
--------- ------- -------
Balance, end of year $ 1,417,056 749,195 715,046
========= ======= =======
</TABLE>
D-39
<PAGE> 138
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE I - OFFICE BUILDINGS AND EQUIPMENT
Office buildings and equipment are stated at cost less accumulated depreciation
and are summarized as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------
1994 1993
--------- ---------
<S> <C> <C>
Land and land improvements $ 946,959 842,959
Buildings and improvements 4,476,683 3,233,076
Furniture and equipment 1,465,946 1,163,042
--------- ---------
6,889,588 5,239,077
Less accumulated depreciation 1,398,029 1,286,751
--------- ---------
Total office buildings and equipment $ 5,491,559 3,952,326
========= =========
</TABLE>
Depreciation expense amounted to $343,206, $261,001 and 219,189 in 1994, 1993
and 1992 respectively.
NOTE J - EXCESS OF COST OVER EQUITY IN UNDERLYING NET ASSETS OF SUBSIDIARIES
The excess of cost over equity in underlying net assets of Peoples State Bank
of Pittsville, at the date of acquisition amounted to $279,948. The amount is
being amortized over a period of ten years. Amortization expense amounted to
$27,995, $27,995 and $20,996 for the years ended December 31, 1994, 1993 and
1992 respectively. Accumulated amortization amounted to $76,986 and $48,991
at December 31, 1994 and 1993 respectively.
The excess of cost over equity in underlying net assets of The First National
Bank of Columbus at the date of acquisition amounted to $1,853,256. The amount
is being amortized over a period of ten years. Amortization expense amounted
to $154,438 for the year ended December 31, 1994. Accumulated amortization
amounted to $154,438 at December 31, 1994.
NOTE K - VALUATION OF CORE DEPOSITS
The fair market value of core deposits of Peoples State Bank of Pittsville at
the date of acquisition, amounted to $403,328. The amount, net of
amortization, has been included as part of other assets and is being amortized
over a period of eight years. Amortization expense amounted to $50,416, $50,416
and $37,812 for the years ended December 31, 1994, 1993 and 1992 respectively.
Accumulated amortization amounted to $138,644 and $88,228 at December 31, 1994
and 1993 respectively.
The fair market value of core deposits of The First National Bank of Columbus
at the date of acquisition, amounted to $792,189. The amount, net of
amortization, has been included as part of other assets and is being amortized
over a period of eight years. Amortization expense amounted to $82,520 for the
year ended December 31, 1994. Accumulated amortization amounted to $82,520 at
December 31, 1994.
D-40
<PAGE> 139
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE L - INTEREST ON DEPOSITS
Interest expense on deposits is as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
NOW accounts $500,448 407,362 436,617
Money market demand accounts 292,083 291,762 333,223
Savings deposits 919,035 715,624 731,020
Time, $100,000 and over 228,000 153,431 219,000
Other Time 2,886,491 2,803,304 3,481,558
---------- --------- ---------
Total $4,826,057 4,371,483 5,201,418
========== ========= =========
</TABLE>
NOTE M - SHORT-TERM BORROWINGS
Short-term borrowings consisted of the following:
<TABLE>
<CAPTION>
December 31,
----------------------------
1994 1993
---------- ---------
<S> <C> <C>
Federal funds purchased and securities
sold under agreements to repurchase $ 16,110,380 1,882,242
U.S. Treasury note account 772,253 1,104,528
---------- ---------
Total short-term borrowings $ 16,882,633 2,986,770
========== =========
</TABLE>
NOTE N - LONG-TERM BORROWINGS
Long-term borrowings consisted of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------
1994 1993
--------- ---------
<S> <C> <C>
Note payable - bank $ 1,500,000 2,950,000
Federal Home Loan Bank advances 4,952,253 5,235,591
--------- ---------
Total long-term borrowings $ 6,452,253 8,185,591
========= =========
</TABLE>
Note payable - bank is due November 15, 1995 with a fixed interest rate of
5.73%. The note is secured by the common stock of the Company's subsidiary,
The First National Bank of Portage. In connection with the note payable the
Company has agreed to maintain a certain capital to adjusted asset ratio,
minimum return on assets and agreed to not incur additional debt at the
holding company. The Bank is in compliance with these requirements. (See
Note T).
D-41
<PAGE> 140
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE N - LONG-TERM BORROWINGS (continued)
During 1991, the Company entered into a master contract agreement with the
Federal Home Loan Bank (FHLB) which provides for borrowings up to a maximum of
35% of assets subject to certain restrictions. The indebtedness is evidenced by
a master contract dated December 23, 1991. FHLB provides both fixed and
floating rate advances. Floating rates are tied to short-term market rates of
interest, such as Fed funds or Treasury Bill rates. Fixed rate advances are
priced in reference to market rates of interest, namely the rates that FHLB
pays to borrowers at various maturities.
The following table indicates advances outstanding and the applicable interest
rates and maturity dates. Interest is payable monthly with quarterly principal
payments.
<TABLE>
<CAPTION>
Fixed Amount Amount
Advance date Due date Rate advanced outstanding
------------ -------- ----- --------- -----------
<S> <C> <C> <C> <C>
1/ 2/92 12/31/94 5.29% $425,000 401,130
2/ 7/92 2/ 7/97 6.76 320,000 303,874
2/ 7/92 2/ 7/97 6.53 320,000 303,874
6/15/92 6/ 1/00 7.01 550,000 417,500
6/15/92 6/ 1/98 6.83 330,000 252,000
8/13/93 8/ 3/03 5.84 3,100,000 2,890,000
9/20/93 4/20/98 4.34 400,000 383,875
---------
Long-term debt outstanding,
December 31, 1994 $ 4,952,253
=========
</TABLE>
The advances are secured by a security agreement pledging First National Bank
of Portage real estate mortgages with a carrying value of $39,693,761.
The aggregate principal maturities of long-term obligations in each of
the next five years and thereafter are as follows:
<TABLE>
<S> <C>
Years ending December 31:
1995 $ 677,958
1996 276,828
1997 849,392
1998 724,575
1999 221,000
Later years 2,202,500
---------
$ 4,952,253
=========
</TABLE>
D-42
<PAGE> 141
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE O - INCOME TAXES
The provision for income taxes included in the consolidated financial
statements consists of the following:
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Current taxes:
Federal $ 594,663 402,989 496,790
State 168,226 135,792 155,396
------- ------- -------
762,889 538,781 652,186
Deferred income taxes 23,860 47,019 (17,211)
------- ------- -------
Total provision for income taxes $ 786,749 585,800 634,975
======= ======= =======
</TABLE>
The net deferred tax assets in the accompanying consolidated balance sheets
include the following amounts of deferred tax assets and liabilities:
<TABLE>
<CAPTION>
December 31,
-----------------------------------------
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Deferred tax assets:
Allowance for loan losses $ 211,000 85,000 85,095
Unrealized loss on available for sale securities 446,747 - -
Other 77,000 101,000 146,924
Deferred tax liabilities - depreciation (180,000) (215,000) (214,000)
------- ------- -------
$ 554,747 (29,000) 18,019
======= ======= =======
</TABLE>
A reconciliation of statutory federal income taxes based upon income before
taxes to the provision for federal and state income taxes, as summarized
previously, is as follows:
<TABLE>
<CAPTION>
December 31,
---------------------------------------------------------------------
1994 1993 1992
--------------- ---------------- ----------------
% of % of % of
pretax pretax pretax
Amount income Amount income Amount income
------- ------ ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
Reconciliation of statutory
to effective taxes:
Federal income taxes
at statutory rate $ 915,398 34.0% 700,395 34.0% 724,381 34.0%
Adjustments for:
Tax-exempt interest
on municipal
obligations (369,186) (13.7) (252,493) (12.3) (228,680) (10.7)
Increases in taxes
resulting from
state income taxes 111,056 4.1 89,623 4.4 102,561 4.8
Other - net 129,481 4.8 48,275 2.3 36,713 1.7
------- ---- ------- ---- ------- ----
Effective income
taxes - operations $ 786,749 29.2% 585,800 28.4% 634,975 29.8%
======= ==== ======= ==== ======= ====
</TABLE>
D-43
<PAGE> 142
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE P - PENSION PLAN
The Company has a defined benefit pension plan covering substantially all of
its employees. The benefits are based on years of service and the employees's
average monthly pay received during any period of five consecutive years which
gives the highest average. The Company's funding policy is to have the
actuaries provide management with both a minimum and a maximum pension
contribution for the plan year. Management then decides each year the amount
of the contribution which will be made from within the range provided by the
actuaries.
There has been a plan curtailment during the period ended December 31, 1994 due
to the benefit accrual freeze as of December 31, 1994. We have reflected the
curtailment as of the October 1, 1994 measurement date.
The following table sets forth the Plan's funded status at December 31, 1994
and 1993.
<TABLE>
<CAPTION>
1994 1993
--------- ---------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligations, including
vested benefits of $968,221 and $1,056,406
in 1994 and 1993 respectively $ (998,148) (1,073,666)
========= =========
Projected benefit obligation for services
rendered to date $ (998,148) (1,413,600)
Plan assets at fair value, primarily fixed
income assets 1,261,833 1,271,844
--------- ---------
Projected benefit obligation in excess of
plan assets 263,685 (141,756)
Prior service cost not yet recognized in
net periodic pension cost - (1,023)
Adjustment for contribution made from
measurement date to fiscal year end 33,917 -
Unrecognized net (gain) loss from past
experience different from that assumed
and effects of changes in assumptions (35,492) 125,380
--------- ---------
$ 262,110 (17,399)
========= =========
</TABLE>
D-44
<PAGE> 143
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE P - PENSION PLAN (continued)
Net pension cost for 1994, 1993 and 1992 included the following components:
<TABLE>
<CAPTION>
1994 1993 1992
------- ------- -------
<S> <C> <C> <C>
Service cost-benefits earned during the year $ 98,949 75,228 62,427
Interest cost on projected benefit obligation 80,513 79,902 67,641
Net amortization and deferral (150,428) 41,408 66,797
------- ------- -------
Total periodic pension cost 29,034 196,538 196,865
Actual return (gain) loss on plan assets 50,427 (123,861) (134,840)
------- ------- -------
Net periodic pension cost $ 79,461 72,677 62,025
======= ======= =======
</TABLE>
For the years ended December 31, 1994, 1993 and 1992, the following economic
assumptions were used in determining the actuarial present value of the
projected benefit obligations.
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Weighted average discount rate 7.25% 5.75% 6.50%
Rate of increase in future compensation levels 5.23% 7.75% 6.00%
Long-term rate of return on assets 7.75% 5.19% 7.75%
</TABLE>
NOTE Q - COMMITMENTS, CONTINGENCIES AND CREDIT RISK
In the normal course of business, the Company is involved in various legal
proceedings. In the opinion of management, any liability resulting from such
proceedings would not have a material adverse effect on the consolidated
financial statements.
The Subsidiary Bank is party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend credit
and standby letters of credit. They involve, to varying degrees, elements of
credit risk in excess of amounts recognized on the consolidated balance
sheets.
The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual notional amount of those
instruments. The Bank uses the same credit policies in making commitments and
issuing letters of credit as it does for on-balance-sheet instruments.
A summary of the contract or notional amount of the Bank's exposure to
off-balance-sheet risk as of December 31, 1994 and 1993 is as follows:
<TABLE>
<CAPTION>
1994 1993
---------- ---------
<S> <C> <C>
Financial instruments whose contract amounts
represent credit risk:
Commitments to extend credit $ 14,253,000 4,200,200
Standby letters of credit 34,427 -
</TABLE>
D-45
<PAGE> 144
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE Q - COMMITMENTS, CONTINGENCIES AND CREDIT RISK (continued)
Commitments to extend 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. 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. The credit risk involved in issuing
letters of credit is essentially the same as that involved in extending loan
facilities to customers. The Bank evaluates each customer's credit worthiness
on a case-by-case basis. The amount of collateral obtained, if deemed
necessary by the Bank upon extension of credit, is based on management's credit
evaluation of the counterparty. Collateral held varies but may include
accounts receivable, inventory, property and equipment, and income-producing
commercial properties.
NOTE R - STOCK SPLIT AND STOCK OFFERING
On September 1, 1993, the Board of Directors approved a 4 for 1 stock split to
be accomplished by a 300% stock dividend payable of the Company's $1 par value
common stock. As a result of the stock split, 485,532 additional shares were
issued, and retained earnings were reduced by $485,532. All share information,
common stock and retained earnings, and earnings per share, has been restated
for the split.
The Company offered to Wisconsin residents who were holders of record at the
close of business October 1, 1993 of its outstanding common stock, the right to
purchase an additional 260,000 shares at $23. On November 15, 1993, the
Company had received consideration for all 260,000 shares and recorded the
additional capital net of $14,096 in cost relating to the offering.
D-46
<PAGE> 145
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE S - REGULATORY CAPITAL REQUIREMENTS
The Federal Reserve Board and other bank regulatory agencies have adopted
risk-based capital guidelines for banks and bank holding companies. The main
objectives of the risk-based capital framework are to provide a more consistent
system for comparing capital positions of banking organizations and to take
into account the different risks among banking organizations' assets and
off-balance-sheet items. Bank regulatory agencies have supplemented the
risk-based capital standard with a leverage ratio for Tier 1 capital to total
reported assets. The minimum leverage ratio standard is 3 percent. Depending
upon the judgment of the various regulatory agencies, a greater leverage ratio
may be required based upon the relative risk of the organization.
Below is a comparison of the Bank's 1994 actual with the minimum requirements
for well-capitalized and adequately capitalized banks, as defined by the
federal regulatory agencies' Prompt Corrective Action Rules:
<TABLE>
<CAPTION>
Minimum Requirements
----------------------------------
1994 Well Adequately
Actual capitalized capitalized
------ ----------- -----------
<S> <C> <C> <C>
Tier 1 risk-based capital 8.98% 6.00% 4.00%
Total risk-based capital 9.97% 10.00% 8.00%
Leverage ratio 6.52% 5.00% 4.00%
</TABLE>
NOTE T - RETAINED EARNINGS
The principal source of income and funds of Greater Columbia Bancshares,
Inc. are dividends from its subsidiary, The First National Bank of Portage.
The bank subsidiary, as a national bank, is prohibited from declaring or
paying any dividends without prior regulatory approval in an amount greater
than $166,595. Maintenance of adequate capital at the subsidiary bank
effectively restricts potential dividends to an amount less than $166,595.
As the result of an agreement signed by the Company upon the issuance of
the notes payable during 1994, the Company is further precluded from paying
dividends to its shareholders without the prior written consent of the
lending bank. (See Note N).
D-47
<PAGE> 146
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE U - BUSINESS ACQUISITIONS
In April 1992, The First National Bank of Portage acquired, for $6,363,840, the
business and certain assets and liabilities of Peoples State Bank of
Pittsville. This acquisition has been accounted for as a purchase and,
accordingly, the acquired assets and liabilities have been recorded at their
estimated fair values at date of acquisition. The operating results of this
acquisition are included in the Company's consolidated results of operations
from the date of acquisition.
In March 1994, Greater Columbia Bancshares, Inc. acquired, for $10,797,150,
100% of 1st Columbia Corp. stock. 1st Columbia Corp.'s principal asset was The
First National Bank of Columbus, which was liquidated into The First National
Bank of Portage on the date of the acquisition. This acquisition has been
accounted for as a purchase and, accordingly, the acquired assets and
liabilities have been recorded at their estimated fair values at date of
acquisition. The operating results of this acquisition are included in the
Company's consolidated results of operations from the date of acquisition.
The following unaudited pro-forma summary presents the consolidated results of
operations of the Company as if the acquisitions had occurred at the beginning
of 1992.
<TABLE>
<CAPTION>
(In Thousands)
----------------------
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Interest income $14,095 14,652 16,040
Interest expense (6,009) (6,530) (7,971)
Provision for loan losses (614) (195) (150)
Other income 1,016 1,602 1,058
Other expenses (6,469) (6,447) (6,192)
Income taxes (598) (1,020) (775)
------ ------ ------
Net income $1,421 2,062 2,010
====== ====== ======
Net income per share $ 1.57 2.27 2.22
====== ====== ======
</TABLE>
The above amounts are based upon certain assumptions and estimates which the
Company believes are reasonable, and do not reflect any benefit from
economies which might be achieved from combined operations. The pro-forma
results do not necessarily represent results which would have occurred if the
acquisitions had taken place on the basis assumed above, nor are they
indicative of the results of future combined operations.
D-48
<PAGE> 147
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE V - GREATER COLUMBIA BANCSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL
INFORMATION
<TABLE>
<CAPTION>
December 31,
-----------------------------
1994 1993
---------- ----------
<S> <C> <C>
Condensed balance sheets
Assets:
Deposits in subsidiary bank $ 67,452 19,249
Investments - 5,992,253
Investment in subsidiary 15,045,588 10,676,995
Taxes receivable 43,651 28,700
---------- ----------
Total assets $ 15,156,691 16,717,197
========== ==========
Liabilities:
Accrued interest payable $ 11,221 22,069
Accounts payable 5,250 -
Notes payable - bank 1,500,000 2,950,000
---------- ----------
Total liabilities 1,516,471 2,972,069
---------- ----------
Stockholders' equity:
Common stock, $1 par value, 2,000,000 shares
authorized, 907,376 shares issued and outstanding 907,376 907,376
Surplus 5,705,904 5,705,904
Retained earnings 7,894,153 7,131,848
---------- ----------
14,507,433 13,745,128
Unrealized loss on available for sale
securities, net (867,213) -
---------- ----------
Total stockholders' equity 13,640,220 13,745,128
---------- ----------
Total liabilities and stockholders' equity $ 15,156,691 16,717,197
========== ==========
</TABLE>
D-49
<PAGE> 148
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE V - GREATER COLUMBIA BANCSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL
INFORMATION (continued)
<TABLE>
<CAPTION>
December 31,
-------------------------------------------------
1994 1993 1992
--------- --------- ---------
<S> <C> <C> <C>
Condensed statements of income
Income:
Dividends from subsidiary $ 3,574,462 540,000 958,500
Interest income 42,256 28,576 4,063
Security gain, net 6,066 - -
--------- --------- ---------
Total income 3,622,784 568,576 962,563
--------- --------- ---------
Expenses:
Interest - short-term - 156,842 181,340
Interest - long-term 127,023 22,068 -
Other 66,743 70,178 16,645
--------- --------- ---------
Total expenses 193,766 249,088 197,985
--------- --------- ---------
Income before income tax benefit and
equity in undistributed net income
of subsidiary 3,429,018 319,488 764,578
Income tax benefit 49,451 75,200 66,025
--------- --------- ---------
Income before equity in undistributed
net income of subsidiary 3,478,469 394,688 830,603
Equity in undistributed net income
of subsidiary (1,572,870) 1,079,497 664,957
--------- --------- ---------
Net income $ 1,905,599 1,474,185 1,495,560
========= ========= =========
</TABLE>
D-50
<PAGE> 149
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
December 31, 1994, 1993 and 1992
NOTE V - GREATER COLUMBIA BANCSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL
INFORMATION (continued)
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------
1994 1993 1992
---------- --------- ---------
<S> <C> <C> <C>
Condensed statements of cash flows
Cash flows from operating activities
Net income $ 1,905,599 1,474,185 1,495,560
---------- --------- ---------
Adjustments to reconcile net income
to net cash provided by operating
activities:
Decrease (increase) in
taxes receivable (14,951) 5,405 33,170
Increase (decrease) in
interest payable (10,848) (23,622) 2,812
Increase in accounts payable 5,250 - -
Gain on sale of securities (6,066) - -
Equity in undistributed earnings 1,572,870 (1,079,497) (664,957)
---------- --------- ---------
Total adjustments 1,546,255 (1,097,714) (628,975)
---------- --------- ---------
Net cash provided by
operating activities 3,451,854 376,471 866,585
---------- --------- ---------
Cash flows from investing activities
Investment in Subsidiary Bank - - (1,500,000)
Purchase of securities held for
investment - (5,992,253) -
Proceeds from sale of investments
available for sale 6,019,236 - -
Purchase of investments available
for sale (20,917) - -
Purchase of The First National Bank
of Columbus, net of cash and cash
equivalents acquired (6,808,676) - -
---------- --------- ---------
Net cash used in
investing activities (810,357) (5,992,253) (1,500,000)
---------- --------- ---------
Cash flows from financing activities
Proceeds from stock offering (net) - 5,965,904 -
Proceeds from debt issuance - 2,950,000 1,500,000
Principal payment on notes payable -
bank (1,450,000) (2,950,000) (550,000)
Dividends paid (1,143,294) (388,426) (291,319)
---------- --------- ---------
Net cash provided by (used in)
financing activities (2,593,294) 5,577,478 658,681
---------- --------- ---------
Net increase (decrease) in cash
and cash equivalents 48,203 (38,304) 25,266
Cash and cash equivalents
at beginning of year 19,249 57,553 32,287
---------- --------- ---------
Cash and cash equivalents
at end of year $ 67,452 19,249 57,553
========== ========= =========
</TABLE>
D-51
<PAGE> 150
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(concluded)
December 31, 1994, 1993 and 1992
NOTE V - GREATER COLUMBIA BANCSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL
INFORMATION (concluded)
<TABLE>
<CAPTION>
December 31,
--------------------------------------------------
1994 1993 1992
---------- --------- ---------
<S> <C> <C> <C>
Supplemental disclosures of cash flow
information
Cash paid (received) during year for:
Interest $ 137,871 202,532 178,528
========== ========= =========
Income taxes (received) $ (34,500) (80,605) (99,195)
========== ========= =========
Supplemental schedule of non-cash investing
and financing activities
Securities held for investment
reclassified to available for sale
securities $ 5,992,253 - -
========== ========= =========
Acquisition of The First National Bank
of Columbus:
Cash purchase price $ 10,797,150 - -
========== ========= =========
Assets acquired:
Cash and cash equivalents $ 3,988,474 - -
Investment in subsidiary 6,808,676 - -
---------- --------- ---------
$ 10,797,150 - -
========== ========= =========
</TABLE>
D-52
<PAGE> 151
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
------
September 30, December 31,
1995 1994
------------ ------------
<S> <C>
Cash and due from banks $ 5,596,872 6,994,494
Available for sale securities 30,762,250 36,098,223
Held to maturity securities 20,932,287 24,976,275
Loans, less allowance for loan losses of $1,454,182
and $1,412,197 in 1995 and 1994 respectively 142,308,684 131,744,087
Office building and equipment 5,272,102 5,491,559
Accrued interest receivable and other assets 5,832,082 5,895,218
----------- -----------
Total assets $ 210,704,277 211,199,856
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities
- -----------
Deposits:
Non-interest bearing $ 22,689,715 23,078,276
NOW accounts 22,670,906 25,396,424
Money market demand accounts 9,923,394 11,677,412
Savings 35,963,586 39,272,000
Time, $100,000 and over 9,555,000 6,353,233
Other Time 69,224,617 67,350,804
----------- -----------
Total deposits 170,027,218 173,128,149
Short-term borrowings 18,193,560 16,882,633
Long-term borrowings 5,843,502 6,452,253
Accrued interest payable and other liabilities 1,711,292 1,096,601
----------- -----------
Total liabilities 195,775,572 197,559,636
----------- -----------
Commitments, contingencies and credit risk
------------------------------------------
Stockholders' equity
---------------------
Common stock, $1 par value; 2,000,000 shares
authorized, 907,376 shares issued and outstanding 907,376 907,376
Surplus 5,705,904 5,705,904
Retained earnings 8,436,525 7,894,153
----------- -----------
15,049,805 14,507,433
Unrealized loss on available for sale securities, net (121,100) (867,213)
----------- -----------
Total stockholders' equity 14,928,705 13,640,220
----------- -----------
Total liabilities and stockholders' equity $ 210,704,277 211,199,856
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
D-53
<PAGE> 152
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
1995 1994
------------ ---------
<S> <C> <C>
Interest income
---------------
Interest and fees on loans $ 9,712,550 7,377,764
Interest on investment securities:
U.S. Treasury and U.S. Government
agencies and corporations 1,165,752 1,488,882
States and political subdivisions 745,188 629,990
Other 88,147 267,505
Interest on federal funds sold 13,875 21,151
Interest on deposits in banks 4,960 6,203
---------- ---------
Total interest income 11,730,472 9,791,495
---------- ---------
Interest expense
----------------
Interest on deposits 4,200,614 3,550,084
Interest on short-term borrowings 834,999 279,446
Interest on long-term borrowings 425,743 336,440
--------- ---------
Total interest expense 5,461,356 4,165,970
--------- ---------
Net interest income 6,269,116 5,625,525
Provision for loan losses 35,000 -
--------- ---------
Net interest income after provision
for loan losses 6,234,116 5,625,525
--------- ---------
Other operating income
----------------------
Service fees 553,314 534,940
Other income 96,366 228,481
Securities gains (losses), net 11,042 (135,658)
--------- ---------
Total other operating income 660,722 627,763
--------- ---------
Other operating expenses
------------------------
Salaries 1,785,545 1,708,685
Pensions and other employee benefits 559,558 551,542
Occupancy expense 403,493 382,659
Furniture and equipment expenses 235,838 256,660
Computer services 276,437 244,866
Other expenses 1,322,469 1,261,555
--------- ---------
Total other operating expenses 4,583,340 4,405,967
--------- ---------
Income before income taxes 2,311,498 1,847,321
Less applicable income taxes 625,832 389,636
--------- ---------
Net income $ 1,685,666 1,457,685
---------- ========= =========
Earnings per share $ 1.86 1.61
==== ====
Weighted average shares
outstanding 907,376 907,376
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
D-54
<PAGE> 153
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
--------------------------------
1995 1994
---------- -----------
(In Thousands)
<S> <C> <C>
Cash flows from operating activities
------------------------------------
Net income $ 1,685,666 1,457,685
---------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 274,500 257,405
Provision for loan losses 35,000 -
Amortization and accretion of bond premiums
and discounts - net 224,607 284,777
Loss on sale of investment securities - 135,658
Change in assets and liabilities, net of effects
from purchase of The First National Bank
of Columbus in 1994:
Increase in interest receivable (317,589) (719,783)
(Increase) decrease in other assets (3,636) 397,288
Increase in taxes payable 66,926 59,124
Increase in interest payable 526,723 77,540
Increase (decrease) in other liabilities 21,042 (420,536)
---------- -----------
Total adjustments 827,573 71,473
---------- -----------
Net cash provided by operating activities 2,513,239 1,529,158
---------- -----------
Cash flows from investing activities
------------------------------------
Proceeds from sales of available for sale securities - 29,276,009
Proceeds from maturity of available for sale securities 3,851,946 3,952,385
Purchase of available for sale securities - (12,959,452)
Proceeds from maturities of held to maturity securities 1,355,033 1,911,018
Purchase of held to maturity securities (1,200,000) (9,336,864)
Net increase in loans (4,320,748) (15,784,164)
Purchase of office buildings and equipment (55,043) (225,338)
Purchase of The First National Bank of Columbus,
net of cash and cash equivalents - (2,497,343)
---------- ----------
Net cash used in investing activities (368,812) (5,663,749)
---------- ----------
</TABLE>
See Notes to Consolidated Financial Statements.
D-55
<PAGE> 154
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(concluded)
Increase (Decrease) in Cash and Cash Equivalents
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------
1995 1994
------------ -------------
<S> <C> <C>
(In Thousands)
Cash flows from financing activities
------------------------------------
Net decrease in deposits $ (3,100,931) (8,981,022)
Net (increase) decrease in U.S. Treasury note account 875,957 (302,562)
Net increase in Federal Funds purchased and
securities sold under agreement to repurchase 434,970 14,909,257
Principal payments on Federal Home Loan Bank advances (608,751) (211,961)
Principal payments on notes payable - bank - (1,450,000)
Dividends paid (1,143,294) (1,143,294)
--------- ----------
Net cash provided by (used in)
financing activities (3,542,049) 2,820,418
--------- ----------
Net increase (decrease) in cash
and cash equivalents 1,397,622 (1,314,173)
--------- ----------
Cash and cash equivalents at beginning of period 6,994,494 6,484,589
--------- ----------
Cash and cash equivalents at end of period $ 5,596,872 5,170,416
========= ==========
Supplemental disclosures of cash flow information
-------------------------------------------------
Cash paid during the period for:
Interest $ 4,934,633 4,088,430
========= ==========
Income taxes $ 489,779 454,230
========= ==========
Supplemental schedule of non-cash investing
-------------------------------------------
and financing activities
------------------------
Securities held for investment reclassified to:
Held to maturity securities $ - 17,490,369
========= ==========
Available for sale securities $ - 44,556,167
========= ==========
Net change in unrealized loss on available
for sale securities $ 746,113 559,498
========= ==========
Acquisition of the First National Bank of Columbus:
Cash purchase price $ - 10,797,150
========= ==========
Assets acquired:
Cash and cash equivalents $ - 8,299,807
Investments - 23,807,093
Loans, net of reserve of $874,521 - 26,600,886
Office building and equipment, net - 1,661,434
Other assets - 3,591,776
Liabilities assumed:
Deposits - (52,812,612)
Other liabilities - (351,234)
--------- ----------
$ - 10,797,150
========= ==========
</TABLE>
See Notes to Consolidated Financial Statements.
D-56
<PAGE> 155
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995 and 1994
(Unaudited)
NOTE A - GENERAL
The accounting and reporting policies of Greater Columbia Bancshares,
Inc. and Subsidiary (the "Company") conform to generally accepted accounting
principles and to general practices within the banking industry.
Significant accounting policies used by the Company are summarized in Note A
to the December 31, 1994 and 1993 financial statements.
The condensed financial statements reflect adjustments, all of which
are of a normal recurring nature, and, in the opinion of management,
necessary for a fair statement of results for the interim periods. The
operating results for the nine months ended September 30, 1995 are not
necessarily indicative of the results which may be expected for the entire
year. The accompanying condensed financial statements should be read in
conjunction with the Company's December 31, 1994 and 1993 financial
statements and related notes.
NOTE B - ALLOWANCE FOR LOAN LOSSES
An analysis of the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------
1995 1994
------------ -----------
<S> <C> <C>
Balance, beginning of period $ 1,417,056 749,195
Provision charged to expense 35,000 -
Recoveries of loans previously charged-off 32,861 15,287
Loans charged-off (30,735) (226,806)
Amount acquired from acquisition of The First
National Bank of Columbus - 874,521
--------- ---------
Balance, end of period $ 1,454,182 1,412,197
========= =========
</TABLE>
NOTE C - NONPERFORMING LOANS
Nonperforming loans are summarized as follows:
<TABLE>
<CAPTION>
September 30,
--------------------------
1995 1994
------- -------
<S> <C> <C>
Nonperforming loans $255,000 372,000
======= =======
</TABLE>
D-57
<PAGE> 156
GREATER COLUMBIA BANCSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995 and 1994
(Unaudited)
NOTE D - EARNINGS PER COMMON SHARE
For purposes of calculating income per common share, the weighted
average number of shares outstanding for the nine months ended September 30,
1995 and 1994 was 907,376 shares.
NOTE E -TERMINATION OF PENSION PLAN
In July 1995, the Company filed for approval with the Internal Revenue Service
to terminate its pension plan. Pending this approval, the plan will be
terminated and any overfunding will be distributed to the employees.
NOTE F -SUBSEQUENT EVENTS
The Company has entered into a merger agreement with Associated Banc-Corp
dated as of December 22, 1995. The Company will be acquired by Associated
Banc-Corp under this agreement subject to regulatory approval.
On November 15, 1995, the Notes Payable - Bank of $1,500,000 was refinanced.
The due date was extended to March 15, 1996 with a fixed interest rate of
7.56%
D-58
<PAGE> 157
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is incorporated under the Wisconsin Business
Corporation Law (the "WBCL"). Under Section 180.0851 of the WBCL, the
Registrant shall indemnify a director or officer, to the extent such person is
successful on the merits or otherwise in the defense of a proceeding, for all
reasonable expenses incurred in the proceeding, if such person was a party to
such proceeding because he or she was a director or officer of the Registrant.
In all other cases, the Registrant shall indemnify a director or officer
against liability incurred in a proceeding to which such person was a party
because he or she was a director or officer of the Registrant; unless liability
was incurred because he or she breached or failed to perform a duty owed to the
Registrant and such breach or failure to perform constitutes: (i) a willful
failure to deal fairly with the Registrant or its shareholders in connection
with a matter in which the director or officer has a material conflict of
interest; (ii) a violation of criminal law, unless the director or officer had
reasonable cause to believe his or her conduct was lawful or no reasonable
cause to believe his or her conduct was unlawful; (iii) a transaction from
which the director or officer derived an improper personal profit; or (iv)
willful misconduct. Section 180.0858 of the WBCL provides that subject to
certain limitations, the mandatory indemnification provisions do not preclude
any additional right to indemnification or allowance of expenses that a
director or officer may have under the Registrant's articles of incorporation,
bylaws, a written agreement between the director or officer and the Registrant
or a resolution of the Board of Directors or adopted by majority vote of the
Registrant's shareholders.
Section 180.0859 of the WBCL provides that it is the public policy of
the State of Wisconsin to require or permit indemnification, allowance of
expenses and insurance to the extent required or permitted under Sections
180.0850 to 180.0858 of the WBCL for any liability incurred in connection with
a proceeding involving a federal or state statute, rule or regulation
regulating the offer, sale or purchase of securities.
The Registrant's Articles of Incorporation contains no provisions in
relation to the indemnification of directors and officers of the Registrant.
Article XI of the Registrant's By-laws ("Article XI") authorizes
indemnification of officers and directors of the Registrant consistent with the
description of the indemnification provisions in Section 180.0851 of the WBCL
as described above. Article XI provides that the Registrant shall indemnify a
director, officer, employee or agent of the Registrant to the extent such
individual has been successful on the merits or otherwise in the defense of any
threatened, pending or completed civil, criminal, administrative or
investigative action, suit, arbitration or other proceeding, whether formal or
informal (including, but not limited to, any act or failure to act alleged or
determined (i) to have been negligent, (ii) to have violated the Employee
Retirement Income Security Act of 1974; or (iii) to have violated Sections
180.0832, 180.0833 and 180.1202 of the WBCL, or any successor thereto,
regarding loans to directors, unlawful distributions and distributions of
assets, which involves foreign, federal, state or local law and which is
brought by or in the right of the Registrant or by any other person or entity,
to which the director, officer, employee or agent was a party because he or she
is a director, officer, employee or agent. In all other cases, the Registrant
shall indemnify a director, officer, employee or agent of the Registrant
against liability and expenses incurred by such person in a proceeding unless
it shall have been proven by final judicial adjudication that such person
breached or failed to perform a duty owed to the Registrant under the
circumstances described above as set forth in Section 180.0851 of the WBCL.
Article XI defines a "director, officer, employee or agent" as (i) a natural
person who, is or was a director, officer, employee or agent of the Registrant,
(ii) a natural person who, while a director, officer, employee or agent of the
Registrant, is or was serving either pursuant to the Registrant's specific
request or as a result of the nature of such person's duties to the Registrant
as a director, officer, partner, trustee, member of any governing or decision
making committee, employee or agent of another corporation or foreign
corporation, partnership, joint venture, trust or other enterprise and (iii) a
person who, while a director,
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<PAGE> 158
officer, employee or agent of the Registrant, is or was serving an employee
benefit plan because his or her duties to the Registrant also impose duties on,
or otherwise involve services by, the person to the plan or to participants in
or beneficiaries of the plan. Unless the context requires otherwise, Article
XI indemnification extends to the estate or personal representative of a
director, officer, employee or agent.
All officers, directors, employees and agents of controlled
subsidiaries of the Registrant shall be deemed for purposes of Article XI to be
serving as such officers, directors, employees and agents at the request of the
Registrant. The right to indemnification granted to such officers and
directors by Article XI is not subject to any limitation or restriction imposed
by any provision of the Articles of Incorporation or Bylaws of a controlled
subsidiary. For purposes of Article XI, a "controlled subsidiary" means any
corporation at least 80% of the outstanding voting stock of which is owned by
the Registrant or another controlled subsidiary of the Registrant.
Upon written request by a director, officer, employee or agent who is
a party to a proceeding, the Registrant shall pay or reimburse his or her
reasonable expenses as incurred if the director, officer, employee or agent
provides the Registrant with: (i) a written affirmation of his or her good
faith belief that he or she is entitled to indemnification under Article XI;
and (ii) a written undertaking to repay all amounts advanced without interest
to the extent that it is ultimately determined that indemnification under
Article XI is prohibited. The Registrant shall have the power to purchase and
maintain insurance on behalf of any person who is a director, officer, employee
or agent against any liability asserted against or incurred by the individual
in any such capacity arising out of his or her status as such, regardless of
whether the Registrant is required or authorized to indemnify or allow expenses
to the individual under Article XI.
The right to indemnification under Article XI may be amended only by a
majority vote of the shareholders and any reduction in the right to
indemnification may only be prospective from the date of such vote.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
Exhibit No.
2(a) Agreement and Plan of Merger dated as of December 22,
1995 among the Registrant, Associated Banc-Shares,
Inc. and Greater Columbia Bancshares, Inc.,
incorporated by reference to Exhibit A to the Proxy
Statement/Prospectus of the Registrant and Greater
Columbia Bancshares, Inc. (the "Proxy
Statement/Prospectus").
2(b) Voting Agreement dated as of December 22, 1995 among
certain shareholders of Greater Columbia Bancshares,
Inc. and the Registrant incorporated by reference to
Exhibit B to the Proxy Statement/Prospectus.
3(a) Articles of Incorporation, as amended and restated,
incorporated by reference to Exhibit 3 of the
Registrant's Quarterly Report on Form 10-Q filed
for the quarter ended June 30, 1993, SEC File No.
0-5519.
3(b) Bylaws, as amended, incorporated by reference to
Exhibit 3(b) of the Registrant's Quarterly Report on
Form 10-Q filed for the quarter ended September 30,
1991, SEC File No. 0-5519.
4 The Registrant has outstanding certain long term
debt. None of such debt exceeds 10% of the total
assets of the Registrant and its consolidated
subsidiaries. Thus, copies of the constituent
instruments defining the rights of the holders of
such debt are not included as
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<PAGE> 159
exhibits to this Registration Statement. The
Registrant agrees to furnish copies of such
instruments to the Commission upon request.
5 Opinion of Saitlin, Patzik, Frank & Samotny Ltd.
regarding legality of issuance of the Registrant's
securities.
8 Opinion of KPMG Peat Marwick LLP regarding certain
federal income tax matters.
10(a) The 1982 Incentive Stock Option Plan of the
Registrant incorporated by reference to Exhibit 10
to Annual Report on Form 10-K for fiscal year ended
December 31, 1987.
10(b) The Restated Long-Term Incentive Stock Option Plan of
the Registrant incorporated by reference to Exhibit
10 filed with the Registrant's registration
statement (33-86790) on Form S-8 filed under the
Securities Act of 1933.
10(c) Deferred Compensation Agreement dated November 1,
1986 between Associated Bank Green Bay, National
Association and Robert C. Gallagher incorporated by
reference to Exhibit 10(c) of the Registrant's
Annual Report on Form 10-K for fiscal year ended
December 31, 1992, SEC. File No. 0-5519.
10(d) Change of Control Plan of the Registrant effective
April 25, 1994 incorporated by reference to
Exhibit 10(d) of the Registrant's Annual Report on
Form 10-K for fiscal year ended December 31, 1994,
SEC File No. 0-5519.
10(e) Deferred Compensation Plan and Deferred Compensation
Trust effective as of December 16, 1993, and
Deferred Compensation Agreement of the Registrant
dated December 31, 1994, incorporated by reference
to Exhibit 10(e) of the Registrant's Annual Report
on Form 10-K for fiscal year ended December 31,
1994, SEC File No. 0-5519.
11 Statement Re Computation of Per Share Earnings
incorporated by reference to Exhibit 11 of the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and Exhibit
11 of the Registrant's Quarterly Report on Form 10-Q
filed for the quarter ended September 30,
1995, SEC File No. 0-5519.
21 List of Subsidiaries of the Registrant incorporated
by reference to Exhibit 21 of the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, SEC File No. 0-5519.
23(a) Consent of KPMG Peat Marwick LLP as to the financial
statements of the Registrant and the tax opinion.
23(b) Consent of Saitlin, Patzik, Frank & Samotny Ltd.
incorporated by reference to Exhibit 5.
23(c) Consent of Conley McDonald LLP as to the financial
statements of Greater Columbia Bancshares, Inc.
24 Powers of Attorney.
(b) No financial statement schedules are required to be filed herewith
pursuant to Item 21(b) or (c) of this Form.
II-3
<PAGE> 160
ITEM 22. UNDERTAKINGS.
(a)(1) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement: (x) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the
"Securities Act"); (y) to reflect in the prospectus any facts
or events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; (z) to include any material
information with respect to the plan of distribution not
previously disclosed in the registration statement or any
material change to such information in the registration
statement.
(ii) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at such time shall be deemed to be the initial bona
fide offering thereof.
(iii) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(2) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (and, where applicable, each filing of an
employee benefit plan's annual report to Section 15(d) of the Exchange
Act), that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) The undersigned registrant hereby undertakes as
follows: that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of
this registration statement, by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the
applicable form.
(4) The registrant undertakes that every prospectus (i)
that is filed pursuant to paragraph (3) immediately preceding, or (ii)
that purports to meet the requirements of section 10(a)(3) of the
Securities Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(5) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
II-4
<PAGE> 161
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy, as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the company being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.
II-5
<PAGE> 162
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Green Bay,
State of Wisconsin, on this 2nd day of February, 1996.
ASSOCIATED BANC-CORP
By: /s/ Harry B. Conlon
-----------------------
Harry B. Conlon,
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature
---------
Title Date
----- ----
<S> <C> <C>
/s/ Harry B. Conlon Chairman, President, Chief February 2, 1996
--------------------------------- Executive Officer and a Director
Harry B. Conlon (Principal Executive Officer)
/s/ Robert C. Gallagher Executive Vice President and a February 2, 1996
--------------------------------- Director
Robert C. Gallagher
/s/ Joseph B. Selner Senior Vice President, Chief February 2, 1996
--------------------------------- Financial Officer, and Principal
Joseph B. Selner Financial and Accounting Officer
* Director February 2, 1996
---------------------------------
Robert Feitler
* Director February 2, 1996
---------------------------------
Ronald R. Harder
* Director February 2, 1996
---------------------------------
John S. Holbrook, Jr.
* Director February 2, 1996
---------------------------------
William R. Hutchinson
</TABLE>
II-6
<PAGE> 163
<TABLE>
<S> <C> <C>
* Director February 2, 1996
---------------------------------
James F. Janz
* Director February 2, 1996
---------------------------------
William J. Lawson
* Director February 2, 1996
---------------------------------
John C. Meng
* Director February 2, 1996
---------------------------------
J. Douglas Quick
</TABLE>
*Brian R. Bodager hereby signs this registration statement on February
2, 1996 on behalf of each of the indicated persons for whom he is
attorney-in-fact pursuant to a power of attorney filed herewith.
*By:/s/ Brian R. Bodager
--------------------
Brian R. Bodager
II-7
<PAGE> 164
EXHIBIT INDEX
EXHIBIT NO.
2(a) Agreement and Plan of Merger dated as of December 22,
1995 among the Registrant, Associated Banc-Shares,
Inc. and Greater Columbia Bancshares, Inc.,
incorporated by reference to Exhibit A to the Proxy
Statement/Prospectus of the Registrant and Greater
Columbia Bancshares, Inc. (the "Proxy
Statement/Prospectus").
2(b) Voting Agreement dated as of December 22, 1995 among
certain shareholders of Greater Columbia Bancshares,
Inc. and the Registrant incorporated by reference to
Exhibit B to the Proxy Statement/Prospectus.
3(a) Articles of Incorporation, as amended and restated,
incorporated by reference to Exhibit 3 of the
Registrant's Quarterly Report on Form 10-Q filed
for the quarter ended June 30, 1993, SEC File No.
0-5519.
3(b) Bylaws, as amended, incorporated by reference to
Exhibit 3(b) of the Registrant's Quarterly
Report on Form 10-Q filed for the quarter ended
September 30, 1991, SEC File No. 0-5519.
4 The Registrant has outstanding certain long term
debt. None of such debt exceeds 10% of the
total assets of the Registrant and its consolidated
subsidiaries. Thus, copies of the constituent
instruments defining the rights of the holders of
such debt are not included as exhibits to this
Registration Statement. The Registrant agrees to
furnish copies of such instruments to the Commission
upon request.
5 Opinion of Saitlin, Patzik, Frank & Samotny Ltd.
regarding legality of issuance of the Registrant's
securities.
8 Opinion of KPMG Peat Marwick LLP regarding certain
federal income tax matters.
10(a) The 1982 Incentive Stock Option Plan of the
Registrant incorporated by reference to Exhibit 10
to Annual Report on Form 10-K for fiscal year ended
December 31, 1987.
10(b) The Restated Long-Term Incentive Stock Option Plan of
the Registrant incorporated by reference to Exhibit
10 filed with the Registrant's registration
statement (33-86790) on Form S-8 filed under the
Securities Act of 1933.
10(c) Deferred Compensation Agreement dated November 1,
1986 between Associated Bank Green Bay, National
Association and Robert C. Gallagher incorporated by
reference to Exhibit 10(c) of the Registrant's
Annual Report on Form 10-K for fiscal year ended
December 31, 1992, SEC. File No. 0-5519.
10(d) Change of Control Plan of the Registrant effective
April 25, 1994 incorporated by reference to
Exhibit 10(d) of the Registrant's Annual Report on
Form 10-K for fiscal year ended December 31, 1994,
SEC File No. 0-5519.
<PAGE> 165
EXHIBIT NO.
10(e) Deferred Compensation Plan and Deferred Compensation
Trust effective as of December 16, 1993, and
Deferred Compensation Agreement of the Registrant
dated December 31, 1994, incorporated by reference
to Exhibit 10(e) of the Registrant's Annual Report
on Form 10-K for fiscal year ended December 31, 1994,
SEC File No. 0-5519.
11 Statement Re Computation of Per Share Earnings
incorporated by reference to Exhibit 11 of the
Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and Exhibit
11 of the Registrant's Quarterly Report on Form 10-Q
filed for the quarter ended September 30,
1995, SEC File No. 0-5519.
21 List of Subsidiaries of the Registrant incorporated
by reference to Exhibit 21 of the Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1994, SEC File No. 0-5519.
23(a) Consent of KPMG Peat Marwick LLP as to the financial
statements of the Registrant and the tax opinion.
23(b) Consent of Saitlin, Patzik, Frank & Samotny Ltd.
incorporated by reference to Exhibit 5.
23(c) Consent of Conley McDonald LLP as to the financial
statements of Greater Columbia Bancshares, Inc.
24 Powers of Attorney.
<PAGE> 1
EXHIBIT 5
SAITLIN, PATZIK, FRANK & SAMOTNY LTD.
150 SOUTH WACKER DRIVE
SUITE 900
CHICAGO, ILLINOIS 60606
(312) 551-8300
(312) 551-8300 February 2, 1996 1169-036-A
The Board of Directors of
Associated Banc-Corp
112 North Adams Street
Green Bay, Wisconsin 54307
Re: ASSOCIATED BANC-CORP: REGISTRATION STATEMENT ON FORM S-4
Gentlemen:
We have acted as legal counsel to Associated Banc-Corp, a Wisconsin
corporation (the "Registrant"), in connection with the preparation of the
Registration Statement filed on February 2, 1996 on Form S-4 with exhibits with
the Securities and Exchange Commission (the "Registration Statement"), relating
to the registration of 967,725 shares of the Registrant's common stock $0.01
par value ("Common Stock"). The shares of Common Stock are being issued in
connection with the merger of Greater Columbia Bancshares, Inc. with and into
Associated Banc-Shares, Inc., a wholly-owned subsidiary of the Registrant. We
have reviewed such records, documents and matters of law as we have deemed
necessary to render this opinion. We have also participated in conversations
with officers of the Registrant during which facts material to the opinions
expressed herein were discussed. We have assumed such factual matters to be
true and correct.
In making our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as certified or
photostatic copies and the capacity of each party executing a document to so
execute such document.
An opinion of counsel is predicated upon all of the facts and conditions
as set forth therein and is based upon counsel's analysis of the statutes,
regulatory interpretations and case law in effect as of the date of this
opinion. It is neither a guarantee of the current status of the law nor should
it be accepted as a guarantee that a court of law or an administrative agency
will concur in the opinion.
<PAGE> 2
The Board of Directors of
Associated Banc-Corp
February 2, 1996
Page 2
Based upon the foregoing and assuming the accuracy of the statements
regarding the Registrant and the conduct of its business all as set forth in
its Registration Statement, it is our opinion that the Common Stock, when
issued as provided under applicable Wisconsin law, the Registration Statement,
and the Registrant's Articles of Incorporation and By-laws, will be validly
issued, fully paid and non-assessable except as such shares may be subject to
Section 180.0622(2)(b) of Wisconsin Business Corporation Law.
We do not find it necessary for the purpose of this opinion, and
accordingly we do not purport to cover herein, the application of the
securities or "Blue Sky" laws of the various states to the issuance of the
Common Stock.
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
We are licensed to practice only in Illinois and no opinion is expressed
by us herein as to laws of other jurisdictions. This opinion is limited to the
matters expressly set forth herein, and no opinion is to be implied or may be
inferred beyond the others expressly so stated.
We hereby consent to the references to this firm and the inclusion of the
legality opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Saitlin, Patzik, Frank & Samotny Ltd.
SAITLIN, PATZIK, FRANK & SAMOTNY LTD.
SPFS:bjw
<PAGE> 1
KPMG PEAT MARWICK LLP
303 E. Wacker Drive
Chicago, IL 60601
(312) 938-1000
EXHIBIT 8
January 31, 1996
Board of Directors Board of Directors
Associated Banc-Corp Greater Columbia Bancshares, Inc.
112 North Adams Street 222 East Wisconsin Street
PO Box 13307 Portage, Wisconsin 53901
Green Bay, Wisconsin 54307-3307
Board of Directors
Associated Banc-Shares, Inc.
112 North Adams Street
PO Box 13307
Green Bay, Wisconsin 54307-3307
Dear Board Members:
In connection with the closing of the proposed merger ("Merger") of Greater
Columbia Bancshares, Inc., a Wisconsin corporation (the "Company"), into
Associated Banc-Shares, Inc., a Wisconsin corporation ("Holding") and a
wholly-owned subsidiary of Associated Banc-Corp, a Wisconsin corporation
("Associated"), you have requested the opinion of KPMG Peat Marwick LLP
("KPMG") with respect to certain federal income tax consequences of the Merger.
The Merger contemplates the acquisition by Holding of all the assets and
liabilities of the Company in exchange for common stock, $0.01 par value, of
Associated ("Associated Common Stock") pursuant to an Agreement and Plan of
Merger, dated as of December 22, 1995 (the "Agreement"), entered into by the
Company, Associated and Holding.
The opinion expressed in this letter is based on the Internal Revenue Code of
1986, as amended (the "Code"), the Income Tax Regulations promulgated by the
Treasury Department thereunder and judicial authority reported as of the date
hereof. We have also considered the position of the Internal Revenue Service
(the "Service") reflected in published and private rulings. Although we are
not aware of any pending changes to these authorities that would alter our
opinions, there
<PAGE> 2
KPMG PEAT MARWICK LLP
Board of Directors
January 31, 1996
Page 2
can be no assurance that future legislative or administrative changes, court
decisions or Service interpretations will not significantly modify the
statements or opinions expressed herein. Unless specifically requested
otherwise, KPMG undertakes no responsibility to update this opinion letter in
the event of any such change or modification. Although the conclusions
contained herein are based upon our best interpretation of existing sources of
law and express what we believe a court would properly conclude if presented
with these issues, no assurance can be given that such interpretations would be
followed if they were to become the subject of judicial or administrative
proceedings. We express no opinion herein as to any issue of federal law other
than those specifically considered herein. We also do not express any opinion
as to any issue of state or local law.
For the purposes indicated above, and based upon our review, the conditions set
forth below, and representations made to us by the Company, Associated and
Holding, it is the opinion of KPMG that:
(1) Provided the Merger qualifies as a statutory merger under applicable
law, the merger of the Company into Holding, pursuant to the
Agreement, will constitute a reorganization within the meaning of
section 368(a)(1)(A) and section 368(a)(2)(D) of the Code. The
Company, Associated and Holding will each be considered "a party to
a reorganization" within the meaning of section 368(b) of the Code
for purposes of this reorganization;
(2) No gain or loss will be recognized by the Company on the transfer of
substantially all its assets to Holding in exchange for shares of
Associated Common Stock, cash to be paid to the shareholders of the
Company in lieu of fractional share interests of Associated Common
Stock, and the assumption by Holding of the liabilities of the
Company (Code sections 361(a) and 357(a));
(3) The basis of the Company assets to be received by Holding will be
the same as the basis of such assets in the hands of the Company
immediately prior to the Merger (Code section 362(b));
(4) The holding period of the Company assets in the hands of Holding
will include the period during which such assets were held by the
Company (Code section 1223(2));
(5) No gain or loss will be recognized by Associated or Holding upon the
receipt by
<PAGE> 3
KPMG PEAT MARWICK LLP
Board of Directors
January 31, 1996
Page 3
Holding of substantially all the Company assets in exchange for
shares of Associated Common Stock, cash to be paid to the
shareholders of the Company in lieu of fractional share interests of
Associated Common Stock, and the assumption by Holding of the
liabilities of the Company (Regulation 1.1032-2);
(6) No gain or loss will be recognized by the holders of Company common
stock, $1.00 par value per share, upon the exchange of such stock
soley for shares of Associated Common Stock, including any
fractional share interest to which they may be entitled (Code
section 354(a)(1));
(7) The basis of the Associated Common Stock (including any fractional
share interests to which they may be entitled) which is received by
Company shareholders will be the same as the basis of the Company
common stock surrendered in exchange therefore (Code section
358(a)(1));
(8) The holding period of Associated Common Stock (including any
fractional share interests to which they may be entitled) which is
received by a Company shareholder will include the period during
which the Company common stock surrendered in exchange therefore was
held, provided that the Company common stock is held as a capital
asset in the hands of the Company shareholder on the date of the
exchange (Code section 1223(1));
(9) The payment of cash in lieu of fractional share interests of
Associated Common Stock will be treated as if the fractional shares
were distributed as part of the exchange and then redeemed by
Associated. These cash payments will be treated as having been
received as distributions in full payment in exchange for the
fractional shares redeemed, subject to the provisions and
limitations of section 302(a) of the Code (Rev. Rul. 66-365, 1966-2
C.B. 116; Rev. Proc. 77-41, C.B. 574);
(10) Holding will succeed to and take into account, as of the effective
date of the Merger, the items of the Company described in section
381(c) of the Code, subject to the conditions and limitations of
sections 381, 382, 383 and 384 of the Code, and the regulations
thereunder; and
(11) The basis of Holding common stock will be increased by the amount in
which Company's tax basis in its assets exceeds the tax basis in its
liabilities (Regulation
<PAGE> 4
KPMG PEAT MARWICK LLP
Board of Directors
January 31, 1996
Page 4
1.358 - 6(c)(1)).
In rendering this opinion, we have examined the Agreement and such other
documents as we have deemed appropriate. We have assumed the genuineness of
all signatures, the legal capacity of all natural persons, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as copies, the authenticity of the
originals of such copies, and that the Merger will be consummated pursuant to
the applicable states' laws in the manner set forth in the Agreement. We have
also assumed that any written representations and covenants of the Company,
Associated and Holding made in connection with rendering our opinion will be
accurate and complete in all respects as of the time they are provided to us
and as of the closing of the Merger. Any changes in these facts, or in the
accuracy of these assumptions, representations or covenants, would necessitate
reconsideration of our opinion and possibly result in a different conclusion.
Our opinion is limited to those federal income tax issues specifically
considered herein and is addressed to and is only for the benefit of the
Company, Associated and Holding. The opinion is furnished to you pursuant to
sections 7.02(f) and 7.03(e) of the Agreement and may not be used or relied
upon for any other purpose, and may not be circulated or otherwise referred to
for any other purpose, without our express written consent.
Very truly yours,
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Associated Banc-Corp:
We consent to the use of our report incorporated herein by reference and our
tax opinion included herein and to the reference to our firm under the headings
"The Merger - Certain Material Federal Income Tax Consequences" and "Experts"
in the registration statement.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
January 31, 1996
<PAGE> 1
EXHIBIT 23 (c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use in this Registration Statement of Associated Banc-Corp of
our report on the balance sheets of Greater Columbia Bancshares, Inc. as of
December 31, 1994 and 1993, and the related statements of income, changes in
stockholders' equity, and cash flows for the three years ended December 31,
1994, 1993 and 1992 and to the reference to our firm under the heading
"Experts."
CONLEY McDONALD LLP
Certified Public Accountants
Brookfield, Wisconsin
January 31, 1996
<PAGE> 1
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ Robert Feitler
-------------------
Robert Feitler
Director
<PAGE> 2
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ Ronald R. Harder
---------------------
Ronald R. Harder
Director
<PAGE> 3
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ John S. Holbrook, Jr.
--------------------------
John S. Holbrook, Jr.
Director
<PAGE> 4
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ William R. Hutchinson
--------------------------
William R. Hutchinson
Director
<PAGE> 5
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ James F. Janz
------------------
James F. Janz
Director
<PAGE> 6
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ William J. Lawson
----------------------
William J. Lawson
Director
<PAGE> 7
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ John C. Meng
-----------------
John C. Meng
Director
<PAGE> 8
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Greater Columbia Bancshares, Inc.
Said attorney-in-fact and agent shall have full power to act for him
and in his name, place, and stead in any and all capacities, to sign such Form
S-4 Registration Statement and any and all amendments thereto (including post-
effective amendments), with power where appropriate to affix the corporate seal
of the Corporation thereto and to attest such seal, and to file such Form S-4
and each amendment (including post-effective amendments) so signed, with all
exhibits thereto, and any and all documents in connection therewith, with the
SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full
power and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney as of the 15th day of January, 1996.
/s/ J. Douglas Quick
---------------------
J. Douglas Quick
Director
