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EXHIBIT 1
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MERGER AGREEMENT
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MERGER AGREEMENT dated as of December 28, 1996 (hereinafter called the "Merger
Agreement"), between Liberty Bancorp, Inc. (hereinafter called "LIBERTY") and
Banc One Oklahoma Corporation (hereinafter called "BANC ONE OKLAHOMA") and
joined in by BANC ONE CORPORATION (hereinafter called "BANC ONE").
WITNESSETH:
LIBERTY is a corporation duly organized under the laws of the State of Oklahoma.
Its principal office is located at 000 Xxxxx Xxxxxxxx, Oklahoma City, Oklahoma
County, Oklahoma. As of September 30, 1996, LIBERTY had authorized capital stock
consisting of 50,000,000 shares of common stock having a par value of $0.01 per
share ("LIBERTY Common"), of which a total of 9,448,538 shares were issued and
outstanding and 39,890 of which were shares of treasury stock owned by LIBERTY.
Except as set forth in EXHIBIT A hereto, LIBERTY, or a subsidiary of LIBERTY,
owns, beneficially and of record, all of the issued and outstanding capital
stock of the banks (the "Banks") and of the corporations and/or limited
liability companies (together, the "Companies") listed in EXHIBIT A hereto. The
Banks and the Companies are hereinafter sometimes referred to collectively as
"Subsidiaries" and each, sometimes, as a "Subsidiary."
BANC ONE OKLAHOMA is a corporation duly organized under the laws of the State of
Oklahoma. Its principal office is located at 615 Xxxxxxxx, P.O. Box 656,
Oklahoma County, Oklahoma. As of the date of this Agreement, BANC ONE OKLAHOMA
had capital stock of $500 divided into 500 shares of common stock having a par
value of one dollar ($1.00) per share ("BANC ONE OKLAHOMA Common"), all of which
are issued and outstanding. BANC ONE OKLAHOMA is a wholly owned subsidiary of
BANC ONE.
BANC ONE is a corporation duly organized under the laws of the State of Ohio.
Its principal office is located at 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
Xxxxxx, Xxxx. As of September 30, 1996 BANC ONE had capital stock of
$2,399,105,000, divided into 600,000,000 shares of common stock, without par
value ("BANC ONE Common"), 431,805,662 of which shares of BANC ONE Common were
issued and outstanding and 5,622,100 of which were shares of treasury stock
owned by BANC ONE and acquired at a cost of $(205,898,000), and 35,000,000
shares of preferred stock without par value, of which 4,801,546 shares were
issued and outstanding as Series C $3.50 Cumulative
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Convertible Preferred Stock ("BANC ONE Preferred C") and none of which were
shares of treasury stock owned by BANC ONE.
The respective Boards of Directors of LIBERTY, BANC ONE OKLAHOMA and BANC ONE
have each approved this Merger Agreement and the consummation of the
transactions contemplated hereby and have approved the execution and delivery of
this Merger Agreement. This Merger Agreement provides for the merger of LIBERTY
with and into BANC ONE OKLAHOMA upon the terms and conditions of this Merger
Agreement (the "Merger"). BANC ONE OKLAHOMA will be the surviving corporation of
the Merger. From and after the time the Merger shall become effective as set
forth in Section 4 of this Merger Agreement, and as and when required by this
Merger Agreement, BANC ONE will issue shares of BANC ONE Common and in exchange
for all of the issued and outstanding shares of LIBERTY Common. It is understood
by each of the parties hereto that BANC ONE seeks, as a result of the Merger, to
acquire LIBERTY, the Banks and the Companies and all of their respective
operating assets and liabilities.
Subject to the terms and conditions of this Merger Agreement, all parties will
exert their reasonable best efforts to obtain such regulatory approvals and to
effect such other actions as are necessary or appropriate to consummate the
Merger. In no event will BANC ONE issue more than 12,161,807 Shares of BANC ONE
Common in connection with the transactions contemplated by this Merger
Agreement, except as may be required upon application of Section 7(e) or 26(e)
of this Merger Agreement.
In consideration of the premises, LIBERTY, BANC ONE and BANC ONE OKLAHOMA hereby
make this Merger Agreement and prescribe the terms and conditions of the Merger
and the mode of carrying the Merger into effect as follows:
1. MERGER. Subject to the terms and conditions hereinafter set forth in
this Merger Agreement, LIBERTY shall be merged with and into BANC ONE
OKLAHOMA pursuant to and in accordance with applicable provisions of
the Oklahoma General Corporation Act ("Oklahoma GCA").
2. NAME. The name of the surviving corporation (hereinafter called the
"Surviving Corporation" whenever reference is made to it as of the
Effective Time or thereafter) shall be "Banc One Oklahoma
Corporation."
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3. BUSINESS. The business of BANC ONE OKLAHOMA as the Surviving
Corporation shall be that of a bank holding company. The Surviving
Corporation shall exist by virtue of, and be governed by, the laws of
the State of Oklahoma and shall have its principal office at 100 North
Broadway, Oklahoma City, Oklahoma.
4. EFFECTIVE TIME OF MERGER; CERTIFICATE OF INCORPORATION. The Merger
shall become effective in accordance with applicable provisions of
Section 1081 of the Oklahoma GCA upon the later of (i) the time a
certificate of merger, certified copy of the Merger Agreement or other
document or documents effecting the Merger under the Oklahoma GCA are
filed with the Secretary of State of the State of Oklahoma (the
"Oklahoma State Filing") and (ii) that time, if any, subsequent to the
time of the Oklahoma State Filing, designated in the Oklahoma State
Filing as the time the merger shall become effective (the "Effective
Time").
The Certificate of Incorporation of BANC ONE OKLAHOMA in effect as of
the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation and the By-laws of BANC ONE OKLAHOMA in effect
as of the Effective Time shall be the By-laws of the Surviving
Corporation.
5. EFFECT OF MERGER. At the Effective Time, the separate corporate
existence of LIBERTY and BANC ONE OKLAHOMA, respectively, shall, as
provided in applicable provisions of the Oklahoma GCA be merged into
and continued in BANC ONE OKLAHOMA as the Surviving Corporation, which
shall be deemed to be the same corporation as LIBERTY and BANC ONE
OKLAHOMA. All rights, franchises and interests of LIBERTY and BANC ONE
OKLAHOMA, respectively, in and to every type of property, real,
personal and mixed, and chooses in action, shall be transferred to and
vested in BANC ONE OKLAHOMA as the Surviving Corporation by virtue of
the Merger without any deed or other transfer in the same manner and
to the same extent as such rights, franchises and interests were held
or enjoyed by LIBERTY and BANC ONE OKLAHOMA, respectively, at the
Effective Time, as provided in applicable provisions of the Oklahoma
GCA.
6. LIABILITIES UPON MERGER. The Surviving Corporation shall be
responsible for all of the liabilities of every kind and description
of LIBERTY and BANC ONE OKLAHOMA existing as of the Effective Time,
except as may be specifically provided otherwise in this Merger
Agreement.
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7. CONVERSION OF SHARES.
(a) At the Effective Time:
(i) Each of the not more than 10,350,474 shares of LIBERTY Common
that shall be issued and outstanding immediately prior to the
Effective Time, except for shares of LIBERTY Common subject to
the rights of a dissenting shareholder, shall thereupon and
without further action be converted into 1.175 shares of BANC ONE
Common, subject, however, to (i) the anti-dilution provisions of
Sections 7(e) of this Merger Agreement and (ii) provisions set
forth in Section 7(c) herein relative to fractional shares (the
"Exchange Rate").
(ii) The 500 shares of BANC ONE OKLAHOMA Common issued and outstanding
immediately prior to the Effective Time shall continue to be
issued and outstanding shares of common stock without par value
of the Surviving Corporation.
(iii) Any shares of LIBERTY Common held by LIBERTY as treasury stock
immediately prior to the Effective Time shall be canceled and
shall not represent capital stock of the Surviving Corporation
and shall not be exchanged for shares of BANC ONE Common.
(b) LIBERTY's shareholders of record at the Effective Time, for the shares
of LIBERTY Common then held by them, respectively, shall be allocated
and be entitled to receive (upon surrender of certificates formerly
representing shares of LIBERTY Common for cancellation) certificates
for shares of BANC ONE Common as shall be equal to (x) the number of
shares of LIBERTY Common outstanding immediately prior to the
Effective Time multiplied by (y) the Exchange Rate.
(c) No certificate for fractional shares of BANC ONE Common will be issued
by BANC ONE in connection with the exchange contemplated by the
Merger, but in lieu thereof, any holder of LIBERTY Common shall, upon
surrender of the certificate or certificates representing such LIBERTY
Common, be paid cash, without interest, by BANC ONE for such
fractional shares on the basis of the average of the closing prices of
BANC ONE
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Common on the New York Stock Exchange ("NYSE") during the Valuation
Period (as hereinafter defined) as reported in THE WALL STREET JOURNAL
for NYSE Composite Transactions for each of the days included in the
Valuation Period.
The term "Valuation Period" shall mean the ten consecutive NYSE
trading days ending on the sixth NYSE trading day immediately prior to
the proposed Effective Time, as designated by BANC ONE pursuant to
Section 10(c) of this Merger Agreement.
(d) As soon as practicable after the Effective Time, holders of
certificates formerly representing shares of LIBERTY shall be
instructed to tender such certificates to BANC ONE pursuant to a
letter of transmittal which shall be delivered to such shareholders by
BANC ONE and, subject to the provisions set forth above relating to
fractional shares, BANC ONE, or Xxxxxx Trust & Savings Bank, as
Exchange Agent for BANC ONE, will distribute to such holders of
certificates formerly representing shares of LIBERTY Common in
exchange for and upon surrender for cancellation by such holders of a
certificate or certificates formerly representing shares of LIBERTY
Common the certificate(s) for shares of BANC ONE Common in accordance
with the Exchange Rate. Each certificate formerly representing LIBERTY
Common (other than certificates representing shares of LIBERTY Common
subject to the rights of dissenting shareholders) shall be deemed for
all purposes to evidence the ownership of the number of shares of BANC
ONE Common and cash for fractional shares into which such shares have
been converted, except, however, and notwithstanding the foregoing,
that, until such surrender of the certificate or certificates formerly
representing shares of LIBERTY Common, the holder thereof shall not be
entitled to receive any dividend or other payment or distribution
payable to holders of BANC ONE Common. Upon such surrender (or, in
lieu of surrender, other provisions reasonably satisfactory to BANC
ONE as are made as set forth in the next following paragraph), there
shall be paid to the person entitled thereto the aggregate amount of
dividends or other payments or distributions (in each case without
interest) which became payable after the Effective Time on the whole
shares of BANC ONE Common represented by the certificates issued upon
such surrender and exchange or in accordance with such other
provisions, as the case may be. After the Effective Time, the holders
of certificates formerly representing shares of LIBERTY Common shall
cease to have rights with respect to such shares (except such rights,
if any, as they may have as dissenting shareholders), and except as
aforesaid, their sole rights shall be to exchange
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said certificates for shares of BANC ONE Common and cash for
fractional shares in accordance with this Merger Agreement.
Certificates formerly representing shares of LIBERTY Common
surrendered for cancellation by each shareholder entitled to
exchange shares of LIBERTY Common for shares of BANC ONE Common
by reason of the Merger shall be appropriately endorsed or
accompanied by such appropriate instruments of transfer as BANC
ONE may reasonably require; provided, however, that if there be
delivered to BANC ONE by any person who is unable to produce any
such certificate formerly representing shares of LIBERTY Common
for transfer (i) evidence to the reasonable satisfaction of BANC
ONE that any such certificate has been lost, wrongfully taken or
destroyed, and (ii) such security or indemnity as reasonably may
be requested by BANC ONE to save it and Xxxxxx Bank & Trust
harmless, and (iii) evidence to the reasonable satisfaction of
BANC ONE that such person is the owner of the shares theretofore
represented by each certificate claimed by him to be lost,
wrongfully taken or destroyed and that he is the person who would
be entitled to present each such certificate and to receive
shares of BANC ONE Common pursuant to this Merger Agreement, then
BANC ONE, in the absence of actual notice to it that any shares
theretofore represented by any such certificate have been
acquired by a bona fide purchaser, shall deliver to such person
the certificate(s) representing shares of BANC ONE Common which
such person would have been entitled to receive upon surrender of
each such lost, wrongfully taken or destroyed certificate
formerly representing shares of LIBERTY Common.
(e) If prior to the Effective Time BANC ONE or LIBERTY shall declare
a stock dividend or make distributions upon or subdivide, split
up, reclassify or combine its shares of common stock or declare a
dividend or make a distribution on its common stock in any
security convertible into or exchangeable for its common stock,
appropriate adjustment or adjustments will be made in the
Exchange Rate.
8. BOARD OF DIRECTORS AND EMPLOYEES; NAME CHANGES. The directors of
LIBERTY immediately prior to the Effective Time shall serve as the
directors of the Surviving Corporation immediately following the
Effective Time and until the next annual meeting of shareholders at
which their respective successors are elected and qualified. The
officers and employees of the Surviving Corporation immediately
following the Effective Time shall be the officers and employees of
LIBERTY immediately before the Effective Time with each such person to
hold
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the same office in the Surviving Corporation as held by such person in
LIBERTY. The directors, officers and employees of the Subsidiaries
immediately following the Effective Time shall be the directors,
officers and employees of the respective Subsidiaries immediately
before the Effective Time.
LIBERTY will cooperate with BANC ONE in the procurement of requisite
corporate and regulatory approvals and will use its reasonable best
efforts to take such other steps as are appropriate and necessary to
effect, when and if requested by BANC ONE, changes in the name of each
of the Subsidiaries to include the words "BANC ONE BANK" or "BANC ONE"
so that such name changes will become effective at the Effective Time
or such later dates as may be designated by BANC ONE.
9. STOCK OPTIONS AND EMPLOYEE BENEFITS.
(a) As of the date of the Merger Agreement, there are outstanding and
unexercised stock options for shares of LIBERTY Common held by
directors, officers and employees of LIBERTY and its Subsidiaries
and by Xxxxx X. Xxxxx and/or his assigns ("Xxxxx"). Immediately
following the Effective Time, all unexercised stock options for
shares of LIBERTY Common issued to and held by directors,
officers and employees of LIBERTY and its Subsidiaries and by
Xxxxx immediately prior to the Effective Time shall be assumed by
BANC ONE and converted into options to purchase that number of
shares of BANC ONE Common equal to the number of shares of
LIBERTY Common subject to such unexercised options immediately
prior to the Effective Time multiplied by the Exchange Rate. The
per share exercise price of such options for shares of BANC ONE
Common shall be the exercise price applicable to the options for
shares of LIBERTY Common converted into options for BANC ONE
shares divided by the Exchange Rate. Except as set forth herein,
all terms and conditions of the stock option agreements for
options for LIBERTY Common shall continue in full force and
effect.
(b) All other employee benefit programs to be available and
applicable to the employees of LIBERTY and the Subsidiaries
following the Effective Time shall be as described in and
governed by a Letter Agreement dated December 27, 1996,
pertaining to benefits between LIBERTY and BANC ONE (the
"Benefits Agreement").
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10. UNDERTAKINGS OF THE PARTIES. LIBERTY, BANC ONE OKLAHOMA and BANC ONE
further agree as follows:
(a) This Merger Agreement shall be submitted to the shareholders of
LIBERTY for approval at a meeting to be called and held in
accordance with applicable law and the Certificate of
Incorporation and By-laws of LIBERTY. Such shareholders' meeting
will be scheduled to be held approximately 30 days following the
mailing by LIBERTY of its proxy statement to its shareholders,
which mailing will promptly follow the effective date of the
registration statement to be filed by BANC ONE with the
Securities and Exchange Commission (the "SEC") as provided in
Section 10(d). LIBERTY and BANC ONE will cooperate with each
other in order to facilitate the preparation, filing and
clearance of the registration statement and the proxy statement
under federal and state securities laws to be used with respect
to such shareholders' meeting and the exchange of shares as
contemplated by this Merger Agreement.
(b) BANC ONE will promptly prepare and file an application (believed
in good faith by BANC ONE to be substantially complete in form
and substance) with the Board of Governors of the Federal Reserve
System (the "Board") under appropriate provisions of Section 3 of
the Bank Holding Company Act of 1956, as amended, and, if
necessary, to the Oklahoma State Banking Board (the "Oklahoma
Board") for prior approval of the Merger and/or the proposed
acquisition of LIBERTY and/or one or more of the Subsidiaries by
BANC ONE. LIBERTY will furnish BANC ONE such information,
appropriate representations and documents as may be reasonably
requested by BANC ONE in connection therewith and will cooperate
with BANC ONE in the procurement of requisite corporate and
regulatory approvals to effect the Merger. BANC ONE will provide
LIBERTY and its counsel with reasonable opportunity to comment on
the applications which it proposes to file in connection with
such regulatory approvals and will give due consideration to any
comments of LIBERTY and its counsel before making such filings.
BANC ONE will use its reasonable best efforts to cause such
applications to be approved by the Board and, if required, the
Oklahoma Board and to obtain such other regulatory consents and
approvals as may be necessary to facilitate the Merger, in each
case as soon as possible, and will promptly provide LIBERTY with
copies of all such applications together with correspondence to
or from the Board and the Oklahoma Board related thereto.
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(c) The Effective Time shall occur, subject to Section 26 of this
Merger Agreement, at such time as shall be designated by BANC ONE
which shall be a date not later than the latter of the first or
last Business Day of a month next following the latter of (A)
receipt of all approvals of the Board and the Oklahoma Board and
the expiration of any required waiting periods with respect
thereto and (B) approval of the Merger by the shareholders of
LIBERTY; provided, however, the Effective Time may be such other
day as shall be agreed to by BANC ONE and LIBERTY.
(d) BANC ONE will promptly prepare and file with the SEC and use its
reasonable best efforts to cause to become effective as soon as
possible, a registration statement, including the related
prospectus and proxy statement referred to in Section 10(a) above
(the "Proxy Statement"), and any required amendments thereto or
supplements to any prospectus contained therein, relating to the
exchange of BANC ONE Common contemplated by this Merger
Agreement. BANC ONE will provide LIBERTY and its counsel a
reasonable opportunity to comment on such proposed filings and
will give due consideration to any comments of LIBERTY and its
counsel before making any such filings. Such registration
statement will not cover resales by any persons who may be
considered "underwriters" under Rule 145(c) of the Securities Act
of 1933, as amended (the "1933 Act"). BANC ONE shall use its
reasonable best efforts to have the shares of BANC ONE Common
qualified or exempted from qualification under all applicable
state securities laws as soon as possible. In the event that a
stop order has been issued, or threatened, by the SEC, that
suspends or would suspend the effectiveness of the registration
statement, BANC ONE shall use its reasonable best efforts to
promptly remove, or cause not to be issued, any such stop order.
(e) BANC ONE and/or BANC ONE OKLAHOMA will assume and pay all
expenses incident to the obtaining of the requisite regulatory
consents and approvals. Without limiting the generality of the
foregoing, the expenses to be assumed and paid by BANC ONE shall
include (i) all legal and other expenses and taxes incurred by
BANC ONE incident to the consummation of the Merger contemplated
by this Merger Agreement, (ii) all legal and other expenses
incurred by BANC ONE incident to the preparation and filing of
the applications to the Board, the Oklahoma Board and other
requests for regulatory consents and approvals with the
appropriate bank regulatory agencies as set forth in or
contemplated by this Merger Agreement and (iii) all legal and
other expenses, if any, incurred in connection with the
registration and qualification of BANC ONE Common
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under federal and state securities laws. The expenses to be
assumed and paid by BANC ONE and/or BANC ONE OKLAHOMA shall not
include any legal, accounting or other expenses incurred by
LIBERTY in the negotiation of the Merger, associated with the
Proxy Statement, the examination or review of documents for its
own benefit, in connection with its own corporate proceedings or
with respect to any investment banker or advisor for services
rendered on its behalf, all of which will be assumed and paid by
LIBERTY. BANC ONE will pay the expenses of reproducing the Proxy
Statement.
(f) All information furnished by or on behalf of LIBERTY to BANC ONE
or any of its representatives in connection with this Merger
Agreement (whether before or after the date of this Merger
Agreement) will be kept confidential by BANC ONE in accordance
with the terms of that certain agreement dated December 23, 1996
(the "Confidentiality Agreement") between BANC ONE and LIBERTY.
All information furnished by BANC ONE and BANC ONE OKLAHOMA to
LIBERTY (whether before or after the date of this Merger
Agreement) and the transactions contemplated hereby which is
regarded by BANC ONE as confidential (and is so designated not
later than the time of delivery or the date of this Merger
Agreement) will be kept confidential by LIBERTY and will be used
by LIBERTY and its directors, officers, employees and
representatives of its advisors only in connection with this
Merger Agreement and the transactions contemplated hereby, except
to the extent that such information (i) is already known to
LIBERTY when received, (ii) thereafter becomes lawfully
obtainable from other sources, otherwise than in violation of
this paragraph or similar duties or provisions regarding
confidentiality, or (iii) is, in the reasonable opinion of legal
counsel for LIBERTY, required to be disclosed in any document
filed with the SEC, the Board, the Oklahoma Board or any other
governmental agency or authority.
(g) BANC ONE will provide LIBERTY with copies of all filings made by
BANC ONE with the SEC under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the 1933 Act and the respective
rules and regulations of the SEC thereunder at the time such
filings are made at any time prior to the Effective Time.
(h) BANC ONE and BANC ONE OKLAHOMA will furnish to LIBERTY all
information concerning BANC ONE and BANC ONE OKLAHOMA reasonably
required by LIBERTY in connection with the preparation of proxy
solicitation materials for use in soliciting proxies in
connection with the meeting of LIBERTY's shareholders called for
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the purpose of voting on the Merger and will promptly advise
LIBERTY if BANC ONE determines that any of such information is or
becomes false or misleading in any material respect. LIBERTY will
furnish to BANC ONE all information concerning LIBERTY and the
Subsidiaries reasonably required by BANC ONE in connection with
BANC ONE's preparation of the registration statement (including
the related prospectus) and any required amendments or
supplements thereto, or in connection with other filings by BANC
ONE relating to the registration of its shares and will promptly
advise BANC ONE if LIBERTY determines that any such information
is or becomes false or misleading in any material respect.
(i) No press release or other public disclosure of matters related to
this Merger Agreement or any of the transactions contemplated
hereby shall be made by LIBERTY or BANC ONE unless the other
party shall have provided its prior consent to the form and
substance thereof; provided, however, that nothing herein shall
be deemed to prohibit any party hereto from making any disclosure
which its counsel deems necessary or advisable in order to
fulfill such party's disclosure obligations imposed by law.
(j) Prior to the Effective Time, BANC ONE will vote all the shares of
BANC ONE OKLAHOMA to approve and adopt the proposal to merge
LIBERTY with BANC ONE OKLAHOMA at a meeting of the shareholders
of BANC ONE OKLAHOMA held for such purpose or by means of a
unanimous written consent of BANC ONE OKLAHOMA shareholders
adopted in lieu of a meeting to approve the Merger and approve
this Merger Agreement.
(k) For not less than the three-year period immediately following the
Effective Time, BANC ONE shall make available adequate current
public information about itself as that terminology is used in
and as required by Rule 144(c) of the SEC under the 1933 Act.
(l) LIBERTY will use its reasonable best efforts to cause each person
who, in the joint opinion of counsel for BANC ONE and LIBERTY, is
at the Effective Time or was, at the time of LIBERTY's
shareholders' meeting referred to in Section 10 hereof, an
"affiliate" of LIBERTY (as that term is used in Rules 144 and 145
promulgated by the SEC under the 1933 Act), to execute and
deliver to BANC ONE the written undertakings in the form attached
hereto as EXHIBIT B.
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(m) BANC ONE will initiate a pre-acquisition investigation and review
of the books, credit files, records and facilities of LIBERTY and
its Subsidiaries and will complete such pre-acquisition
investigation as soon as reasonably possible but, in no event,
within not more than 60 days following the date of this Merger
Agreement. BANC ONE shall advise LIBERTY at the conclusion of
such pre-acquisition investigation of all matters then known to
BANC ONE which BANC ONE shall in good faith determine to be
either (i) inconsistent in any material and adverse respect with
any of the representations and warranties of LIBERTY contained in
this Merger Agreement or (ii), in the reasonable judgment of the
Board of Directors of BANC ONE, to be either (x) of such
significance as to materially and adversely affect the financial
condition or the results of operations of LIBERTY and the
Subsidiaries on a consolidated basis or (y) deviate materially
and adversely from LIBERTY's financial statements for the nine
months ended September 30, 1996. BANC ONE shall have the right to
terminate this Merger Agreement as set forth in Section 26(c).
(n) LIBERTY will initiate a pre-acquisition investigation and review
of the books, credit files, records and facilities of BANC ONE
and its subsidiaries and will complete such pre-acquisition
investigation as soon as reasonably possible but, in no event,
within not more than 10 business days following the date of this
Merger Agreement. LIBERTY shall advise BANC ONE at the conclusion
of such pre-acquisition investigation of all matters then known
to LIBERTY which LIBERTY shall in good faith determine to be
either (i) inconsistent in any material and adverse respect with
any of the representations and warranties of BANC ONE or BANC ONE
OKLAHOMA contained in this Merger Agreement or (ii) in the
reasonable judgment of the Board of Directors of LIBERTY, to be
either (x) of such significance as to materially and adversely
affect the financial condition or the results of operations of
BANC ONE and its subsidiaries on a consolidated basis or (y)
deviate materially and adversely from BANC ONE's financial
statements for the nine months ended September 30, 1996. LIBERTY
shall have the right to terminate this Merger Agreement as set
forth in Section 26(d).
(o) In addition to BANC ONE's pre-acquisition investigation of
LIBERTY and LIBERTY's pre-acquisition investigation of BANC ONE,
BANC ONE and LIBERTY shall each provide the other with adequate
opportunity to conduct such further reviews and examinations of
the business, properties and conditions (financial and otherwise)
of the other as BANC ONE and LIBERTY, respectively, shall deem
prudent, provided that such
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investigations shall not interfere unreasonably with the normal
operations of the party being reviewed.
(p) BANC ONE will use its reasonable best efforts to cause the shares
of BANC ONE Common to be issued to the shareholders of LIBERTY
pursuant to this Merger Agreement to be listed on the NYSE as of
the Effective Time.
(q) Prior to the Effective Time, BANC ONE will file with the SEC and
use its reasonable best efforts to cause to become effective not
later than the Effective Time, a registration statement on Form
S-8 or other appropriate form to register with the SEC the shares
of BANC ONE Common which may be issued to individuals upon the
exercise of stock options and/or other stock-related benefits
assumed by BANC ONE pursuant to this Merger Agreement and/or the
Benefits Agreement and will use its reasonable best efforts to
cause such registration statement to remain in effect until the
exercise or expiration of all such options and/or other
stock-related benefits. BANC ONE shall use its reasonable best
efforts to have the shares of BANC ONE Common which may be issued
upon the exercise of such options qualified or exempted from
qualification from all applicable state securities laws.
11. DISSENTING SHAREHOLDERS. Shareholders of LIBERTY Common who do not
vote their shares in favor of the Merger and otherwise perfect
applicable dissenters' rights will be entitled to applicable
dissenters' or appraisal rights, if any, under applicable provisions
of the Oklahoma GCA.
12. TAX OPINION. BANC ONE and LIBERTY shall use their respective
reasonable best efforts to obtain from Wachtell, Lipton, Xxxxx & Xxxx
a written opinion addressed to LIBERTY, its shareholders and BANC ONE,
that based upon the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), the regulations thereunder and rulings
issued by the Internal Revenue Service in transactions similar to
those contemplated by this Merger Agreement:
(a) The statutory Merger of LIBERTY with and into BANC ONE OKLAHOMA
will constitute a reorganization within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(D) of the Internal Revenue
Code;
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(b) No gain or loss will be recognized by BANC ONE or LIBERTY as a
consequence of the transactions herein contemplated;
(c) No gain or loss will be recognized by the shareholders of LIBERTY
on the exchange of their shares of LIBERTY Common for shares of
BANC ONE Common (disregarding for this purpose any cash
consideration received by such shareholders of LIBERTY Common,
including any cash received pursuant to the exercise of statutory
dissenters' rights or for fractional share interests to which
they may be entitled);
(d) The Federal income tax basis of the BANC ONE Common (including
fractional share interests to which they may be entitled)
received by the shareholders of LIBERTY Common for their shares
of LIBERTY Common will be the same as the Federal income tax
basis of the LIBERTY Common surrendered in exchange therefor; and
(e) The holding period of the BANC ONE Common received by a
shareholder of LIBERTY Common will include the period for which
the LIBERTY Common exchanged therefor was held, provided the
exchanged LIBERTY Common was held as a capital asset by such
shareholder on the date of the exchange.
13. REPRESENTATIONS AND WARRANTIES OF BANC ONE. BANC ONE represents and
warrants to LIBERTY that, except as set forth in BANC ONE's disclosure
letter to LIBERTY dated December 27, 1996, and any attachments or
schedules annexed thereto, and delivered to LIBERTY not later than the
time of LIBERTY's execution of this Merger Agreement (the "BANC ONE
Disclosure Letter") and except as otherwise indicated below:
(a) BANC ONE is a corporation duly organized and validly existing in
good standing under the laws of the State of Ohio, is a
registered bank holding company under the Bank Holding Company
Act of 1956, as amended, and is qualified to do business and is
in good standing in the State of Ohio, together with all other
jurisdictions where it is both required to so qualify and where
the failure to so qualify would have a BANC ONE Material Adverse
Effect, as hereinafter defined. A BANC ONE Material Adverse
Effect is that which has or would have a material adverse effect
on the business, operations, financial condition or results of
operations of BANC ONE and its subsidiaries, taken as a whole, or
on the ability of BANC ONE or BANC ONE OKLAHOMA to consummate the
transactions contemplated hereby. BANC ONE has full power and
authority (including
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16
all licenses, franchises, permits and other governmental
authorizations which are legally required) to engage in the
businesses and activities now conducted by it and its
subsidiaries. BANC ONE is not subject to any formal or informal
agreement or understanding with, nor is it subject to any order
of, any bank regulatory authority restricting or prohibiting or
attempting to restrict or prohibit any activities or conduct of
BANC ONE. Subject only to obtaining the required regulatory
approvals, BANC ONE is, and at all times after the date of this
Merger Agreement to and including the Effective Time will be,
authorized to effect the Merger under applicable law. As of
September 30, 1996 BANC ONE had capital stock of $2,399,105,000,
divided into 600,000,000 shares of BANC ONE Common, 431,805,662
of which shares of BANC ONE Common were issued and outstanding
and 5,622,100 of which were shares of treasury stock owned by
BANC ONE and acquired at a cost of $(205,898,000), and 35,000,000
shares of preferred stock without par value, of which 4,801,546
shares were issued and outstanding shares of BANC ONE Preferred C
and none of which were shares of treasury stock owned by BANC
ONE. All of the issued and outstanding shares of BANC ONE's
capital stock are duly authorized, validly issued, fully paid,
nonassessable and subject to no pre-emptive rights. As of
September 30, 1996, BANC ONE had surplus of $4,465,890,000,
retained earnings, including capital reserves, of $1,793,048,000,
net unrealized holding gains/(losses) available for sale (net of
tax) of $(12,754,000), and total consolidated assets of
$98,562,000,000.
(b) BANC ONE has furnished to LIBERTY copies of the following
financial statements relating to BANC ONE and its consolidated
subsidiaries: (i) the audited Consolidated Balance Sheets of BANC
ONE as of December 31, 1995 and 1994 and the Consolidated
Statements of Income, Shareholders' Equity and Cash Flows for the
years then ended, together with the notes thereto, as audited by
Coopers & Xxxxxxx, independent auditors; and (ii) the unaudited
Consolidated Balance Sheet of BANC ONE as at September 30, 1996
and the unaudited Consolidated Statements of Income and
Shareholders' Equity for the period then ended, together with the
notes thereto. Each of the aforementioned financial statements
present fairly, in accordance with generally accepted accounting
principles (applied on a consistent basis except as disclosed in
the footnotes thereto), the consolidated financial position and
results of operations of BANC ONE as of the dates and for the
periods therein set forth. Such financial statements do not, as
of the dates thereof, include any material asset or omit any
material liability, absolute or contingent, or other fact, the
inclusion or omission of which renders such financial statements,
in light of the
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17
circumstances under which they were made, misleading in any
material respect. Since September 30, 1996, there has not been
any change in the financial condition, results of operations or
business of BANC ONE and its subsidiaries that has had a BANC ONE
Material Adverse Effect. Since September 30, 1996, BANC ONE has
issued approximately 1,284,500 additional shares of BANC ONE
Common.
(c) Since December 31, 1992, BANC ONE and each of its subsidiaries
has filed all reports, registrations and statements, together
with any required amendments thereto, that any of them was
required to file with (i) the SEC, including, but not limited to,
all Forms 10-K, Forms 10-Q, Forms 8-K, annual reports and proxy
statements, (ii) the Board, (iii) the Federal Deposit Insurance
Corporation (the "FDIC"), (iv) the Office of the Comptroller of
the Currency (the "OCC") and (v) any applicable state securities
or banking authorities. All such reports and statements filed
with any such regulatory body or authority are collectively
referred to in this Merger Agreement as the "BANC ONE Reports."
As of their respective dates, the BANC ONE Reports complied in
all material respects with the respective rules and regulations
promulgated by the SEC, the Board, the FDIC, the OCC and state
securities or banking authorities, and did not contain at the
time filed any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Board of Directors of BANC ONE has duly authorized the
execution and delivery of this Merger Agreement, approved the
Merger as contemplated by said Merger Agreement and authorized
the issuance of the shares of BANC ONE Common for shares of
LIBERTY Common as contemplated herein. The Board of Directors of
BANC ONE OKLAHOMA has duly authorized the execution and delivery
of this Merger Agreement and approved the Merger as contemplated
by said Merger Agreement. No authorization of this Merger
Agreement, of the transactions hereby contemplated or of the
issuance of shares as contemplated herein is required by the
shareholders of BANC ONE. BANC ONE and BANC ONE OKLAHOMA have all
requisite power and authority to enter into this Merger Agreement
and, after its vote of the shares of BANC ONE OKLAHOMA in favor
of the Merger, BANC ONE and BANC ONE OKLAHOMA will have the
authority to consummate the transactions contemplated hereby.
This Merger Agreement constitutes the valid, legally binding and
enforceable obligation of each of BANC ONE and BANC ONE OKLAHOMA
and this Merger Agreement and the consummation of the Merger
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18
have been duly authorized and approved on behalf of BANC ONE and
BANC ONE OKLAHOMA by all requisite corporate action. Provided the
required approvals are obtained from the Board and the Oklahoma
Board, neither the execution and delivery of this Merger
Agreement nor the consummation of the Merger will conflict with,
result in the breach of, constitute a default under or accelerate
the performance provided by the terms of any law, or any rule or
regulation of any governmental agency or authority or any
judgment, order or decree of any court, bank regulatory agency or
other governmental agency to which BANC ONE or BANC ONE OKLAHOMA
is subject, any contract, agreement or instrument to which BANC
ONE or BANC ONE OKLAHOMA is a party or by which BANC ONE or BANC
ONE OKLAHOMA is bound or committed, or the Articles of
Incorporation or Regulations of BANC ONE or the Certificate of
Incorporation or By-laws of BANC ONE OKLAHOMA, or constitute an
event which with the lapse of time or action by a third party,
could, to the best of the knowledge of BANC ONE and its executive
officers, after due inquiry, result in the default under any of
the foregoing or result in the creation of any lien, charge or
encumbrance upon any of the assets or properties of BANC ONE or
BANC ONE OKLAHOMA or upon any of the stock of BANC ONE or BANC
ONE OKLAHOMA or adversely affect the ability of BANC ONE to
consummate the transactions contemplated hereby, except, in the
case of contracts, agreements or instruments, such defaults,
conflicts or breaches which either (i) will be cured or waived
prior to the Effective Time or (ii) if not so cured or waived
would not, in the aggregate, have any BANC ONE Material Adverse
Effect.
(e) The reserve for possible loan and lease losses shown on the
September 30, 1996 Consolidated Balance Sheet of BANC ONE is
adequate in all material respects under the requirements of
generally accepted accounting principles to provide for possible
losses, net of recoveries relating to loans previously charged
off, on loans outstanding (including, without limitation, accrued
interest receivable) as of September 30, 1996.
(f) Except as disclosed in the financial statements referred to in
Section 13(b), there is no litigation, action, suit,
investigation or proceeding pending or, to the best of the
knowledge of BANC ONE and its executive officers after due
inquiry, overtly threatened against or affecting BANC ONE or its
subsidiaries or involving any of their respective properties or
assets, at law or in equity, before any federal, state,
municipal, local or other governmental authority, which is
reasonably likely to be resolved adversely to the interest of
BANC ONE or its subsidiaries and, if so resolved, would have a
BANC ONE Material Adverse
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19
Effect or materially impair its ability, or that of BANC ONE
OKLAHOMA, to perform under this Merger Agreement, and to the best
of the knowledge and belief of BANC ONE and its executive
officers after due inquiry, no one has reasonable or valid
grounds on which it reasonably can be expected that anyone will
assert or initiate any such litigation, action, suit,
investigation or proceeding against BANC ONE based upon the
wrongful action or inaction of BANC ONE or its subsidiaries or
any of their respective officers, directors or employees.
(g) At the Effective Time and on such subsequent dates when the
former shareholders of LIBERTY surrender their certificates
formerly representing shares of LIBERTY Common for cancellation
and exchange, the shares of BANC ONE Common to be exchanged with
former shareholders of LIBERTY will be duly authorized and
validly issued by BANC ONE and BANC ONE OKLAHOMA and will be
fully paid and nonassessable and subject to no pre-emptive
rights.
(h) BANC ONE and each of its subsidiaries have good and marketable
title to all their respective assets and properties, whether real
or personal, tangible or intangible, including without limitation
the capital stock of its subsidiaries and all other assets and
properties reflected in BANC ONE's Balance Sheet as of September
30, 1996 or acquired subsequent thereto (except to the extent
that such assets and properties have been disposed of for fair
value in the ordinary course of business since September 30,
1996). Such assets and properties are subject to no liens,
mortgages, security interests, encumbrances, pledges or charges
of any kind, except (i) as noted in said Balance Sheet or the
notes thereto; (ii) statutory liens for taxes not yet delinquent;
(iii) landlord's liens; and (iv) minor defects and irregularities
in title and encumbrances which do not materially impair the use
thereof for the purposes for which they are held; and such liens,
mortgages, security interests, encumbrances and charges do not,
in the aggregate, have a BANC ONE Material Adverse Effect. BANC
ONE and its subsidiaries as lessees have the unqualified right
under valid and subsisting leases to occupy, use, possess and
control all property leased by BANC ONE and its subsidiaries. At
the Effective Time all limitations affecting such properties will
not, in the aggregate, have a BANC ONE Material Adverse Effect.
(i) To the best of the knowledge of BANC ONE and its executive
officers after due inquiry, BANC ONE and its subsidiaries have
complied with all laws, regulations and orders applicable to them
and to the conduct of their businesses, including without
limitation all
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statutes, rules and regulations pertaining to the conduct of
banking activities except for violations which, together with any
penalty which results therefrom, have not had and will not have a
BANC ONE Material Adverse Effect. Neither BANC ONE nor any of its
subsidiaries is in default under, and no event has occurred
which, to the best of the knowledge of BANC ONE and its executive
officers after due inquiry, is likely to result in a default
under the terms of any judgment, decree, order, writ, rule or
regulation of any governmental authority or court, whether
federal, state or local and whether at law or in equity, in each
case where the default has had or is likely to have a BANC ONE
Material Adverse Effect.
(j) BANC ONE and BANC ONE OKLAHOMA have not incurred and will not
incur directly or indirectly any liability for brokerage,
finders', agents' or investment bankers' fees or commissions in
connection with this Merger Agreement or the transactions
contemplated hereby.
(k) Each pension, stock bonus or purchase, profit-sharing,
retirement, health and welfare plan maintained by or covering
employees of BANC ONE or any subsidiary of BANC ONE (hereinafter
referred to collectively as the "plans") which purports to be a
qualified plan under Section 401(a) of the Internal Revenue Code
is so qualified. All of the plans which constitute employee
benefit or employee welfare benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
have been maintained in compliance in all material respects with
the applicable requirements of ERISA. All material notices,
reports and other filings required under applicable law to be
given or made to or with any governmental agency with respect to
the plans have been timely filed or delivered. BANC ONE and its
executive officers, after due inquiry, have no knowledge either
of any circumstances which would adversely affect the
qualification of the plans or their compliance with the
applicable requirements of ERISA, would result or have resulted
in liability under Title IV of ERISA or of any "reportable event"
(as such term is defined in Section 4043(b) of ERISA) or any
"prohibited transaction" (as such term is defined in Section 406
of ERISA and Section 4975(c) of the Internal Revenue Code) which
has occurred during the past five years and which could
reasonably be expected to result in any material liability of
BANC ONE or any subsidiary to the Pension Benefit Guaranty
Corporation (the "PBGC"), the Department of Treasury, the
Department of Labor or any multiemployer plan. Those plans which
are defined benefit plans within the meaning of ERISA meet the
minimum funding standards set forth in the Internal Revenue Code
and
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ERISA and the assets of such plans equal or exceed the actual
present value of accrued benefits under such plans determined on
the basis of the actuarial assumptions contained in the plan's
most recent actuarial valuation. There are no pending or
threatened claims (other than claims for benefits in the ordinary
course), lawsuits or arbitrations which have been asserted or
instituted against the plans, any fiduciaries thereof with
respect to their duties to the plans or the assets of any of the
trusts under any of the plans which could reasonably be expected
to result in any material liability of BANC ONE or any subsidiary
to the PBGC, Department of Treasury, Department of Labor or any
multiemployer plan.
(l) Except where the failure to file would not have a BANC ONE
Material Adverse Effect on BANC ONE and its subsidiaries, BANC
ONE and/or its subsidiaries have duly filed all federal, state,
county and local income, franchise, bank, excise, real and
personal property and other tax returns and reports (including,
but not limited to, those relating to social security,
withholding, unemployment insurance, and occupation (sales) and
use taxes and those filed on a consolidated, combined or unitary
basis) required to have been filed by BANC ONE or its
subsidiaries up to the date hereof. All of the foregoing returns
are true and correct in all material respects, and BANC ONE and
its subsidiaries have paid or, prior to the Effective Time, will
pay all taxes, interest and penalties shown on such returns or
reports as being due or (except to the extent the same are
contested in good faith and, if material, summarized in the BANC
ONE Disclosure Letter) or claimed to be due to any federal,
state, county, local or other taxing authority, and there is, and
at the Effective Time will be, no basis for any additional claim
or assessment which might have a BANC ONE Material Adverse
Effect, except for those being contested in good faith and
summarized in the BANC ONE Disclosure Letter. BANC ONE and its
subsidiaries have paid or made adequate provision in its
financial statements or its books and records for all taxes
payable in respect of all periods ending on or before the date
hereof. BANC ONE and its subsidiaries have, and at the Effective
Time will have, no liability for any taxes, interest or penalties
of any nature whatsoever, except for those taxes which may have
arisen up to the Effective Time in the ordinary course of
business and are properly accrued on the books of BANC ONE as of
the Effective Time or are being contested in good faith and have,
if material, been summarized in the BANC ONE Disclosure Letter.
(m) BANC ONE has in effect insurance coverage with reputable
insurers, which in respect of amounts, premiums, types and risks
insured, constitutes reasonably adequate coverage
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against all risks customarily insured against by bank holding
companies comparable in size and operation to BANC ONE.
(n) Neither the Proxy Statement nor the related registration
statement nor any amendment or supplement thereto that is filed
with the SEC in connection with the transactions contemplated
hereby (except for any information which has been or shall be
supplied by LIBERTY for inclusion in the Proxy Statement and
registration statement and is so included as so supplied) shall
contain (in the case of information relating to the Proxy
Statement, at the time it is mailed and in the case of
information relating to the registration statement at the time it
becomes effective and at the time of LIBERTY's shareholders'
meeting) any untrue statement of a material fact or shall omit to
state a material fact necessary to make the statements contained
therein, in light of the circumstances in which they are made,
not misleading. The registration statement and any amendments or
supplements thereto that are filed with the SEC in connection
with the transactions contemplated hereby will comply as to form
in all material respects with the provisions of the 1933 Act and
the rules and regulations promulgated thereunder.
(o) No employee of BANC ONE or any of its subsidiaries is
represented, for purposes of collective bargaining, by a labor
organization of any type. BANC ONE is unaware of any efforts
during the past five years to unionize or organize any employees
of BANC ONE or any of its subsidiaries, and no claim related to
such employees under the Fair Labor Standards Act, National Labor
Relations Act, Civil Rights Act of 1964, Xxxxx-Xxxxx Act, Xxxxx
Bacon Act, Civil Rights Act of 1866, Age Discrimination in
Employment Act, Equal Pay Act of 1963, Executive Order No. 11246,
Federal Unemployment Tax Act, Vietnam Era Veterans Readjustment
Act, Occupational Safety and Health Act, or any state or local
employment related law, order, ordinance or regulation, no unfair
labor practice, discrimination or wage-and-hour claim is pending
or, to the best of knowledge of BANC ONE and its executive
officers after due inquiry, threatened against BANC ONE or any of
its subsidiaries which claim has had or is reasonably likely to
have a BANC ONE Material Adverse Effect.
(p) To the actual knowledge of BANC ONE and its executive officers:
(i) with respect to any contaminant, pollutant, hazardous
substance, hazardous waste, hazardous pollutant, toxic pollutant,
toxic waste or toxic substance ("Contaminant"), there are no
material actions, proceedings or investigations pending or
threatened before any federal or state
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23
environmental regulatory body, or before any federal or state
court, alleging non-compliance with or liability in connection
with, by BANC ONE or any of its subsidiaries, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
xx.xx. 9601 et seq. ("CERCLA"), the Resource Conservation and
Recovery Act, 42 U.S.C. xx.xx. 6901 et seq. ("RCRA"), the Clean
Water Act, 33 U.S.C. xx.xx. 1251 et seq. ("CWA"), or the Clean
Air Act, 42 U.S.C. xx.xx. 7401 et seq. ("CAA"), as each is
amended from time to time, or any other federal, state, local or
municipal statute, ordinance or regulation, or order, ruling or
other decision of any court, administrative agency or other
governmental authority relating to health or safety or
environmental protection (such statutes, ordinances, regulations,
orders, rulings and decisions, together, "Environmental Laws");
(ii) neither BANC ONE nor any of its subsidiaries is responsible
in any material respect under any Environmental Law for any
release by any person at or in the vicinity of real property of
any Contaminant, including without limitation by spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping or disposing of any such
Contaminant into the environment (collectively "Release"); (iii)
neither BANC ONE nor any of its subsidiaries is responsible for
any material costs of any response action required by virtue of
any Release of any Contaminant into the environment including,
without limitation, costs arising from investigation, removal or
remediation of Contaminants, security fencing, alternative water
supplies, temporary evacuation and housing and other emergency
assistance undertaken by any environmental regulatory body or any
other person; (iv) BANC ONE and its subsidiaries are, in all
material respects, in compliance with all applicable
Environmental Laws; and (v) no real property owned or used by
BANC ONE or any of its subsidiaries contains any Contaminant
including, without limitation, any asbestos, PCBs or petroleum
products or byproducts in any form, the presence, location or
condition of which (a) is reasonably likely to require
remediation or other corrective action pursuant to any
Environmental Law in any material respect, or (b) otherwise would
pose any significant health or safety risk unless remedial
measures were taken.
(q) BANC ONE and/or its subsidiaries (i) have surveyed the facilities
where BANC ONE and its subsidiaries conduct their business
including, without limitation, automatic teller machines
(collectively, the "BANC ONE Facilities") for compliance with the
Americans with Disabilities Act and the regulations issued
thereunder (collectively, "ADA"); (ii) have developed plans to
remove architectural barriers including communication barriers
that are structural in nature from existing BANC ONE Facilities
(collectively, the "BANC
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24
ONE Barriers") when such removal is "readily achievable," as that
term is defined in ADA; (iii)have finalized action plans for
automatic teller machines ("ATMs") in conformance with the Joint
Final Rule of the Architectural and Transportation Barriers
Compliance Board ("ATBCB") and the Department of Transportation,
effective August 16, 1993; (iv) have developed or will develop
schedules for BANC ONE Barrier removal from BANC ONE Facilities
in such action plans so that BANC ONE Barrier removal was
complete on January 26, 1992 or will be completed as soon as
practicable thereafter; and (v) have removed all BANC ONE
Barriers in BANC ONE Facilities or will cause all BANC ONE
Barriers to be removed in accordance with such action plans. All
"alterations" (as such term is defined in ADA) to BANC ONE
Facilities undertaken after January 26, 1992 comply with ADA and
the ATBCB Accessibility Guidelines for Buildings and Facilities
("ADAAG"). Effective January 26, 1992, all plans and designs for
new construction to be utilized by BANC ONE and its subsidiaries
comply with ADA and ADAAG. To the best of the knowledge of BANC
ONE and its executive officers after due inquiry, no
investigations, proceedings, or complaints, formal or informal,
are pending or threatened against BANC ONE and/or its
subsidiaries in connection with BANC ONE Facilities under ADA,
ADAAG, or any other state or federal law concerning accessibility
for individuals with disabilities.
(r) The statements made in the BANC ONE Disclosure Letter and any
attachments thereto shall be deemed to constitute representations
and warranties of BANC ONE under this Merger Agreement to the
same extent as if herein set forth in full. Anything disclosed in
the BANC ONE Disclosure Letter or the attachments thereto shall
be considered to have been disclosed for purposes of all
representations, warranties and covenants under this Merger
Agreement.
14. REPRESENTATIONS AND WARRANTIES OF BANC ONE OKLAHOMA. BANC ONE OKLAHOMA
represents and warrants to LIBERTY that, except as set forth in the
BANC ONE Disclosure Letter, and except as otherwise indicated below:
(a) BANC ONE OKLAHOMA is a corporation duly organized and validly
existing in good standing under the laws of the State of Oklahoma
and is qualified to do business and is in good standing in the
State of Oklahoma together with all other jurisdictions where it
is both required to so qualify and where the failure to so
qualify would have a BANC ONE Material Adverse Effect and BANC
ONE OKLAHOMA has full power and authority
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(including all licenses, franchises, permits and other
governmental authorizations which are legally required) to engage
in the businesses and activities now conducted by it. The
authorized capital stock of BANC ONE OKLAHOMA is 500 shares of
BANC ONE OKLAHOMA Common, all of which are issued and outstanding
and owned by BANC ONE free and clear of all liens, security
interests or other encumbrances. BANC ONE OKLAHOMA's only
subsidiary is Bank One, Oklahoma.
(b) The Board of Directors of BANC ONE OKLAHOMA has duly authorized
execution of this Merger Agreement and approved the merger with
LIBERTY as contemplated by said Merger Agreement. BANC ONE, the
sole shareholder of BANC ONE OKLAHOMA, will vote all the shares
of BANC ONE OKLAHOMA to approve the Merger and adopt this Merger
Agreement. BANC ONE OKLAHOMA has all requisite power and
authority to enter into this Merger Agreement and has the
authority to consummate the transactions contemplated hereby.
This Merger Agreement constitutes the valid and legally binding
obligation of BANC ONE OKLAHOMA and this Merger Agreement and the
consummation hereof have been duly authorized and approved on
behalf of BANC ONE OKLAHOMA by all requisite corporate action.
Provided the required approvals are obtained from the Board and
the Oklahoma Board, neither the execution and delivery of this
Merger Agreement nor the consummation of the Merger will conflict
with, result in the breach of, constitute a default under or
accelerate the performance provided by the terms of any law, or
any rule or regulation of any governmental agency or authority or
any judgment, order or decree of any court, bank regulatory
agency or other governmental agency to which BANC ONE OKLAHOMA
may be subject, any contract, agreement or instrument to which
BANC ONE OKLAHOMA is a party or by which BANC ONE OKLAHOMA is
bound or committed, or the Certificate of Incorporation or
By-laws of BANC ONE OKLAHOMA, or constitute an event which with
the lapse of time or action by a third party, could, to the best
of BANC ONE OKLAHOMA's knowledge, result in the default under any
of the foregoing or result in the creation of any lien, charge or
encumbrance upon any of the assets or properties of BANC ONE
OKLAHOMA or adversely affect the ability of BANC ONE to
consummate the transactions contemplated hereby.
15. REPRESENTATIONS AND WARRANTIES OF LIBERTY. LIBERTY represents and
warrants to BANC ONE that, except as shall be set forth in LIBERTY's
disclosure letter dated December 27, 1996, and any attachments or
schedules annexed thereto, and delivered to BANC ONE not later than
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26
the time of BANC ONE's execution of this Merger Agreement (the
"LIBERTY Disclosure Letter"), and except as indicated below:
(a) LIBERTY is a corporation duly organized and validly existing in
good standing under the laws of the State of Oklahoma, is a
registered bank holding company under the Bank Holding Company
Act of 1956, as amended, and is qualified to do business and is
in good standing in the State of Oklahoma, together with all
other jurisdictions where it is both required to so qualify and
where the failure to so qualify would have a LIBERTY Material
Adverse Effect, as hereinafter defined. A LIBERTY Material
Adverse Effect is that which has or would have a material adverse
effect on the business, operations, financial condition or
results of operations of LIBERTY and the Subsidiaries taken as a
whole, or on the ability of LIBERTY to consummate the
transactions contemplated hereby. LIBERTY and the Subsidiaries
each have full power and authority (including all licenses,
franchises, permits and other governmental authorizations which
are legally required) to engage in the businesses and activities
now conducted by it. LIBERTY is not subject to any formal or
informal agreement or understanding with, nor is it subject to
any order of, any bank regulatory authority restricting or
prohibiting or attempting to restrict or prohibit any activities
or conduct of LIBERTY. Subject only to obtaining the required
regulatory approvals and the approval of LIBERTY shareholders,
LIBERTY is, and at all times after the date of this Merger
Agreement to and including the Effective Time will be, authorized
to effect the Merger under applicable law. As of September 30,
1996, LIBERTY had authorized capital stock consisting of
50,000,000 shares of LIBERTY Common, of which a total of
9,448,538 shares were issued and outstanding and 39,890 of which
were shares of treasury stock owned by LIBERTY. All of the issued
and outstanding shares of LIBERTY Common are duly authorized,
validly issued, fully paid, nonassessable and subject to no
pre-emptive rights. There are no outstanding options, warrants,
stock appreciation rights or commitments of any kind related to
LIBERTY's capital stock or the exchange of LIBERTY's capital
stock except for (i) outstanding stock options which have been
granted related to the purchase of not more than 615,705 shares
of LIBERTY Common pursuant to the Liberty Bancorp, Inc. 1990
Stock Option Plan, As Amended (the "LIBERTY Option Plan"), (ii)
outstanding stock options which have been granted related to the
purchase of not more than 289,694 shares of LIBERTY Common
pursuant to an Option to Purchase Common Stock between LIBERTY
and Xxxxx (the "Xxxxx Option"), and (iii) the option to be
granted to BANC ONE pursuant to Section 21 of this Merger
Agreement. As of September 30, 1996, LIBERTY had surplus of
$210,184,000, retained
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27
earnings, including capital reserves, of $63,898,000, net
unrealized holding gains/(losses) available for sale (net of tax)
of $1,798,000, and total consolidated assets of $2,905,361,000.
(b) LIBERTY has furnished to BANC ONE copies of the following
financial statements relating to LIBERTY and the Subsidiaries on
a consolidated basis: (i) the audited Consolidated Balance Sheet
of LIBERTY as of December 31, 1995 and 1994, and the Consolidated
Statements of Income, Stockholders' Equity and Cash Flows for the
years then ended, together with the notes thereto, as audited by
Xxxxxx Xxxxxxxx LLP, Certified Public Accountants; and (ii) the
unaudited Consolidated Balance Sheet of LIBERTY as at September
30, 1996 and the unaudited Consolidated Statement of Income for
the period then ended, together with the notes thereto. Each of
the aforementioned financial statements presents fairly, in
accordance with generally accepted accounting principles (applied
on a consistent basis except as disclosed in the footnotes
thereto), the consolidated financial position and results of
operations of LIBERTY as of the dates and for the periods therein
set forth. Such financial statements do not, as of the dates
thereof, include any material asset or omit any material
liability, absolute or contingent, or other fact, the inclusion
or omission of which renders such financial statements, in light
of the circumstances under which they were made, misleading in
any material respect. Since September 30, 1996, there has not
been any change in the financial condition, results of operations
or business of LIBERTY and the Subsidiaries that has had a
LIBERTY Material Adverse Effect. Since September 30, 1996,
LIBERTY has issued and acquired shares of LIBERTY Common
resulting in 9,445,075 shares of LIBERTY Common being outstanding
as of December 27, 1996.
(c) Since December 31, 1992, LIBERTY and each of the Subsidiaries has
filed all reports, registrations and statements, together with
any required amendments thereto, that any of them was required to
file with (i) the SEC, including, but not limited to, all Forms
10-K, Forms 10-Q, Forms 8-K, annual reports and proxy statements,
(ii) the Board, (iii) the FDIC, (iv) OCC and (v) any applicable
state securities or banking authorities. All such reports and
statements filed with any such regulatory body or authority are
collectively referred to in this Merger Agreement as the "LIBERTY
Reports." As of their respective dates, the LIBERTY Reports
complied in all material respects with the respective rules and
regulations promulgated by the SEC, the Board, the FDIC, the OCC
and state securities or banking authorities, and did not contain
at the time filed any untrue statement
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of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
(d) The Board of Directors of LIBERTY has duly authorized the
execution and delivery of this Merger Agreement and approved the
Merger as contemplated by the Merger Agreement and, subject to
the fiduciary duties of the Board of Directors, will recommend it
to the LIBERTY shareholders for adoption. Subject to the approval
by the shareholders of LIBERTY, this Merger Agreement constitutes
the valid, legally binding and enforceable obligation of LIBERTY
and LIBERTY has all requisite power and authority to enter into
this Merger Agreement and LIBERTY has the authority to consummate
the transactions contemplated hereby so that, provided all such
shareholder and regulatory approvals are obtained, neither the
execution and delivery of this Merger Agreement nor the
consummation of the Merger will conflict with, result in the
breach of, constitute a default under or accelerate the
performance provided by the terms of any law, or any rule or
regulation of any governmental agency or authority or any
judgment, order or decree of any court, bank regulatory agency or
other governmental agency to which LIBERTY is subject, any
contract, agreement or instrument to which LIBERTY is a party or
by which LIBERTY is bound or committed, or the Certificate of
Incorporation or By-Laws of LIBERTY, or constitute an event which
with the lapse of time or action by a third party, could, to the
best of the knowledge of LIBERTY and its executive officers after
due inquiry, result in the default under any of the foregoing or
result in the creation of any lien, charge or encumbrance upon
any of the assets or properties of LIBERTY or upon any of
LIBERTY's capital stock; except, in the case of contracts,
agreements or instruments, such defaults, conflicts or breaches
which either (i) will be cured or waived prior to the Effective
Time or (ii) if not so cured or waived would not, in the
aggregate, have a LIBERTY Material Adverse Effect.
(e) The reserve for possible loan and lease losses shown on the
September 30, 1996 Consolidated Balance Sheet of LIBERTY is
adequate in all material respects under the requirements of
generally accepted accounting principles to provide for possible
losses, net of recoveries relating to loans previously charged
off, on loans outstanding (including, without limitation, accrued
interest receivable) as of September 30, 1996.
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(f) Except as disclosed in the financial statements referred to in
Section 15(b), there is no litigation, action, suit,
investigation or proceeding pending or, to the best of the
knowledge LIBERTY and its executive officers after due inquiry,
overtly threatened, against or affecting LIBERTY or any of its
Subsidiaries or involving any of their respective properties or
assets, at law or in equity, before any federal, state,
municipal, local or other governmental authority which is
reasonably likely to be resolved adversely to the interest of
LIBERTY or its Subsidiaries and, if so resolved, would have a
LIBERTY Material Adverse Effect, and to the best of the knowledge
and belief of LIBERTY and its executive officers after due
inquiry, no one has reasonable or valid grounds on which it
reasonably can be expected that anyone will assert or initiate
any such litigation, action, suit, investigation or proceeding
against LIBERTY based upon the wrongful action or inaction of
LIBERTY or any of its Subsidiaries or any of their respective
officers, directors or employees.
(g) LIBERTY and its Subsidiaries have good and marketable title to
all their respective assets and properties, whether real or
personal, tangible or intangible, including without limitation
the capital stock of its Subsidiaries and all other assets and
properties reflected in LIBERTY's Balance Sheet as of September
30, 1996 or acquired subsequent thereto (except to the extent
that such assets and properties have been disposed of for fair
value in the ordinary course of business since September 30,
1996). Such assets and properties are subject to no liens,
mortgages, security interests, encumbrances, pledges or charges
of any kind, except (i) as reflected in said Balance Sheet or the
notes thereto; (ii) statutory liens for taxes not yet delinquent;
(iii) landlord's liens; and (iv) minor defects and irregularities
in title and encumbrances which do not materially impair the use
thereof for the purposes for which they are held; and such liens,
mortgages, security interests, encumbrances and charges do not,
in the aggregate, have a LIBERTY Material Adverse Effect. LIBERTY
and its Subsidiaries as lessee have the unqualified right under
valid and subsisting leases to occupy, use, possess and control
all property leased by LIBERTY and its Subsidiaries. At the
Effective Time all limitations affecting such properties will
not, in the aggregate, have a LIBERTY Material Adverse Effect.
(h) To the best of the knowledge of LIBERTY and its executive
officers after due inquiry, LIBERTY and its Subsidiaries have
complied with all laws, regulations and orders applicable to them
and to the conduct of their businesses, including without
limitation, all statutes, rules and regulations pertaining to the
conduct of banking activities except for
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violations which together with any penalty which results
therefrom have not had and will not have a LIBERTY Material
Adverse Effect. Neither LIBERTY nor any of its Subsidiaries is in
default under, and no event has occurred which, to the best of
the knowledge of LIBERTY and its executive officers after due
inquiry, is likely to result in the default under the terms of
any judgment, decree, order, writ, rule or regulation of any
governmental authority or court, whether federal, state or local
and whether at law or in equity, in each case when the default
has had or is likely to have a LIBERTY Material Adverse Effect.
(i) LIBERTY has not incurred and will not incur any liability for
brokerage, finders', agents', or investment bankers' fees or
commissions in connection with this Merger Agreement or the
transactions contemplated hereby except for fees to Xxxxxx
Xxxxxxx & Co. Incorporated to be determined in accordance with
the terms of that certain engagement letter dated December 12,
1996, which is annexed as an exhibit to the LIBERTY Disclosure
Letter.
(j) Except as set forth in the LIBERTY Document List (the "LIBERTY
Document List") attached to the LIBERTY Disclosure Letter,
neither LIBERTY nor any of its Subsidiaries is a party to or
bound by any written or oral (i) employment or consulting
contract which is not terminable by LIBERTY or its Subsidiaries
on 60 days or less notice, (ii) employee bonus, deferred
compensation, pension, stock bonus or purchase, profit-sharing,
retirement or stock option plan, (iii) other employee benefit or
welfare plan, or (iv) other executory material agreements as
defined by the instructions to Exhibit 10 under Item 601 of SEC
Regulation S-K. All such pension, stock bonus, profit-sharing,
retirement, health and welfare plans set forth in the LIBERTY
Document List are hereinafter referred to collectively as the
"Plans." Each of those Plans which purports to be a qualified
plan under Section 401(a) of the Internal Revenue Code is so
qualified and nothing has occurred, to the knowledge of LIBERTY
and its executive officers, whether by action or the failure to
act, which could reasonably be expected to result in the loss of
such qualification. All of the plans which constitute employee
pension benefit plans or employee welfare plans subject to ERISA
have been maintained in compliance in all material respects with
ERISA. All material notices, reports and other filings required
under applicable law to be given or made to or with any
governmental agency with respect to the plans have been timely
filed or delivered. LIBERTY and its executive officers, after due
inquiry, have no knowledge either of any circumstances which
would adversely affect
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the qualification of the plans or their compliance with ERISA,
would result or have resulted in liability under Title IV of
ERISA or of any unreported "reportable event" (as such term is
defined in Section 4043(b) of ERISA) or "prohibited transaction"
(as such term is defined in Section 406 of ERISA and Section
4975(c) of the Internal Revenue Code) which has occurred during
the past five years and which could reasonably be expected to
result in any material liability of LIBERTY or any Subsidiary to
the PBGC, the Department of Treasury, the Department of Labor or
any multiemployer plan. Those plans which are defined benefit
plans within the meaning of ERISA meet the minimum funding
standards set forth in the Internal Revenue Code and ERISA and
the assets of such plans equal or exceed the actual present value
of accrued benefits under such plans as determined on the basis
of the actuarial assumptions contained in the plan's most recent
actuarial valuation. There are no pending or threatened claims
(other than claims for benefits in the ordinary course and
pursuant to domestic relations orders), lawsuits or arbitrations
which have been asserted or instituted against the plans, any
fiduciaries thereof with respect to their duties to the plans or
the assets of any of the trusts under any of the plans which
could reasonably be expected to result in any material liability
of LIBERTY or any of its Subsidiaries to the PBGC, the Department
of Treasury, the Department of Labor or any multiemployer plan.
(k) Except where the failure to file would not have a LIBERTY
Material Adverse Effect on LIBERTY and its Subsidiaries, LIBERTY
and/or its Subsidiaries have duly filed all federal, state,
county and local income, franchise, bank, excise, real and
personal property and other tax returns and reports (including,
but not limited to, those relating to social security,
withholding, unemployment insurance, and occupation (sales) and
use taxes and those filed on a consolidated, combined or unitary
basis) required to have been filed by LIBERTY or its Subsidiaries
up to the date hereof. LIBERTY has made available to BANC ONE a
copy of its Federal income tax return for the years 1995 and 1994
and agrees to provide a copy of its Federal income tax return for
the year 1996 when the same becomes available. All of the
foregoing returns are true and correct in all material respects,
and LIBERTY and its Subsidiaries have paid or, prior to the
Effective Time, will pay all taxes, interest and penalties shown
on such returns or reports as being due or (except to the extent
the same are contested in good faith and, if material, summarized
in the LIBERTY Disclosure Letter) claimed to be due to any
federal, state, county, local or other taxing authority, and
there is, and at the Effective Time will be, no basis for any
additional claim or assessment which might have a LIBERTY
Material Adverse Effect,
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except for those being contested in good faith and summarized in
the LIBERTY Disclosure Letter. LIBERTY and its Subsidiaries have
paid or made adequate provision in its financial statements or
its books and records for all taxes payable in respect of all
periods ending on or before the date hereof. LIBERTY and its
Subsidiaries have, and at the Effective Time will have, no
liability for any taxes, interest or penalties of any nature
whatsoever, except for those taxes which may have arisen up to
the Effective Time in the ordinary course of business and are
properly accrued on the books of LIBERTY as of the Effective Time
or are being contested in good faith and have, if material, been
summarized in the LIBERTY Disclosure Letter.
(l) LIBERTY has in effect insurance coverage with reputable insurers
which in respect of amounts, premiums, types and risks insured,
constitutes reasonably adequate coverage against all risks
customarily insured against by bank holding companies comparable
in size and operation to LIBERTY.
(m) LIBERTY has not, since September 30, 1996 to the date hereof, (i)
sold or issued any corporate debt securities or sold, issued,
reissued or increased its shares of its capital stock; (ii)
granted any option for the purchase of capital stock other than
with respect to existing stock option plans as described in the
Benefits Agreement; (iii) declared or set aside or paid any
dividend or other distribution in respect of its capital stock,
except as permitted pursuant to Section 16(a) hereof or directly
or indirectly, purchased, redeemed or otherwise acquired any
shares of such stock; (iv) incurred any obligation or liability
(absolute or contingent) except obligations or liabilities
incurred in the ordinary course of business, or mortgaged,
pledged or subjected to lien or encumbrance (other than
landlord's liens and statutory liens for taxes not yet delinquent
and banking transactions conducted in the ordinary course of
business) on any of its material assets or properties; (v)
discharged or satisfied any material lien or encumbrance or paid
any material obligation or liability (absolute or contingent),
other than liabilities included in LIBERTY's financial statements
as of September 30, 1996, liabilities incurred since the date
thereof in the ordinary course of business and liabilities
incurred in carrying out the transactions contemplated by this
Merger Agreement; (vi) sold, exchanged or otherwise disposed of
any material capital assets; (vii) made any extraordinary
officers' salary increase or wage increase, entered into any
employment contract with any officer or salaried employee or
instituted any employee welfare, bonus, stock option,
profit-sharing, retirement or similar plan or arrangement; (viii)
suffered any damage, destruction or loss, whether or not
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covered by insurance, that has had a LIBERTY Material Adverse
Effect or waived any rights of value which, in the aggregate,
have had a LIBERTY Material Adverse Effect; (ix) entered or
agreed to enter into any agreement or arrangement granting any
preferential right to purchase any of its material assets,
properties or rights or requiring the consent of any party to the
transfer and assignment of any such material assets, properties
or rights; or (x) entered into any other material transaction
(other than in the ordinary course of business) except as
expressly contemplated by this Merger Agreement.
(n) LIBERTY has annexed to the LIBERTY Disclosure Letter a loan
schedule identifying certain loan agreements, notes and borrowing
arrangements (the "LIBERTY Loan Schedule") between its
Subsidiaries and borrowers of its Subsidiaries. Except as
specifically noted on the LIBERTY Loan Schedule, no Subsidiary
was, as of November 30, 1996, a party to any written or oral (i)
loan agreement, note or borrowing arrangement, other than credit
card loans and other loans the unpaid balance of which does not
exceed $100,000 per loan, under the terms of which the obligor is
over 60 days delinquent in payment of principal or interest or,
to the best of LIBERTY's knowledge, in default of any other
provision as of the dates shown thereon; (ii) loan agreement,
note or borrowing arrangement which has been classified as
"substandard," "doubtful," "loss," "other loans especially
mentioned" or any comparable classifications by LIBERTY, a
Subsidiary or banking regulator; (iii) loan agreement, note, or
borrowing arrangement, including any loan guaranty, with any
director, executive officer or ten percent shareholder of LIBERTY
or, to the actual knowledge of LIBERTY and its executive officers
after due inquiry, any person, corporation or enterprise
controlling, controlled by or under common control with any of
the foregoing; or, (iv) to the best of the knowledge of LIBERTY
and its executive officers after due inquiry, loan agreement,
note or borrowing arrangement in violation of any law, regulation
or rule of any governmental authority and which violation could,
to the best of the knowledge of LIBERTY and its executive
officers after due inquiry, have a LIBERTY Material Adverse
Effect.
(o) None of the information provided by LIBERTY to BANC ONE for
inclusion in the Proxy Statement or related registration
statement or any amendment or supplement thereto (to the extent
so included as so provided) shall contain (in the case of
information relating to the Proxy Statement, at the time it is
mailed and in the case of information relating to the
registration statement, at the time it becomes effective) any
untrue statement of a material fact or shall omit to state a
material fact necessary to make the statements contained
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34
therein, in light of the circumstances in which they are made,
not misleading. The Proxy Statement that is filed with the SEC in
connection with the meeting of the shareholders of LIBERTY will
comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations promulgated
thereunder.
(p) Neither LIBERTY nor any Subsidiary is, as of the date hereof, a
party to any material contract and/or any material credit
agreement as obligor, maker, issuer or guarantor and which
contract or agreement contains covenants which make the
acquisition of LIBERTY or any Subsidiary by or merger with
another entity a condition of default or acceleration.
(q) Attached hereto as EXHIBIT A is LIBERTY's Subsidiaries List which
sets forth the complete legal name of each Subsidiary, a
designation of the laws under which each Subsidiary is
incorporated and the activities conducted by each Subsidiary.
Except as set forth in EXHIBIT A, LIBERTY has no subsidiaries.
Each of the Subsidiaries is a corporation, limited liability
company or similar entity duly organized and validly existing in
good standing under the laws of the United States or the state of
its incorporation or organization and has full power and
authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required) to engage
in the businesses and activities now conducted by it and is duly
qualified to do business and is in good standing in all
jurisdictions where the failure to so qualify (together with all
such failures) would have a LIBERTY Material Adverse Effect.
Except as may be set forth in EXHIBIT A, LIBERTY and/or one or
more of its Subsidiaries owns beneficially and of record all the
outstanding shares of capital stock of each Subsidiary, which
stock is fully paid and non-assessable (except as provided in 12
U.S.C.ss.55 and similar state laws). Neither LIBERTY nor any of
its Subsidiaries is a party to any partnership or joint venture
or owns more than 5% of the equity or voting interest in any
entity or enterprise except as may be set forth and described in
the LIBERTY Disclosure Letter.
(r) No employee of LIBERTY or any of its Subsidiaries is represented,
for purposes of collective bargaining, by a labor organization of
any type. LIBERTY is unaware of any efforts during the past five
years to unionize or organize any employees of LIBERTY or any of
its Subsidiaries, and no claim related to such employees under
the Fair Labor Standards Act, National Labor Relations Act, Civil
Rights Act of 1964, Xxxxx-Xxxxx Act, Xxxxx Xxxxx Act, Civil
Rights Act of 1866, Age Discrimination in Employment Act, Equal
Pay Act of 1963, Executive Order No. 11246, Federal Unemployment
Tax Act,
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Vietnam Era Veterans Readjustment Act, Occupational Safety and
Health Act, or any state or local employment related law, order,
ordinance or regulation, no unfair labor practice, discrimination
or wage-and-hour claim is pending or, to the best of the
knowledge of LIBERTY and its executive officers after due
inquiry, threatened against LIBERTY or its Subsidiaries, which
claim has had or is reasonably likely to have a LIBERTY Material
Adverse Effect.
(s) To the actual knowledge of LIBERTY and its executive officers:
(i) with respect to any Contaminant, there are no material
actions, proceedings or investigations pending or threatened
before any federal or state environmental regulatory body, or
before any federal or state court, alleging non-compliance with
or liability in connection with, by LIBERTY or any Subsidiary,
CERCLA or any other Environmental Laws; (ii) neither LIBERTY nor
any Subsidiary is responsible in any material respect under any
Environmental Law for any Release by any person at or in the
vicinity of any real property of any Contaminant, including
without limitation by spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing of any such Contaminant into the
environment; (iii) neither LIBERTY nor any Subsidiary is
responsible for any material costs of any response action
required by virtue of any Release of any Contaminant into the
environment including, without limitation, costs arising from
investigation, removal or remediation of Contaminants, security
fencing, alternative water supplies, temporary evacuation and
housing and other emergency assistance undertaken by any
environmental regulatory body or any other person; (iv) LIBERTY
and each Subsidiary is, in all material respects, in compliance
with all applicable Environmental Laws; and (v) no real property
owned or used by LIBERTY or any Subsidiary contains any
Contaminant including, without limitation, any asbestos, PCBs or
petroleum products or byproducts in any form, the presence,
location or condition of which (a) is reasonably likely to
require remediation or other corrective action pursuant to any
Environmental Law in any material respect, or (b) otherwise would
pose any significant health or safety risk unless remedial
measures were taken.
(t) LIBERTY and/or the Subsidiaries (i) have surveyed the facilities
where LIBERTY and the Subsidiaries conduct their business
including, without limitation, ATMs (collectively, the "LIBERTY
Facilities") for compliance with ADA; (ii) have developed action
plans to remove architectural barriers including communication
barriers that are structural in nature from existing LIBERTY
Facilities (collectively, the "LIBERTY Barriers") when such
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removal is "readily achievable," as that term is defined in ADA;
(iii) have finalized plans for ATMs in conformance with the Joint
Final Rule of the ATBCB and the Department of Transportation,
effective August 16, 1993; (iv) have developed or will develop
schedules for LIBERTY Barrier removal from LIBERTY Facilities in
such action plans so that LIBERTY Barrier removal was complete on
January 26, 1992 or will be completed as soon as practicable
thereafter; and (v) have removed all LIBERTY Barriers in LIBERTY
Facilities or will cause all LIBERTY Barriers to be removed in
accordance with such action plans. All "alterations" (as such
term is defined in ADA) to LIBERTY Facilities undertaken after
January 26, 1992 comply with ADA and the ADAAG. Effective January
26, 1992, all plans and designs for new construction to be
utilized by LIBERTY and the Subsidiaries comply with ADA and
ADAAG. To the best of the knowledge of LIBERTY and its executive
officers after due inquiry, no investigations, proceedings, or
complaints, formal or informal, are pending or threatened against
LIBERTY and/or the Subsidiaries in connection with LIBERTY
Facilities under ADA, ADAAG, or any other state or federal law
concerning accessibility for individuals with disabilities.
(u) The statements made in the LIBERTY Disclosure Letter and any
attachments thereto shall be deemed to constitute representations
and warranties of LIBERTY under this Merger Agreement to the same
extent as if herein set forth in full. Anything disclosed in the
LIBERTY Disclosure Letter or the attachments thereto shall be
considered to have been disclosed for purposes of all
representations, warranties and covenants under this Merger
Agreement.
16. ACTION BY LIBERTY PENDING EFFECTIVE TIME. LIBERTY agrees that from the
date of this Merger Agreement until the earlier of the Effective Time
or the time that this Merger Agreement is terminated, except as stated
in LIBERTY's Disclosure Letter or except with prior written permission
of BANC ONE, which, in any case covered by Section 16(d) hereof, shall
not be unreasonably withheld:
(a) Beginning with the fourth quarter of 1996 and for each succeeding
calendar quarter thereafter prior to the calendar quarter in
which the Effective Time shall occur, LIBERTY
(i) will not declare or pay any dividends or make any
distributions on shares of LIBERTY Common, except cash
dividends of (A) $ 0.25 per share for the fourth
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37
quarter of 1996 and (B) of not more than $0.30 per share for
each quarter subsequent to the fourth quarter of 1996; and
(ii) except as hereinbelow provided, will not declare or pay any
dividends or make any distributions in any amount on LIBERTY
Common in the quarter in which the Effective Time shall
occur and in which the shareholders of LIBERTY Common are
entitled to receive regular quarterly dividends on the
shares of BANC ONE Common into which the shares of LIBERTY
Common have been converted. It is the intent of this part
(ii) to provide that the holders of LIBERTY Common will
receive either the payment of cash dividends on their shares
of LIBERTY Common or the payment of cash dividends as the
holders of shares of BANC ONE Common received in exchange
for the shares of LIBERTY Common for the calendar quarter
during which the Effective Time shall occur, but will not
receive and will not become entitled to receive for the same
calendar quarter both the payment of a cash dividend as
shareholders of LIBERTY and the payment of a cash dividend
as the holders of the shares of BANC ONE Common received in
exchange for the shares of LIBERTY Common. In the event that
LIBERTY does not declare and pay cash dividends on its
LIBERTY Common in a particular calendar quarter because of
LIBERTY's reasonable expectation that the Effective Time
would occur in said calendar quarter and the Effective Time
does not in fact occur effective in said calendar quarter,
then, as a result thereof, LIBERTY shall be entitled to
declare and pay a cash dividend (within the limitations of
this Section 16) on said shares of LIBERTY Common for said
calendar quarter as soon as reasonably practicable.
The declaration of any dividends within the limitations of this
paragraph shall remain within the discretion of the Board of Directors
of LIBERTY.
(b) LIBERTY will not issue, sell or grant any warrant, option,
phantom stock option, stock appreciation right or commitment of
any kind for or related to or acquire for value any shares of its
capital stock or otherwise effect any change in connection with
its equity capitalization except as related to (i) the
outstanding stock options which have been granted related to the
purchase of not more than 615,705 shares of LIBERTY Common
pursuant to the LIBERTY Option Plans, (ii) the outstanding stock
option which has been granted related to the purchase of not more
than 289,694 shares of LIBERTY Common
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pursuant to the Xxxxx Option, and (iii) the option to be granted
to BANC ONE pursuant to Section 21 of this Merger Agreement.
(c) Except as otherwise set forth in or contemplated by this Merger
Agreement, LIBERTY will carry on its businesses in substantially
the same manner as heretofore, keep in full force and effect
insurance comparable in amount and scope of coverage to that now
maintained by it and use its reasonable best efforts to maintain
and preserve its business organization intact.
(d) Neither LIBERTY nor any Subsidiary will (i) enter into any new
line of business or incur or agree to incur any obligation or
liability except liabilities and obligations (including corporate
debt issuances) incurred in the ordinary course of business,
except as may be directed by any regulatory agency; (ii) except
as may be directed by any regulatory agency, change its or its
Subsidiaries' lending, investment, liability management and other
material banking policies in any material respect; (iii) except
in the ordinary course of business and consistent with prior
practice, grant any general or uniform increase in the rates of
pay of employees; (iv) establish any new employee benefit plan or
amend any existing plan (except as required by law) so as to
increase by any significant amount the benefits payable
thereunder; (v) incur or commit to any capital expenditures other
than in the ordinary course of business (which will in no event
include the establishment of new branches or any other facilities
or any capital expenditures in excess of $75,000 for any
individual project for any purpose); or (vi) merge into,
consolidate with or permit any other corporation to be merged or
consolidated with it or any Subsidiary or acquire outside of the
ordinary course of business part of or all the assets or stock of
any other corporation or person.
(e) LIBERTY will not change its or its Subsidiaries' methods of
accounting in effect at December 31, 1995, except as required by
changes in generally accepted accounting principles as concurred
in by Xxxxxx Xxxxxxxx LLP or change any of its methods of
reporting income and deductions for Federal income tax purposes
from those employed in the preparation of LIBERTY's Federal
income tax returns for the taxable years ending December 31, 1995
and 1994, except as required by changes in law or regulation.
(f) To the extent permitted by law, LIBERTY will afford BANC ONE, its
officers and other authorized representatives, such access to all
books, records, bank examination reports,
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39
tax returns, leases, contracts and documents of LIBERTY and its
Subsidiaries and will furnish to BANC ONE such information with
respect to the assets and business of LIBERTY and its
Subsidiaries as BANC ONE may from time to time reasonably request
in connection with this Merger Agreement and the transactions
contemplated hereby.
(g) LIBERTY will promptly advise BANC ONE in writing of all material
corporate actions taken by the directors and shareholders of
LIBERTY, furnish BANC ONE with copies of all monthly and other
interim financial statements of LIBERTY as they become available,
and keep BANC ONE fully informed concerning all trends and
developments which in the opinion of LIBERTY may have a LIBERTY
Material Adverse Effect.
(h) LIBERTY, its Subsidiaries and their respective officers,
directors and employees will not contract for or acquire, at the
expense of LIBERTY or any of its Subsidiaries, a policy or
policies providing for insurance coverage for directors, officers
and/or employees of LIBERTY and/or its Subsidiaries for any
period subsequent to the Effective Time for events occurring
before or after the Effective Time; provided, however, that
LIBERTY may renew, extend or replace existing policies in the
ordinary course consistent with past practices for periods of not
greater than one year.
17. ACTION BY BANC ONE PENDING EFFECTIVE TIME. BANC ONE agrees that from
the date of this Agreement until the Effective Time, except with prior
written permission of LIBERTY:
(a) BANC ONE will not adopt or implement any amendment to its
Articles of Incorporation or any plan of consolidation, merger or
reorganization which would affect in any manner the terms and
provisions of the shares of BANC ONE Common or the rights of the
holders of such shares or reclassify any of the BANC ONE Common.
(b) Except as otherwise set forth in or contemplated by this Merger
Agreement, BANC ONE will carry on its businesses in substantially
the same manner as heretofore, keep in full force and effect
insurance comparable in amount and scope of coverage to that now
maintained by it and use its reasonable best efforts to maintain
and preserve its business organization intact.
(c) BANC ONE will not change its methods of accounting in effect at
December 31, 1995, except as required by changes in generally
accepted accounting principles as concurred
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in with Coopers & Xxxxxxx, its independent auditors, or change
any of its methods of reporting income and deductions for Federal
income tax purposes from those employed in the preparation of the
Federal income tax returns of BANC ONE for the taxable years
ending December 31, 1995 and 1994, except as required by changes
in law or regulation.
(d) To the extent permitted by law, BANC ONE will afford LIBERTY, its
officers and other authorized representatives, such access to all
books, records, bank examination reports, tax returns, leases,
contracts and documents of BANC ONE and its subsidiaries and will
furnish to LIBERTY such information with respect to the assets,
earnings and business of BANC ONE and its subsidiaries as LIBERTY
may from time to time reasonably request in connection with this
Merger Agreement and the transactions contemplated hereby.
(e) BANC ONE will not, and will cause its subsidiaries not to, make
or agree to make any acquisition, or take any other action, that
adversely affects its ability or the ability of BANC ONE OKLAHOMA
to consummate the transactions contemplated by this Merger
Agreement.
18. CONDITIONS TO OBLIGATIONS OF BANC ONE AND BANC ONE OKLAHOMA. The
obligations of BANC ONE and BANC ONE OKLAHOMA to effect the Merger are
subject, unless waived by BANC ONE, to the satisfaction of the
following conditions on or prior to the Effective Time:
(a) There shall not have been any change in the consolidated
financial condition, aggregate net assets, shareholders' equity,
business or operating results of LIBERTY and its Subsidiaries,
taken as a whole, from September 30, 1996 to the Effective Time
that has had a LIBERTY Material Adverse Effect.
(b) LIBERTY shall not have paid cash dividends from October 1, 1996
to the Effective Time except as permitted under this Merger
Agreement.
(c) All representations by LIBERTY contained in this Merger Agreement
shall be true at, or as of, the Effective Time as though such
representations were made at and as of said date, except for (i)
changes contemplated by the Merger Agreement, (ii)
representations as of a specified time other than the Effective
Time, which shall be true at such specified time
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(provided, however, that the representation of LIBERTY contained
in Section 15(e) shall be true in all material respects as
applied to the Balance Sheet of LIBERTY included in the most
recently available quarterly or annual report to LIBERTY
shareholders and/or LIBERTY's most recently filed report to the
SEC on Form 10-Q or Form 10-K prior to the Effective Time and the
allowance for possible loan losses included therein, as though
each reference to "September 30, 1996" in such Section were a
reference to the last day of the calendar quarter of such report
or form), and (iii) inaccuracies or breaches which do not,
individually or in the aggregate, have a LIBERTY Material Adverse
Effect.
(d) BANC ONE shall have received the opinion of legal counsel for
LIBERTY, dated as of the Effective Time, substantially to the
effect set forth in EXHIBIT C hereto, together with a copy of the
Certificate of Incorporation, as amended, of LIBERTY certified by
the Secretary of State of Oklahoma and Certificates of Good
Standing dated as of a date not more than 20 days prior to the
Effective Time from the Secretary of State of the State of
Oklahoma or the OCC, as appropriate, for each Bank.
(e) LIBERTY shall have fulfilled and satisfied, in all material
respects, all agreements and conditions required by this Merger
Agreement to be fulfilled and satisfied by it at or prior to the
Effective Time.
(f) As of the close of the most recent calendar quarter (or if the
Effective Time shall occur within 20 days following the close of
a calendar quarter, then as of the next preceding calendar
quarter) cumulative earnings per share on LIBERTY Common reported
by LIBERTY for calendar quarters beginning with the fourth
quarter of 1996 through the quarter in which the Effective Time
shall occur shall be greater than or equal to the amount
calculated by multiplying (x) $0.55 by (y) the number of full
calendar quarters which have passed since September 30, 1996 and
for which earnings of LIBERTY Common have been reported as of
such date, times (z) 0.9. After consultation with BANC ONE,
LIBERTY may effect the sales of certain of LIBERTY's securities,
which sales may result in losses. As used in this Section
"reported" means reported on LIBERTY's financial statements
prepared in accordance with generally accepted accounting
principles applied on a basis consistent with LIBERTY's financial
statements for the years ended December 31, 1995 and 1994, as
included in LIBERTY's reports to the SEC on Forms 10-K or
LIBERTY's annual reports to shareholders subject to any
subsequent adjustments required to be reported whether or not
such adjustments have, as yet, been reported with
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the following adjustments, if any, net of related income tax
savings and costs, which were reflected in net income for the
relevant period(s) added back into or deducted from net income
for the applicable period: (i) outside legal, investment banking,
accounting and other fees and expenses associated with or
resulting from the Merger, including severance and compensation
costs disclosed in the LIBERTY Disclosure Letter; (ii) gains or
losses on sales of assets outside of the ordinary course of
business; (iii) losses on sales of securities sold after
consultation with BANC ONE pursuant to this Section 18(g); (iv)
any other expenses upon which BANC ONE and LIBERTY shall mutually
agree; and (v) the effect of any changes in accounting principles
required to be adopted by LIBERTY by any regulatory authority or
under generally accepted accounting principles.
(g) The total number of shares of LIBERTY Common issued and
outstanding (not including treasury shares held by LIBERTY),
including the total number of shares of LIBERTY Common related to
outstanding and unexercised options related to LIBERTY Common,
including options under the LIBERTY Option Plan and the Xxxxx
Option, but not including the option to BANC ONE provided for in
Section 21 of this Merger Agreement, shall not be more than
10,350,474 shares.
(h) LIBERTY shall have furnished BANC ONE certificates, signed on its
behalf by its Chairman or President and its Secretary or an
Assistant Secretary and dated as of the Effective Time,
certifying as to the form of and adoption of resolutions of its
Board and shareholders approving the Merger Agreement and the
Merger, respectively, and to the effect that the conditions
described in Paragraphs (a), (b), (c), (f), and (g), of this
Section 18 have been fully satisfied.
19. CONDITIONS TO OBLIGATIONS OF LIBERTY. The obligations of LIBERTY to
effect the Merger are subject, unless waived by LIBERTY, to the
satisfaction on or prior to the Effective Time of the following
conditions:
(a) There shall not have been any change in the consolidated
financial condition, aggregate net assets, shareholders' equity,
business, or operating results of BANC ONE and its subsidiaries,
taken as a whole, from September 30, 1996 to the Effective Time
that has had a BANC ONE Material Adverse Effect.
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(b) All representations by BANC ONE and BANC ONE OKLAHOMA contained
in this Merger Agreement shall be true at, or as of, the
Effective Time as though such representations were made at and as
of said date, except for changes (i) contemplated by this Merger
Agreement, (ii) representations as of a specified time other than
the Effective Time, which shall be true in all material respects
at such specified time (provided, however, that the
representation of BANC ONE contained in Section 13(e) shall be
true in all material respects as applied to the Balance Sheet of
BANC ONE included in the most recently available quarterly or
annual report to BANC ONE's shareholders and/or BANC ONE's most
recently filed report to the SEC on Form 10-Q or Form 10-K prior
to the Effective Time and the reserve for possible loan and lease
losses included therein, as though each reference to "September
30, 1996" in such Section were a reference to the last day of the
calendar quarter of such report or form), and (iii) inaccuracies
or breaches which do not, individually or in the aggregate, have
a BANC ONE Material Adverse Effect.
(c) LIBERTY shall have received the opinion of counsel for BANC ONE
and BANC ONE OKLAHOMA, (i) on and dated the date on which the
registration statement described in Section 10(d) of this Merger
Agreement shall have become effective as described in Section
20(b) of this Merger Agreement substantially to the effect of
paragraphs numbered 5, 6 and 7 of EXHIBIT D hereto and (ii) on
and dated as of the Effective Time substantially to the effect
set forth in EXHIBIT D hereto, together with a copy of the
Articles of Incorporation of BANC ONE certified by the Secretary
of State of the State of Ohio and a copy of the Certificate of
Incorporation of BANC ONE OKLAHOMA certified by the Secretary of
State of the State of Oklahoma and, as LIBERTY shall reasonably
require, Certificates of Good Standing of BANC ONE and BANC ONE
OKLAHOMA dated as of a date not more than 20 days prior to the
day of the Effective Time from the Secretary of State of the
State of Ohio or Secretary of State of the State of Oklahoma, as
applicable, and copies of the Regulations of BANC ONE and By-laws
of BANC ONE OKLAHOMA.
(d) BANC ONE and BANC ONE OKLAHOMA shall have fulfilled and
satisfied, in all material respects, all agreements and
conditions required by this Merger Agreement to be fulfilled and
satisfied by it at or prior to the Effective Time.
(e) As of the close of the most recent calendar quarter (or if the
Effective Time shall occur within 20 days following the close of
a calendar quarter, then as of the close of the next
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preceding calendar quarter) cumulative earnings per share of BANC
ONE Common reported by BANC ONE for calendar quarters beginning
with the fourth quarter of 1996 through the quarter in which the
Effective Time shall occur shall be greater than or equal to the
amount calculated by multiplying (x) $0.81 by (y) the number of
full calendar quarters which have passed since September 30, 1996
and for which earnings per share of BANC ONE Common have been
reported as of such date, times (z) 0.9. As used in this Section,
"reported" means reported on BANC ONE's financial statements
prepared in accordance with generally accepted accounting
principles applied on a basis consistent with BANC ONE's
financial statements for the years ended December 31, 1995 and
1994, as included in BANC ONE's reports to the SEC on Forms 10-K
or BANC ONE's annual reports to shareholders subject to any
subsequent adjustments required to be reported to the SEC whether
or not such adjustments have, as yet, been reported with the
effect of any changes in accounting principles required to be
adopted by BANC ONE by any regulatory authority or under
generally accepted accounting principles, if any, net of related
income tax savings and costs, which were reflected in net income
for the relevant period(s) added back into or deducted from net
income for the relevant period(s).
(f) BANC ONE and BANC ONE OKLAHOMA shall have each furnished LIBERTY
a certificate, signed on its behalf by its Chairman, President,
Senior Executive Vice President or an Executive Vice President
and by its Secretary or Assistant Secretary and dated as of the
Effective Time certifying as to the form of and adoption of the
resolution of its Board approving the Merger Agreement and the
Merger, and to the effect that the conditions described in
Paragraphs (a), (b), (d), and (e) of this Section 19 have been
fully satisfied as to it.
(g) The shares of BANC ONE Common to be issued to the holders of
LIBERTY Common shall be listed on the NYSE.
(h) LIBERTY shall have received an opinion from Xxxxxx Xxxxxxx & Co.
Incorporated, dated as of a date not more than five days prior
to the date of the Proxy Statement, to the effect that, in the
opinion of such firm, the financial consideration to be received
by the holders of LIBERTY Common as a result of the Merger is
fair to such holders and such opinion shall not have been
withdrawn prior to the Effective Time.
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20. CONDITIONS TO OBLIGATIONS OF ALL PARTIES. In addition to the
provisions of Sections 18 and 19 hereof, the obligations of BANC ONE
and LIBERTY to effect the Merger shall be subject to the satisfaction
of the following conditions on or prior to the Effective Time:
(a) The parties hereto shall have received all necessary approvals of
governmental agencies and authorities of the transactions
contemplated by this Merger Agreement and each of such approvals
shall remain in full force and effect at the Effective Time. BANC
ONE shall notify LIBERTY promptly upon receipt of all necessary
governmental approvals. At the Effective Time, (i) no party
hereto shall be subject to any order, decree or injunction of a
court or governmental agency of competent jurisdiction which
enjoins or prohibits the consummation of the Merger; and (ii) no
statute, rule, regulation, order, injunction or decree shall have
been enacted, entered, promulgated or enforced by any
governmental authority which prohibits or makes illegal
consummation of the Merger.
(b) The registration statement required to be filed by BANC ONE
pursuant to Section 10(d) of this Merger Agreement shall have
become effective by an order of the SEC, the shares of BANC ONE
Common to be exchanged in the Merger shall have been qualified or
exempted under all applicable state securities laws, and there
shall have been no stop order issued and in effect or threatened
by the SEC that suspends or would suspend the effectiveness of
the registration statement, and no proceeding by the SEC shall
have been commenced, pending or overtly threatened for such
purpose and the BANC ONE Common to be issued in the Merger will
be authorized for trading on the NYSE.
(c) This Merger Agreement shall have been duly approved and adopted
by the requisite affirmative vote of the shareholders of LIBERTY
and BANC ONE OKLAHOMA.
(d) Wachtell, Lipton, Xxxxx & Xxxx shall have issued its written
opinion, dated as of the date of the Effective Time, satisfactory
to LIBERTY and BANC ONE, respectively, substantially to the
effect set forth in clauses (a) through (e) of Section 12 of this
Merger Agreement and there shall exist as of, at or immediately
prior to the Effective Time, no facts or circumstances which
would render such opinion inapplicable in any respect to the
transactions to be consummated hereunder.
(e) The aggregate of (i) the fractional share interests of BANC ONE
Common to be paid in cash pursuant to Section 7(c), and (ii) the
shares of BANC ONE Common to which
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holders of LIBERTY Common would have been entitled as of the
Effective Time but who, as of the Effective Time, have taken
steps to perfect their rights as dissenting shareholders pursuant
to the provisions of applicable law, shall not be more than 10%
of the maximum aggregate number of shares of BANC ONE Common
which could be issued as a result of the Merger.
(f) The registration statement filed by BANC ONE with the SEC
registering the shares of BANC ONE Common reserved for issuance
pursuant to the exercise of options on BANC ONE Common pursuant
to the LIBERTY Option Plan shall have become effective pursuant
to rules and regulations of the SEC and shall have been qualified
or exempted under all applicable state securities laws, and there
shall have been no stop order issued and in effect or threatened
by the SEC that suspends or would suspend the effectiveness of
such registration and no proceeding by the SEC shall have been
commenced, pending or overtly threatened for such purpose.
21. OPTION TO PURCHASE
By not later than December 31, 1996, LIBERTY shall grant to BANC ONE
an option to purchase shares of LIBERTY Common in substantially the
form of EXHIBIT E and shall execute and deliver to BANC ONE an option
agreement in substantially the form of said EXHIBIT E.
22. INDEMNIFICATION.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether formal or informal and
whether civil, administrative or criminal, including, without
limitation, any such claim, action, suit, proceeding or
investigation pursuant to which any person who is now, or has
been at any time prior to the date hereof, or who becomes prior
to the Effective Time, a director, officer, employee, fiduciary
or agent of LIBERTY or any of its Subsidiaries (the "Indemnified
Parties") is, or is threatened to be, made a party or a witness,
based in whole or in part on, or arising in whole or in part out
of, or pertaining to, this Merger Agreement or any of the
transactions contemplated hereby (a "Merger Related Event"),
whether in any case asserted or arising before or after the
Effective Time, the parties hereto agree to cooperate and use
their reasonable best efforts to defend against and respond to
such claim, action, suit, proceedings or investigation.
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With respect to any Merger Related Event, and conditioned upon
the Merger becoming effective, BANC ONE shall indemnify, defend
and hold harmless, as and to the fullest extent permitted by
applicable law, each Indemnified Party against any and all
losses, claims, damages, liabilities, costs, expenses (including
attorneys' fees and expenses), judgments and fines, and amounts
paid in settlement, in connection with any such threatened or
actual claim, action, suit, proceedings or investigation;
provided, however, that BANC ONE shall not be liable for any
settlement effected without its prior written consent (which
consent shall not be unreasonably withheld). In the event of any
such threatened or actual claim, action, suit, proceedings or
investigation (whether asserted or arising before or after the
Effective Time), (i) BANC ONE shall pay expenses (including
attorney's fees and expenses) in advance of the final disposition
of any claim, suit, proceedings or investigation to each
Indemnified Party to the fullest extent permitted by applicable
law, and (ii) BANC ONE shall use its reasonable best efforts to
vigorously defend any such matter; provided, however, that BANC
ONE's obligations as herein set forth shall not apply to any
losses, claims, damages, liabilities, costs, expenses, judgments,
fines and amounts paid in settlement by any Indemnified Party
involving the fraud, bad faith and/or reckless disregard of such
Indemnified Party or related to any threatened or actual claim,
action, suit, proceedings or investigation brought by BANC ONE
against any Indemnified Party. Any Indemnified Party wishing to
claim indemnification and defense under this Section 22(a) shall,
upon the earlier to occur of (A) receiving actual notice of any
such claim, action, suit, proceeding or investigation, (B)
otherwise learning of such claim, action, suit, proceeding or
investigation or (C) receiving other information which would give
a reasonably prudent person reason to believe that such a claim,
action, suit, proceeding or investigation had or might be
brought, notify BANC ONE thereof as soon as reasonably
practicable thereafter. BANC ONE's obligations pursuant to this
Section 22(a) are conditioned upon (A) BANC ONE being given the
right to control and direct the investigation, defense and/or
settlement of each such matter; provided, however, that BANC ONE
will endeavor to consult with the Indemnified Party and to take
the views of such Indemnified Party into consideration in
effecting any settlement, (B) the Indemnified Party having
reasonably cooperated with BANC ONE in connection therewith, and
(C) the BANC ONE being given prompt written notice of any such
claim, action, suit, proceeding or investigation; provided,
however, that the failure to so notify shall not affect the
obligations of BANC ONE unless BANC ONE is prejudiced thereby.
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(b) To the extent not prohibited by applicable law, BANC ONE shall
insure that all rights to indemnification and defense and all
limitations of liability existing in favor of the Indemnified
Parties as provided in LIBERTY's Certificate of Incorporation and
By-laws or similar governing documents of any of its Subsidiaries
or indemnification agreements, as in effect as of December 1,
1996, or as otherwise provided for or allowed under applicable
law as in effect as of the date hereof or as such law is amended
at a time prior to the Effective Time, with respect to claims or
liabilities arising from facts or events existing or occurring
prior to the Effective Time, shall survive the Merger and shall
continue in full force and effect, without any amendment thereto,
for a period of six (6) years from the Effective Time; provided,
however, that all rights to indemnification in respect of any
claim asserted or made within such period shall continue until
the final disposition of such claim.
(c) In connection with any obligation of BANC ONE to indemnify any
Indemnified Party pursuant to Section 22(a) or (b), any
determination required to be made with respect to whether an
Indemnified Party's conduct complies with the standards set forth
in Section 22(a), above, or under Oklahoma law and the
Certificate of Incorporation or By-Laws of LIBERTY shall be made
by independent counsel (which shall not be counsel that provides
material services to BANC ONE) selected by BANC ONE and
reasonably acceptable to the Indemnified Party; and provided,
further, that, in making such determination, BANC ONE shall have
the burden to demonstrate that the Indemnified Party's conduct
failed to comply with such standard.
(d) From and after the Effective Time, persons who, immediately prior
to the Effective Time, served as the directors, officers and
employees of LIBERTY and its Subsidiaries, who, following the
Effective Time, continue as directors, officers and/or employees
of the Surviving Corporation or one of its subsidiaries, shall
have indemnification and defense rights having prospective
application only, except, however, for the indemnification and
defense rights set forth in paragraphs (a), (b) and (c) of this
Section 22. These prospective indemnification and defense rights
shall consist of (i) such rights to which directors, officers and
employees are entitled under the provisions of the Certificate of
Incorporation, By-laws or similar governing documents of the
Surviving Corporation and its subsidiaries, as applicable, as in
effect from time to time after the Effective Time, as applicable,
and provisions of applicable law as in effect from time to time
after the Effective Time and (ii) those indemnification and
defense rights set forth in agreements,
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if any, between BANC ONE and the directors and executive officers
of the Surviving Corporation and its Subsidiaries. Such
agreements, if any, which shall be executed as soon as
practicable following the Effective Time, shall provide certain
indemnification and defense rights that are comparable to those
provided to directors, officers and employees of BANC ONE and its
subsidiaries generally, but which rights may be greater or lesser
than the indemnification and defense rights available in clause
(i) above.
(e) The obligations of BANC ONE provided under paragraphs (a), (b)
and (c) of this Section 22 are intended to be the joint and
several obligations of BANC ONE and the Surviving Corporation and
to benefit, and be enforceable against BANC ONE and the Surviving
Corporation directly by the Indemnified Parties, and shall be
binding on all respective successors and permitted assigns of
BANC ONE and the Surviving Corporation.
(f) In the event BANC ONE or the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any
other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger, or (ii)
transfers or conveys all or substantially all of its properties
and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of
BANC ONE or the Surviving Corporation, as the case may be, assume
the obligations set forth in this Section 22.
(g) The provisions of this Section 22 are intended for the benefit
of, and shall be enforceable by, each Indemnifed Party and his or
her heirs and representatives. BANC ONE shall pay all reasonable
costs, including attorneys' fees, that may be incurred by any
Indemnified Party in successfully enforcing the indemnity and
other obligations provided for in this Section 22. The rights of
each Indemniftied Party hereunder shall be in addition to any
other rights such Indemnified Party may have under applicable
law.
23. NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations and warranties of LIBERTY, BANC ONE and BANC ONE
OKLAHOMA contained in this Merger Agreement shall not survive the
Effective Time.
24. GOVERNING LAW. This Merger Agreement shall be construed and
interpreted according to the applicable laws of the State of Oklahoma.
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25. ASSIGNMENT. This Merger Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither
this Merger Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
26. SATISFACTION OF CONDITIONS; TERMINATION.
(a) BANC ONE and BANC ONE OKLAHOMA agree to use their reasonable best
efforts to obtain satisfaction of the conditions of this Merger
Agreement insofar as they relate to BANC ONE and BANC ONE
OKLAHOMA, and LIBERTY agrees to use its reasonable best efforts,
subject to the fiduciary duties of the Board of Directors of
LIBERTY, to obtain the satisfaction of the conditions of this
Merger Agreement insofar as they relate to LIBERTY, in each case
as soon as possible.
(b) This Merger Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by
the shareholders of BANC ONE OKLAHOMA or by LIBERTY's
shareholders, upon the occurrence of any of the following by
written notice from BANC ONE to LIBERTY (authorized by the Board
of Directors or executive officers of BANC ONE), or by written
notice from LIBERTY to BANC ONE (authorized by the Board of
Directors of LIBERTY), as the case may be:
(i) If any material condition to the obligations of BANC ONE
and/or BANC ONE OKLAHOMA set forth in Section 18 or 20 is
not substantially satisfied at the time or times
contemplated thereby and such condition is not waived by
BANC ONE or if any material condition to the obligations of
LIBERTY as set forth in Section 19 or 20 is not
substantially satisfied at the time or times contemplated
thereby and such condition is not waived by LIBERTY. Each
party's right to terminate under this Section 26 (b)(i)
shall relate only to conditions to that party's obligations;
(ii) In the event of a material breach by the other of any
representation, warranty, condition or agreement contained
in this Merger Agreement that is not cured within 30 days of
the time that written notice of such breach is received by
such other party from the party giving notice; or
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(iii) If the Merger shall not have been consummated on or before
December 29, 1997.
(c) In the event that BANC ONE's pre-acquisition investigation and
review of LIBERTY as described in Section 10(m) of this Merger
Agreement discloses matters which BANC ONE in good faith believes
to be either (i) inconsistent in any material respect with any of
the representations and warranties of LIBERTY contained in this
Merger Agreement or (ii), in the reasonable judgment of the Board
of Directors of BANC ONE, to be either (x) of such significance
as to materially and adversely affect the financial condition or
the results of operations of LIBERTY and its Subsidiaries on a
consolidated basis or (y) deviate materially and adversely from
LIBERTY's financial statements for the nine months ended
September 30, 1996, BANC ONE may elect to terminate this Merger
Agreement by giving written notice of termination to LIBERTY
within seven days of the conclusion of such pre-acquisition
investigation.
(d) In the event that LIBERTY's pre-acquisition investigation and
review of BANC ONE as described in Section 10(n) of this Merger
Agreement discloses matters which LIBERTY in good faith believes
to be either (i) inconsistent in any material respect with any of
the representations and warranties of BANC ONE contained in this
Merger Agreement, or (ii) in the reasonable judgment of the Board
of Directors of LIBERTY, to be either (x) of such significance as
to materially and adversely affect the financial condition or the
results of operations of BANC ONE and its subsidiaries on a
consolidated basis or (y) deviate materially and adversely from
BANC ONE's financial statements for the nine months ended
September 30, 1996, LIBERTY may elect to terminate this Merger
Agreement by giving written notice of termination to BANC ONE
within seven days of the conclusion of such pre-acquisition
investigation.
(e) By LIBERTY if its Board of Directors so determines by a vote of a
majority of the members of its entire Board, at any time during
the ten-day period commencing two days after the Determination
Date, if either (x) both of the following conditions are
satisfied:
(i) the Average Closing price shall be less than $35.90; and
(ii) (A) the number obtained by dividing the Average Closing
Price by the Starting Price (such number being referred to
herein as the "BANC ONE Ratio") shall be less than (B) the
number obtained by dividing the Average Index Price by the
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Index Price of the Starting Date and subtracting 0.20 from the
quotient in this clause (x) (ii)(B) (such number being referred
to herein as the "Index Ratio"); or
(y) the Average Closing Price shall be less than $33.656; subject,
however, to the following four sentences. If LIBERTY elects to
exercise its termination right pursuant to the immediately preceding
sentence, it shall give prompt written notice to BANC ONE which notice
shall specify which of the clauses (x) or (y) is is applicable (or if
both would be applicable, which clause is being invoked); provided
that such notice or election to terminate may be withdrawn at any time
within the aforementioned ten-day period. During the five-day period
commencing with its receipt of such notice, BANC ONE shall have the
option in the case of a failure to satisfy the condition in clause
(x), of adjusting the Exchange Rate to equal the lesser of (i) a
number equal to a quotient (rounded to the nearest one-thousandth),
the numerator of which is the product of $35.90 and the Exchange Rate
(as then in effect) and the denominator of which is the Average
Closing Price, and (ii) a number equal to a quotient (rounded to the
nearest one-thousandth), the numerator of which is the Index Ratio
multiplied by the Exchange Rate (as then in effect) and the
denominator of which is the ACQUIRED COMPANY Ratio. During such
five-day period, BANC ONE shall have the option, in the case of a
failure to satisfy the condition in clause (y), to elect to increase
the Exchange Rate to equal a number equal to a quotient (rounded to
the nearest one-thousandth), the numerator of which is the product of
$33.656 and the Exchange Rate (as then in effect) and the denominator
of which is the Average Closing Price. If BANC ONE makes an election
contemplated by either of the two preceding sentences within such
five-day period, it shall give prompt written notice to LIBERTY of
such election and the revised Exchange Rate, whereupon no termination
shall have occurred pursuant to this Section 26(e) and this Agreement
shall remain in effect in accordance with its terms (except as the
Exchange Rate shall have been so modified), and any references in this
Agreement to "Exchange Rate" shall thereafter be deemed to refer to
the Exchange Ratio as adjusted pursuant to this Section 26(e).
For purposes of this Section 26(e), the following terms shall have the
meanings indicated:
"Average Closing Price" means the average of the daily last sale
prices of BANC ONE Common stock as reported on the NYSE Composite
Transactions reporting system (as reported in The Wall Street Journal
or, if not reported therein, in another mutually agreed
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upon authoritative source) for the ten consecutive full trading days
in which such shares are traded on the NYSE ending at the close of
trading on the Determination Date.
"Average Index Price" means the average of the Index Prices for the
ten consecutive full NYSE trading days ending at the close of trading
on the Determination Date.
"Determination Date" means the date on which the approval of the Board
required for consummation of the Merger shall be received.
"Index Group" means the group of each of the 14 bank holding companies
listed below, the common stock of all of which shall be publicly
traded and as to which there shall not have been since the Starting
Date and before the Determination Date, any public announcement of a
proposal for such company to be acquired or for such company to
acquire another company or companies in transactions with a value
exceeding 25% of the acquiror's market capitalization. In the event
that the common stock of any such company ceases to be publicly traded
or such an announcement is made, such company will be removed from the
Index Group, and the weights (which have been determined based on the
number of outstanding shares of common stock) redistributed
proportionately for purposes of determining the Index Price.
The 14 bank holding companies and the weights attributed to them are
as follows:
BANK HOLDING COMPANY WEIGHTING
-------------------- ---------
Citicorp 17.2%
Chase Manhattan Corp. 13.9
BankAmerica Corporation 12.6
Xxxxx Fargo & Company 8.9
First Union Corporation 7.0
First Chicago/NBD Corp. 6.0
Norwest Corporation 5.8
Fleet Financial Group, Inc. 4.7
Bank of New York Company, Inc. 4.7
PNC Bank Corp. 4.5
KeyCorp 4.1
SunTrust Banks, Inc. 3.9
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Wachovia Corporation 3.4
Mellon Bank Corporation 3.3
Total 100.0%
"Index Price" on a given date means the weighted average (weighted in
accordance with the factors listed above) of the closing prices on
such date of the companies composing the Index Group.
"Starting Date" means the last full day on which the NYSE was open for
trading prior to the execution of this Agreement.
"Starting Price" shall mean the last sale price per share of BANC ONE
Common Stock on the Starting Date, as reported by the NYSE Composite
Transactions reporting system (as reported in The Wall Street Journal
or, if not reported therein, in another mutually agreed upon
authoritative source.)
If any company belonging to the Index Group or BANC ONE declares or
effects a stock dividend, reclassification, recapitalization,
split-up, combination, exchange of shares or similar transaction
between the Starting Date and the Determination Date, the prices for
the common stock of such company or BANC ONE shall be appropriately
adjusted for the purposes of applying this Section 26(e).
(f) This Merger Agreement may be terminated and abandoned (whether before
or after approval of the Merger by the shareholders of BANC ONE
OKLAHOMA or by LIBERTY's shareholders) by mutual written consent of
LIBERTY, BANC ONE OKLAHOMA and BANC ONE authorized by the respective
Boards of Directors of LIBERTY and BANC ONE OKLAHOMA and by the Board
of Directors or executive officers of BANC ONE.
(g) In the event of termination of this Merger Agreement (i) caused
otherwise than by a willful breach of this Merger Agreement by any of
the parties hereto or (ii) pursuant to Section 26(c), (d) or (e), (A)
this Merger Agreement shall cease and terminate, the acquisition of
LIBERTY as provided herein shall not be consummated, and none of BANC
ONE, BANC ONE OKLAHOMA nor LIBERTY shall have any liability to any
other party under this Merger Agreement of any nature whatever, except
for BANC ONE's
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obligations related to the printing of the proxy solicitation
materials, including any liability for damages, and (B) BANC ONE, BANC
ONE OKLAHOMA and LIBERTY each shall pay its own fees and expenses
incident to the negotiation, preparation and execution of this Merger
Agreement, the respective shareholders' meetings and actions of the
parties and all other acts incidental to, contemplated by or in
pursuance of the transactions contemplated by this Merger Agreement,
including fees and expenses of their respective counsel, accountants
and other experts and advisors. The duties of the parties with respect
to confidential information as set forth in Section 10(f) shall
survive any termination of this Merger Agreement.
(h) If termination of this Merger Agreement shall be judicially determined
to have been caused by willful breach of this Merger Agreement, then,
in addition to other remedies at law or equity for breach of this
Merger Agreement, the party so found to have willfully breached this
Merger Agreement shall indemnify the other parties for their
respective costs, fees and expenses of their counsel, accountants and
other experts and advisors as well as fees and expenses incident to
negotiation, preparation and execution of this Merger Agreement and
related documentation and their shareholders' meetings and consents.
27. WAIVERS; AMENDMENTS. Any of the provisions of this Merger Agreement may be
waived in writing at any time by the party which is, or the shareholders of
which are, entitled to the benefit thereof, provided, however, such waiver,
if material to LIBERTY or its shareholders, may be made only following due
authorization by the Board of Directors of LIBERTY. This Merger Agreement
may be amended or modified in whole or in part by an agreement in writing
executed in the same manner (but not necessarily by the same persons) as
this Merger Agreement and which makes reference to this Merger Agreement;
provided, however, such amendment or modification may be made only
following due authorization by the respective Boards of Directors of
LIBERTY and BANC ONE OKLAHOMA and by the Board of Directors or the
executive officers of BANC ONE; provided, further, however, that after a
favorable vote by the shareholders of LIBERTY any such action shall be
taken by LIBERTY only if, in the opinion of its Board of Directors, such
amendment or modification will not have any material adverse effect on the
benefits intended under this Merger Agreement for the shareholders of
LIBERTY, and will not require resolicitation of any proxies from such
shareholders.
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28. ENTIRE AGREEMENT. Subject to the exceptions noted in the next following
sentence, this Merger Agreement supersedes any other agreement, whether
written or oral, that may have been made or entered into by LIBERTY, BANC
ONE OKLAHOMA and/or BANC ONE or by any officer or officers of such parties
relating to the acquisition of the business or the capital stock of LIBERTY
and/or its Subsidiaries by BANC ONE or BANC ONE OKLAHOMA. Except for the
BANC ONE Disclosure Letter and any attachments thereto, the LIBERTY
Disclosure Letter and any attachments thereto, the Confidentiality
Agreement, and the Benefits Agreement, this Merger Agreement and the
exhibits hereto constitute the entire agreement by the parties, and there
are no agreements or commitments except as set forth herein and therein.
29. CAPTIONS; COUNTERPARTS. The captions in this Merger Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Merger Agreement.
This Merger Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument.
30. NOTICES. All notices and other communications hereunder may be made by
mail, hand-delivery or by courier service. If notices and other
communications are made by nationally recognized overnight courier service
for overnight delivery, such notice shall be deemed to have been given one
business day after being forwarded to such a nationally recognized
overnight courier service for overnight delivery. All notices and other
communications hereunder given to any party shall be communicated to the
remaining party to this Merger Agreement by mail or by hand-delivery in the
same manner as herein provided.
(a) If to BANC ONE, to:
BANC ONE CORPORATION
Attention of: Chief Executive Officer
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
With a copy to:
BANC ONE CORPORATION
Attention of: Xxxxxx X. Xxxxxxx
General Counsel
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
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(b) If to LIBERTY, to:
Liberty Bancorp, Inc.
Attention of: Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
000 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
With a copies to:
Wachtell, Lipton, Xxxxx & Xxxx
Attention of: Xxxxxx Xxxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
and to:
Xxxxx & Xxxxxxx
Attention of: Xxxxxxx X. Xxxxxxx
1800 Mid-America Tower
00 Xxxxx Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
(c) If to BANC ONE OKLAHOMA, to:
Banc One Oklahoma Corporation
Attention of: Xxxxxxx X. Xxxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
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IN WITNESS WHEREOF, this Merger Agreement has been executed the day and year
first above written.
BANC ONE CORPORATION
ATTEST:
By:
------------------ ------------------------------------
Xxxxxxx X. Xxxxxxxx
Its: Senior Executive Vice President
Liberty Bancorp, Inc.
ATTEST:
By:
------------------ ------------------------------------
Xxxxxxx X. Xxxxxx
Its: Chairman and Chief Executive Officer
Banc One Oklahoma Corporation
ATTEST:
By:
------------------ ------------------------------------
Xxxxxxx X. Xxxxxxxx
Its: Vice President
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EXHIBIT A
Subsidiaries
DIRECT SUBSIDIARIES OF LIBERTY BANCORP, INC.
Jurisdiction of
Name Incorporation Business
---- ------------- --------
Liberty Bank and Trust Company
of Oklahoma City, N.A. National Bank Bank
Liberty Bank and Trust
Company of Tulsa, N.A. National Bank Bank
Liberty Real Estate Company Oklahoma Ownership of Bank Premises
Mid-America Credit Life
Assurance Company Oklahoma Credit Insurance Underwriting
Mid-America Insurance Agency,
Inc. Oklahoma Credit Insurance Agent
Liberty Trust Company Oklahoma State Chartered Trust Company
Liberty Financial Corporation Delaware Inactive
Liberty Trust Company of Texas Texas Proposed Texas Trust Company(In
Organization)
SUBSIDIARIES OF LIBERTY BANK AND TRUST COMPANY OF OKLAHOMA CITY, N.A.
Jurisdiction of
Name Incorporation Business
---- ------------- --------
Liberty Mortgage Company Delaware Mortgage Origination and
Servicing
Liberty Property Management
Company Oklahoma Property Management for Bank
Premises
Lexco Petroleum, Inc. Oklahoma Holding Title as Nominee for
DPC Assets
SUBSIDIARIES OF LIBERTY MORTGAGE COMPANY
Jurisdiction of
Name Incorporation Business
---- ------------- --------
Liberty Mortgage Company
of New Mexico New Mexico Mortgage Origination and
Servicing
58
