Mail-Stop 4561
January 10, 2006
Via facsimile and U.S. Mail
Mr. James W. Lokey
President and Chief Executive Officer
Mid-State Bancshares
P.O. Box 6002
Arroyo Grande, California 93421-6002
Re: Mid-State Bancshares
Preliminary Proxy Statement
File No. 000-23925
Filed December 18, 2006
Dear Mr. Lokey:
We have limited our review of your filing to the following
comments. Where indicated, we think you should revise your
document
in response to these comments. If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary. Please be as detailed as necessary in your
explanation. In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure. After reviewing this information, we may or may not
raise additional comments.
The purpose of our review process is to assist you in your
compliance with the applicable disclosure requirements and to
enhance
the overall disclosure in your filing. We look forward to working
with you in these respects. We welcome any questions you may have
about our comments or on any other aspect of our review. Feel
free
to call us at the telephone numbers listed at the end of this
letter.
Preliminary Proxy
Table of Contents
1. Revise the table to include sections for the Proposals and
include
the language of the Proposals. In this regard, "The Special
meeting"
might be revised to include such information. In addition, add a
proxy card either as an Appendix or as part of the proxy.
Questions and Answers, page ii
2. Revise to add a Q&A for dissenters` rights. In that Q&A,
explain
what dissenters must do and not do to perfect their rights. Also,
include a cross reference to the appropriate section in the body
of
the proxy.
3. Revise to add a Q&A that addresses what consideration will be
received in the merger for each share and any other securities,
e.g.,
options,etc.
4. Revise to add a Q&A addressing whether receipt of cash by
holders
will be taxable.
The Merger, page 2
5. Revise the first paragraph to also disclose that if 10%
dissent,
the merger will not be consummated, or disclose that this is a
waivable condition.
6. Revise the disclosure on page 3 to identify all parties to the
voting agreement.
Benefits to Certain Officers and Directors in the Merger, page 4
7. Revise the bullets as follows:
* Bullet one should be revised to clarify if they will be cashed
out
and the total compensation, i.e., the difference between the
exercise
price and the $37.00, should be disclosed.
* If a significant number of options are not vested, i.e., more
than
10%, disclose the dollar value of those unvested option.
* Separately disclose the compensation for Mr. Lokey and other
named
executives (Executive Compensation named executives); revise
bullet
two to quantify any increased compensation in the new agreement;
revise to quantify the compensation of the retention agreements;
revise bullet five to name those executives and quantify the
payments; and, revise bullet six to quantify Carrol Pruett`s
compensation under the change in control agreement.
Security Ownership ..., page 9
8. Revise to include the amounts and percents as of the most
recent
practicable date in the next revised preliminary proxy. Any
changes
when the record date is set can be made at a later date.
The Merger
Background of the Merger, page 10
9. Revise to briefly discuss why the Board did not pursue or
consider
other potential buyers during the period January 2006 through the
signing of the merger agreement.
10. Revise the fourth paragraph on page 10 to disclose how many
"institutions that might have an interest in acquiring Mid-State"
were discussed and how these other institutions came to the Board
knowledge.
Recommendations of, and Factors Considered by, ..., page 12
11. Revise to address whether or not the Board considered putting
the
Company up for sale or otherwise expanding the search for other
potential acquirors. If not, explain why the Board did not
consider
other possible suitors. If the Board did consider other potential
acquirer`s, please discuss why they ultimately chose to negotiate
with Rabobank.
Fairness Opinion - page 13
12. Provide the staff with all reports, opinions, exhibits or
other
materials provided by Sandler O`Neill to Mid-State`s officers or
directors.
Present Value Per Share-Based on ..., page 19
13. With regard to the last paragraph herein, and with a view
towards
additional disclosure, supplementally advise the staff as to
Sandler
O`Neill`s holding of Mid-State (both long and short) at January 1,
2006 and any subsequent purchases through November 1, 2006
Dissenting Shareholders` Rights..., page 23
14. Revise to add disclosure at the bottom of page 22 clarifying
what
happens if no proxy is returned, e.g., does that constitute a
waiver
of dissenters` rights, does it constitute a vote against the
merger,
etc. In this regard, revise the disclosure to list, using bullets,
the exact procedures to be followed in order to perfect
dissenters`
rights, including any addresses where notice is required and
information that must be transmitted in any such notices.
15.
Revise the penultimate paragraph at the bottom of page 22 and the
last bold print sentence therein to clarify that "the Board
believes"
the fair market value is likely to be less than $37.00 and
disclose
the basis for this belief, e.g., recent cases before the Delaware
authorities where holders received less than the merger offer.
Litigation Relating to the Merger, page 23
16. With regard to the alleged breach of fiduciary duties by the
Directors, revise to disclose any specific allegations made. With
regard to the phrase "among other things", clarify if any other
allegations besides the breach of fiduciary duties is alleged.
Interests of Certain Persons in the Merger, page 24
17. Revise each subsection to quantify, where possible, in dollar
terms, the increase from current arrangements and/or agreements.
Where You Can Find More Information, page 32
18. Revise the bullets on page 33 to specifically list all of the
documents incorporated, including the Form type, date filed, and
file
number. In this regard, all Forms 10-Q and 8-K since the last Form
10-K was filed should be listed. In addition, a future
incorporation
of all subsequently filed documents before the meeting date should
be
included.
Closing Comments
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please understand that we may have
additional
comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
Any questions regarding the comments may be directed to
Michael
Clampitt at (202) 551-3434 or to me at (202) 551-3419.
Sincerely,
Chris Windsor
Special Counsel
Financial Services Group
CC: Via U.S. Mail and Fax: (805) 545-8599
Ken Moore, Esq.
Reitner Stuart & Moore
1319 Marsh Street
San Luis Obispo, California 93401
Mr. James W. Lokey
Mid-States Bancshares
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