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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November 2, 1997
COBANCORP INC.
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(Exact name of Registrant as specified in its Charter)
Ohio 0-13166 34-1465382
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(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification
incorporation) No.)
1530 West River Road North, Elyria, Ohio 44035
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (216) 329-8000
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
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On November 2, 1997, CoBancorp Inc. ("CoBancorp"), an Ohio Corporation,
and FirstMerit Corporation ("FirstMerit"), an Ohio Corporation, each registered
as a bank holding company under the Bank Holding Company Act of 1956, as
amended, entered into an Agreement of Affiliation and Plan of Merger
("Agreement"), pursuant to which CoBancorp will merge with and into FirstMerit,
with FirstMerit as the surviving corporation ("Merger"). Based on the closing
price of FirstMerit's common stock on October 31, 1997 of $25.50, the value of
the transaction on such date was approximately $157.0 million. On November 3,
1997, CoBancorp issued a press release announcing the Merger, a copy of which is
included as Exhibit 99 hereto and incorporated by reference herein.
The Merger is structured as a tax-free exchange for CoBancorp
shareholders to the extent they receive FirstMerit common stock in exchange for
CoBancorp common stock, and will be accounted for as a purchase transaction. In
connection with the Merger, FirstMerit plans to issue between 3.1 and 4.3
million shares of its common stock.
In accordance with the terms of the Agreement, each share of CoBancorp
common stock outstanding immediately prior to the effective time of the Merger
will be converted into the right to receive, at the election of the holder
thereof as provided in the Agreement either (i) $44.50 in cash, or (ii) a number
of shares of FirstMerit common stock equal to: (A) if the Average Closing Price
of FirstMerit common stock (the average of the reported daily closing prices of
FirstMerit Common Stock on the Nasdaq National Market during the period of ten
consecutive trading days ending on the tenth calendar day immediately prior to
the effective time)(the "Average Closing Price") is greater than $30.60, $48.53
divided by the Average Closing Price; (B) if the Average Closing Price is equal
to or greater than $28.05 but less than or equal to $30.60, 1.586; (C) if the
Average Closing Price is greater than $22.95 but less than $28.05, $25.50
divided by the Average Closing Price; (D) if the Average Closing Price is equal
to or greater than $20.40 but less than or equal to $22.95, 1.939; or (E) if the
Average Closing Price is less than $20.40, 1.939, subject to the right of
CoBancorp to terminate the Agreement unless FirstMerit agrees that the exchange
ratio shall be calculated by multiplying 1.939 by a factor equal to $20.40
divided by the Average Closing Price.
CoBancorp shareholders may elect to exchange their common stock for
either common stock of FirstMerit, $44.50 in cash or a combination thereof,
provided that no less than 30% nor more than 49% of the total transaction value
will be paid in cash. A CoBancorp shareholder may also make no election.
The following table details the relationship between the Average
Closing Price, the exchange ratio and the indicated value of FirstMerit common
stock to be exchanged for each share of CoBancorp common stock, an election to
receive only FirstMerit common stock, and assuming no prorations as discussed
below.
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INDICATED VALUE OF FIRSTMERIT
AVERAGE CLOSING PRICE EXCHANGE RATIO COMMON STOCK
TO COBANCORP SHAREHOLDER
More than $30.60 $48.53 divided $48.53
by the Average
Closing Price
$30.60 to $28.05 Fixed at 1.586 48.53
30.60 1.586 48.53
30.00 1.586 47.58
29.00 1.586 45.99
28.05 1.586 44.50
$28.04 to $22.96 Floating
28.04 1.587 44.50
27.00 1.648 44.50
26.00 1.712 44.50
25.00 1.780 44.50
24.00 1.854 44.50
22.96 1.938 44.50
$22.95 to $20.40 Fixed at 1.939
22.95 1.939 44.50
22.00 1.939 42.66
21.00 1.939 40.72
20.40 1.939 39.55
Less than $20.40(1) $20.40 divided 39.55
by the Average
Closing Price,
multiplied by
1.939
(1) Assuming that CoBancorp elects to terminate and FirstMerit avoids
such termination by agreeing to an exchange ratio equal to $20.40
divided by the Average Closing Price multiplied by 1.939.
If the CoBancorp shareholders elect less than 30% or more than 49% of
the total transaction value to be paid in cash, the Agreement provides that
shareholders will have certain of their elections allocated on a pro rata basis
so that no less than 30% nor more than 49% of the total transaction value will
be paid in cash.
Consummation of the Merger is subject to certain customary conditions,
including, among others, (i) the approval of the Agreement and the transactions
contemplated thereby by the CoBancorp shareholders, and (ii) receipt of certain
regulatory approvals.
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The preceding description of the Agreement is qualified in its entirety
by reference to the copy of the Agreement included as Exhibit 2.1 hereto, and
which is incorporated by reference herein.
Subsequent to the execution of the Agreement, and subject to
FirstMerit's right to terminate the Agreement if not executed, CoBancorp and
FirstMerit entered into a Stock Purchase Option dated as of November 3, 1997
(the "CoBancorp Stock Option"). Under the CoBancorp Stock Option, FirstMerit was
granted an irrevocable option to purchase, under certain circumstances, up to
687,311 shares of CoBancorp common stock at $40.00 per share. The number of
shares and the purchase price are subject to adjustment as described in the
CoBancorp Stock Option. Under certain circumstances, CoBancorp may be required
to repurchase the CoBancorp Stock Option or the shares acquired pursuant to the
exercise thereof. The CoBancorp Stock Option was granted by CoBancorp as a
condition and inducement to FirstMerit to enter into the Agreement.
The preceding description of the CoBancorp Stock Option is qualified in
its entirety by reference to the copy of the CoBancorp Stock Option included as
Exhibit 2.2 hereto, and which is incorporated by reference herein.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
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(a) Exhibits
2.1 Agreement of Affiliation and Plan of Merger dated as
of November 2, 1997 by and between FirstMerit
Corporation and CoBancorp Inc.
2.2 Stock Purchase Option dated as of November 3, 1997 by
and between CoBancorp Inc. and FirstMerit Corporation
99 Press Release dated November 3, 1997 of CoBancorp
Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
COBANCORP INC.
Date: November 10, 1997 By: /s/ John S. Kreighbaum
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John S. Kreighbaum
Chairman and Chief
Executive Officer
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COBANCORP, INC.
CURRENT REPORT ON FORM 8-K
INDEX OF EXHIBITS
EXHIBIT
2.1 Agreement of Affiliation and Plan of Merger dated
November 2, 1997 by and between FirstMerit
Corporation and CoBancorp Inc.
2.2 Stock Purchase Option dated November 3, 1997 by and
between CoBancorp Inc. and FirstMerit Corporation
99 Press Release dated November 3, 1997 of CoBancorp
Inc.
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