As filed with the Securities and Exchange Commission on January 5, 2007

Registration No. 333-139083

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

PRE-EFFECTIVE

AMENDMENT NO. 1

TO

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

 

Park National Corporation

(Exact name of Registrant as specified in its charter)

 

 

50 North Third Street

Newark, Ohio 43055

(740) 349-8451

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

 

 

David L. Trautman

President and Secretary

Park National Corporation

50 North Third Street

Newark, Ohio 43055

(740) 349-8451

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

 

 

 

 

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable after the effective date of this Registration Statement.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box:  o

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  o

 

 

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

 

 

SUBJECT TO COMPLETION, DATED JANUARY 5, 2007

 

Vision Bancshares, Inc.

2200 Stanford Road

Panama City, Florida 32405

(251) 967-4212

 

 

Notice of Special Meeting of Shareholders

To Be Held on February 20, 2007

 

 

To the Shareholders of Vision Bancshares, Inc.:

 

Notice is hereby given that a special meeting of the shareholders of Vision Bancshares, Inc. will be held on February 20, 2007 at 11:00 a.m., Central Time, at Vision Bank’s Foley office, 501 South McKenzie Street, Foley, Alabama for the purpose of considering and voting on the following matters:

 

1. A proposal to approve the Agreement and Plan of Merger, dated to be effective as of September 14, 2006, by and between Park National Corporation and Vision Bancshares, Inc., which provides for the merger of Vision Bancshares, Inc. with and into Park National Corporation;

 

2. A proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event there are not sufficient votes at the time of the special meeting to approve the Agreement and Plan of Merger; and

 

3. Any other business which properly comes before the special meeting or any adjournment or postponement of the special meeting. The Board of Directors of Vision Bancshares, Inc. is unaware of any other business to be transacted at the special meeting.

 

Holders of record of Vision Bancshares, Inc. common stock at the close of business on January 8, 2007, the record date, are entitled to notice of and to vote at the special meeting and any adjournment or postponement of the special meeting.

 

A prospectus/proxy statement and proxy card for the special meeting are enclosed.

 

Your vote is very important, regardless of the number of shares of Vision Bancshares, Inc. common stock you own. Please vote as soon as possible to make sure that your shares of common stock are represented at the special meeting. To vote your shares of common stock, you may complete and return the enclosed proxy card. If you are a holder of record, you also may cast your vote in person at the special meeting.

 

The Vision Bancshares, Inc. Board of Directors recommends that you vote “FOR” the approval of the Agreement and Plan of Merger.

 

By Order of the Board of Directors,

 

J. Daniel Sizemore
Chairman of the Board, Chief Executive Officer
and President

 

Panama City, Florida

January   , 2007

 

Park National Corporation (“Park”) and Vision Bancshares, Inc. (“Vision”) have entered into an Agreement and Plan of Merger, dated to be effective as of September 14, 2006 (the “merger agreement”), which provides for the merger of Vision with and into Park. We cannot complete the merger unless the holders of at least two-thirds of the issued and outstanding shares of Vision common stock approve the merger agreement. The Board of Directors of Vision has called a special meeting of shareholders to vote on the approval of the merger agreement. The time, date and place of the special meeting are as follows: 11:00 a.m., Central Time, on February 20, 2007, at 501 South McKenzie Street, Foley, Alabama.

 

Under the terms of the merger agreement, the shareholders of Vision will be entitled to elect to receive, in exchange for the shares of Vision common stock, $1.00 par value per share, that they own, either (a) cash, (b) Park common shares, or (c) a combination of cash and Park common shares, subject to the election and allocation procedures set forth in the merger agreement. Subject to adjustment for cash paid in lieu of fractional Park common shares in accordance with the terms of the merger agreement, Park will cause the requests of the Vision shareholders to be allocated on a pro-rata basis so that 50% of the shares of Vision common stock outstanding at the effective time of the merger will be exchanged for cash at the rate of $25.00 per share of Vision common stock and the other 50% of the outstanding shares of Vision common stock will be exchanged for Park common shares at the exchange rate of 0.2475 Park common shares for each share of Vision common stock. For purposes of this allocation, shareholders of Vision who exercise dissenters’ rights will be treated as having elected to receive cash consideration for their shares of Vision common stock.

 

As of January 8, 2007,           shares of Vision common stock were outstanding, an additional           shares of Vision common stock were subject to outstanding subscriptions under the Vision Employee Stock Purchase Plan, as amended (the “Vision ESPP”), and           shares of Vision common stock were subject to outstanding stock options with a weighted average exercise price of $      per share. Each employee who is a participant in the Vision ESPP and who has not paid the entire balance due for any shares of Vision common stock for which the employee has subscribed may pay such balance in full on or prior to the election deadline specified in the merger agreement and receive the applicable shares of Vision common stock. If the participating employee fails to pay such balance in full on or prior to the election deadline specified in the merger agreement, the employee’s subscription to purchase shares of Vision common stock will be treated as cancelled and Vision will refund (without interest) all amounts the employee has had withheld or has paid with respect to the cancelled subscription. Each outstanding stock option (that is not exercised prior to the election deadline specified in the merger agreement) granted under one of Vision’s equity-based compensation plans will be cancelled and extinguished and converted into the right to receive an amount of cash equal to (1) (a) $25.00 multiplied by (b) the number of shares of Vision common stock subject to the unexercised portion of the stock option minus (2) the aggregate exercise price for the shares of Vision common stock subject to the unexercised portion of the stock option.

 

The Park common shares are listed on the American Stock Exchange LLC (“AMEX”) under the symbol “PRK.” On January 8, 2007, the last practicable trading day for which information was available prior to the date of this prospectus/proxy statement, the closing sale price of the Park common shares as reported on AMEX was $      per share. Based on that price, 0.2475 Park common shares would be valued at $     .

 

An investment in the common shares of Park involves certain risks. For a discussion of these risks, see “Risk Factors” beginning on page 10 of this prospectus/proxy statement.

 

Whether or not you plan to attend the Vision special meeting, please complete, sign and return the enclosed proxy card in the enclosed postage-paid envelope. Not voting will have the same effect as voting against the approval of the merger agreement. We urge you to read carefully this prospectus/proxy statement, which contains a detailed description of the merger, the merger agreement and related matters.

 

The securities to be issued under this prospectus/proxy statement are not savings accounts, deposit accounts or other obligations of any bank or savings association and are not insured by the Federal Deposit

Insurance Corporation, the Deposit Insurance Fund or any other federal or state governmental agency. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Park common shares to be issued in the merger or determined if this prospectus/proxy statement is truthful or complete. Any representation to the contrary is a criminal offense.

 

This prospectus/proxy statement is dated January   , 2007, and, together with the enclosed proxy card, is being first mailed to Vision shareholders on or about January   , 2007.

 

Additional Information

 

This prospectus/proxy statement incorporates important business and financial information about Park and Vision from other documents that they have filed with or furnished to the Securities and Exchange Commission but that have not been included in or delivered with this prospectus/proxy statement. You may obtain these documents, without charge, by writing or calling Park or Vision, as appropriate, at:

 

 

In order to ensure timely delivery of documents, any requests for documents should be made no later than five business days before the February 20, 2007 special meeting of the shareholders of Vision. Accordingly, requests should be received by Park or Vision no later than February 12, 2007.

 

See “Incorporation by Reference” on page 13 and “Where You Can Find More Information” on page 65 for more information about the documents referred to in this prospectus/proxy statement.

TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary

	•	all Park common shares;
	•	all cash; or
	•	a combination of cash and Park common shares.

	•	A proposal to approve the Agreement and Plan of Merger, dated to be effective as of September 14, 2006, by and between Park and Vision, which provides for the merger of Vision with and into Park;

	•	A proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies, in the event there are not sufficient votes at the time of the special meeting to approve the Agreement and Plan of Merger; and
	•	Any other business which properly comes before the special meeting or any adjournment or postponement of the special meeting. The Vision Board of Directors is unaware of any other business to be transacted at the special meeting.

	•	Park, together with Vision Alabama and Vision Florida, entered into an employment agreement with J. Daniel Sizemore to become effective at the effective time of the merger. Mr. Sizemore currently serves as Chairman of the Board, Chief Executive Officer and President of Vision and Chairman of the Board and Chief Executive Officer of Vision Alabama and Vision Florida. The compensation and benefits that will be provided to Mr. Sizemore under his employment agreement are described under “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 34 of this prospectus/proxy statement.

	•	Park, together with Vision Alabama, entered into an employment agreement with William E. Blackmon to become effective at the effective time of the merger. Mr. Blackmon currently serves as Executive Vice President and Chief Financial Officer of Vision and Vision Alabama. The compensation and benefits that will be provided to Mr. Blackmon under his employment agreement are described under “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 35 of this prospectus/proxy statement.

	•	Park, together with Vision Alabama, entered into an employment agreement with Andrew W. Braswell to become effective at the effective time of the merger. Mr. Braswell currently serves as Executive Vice President and Senior Lending Officer of Vision Alabama. The compensation and benefits that will be provided to Mr. Braswell under his employment agreement are described under “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 35 of this prospectus/proxy statement.

	•	Park, together with Vision Florida, entered into an employment agreement with Joey W. Ginn to become effective at the effective time of the merger. Mr. Ginn currently serves as President of Vision Florida. The compensation and benefits that will be provided to Mr. Ginn under his employment agreement are described under “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 36 of this prospectus/proxy statement.

	•	Park, together with Vision Alabama, entered into an employment agreement with Robert S. McKean to become effective at the effective time of the merger. Mr. McKean currently serves as President of Vision Alabama. The compensation and benefits that will be provided to Mr. McKean under his employment agreement are described under “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 36 of this prospectus/proxy statement.

	•	Pursuant to the terms of the merger agreement, members of the Boards of Directors of Vision Alabama and Vision Florida will continue to serve following the merger until their respective successors are duly qualified and elected and will receive compensation for their service on the Board of Directors of Vision Alabama or Vision Florida, as appropriate, commensurate with the compensation paid to directors serving on the Boards of Directors of Park’s other subsidiaries.
	•	Park has agreed to purchase directors’ and officers’ liability insurance for the directors and officers of Vision and its subsidiaries for a period of three years after the merger. Park also has agreed to indemnify the directors, officers and employees of Vision and its subsidiaries for certain actions or omissions in the course of their duties as directors, officers and employees of Vision or one of its subsidiaries occurring prior to the merger, including, without limitation, the transactions contemplated by the merger agreement.

	•	Vision Alabama and Vision Florida will each purchase certain real property at which certain of their branches are located from entities owned by one or more directors and/or executive officers of Vision, Vision Alabama and/or Vision Florida. The purchases will occur at the time of the merger, and the purchase price for each property is currently being negotiated by the parties. See “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 38 of this prospectus/proxy statement.

 

In addition to other information in this prospectus/proxy statement or incorporated in this prospectus/proxy statement by reference, you should carefully consider the risk factors discussed in “Item 1A. Risk Factors” of Part I of Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, and in “Item 1A. Risk Factors” of Part II of Park’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006, incorporated by reference into this prospectus/proxy statement, which could materially affect Park’s business, financial condition or future results, as well as the following factors:

 

Fluctuation in the market price of the Park common shares will affect the value of the Park common shares received in the merger.

 

Under the terms of the merger agreement, the shareholders of Vision will be entitled to elect to receive, in exchange for the shares of Vision common stock that they own, either (a) cash at the rate of $25.00 for each share of Vision common stock owned, (b) Park common shares at the exchange ratio of 0.2475 Park common shares for each share of Vision common stock owned, or (c) a combination of cash and Park common shares. The stock exchange ratio (i.e., 0.2475 Park common shares for each share of Vision common stock) will not be adjusted if the market price of the Park common shares decreases prior to the closing of the merger. However, Vision may, but is not obligated to, terminate the merger agreement and abandon the merger if the average of the closing sale prices of the Park common shares on AMEX during the 20 trading-day period ending on the tenth trading day prior to the date established for the closing of the merger is less than $81.00 (as adjusted pursuant to the terms of the merger agreement for any stock split, stock dividend, recapitalization, reclassification, split up, combination, exchange of shares, readjustment or similar transaction). On the other hand, Park may, but is not obligated to, terminate the merger agreement and abandon the merger if the average of the closing sale prices of a Park common share on AMEX during the 20 trading-day period ending on the tenth trading day prior to the date established for the closing of the merger is greater than $121.00 (as adjusted pursuant to the terms of the merger agreement for any stock split, stock dividend, recapitalization, reclassification, split up, combination, exchange of shares, readjustment or similar transaction).

 

On January 8, 2007, the last practicable trading day for which information was available prior to the date of this prospectus/proxy statement, the closing sale price of the Park common shares as reported on AMEX was $     . Based on that price, 0.2475 Park common shares would be valued at $     .

 

The market price of the Park common shares may decrease after January  , 2007 and prior to the closing of the merger. Furthermore, you will not receive your merger consideration until several days after the closing of the merger, and the market price of the Park common shares may decrease during the post-closing period prior to the date that you actually receive your merger consideration. During this period, you will not be able to sell any of the Park common shares that you may be entitled to receive in the merger to avoid losses resulting from any decline in the market price of the Park common shares.

 

You may receive a form of consideration different from the form of consideration you elect.

 

Although you will have an opportunity to elect the form of consideration you wish to receive in the merger, your election will be subject to the allocation procedures set forth in the merger agreement and described in this prospectus/proxy statement to ensure that, subject to adjustment for cash paid in lieu of fractional shares, 50% of the shares of Vision common stock outstanding at the effective time of the merger will be exchanged for cash and the other 50% of the outstanding shares of Vision common stock will be exchanged for Park common shares. For purposes of this allocation, shareholders of Vision who exercise dissenters’ rights will be treated as having elected to receive cash consideration for their shares of Vision common stock. If you elect to receive all cash and the available cash is oversubscribed, then you may receive a portion of the merger consideration in the form of Park common shares. If you elect to receive all Park common shares and the available Park common shares are oversubscribed, then you may receive a portion of the merger consideration in cash. If you elect to receive a combination of cash and Park common shares and either the available Park common shares or the available cash is oversubscribed, you may not receive the specific combination of cash and Park common shares that you request.

Park has no prior operating experience in the Alabama and Florida markets in which Vision and its subsidiaries operate.

 

As of January 8, 2007, Park and its subsidiaries operated 138 offices across 29 Ohio counties and one Kentucky county. The merger with Vision will result in the expansion of the banking operations of Park and its subsidiaries into the Alabama and Florida markets currently served by Vision and its subsidiaries. Park and its subsidiaries have no prior operating experience in these markets and, therefore, will rely to a large extent on the existing Boards of Directors and management of Vision and its subsidiaries with respect to the operation of Vision Alabama and Vision Florida after the merger. Park, together with Vision Alabama and/or Vision Florida, as appropriate, entered into employment agreements with the following executive officers of Vision Alabama and Vision Florida: J. Daniel Sizemore, Chairman of the Board, Chief Executive Officer and President of Vision and Chairman of the Board and Chief Executive Officer of Vision Alabama and Vision Florida; William E. Blackmon, Executive Vice President and Chief Financial Officer of Vision and Vision Alabama; Andrew W. Braswell, Executive Vice President and Senior Lending Officer of Vision Alabama; Joey W. Ginn, President of Vision Florida; and Robert S. McKean, President of Vision Alabama; as well as seven other senior officers of Vision Alabama and Vision Florida. Each of these employment agreements, which will become effective at the effective time of the merger, continues the executive officer’s or employee’s employment relationship with Vision Alabama or Vision Florida, as applicable, after the effective time of the merger for at least a three-year term. See “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 34 of this prospectus/proxy statement. However, there is no guarantee that Park will be able to retain the services of these executive officers and employees of Vision Alabama and Vision Florida, or that Park will be able to successfully manage the operations of the Vision subsidiaries in the Alabama and Florida markets.

 

Park could experience difficulties in managing its growth and effectively integrating Vision and Anderson.

 

Park may not be able to achieve fully the strategic objectives and operating efficiencies in the merger. The costs or difficulties relating to the integration of Vision and its subsidiaries with the Park organization may be greater than expected or the cost savings or any revenue synergies of the combined organization may be lower or take longer to realize than expected. Inherent uncertainties exist in integrating the operations of any acquired entity. In addition, the markets and industries in which Park and Vision and their respective subsidiaries operate are highly competitive. Park may lose its customers or the customers of Vision and its subsidiaries as a result of the merger. Park may also lose key personnel, either from itself or from Vision and its subsidiaries, as a result of the merger, although Park has entered into employment agreements with J. Daniel Sizemore and eleven other executive officers and employees of Vision Alabama and Vision Florida as described in the previous risk factor. These factors could contribute to Park not fully achieving the expected benefits from the merger. Similarly, Park’s recently completed acquisition of Anderson involves the same risks described above.

 

The termination fee may discourage other companies from trying to acquire Vision even if the other acquisition could offer higher immediate value to Vision shareholders.

 

Pursuant to the merger agreement, Vision has agreed to pay Park a termination fee of $6,500,000, if (a) the merger agreement is terminated by Vision because Vision’s Board of Directors has authorized the execution of a definitive written agreement concerning a “superior proposal,” or (b) the merger agreement is terminated by Vision or Park for certain specified reasons and, within 12 months after the termination of the merger agreement, Vision consummates or enters into an agreement relating to a previously-announced acquisition proposal. This termination fee could have the effect of discouraging other companies from trying to acquire Vision, even if the other acquisition could offer higher immediate value to Vision’s shareholders.

 

The fairness opinion obtained by Vision from its financial advisor will not reflect changes in circumstances prior to the merger.

 

Burke Capital Group, L.L.C., the financial advisor to Vision, delivered a fairness opinion to the Board of Directors of Vision on September 14, 2006. The fairness opinion states that, as of the date of the opinion, the merger consideration set forth in the merger agreement was fair and equitable from a financial point of view to the Vision

shareholders. The fairness opinion does not reflect changes that may occur or may have occurred after September 14, 2006, including changes to the operation and prospects of Park or Vision, changes in general market and economic conditions, or other factors. Any such changes, or other factors on which the fairness opinion is based, may alter the relative value of Park and Vision.

 

Some directors and executive officers of Vision have potential conflicts of interest in the merger.

 

Some of the directors and executive officers of Vision have interests in the merger that are different from, or in addition to, their interests as shareholders of Vision. Park, together with Vision Alabama and/or Vision Florida, entered into employment agreements with J. Daniel Sizemore and four other executive officers of Vision Alabama and Vision Florida to become effective at the effective time of the merger. In addition, Park has agreed to purchase directors’ and officers’ liability insurance for the directors and officers of Vision and its subsidiaries for a period of three years after the merger and has agreed to indemnify the directors, officers and employees of Vision and its subsidiaries for certain actions or omissions in the course of their duties as directors, officers and employees of Vision or one of its subsidiaries occurring prior to the merger (including, without limitation, the transactions contemplated by the merger agreement). In connection with the merger, Vision Alabama and Vision Florida also will be purchasing certain real property at which certain of their branches are located from entities owned by one or more directors and/or executive offices of Vision, Vision Alabama and/or Vision Florida. These and certain other additional interests of Vision’s directors and executive officers may cause these persons to view the proposed merger differently than you view it. See “The Proposed Merger (Proposal One) — Interests of Vision directors and executive officers in the merger” beginning on page 34 of this prospectus/proxy statement.

 

Vision’s shareholders will not control Park’s future operations.

 

Following the merger, Vision shareholders in the aggregate will become the owners of less than     % of the approximately           million Park common shares anticipated to be outstanding following the issuance of up to           Park common shares in the Vision merger. As a result, former Vision shareholders will not have a significant impact on the election of directors or on whether future proposals submitted to a vote of Park shareholders are approved or rejected.

 

Changes in interest rates could have a material adverse effect on Park’s financial condition and results of operations.

 

Park’s earnings depend substantially on interest rate spread, which is the difference between (i) the rates earned on loans, investment securities and other interest earning assets and (ii) the interest rates paid on deposits and borrowings. These rates are highly sensitive to many factors beyond Park’s control, including general economic conditions and the policies of various governmental and regulatory authorities. While Park and its subsidiaries have taken measures intended to manage the risks of operating in a changing interest rate environment, there can be no assurance that such measures will be effective in avoiding undue interest rate risk.

 

Certain statements contained in this prospectus/proxy statement which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, the statements specifically identified as forward-looking statements within this prospectus/proxy statement. In addition, certain statements in future filings by each of Park and Vision with the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with the approval of Park or Vision which are not statements of historical fact constitute forward-looking statements within the Private Securities Litigation Reform Act. Examples of forward-looking statements include: (i) projections of income or expense, earnings per share, the payment or non-payment of dividends, capital structure and other financial items; (ii) statements of plans and objectives of each of Park and Vision, or their respective Boards of Directors or management, including those relating to products or services; (iii) statements of future economic performance; and (iv) statements of assumptions underlying such statements. Words such as “believes”,

“anticipates”, “expects”, “intends”, “targeted”, and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying those statements.

 

The Private Securities Litigation Reform Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying the important factors that could cause actual results to differ materially from those discussed in the forward-looking statements. We desire to take advantage of the “safe harbor” provisions of that Act.

 

Forward-looking statements involve risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events, including those factors specifically identified as “Risk Factors” in this prospectus/proxy statement and in the documents incorporated by reference into this prospectus/proxy statement. There is also the risk that the Board of Directors or management of Park or Vision incorrectly analyzes these risks and factors, or that the strategies that Park or Vision develops to address them are unsuccessful.

 

Forward-looking statements speak only as of the date on which they are made, and, except as may be required by law, Park and Vision undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to Park or Vision or any person acting on either of their behalf are qualified in their entirety by the cautionary statements set forth in this prospectus/proxy statement and in the documents incorporated by reference into this prospectus/proxy statement.

 

The Securities and Exchange Commission allows each of Park and Vision to “incorporate by reference” into this prospectus/proxy statement. This means that each of Park and Vision can disclose important information to you by referring you to another document separately filed with or furnished to the Securities and Exchange Commission. The information incorporated by reference is deemed to be part of this prospectus/proxy statement, except for any information superseded by information contained in this prospectus/proxy statement or in later-filed documents incorporated by reference in this prospectus/proxy statement. You should read the information relating to Park and Vision contained in this prospectus/proxy statement and the information in the documents incorporated by reference.

 

This prospectus/proxy statement incorporates by reference the documents listed below that Park has previously filed with or furnished to the Securities and Exchange Commission and any future filings made by Park with the Securities and Exchange Commission before the special meeting of Vision shareholders to be held on February 20, 2007, under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended.

 

 

This prospectus/proxy statement incorporates by reference the documents listed below that Vision has previously filed with or furnished to the Securities and Exchange Commission and any future filings made by Vision with the Securities and Exchange Commission before the special meeting of Vision shareholders to be held on February 20, 2007, under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended.

 

 

This prospectus/proxy statement incorporates by reference important business and financial information that is not included or delivered with it. You can request a free copy of any or all of these documents, including exhibits that are specifically incorporated by reference into these documents, by writing to or calling one of the following individuals:

 

 

In order to ensure timely delivery of documents, any requests for documents should be made no later than five business days before the February 20, 2007 special meeting of the shareholders of Vision. Accordingly, requests should be received by Park or Vision, as appropriate, no later than February 12, 2007.

 

You may also obtain copies of the documents from the Securities and Exchange Commission through its website. See “Where You Can Find More Information” on page 65.

 

Following the merger, Park will continue to be regulated by the information, reporting and proxy statement requirements of the Securities Exchange Act of 1934, as amended.

 

Park has supplied all information contained or incorporated by reference in this prospectus/proxy statement relating to Park, and Vision has supplied all information contained or incorporated by reference in this prospectus/proxy statement relating to Vision.

 

You should rely only on the information which is contained in this prospectus/proxy statement or to which we have referred in this prospectus/proxy statement. We have not authorized anyone to provide you with information that is different.

 

Park common shares are listed on AMEX under the symbol “PRK.” Vision’s common stock is not listed on any exchange, nor is it included on NASDAQ. However, trades may be reported on the OTC Bulletin Board under the symbol “VBAL.OB”. Vision is aware that FIG Partners, LLC and Morgan Keegan & Company, Inc. currently make a market in Vision’s common stock. Vision is aware that there are also private transactions in Vision’s common stock and, therefore, the data set forth below may not reflect all such transactions.

 

The information presented in the following table reflects the closing sale prices for Park common shares and Vision common stock on September 13, 2006, the last trading day preceding our public announcement of the merger, and on January 8, 2007, the last practicable trading day for which information was available prior to the date of this prospectus/proxy statement. The table also presents the equivalent price per share of Vision, giving effect to the merger as of such dates. The “Vision Bancshares, Inc. Equivalent Per Share Price” is determined by multiplying the exchange ratio of 0.2475 by the closing sale price of Park common shares on the dates indicated.

 

Park National Corporation and Vision Bancshares, Inc.
Comparative Market Value

 

 

The following table sets forth selected consolidated historical data of Park for the periods and at the dates indicated. This data has been derived in part from and should be read together with the audited consolidated financial statements and notes thereto incorporated by reference in Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005, which is incorporated herein by reference. Financial data at September 30, 2005 and 2006, and for the nine months ended September 30, 2005 and 2006, are derived from unaudited financial data included in Park’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006, which is incorporated herein by reference. See “Incorporation by Reference” on page 13 and “Where You Can Find More Information” on page 65. Park believes that the interim financial data reflects all adjustments (consisting solely of normal recurring accruals) necessary for a fair presentation of results of operations for those periods and financial position at those dates. The results of operations for the nine-month period ended September 30, 2006 are not necessarily indicative of the operating results to be anticipated for the fiscal year ending December 31, 2006.

 

The consolidated historical data of Park set forth in the following table does not reflect the acquisition of Anderson by Park through the merger of Anderson with and into The Park National Bank effective as of December 18, 2006. Subject to adjustment for cash paid in lieu of fractional shares in accordance with the terms of the Anderson merger agreement, the shareholders of Anderson are receiving aggregate consideration consisting of 86,137 common shares of Park and $9,052,093. At September 30, 2006, Anderson had total assets of $70.39 million; total loans, net of unearned income, of $55.24 million; total deposits of $62.36 million; and total shareholders’ equity of $7.51 million.

 

 

 

 

The following table sets forth selected consolidated historical data of Vision for the periods and at the dates indicated. This data has been derived in part from and should be read together with the audited consolidated financial statements and notes thereto included in Vision’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005, which is incorporated herein by reference. Financial data at September 30, 2005 and 2006, and for the nine months ended September 30, 2005 and 2006, are derived from unaudited financial data included in Vision’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006, which is incorporated herein by reference. See “Incorporation by Reference” on page 13 and “Where You Can Find More Information” on page 65. Vision believes that the interim financial data reflects all adjustments (consisting solely of normal recurring accruals) necessary for a fair presentation of results of operations for those periods and financial position at those dates. The results of operations for the nine-month period ended September 30, 2006 are not necessarily indicative of the operating results to be anticipated for the fiscal year ending December 31, 2006.

 

 

The following table presents at the dates and for the periods indicated certain historical per share data for Park and for Vision. The information is derived from and should be read together with the respective historical consolidated financial statements of Park and Vision which are incorporated by reference in or included in the respective periodic reports of Park and Vision, as appropriate, incorporated by reference in this prospectus/proxy statement.

 

 

 

This prospectus/proxy statement is being provided to you in connection with the solicitation of proxies by the Vision Board of Directors for use at the special meeting of shareholders to be held on February 20, 2007 at 11:00 a.m., Central Time, at Vision Bank’s Foley office, 501 South McKenzie Street, Foley, Alabama, including any adjournments or reschedulings of that special meeting. At the special meeting, the shareholders of Vision will be asked to consider and vote upon the following matters:

 

 

The Board of Directors of Vision has unanimously adopted the merger agreement and recommends a vote “FOR” the approval of the merger agreement.

 

The Board of Directors of Vision has fixed the close of business on January 8, 2007 as the record date for determining the Vision shareholders who are entitled to notice of and to vote at the special meeting of shareholders. Only holders of shares of Vision common stock who are holders at the close of business on the record date will be entitled to notice of and to vote at the special meeting.

 

As of the close of business on January 8, 2007, there were          shares of Vision common stock outstanding and entitled to vote at the special meeting. The shares of Vision common stock were held of record by approximately           shareholders. Each share of Vision common stock entitles the holder to one vote on each matter properly presented at the special meeting.

 

Under Alabama law and Vision’s amended and restated articles of incorporation and by-laws, the approval of the merger agreement requires the affirmative vote of the holders of at least two-thirds of the shares of Vision common stock outstanding and entitled to vote at the Vision special meeting.

 

As of January 8, 2007, directors and executive officers of Vision and their respective affiliates beneficially owned an aggregate of           shares of Vision common stock (excluding shares underlying unexercised stock options or subject to outstanding subscriptions under the Vision ESPP), amounting to     % of the outstanding shares of Vision common stock as of the record date. As of the date of this prospectus/proxy statement, neither Park nor any of its directors, executive officers or affiliates beneficially owned any shares of Vision common stock.

 

A quorum, consisting of the holders of a majority of the outstanding shares of Vision common stock, must be present in person or by proxy at the Vision special meeting before any action can be taken. A properly executed proxy card marked “ABSTAIN” will not be voted on the approval of the merger agreement but will count toward determining whether a quorum is present. Brokers who hold shares of Vision common stock in “street name” for the beneficial owners cannot vote these shares of Vision common stock on the approval of the merger agreement without specific instructions from the beneficial owners. Because the approval of the merger agreement requires the affirmative vote of the holders of two-thirds of the shares of Vision common stock outstanding and entitled to vote at the special meeting, an abstention or, if your shares of Vision common stock are held in “street name,” your failure to instruct your broker how to vote, will have the same effect as a vote “AGAINST” the approval of the merger agreement.

 

A proxy card for use at the special meeting accompanies each copy of this prospectus/proxy statement mailed to Vision shareholders. Your proxy is solicited by the Board of Directors of Vision. Whether or not you attend the special meeting, the Vision Board of Directors urges you to return the enclosed proxy card. If you return your properly executed proxy card prior to the special meeting and do not revoke it prior to its use, the shares of Vision common stock represented by that proxy card will be voted at the special meeting or, if appropriate, at any adjournment of the special meeting. The shares of Vision common stock will be voted as specified on the proxy card or, in the absence of specific instructions to the contrary, will be voted “FOR” the approval of the merger agreement and, if necessary, “FOR” the approval of the adjournment of the special meeting to solicit additional proxies.

 

If you have returned a properly executed proxy card, you may revoke it at any time before a vote is taken at the special meeting by:

 

 

Your attendance at the special meeting will not, by itself, revoke your proxy.

 

If you are a Vision shareholder whose shares of common stock are not registered in your own name, you will need additional documentation from your record holder in order to vote your shares of Vision common stock in person at the special meeting.

 

We do not expect any matter other than the approval of the merger agreement and, if necessary, the approval of the adjournment of the special meeting to solicit additional proxies, to be brought before the Vision special meeting. If any other matters are properly brought before the special meeting for consideration, shares of Vision common

stock represented by properly executed proxy cards will be voted, to the extent permitted by applicable law, in the discretion of the persons named in the proxy card in accordance with their best judgment.

 

Vision will bear its own cost of solicitation of proxies on behalf of the Vision Board of Directors, except that Vision and Park have agreed to share equally the costs (excluding the fees and disbursements of legal counsel, financial advisors and accountants) incurred in connection with preparing (including copying, printing and distributing) this prospectus/proxy statement. Proxies will be solicited by mail and may be further solicited by additional mailings, personal contact, telephone, facsimile or electronic mail, by directors, officers and regular employees of Vision, none of whom will receive additional compensation for their solicitation activities. Vision does not presently anticipate hiring a proxy solicitation firm to assist with the solicitation of proxies on behalf of the Vision Board of Directors. However, if the Company decides to hire a proxy solicitation firm, Vision estimates that the total fees paid to such firm will not exceed $20,000. Vision will also pay the standard charges and expenses of brokerage houses, voting trustees, banks, associations and other custodians, nominees and fiduciaries, who are record holders of shares of Vision common stock not beneficially owned by them, for forwarding this prospectus/proxy statement and other proxy solicitation materials to, and obtaining proxies from, the beneficial owners of shares of Vision common stock entitled to vote at the special meeting.

 

The following is a summary of the steps that you must take if you wish to exercise dissenters’ rights with respect to the merger. This is not a complete statement of the law relating to dissenters’ rights and is qualified in its entirety by reference to Annex C, which sets forth the full text of Sections 10-2B-13.01 through 10-2B-13.32 of the Alabama Business Corporation Act. As used in this summary and in Sections 10-2B-13.01 through 10-2B-13.32, the term “dissenting shareholder” means the record holder of the dissenting shares. A person having a beneficial interest in shares of Vision common stock which are held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record shareholder to timely and properly follow the steps summarized below to perfect whatever dissenters’ rights the beneficial shareholder may have. If you are considering dissenting, you should consult your own legal advisor.

 

Sections 10-2B-13.01 through 10-2B-13.32 of the Alabama Business Corporation Act provide for rights to obtain payment of the fair value of the shares of Vision common stock of a shareholder of record who (i) has delivered notice in writing to Vision before the vote is taken that he or she intends to seek a cash payment if the merger is consummated and (ii) does not vote in favor of the approval of the merger agreement. Within ten (10) days after completion of the merger, Vision will send to each shareholder who has given such notice to Vision a dissenters’ notice stating, among other things, a date not less than thirty (30) days nor more than sixty (60) days after the date of the dissenters’ notice by which the shareholder must submit a written payment demand. Within twenty (20) days after making such payment demand, the shareholder must submit the certificates representing shares of Vision common stock to Vision for notation thereon that such demand has been made.

 

The written payment demand should be sent to:

 

William E. Blackmon
Vision Bancshares, Inc.
P.O. Box 4649
Gulf Shores, Alabama 36547-4649
Facsimile: (251) 968-3363

 

As soon as the merger is completed, or upon the receipt of a payment demand by a shareholder, Vision will offer to pay each dissenting shareholder the amount which Vision estimates to be the fair value of the shares of Vision common stock, plus accrued interest. Each dissenting shareholder may agree to accept such offer of payment and upon receiving payment, such dissenting shareholder ceases to have any interest in the shares. “Fair value” means the value of the shares immediately before the consummation of the merger excluding any appreciation or depreciation in anticipation of the merger unless exclusion would be inequitable. If a dissenting shareholder is dissatisfied with Vision’s offer of payment, the shareholder may notify Vision in writing within 30 days after Vision’s offer stating his or her own estimate of the fair value of the shares of Vision common stock, plus accrued

interest, and demanding payment of such amount, or such dissenting shareholder may simply reject Vision’s offer and demand payment of the fair value of his or her shares of Vision common stock plus accrued interest.

 

If Vision fails to make an offer to a dissenting shareholder within 60 days after the date set for demanding payment, the shareholder may notify Vision of his or her own estimate of the fair value of the shares of Vision common stock and accrued interest and demand payment. If the dissenting shareholder and Vision cannot agree upon the fair value, plus interest, to be paid for shares of Vision common stock that are the subject of the demand, then Vision must commence a proceeding in the Alabama Circuit Court for Baldwin County within 60 days of receiving the payment demand to have the fair value of the shares plus accrued interest determined. If Vision does not commence the proceeding within 60 days after receipt of the payment demand and the shareholder’s account still remains unsettled, Vision must pay each dissenting shareholder the amount of money demanded. In any court proceeding, the court will assess costs against Vision except that the court may assess costs against all or some of the dissenting shareholders if the court finds the dissenting shareholders acted arbitrarily, vexatiously or not in good faith in demanding payment.

 

A dissenting shareholder may assert dissenters’ rights as to fewer than all shares registered in such holder’s name, but only if the record holder dissents with respect to all shares beneficially owned by any one person and provides written notice to Vision of the name and address of each person on whose behalf the dissenters’ rights are asserted. A “beneficial shareholder” is defined by the Alabama Business Corporation Act as the “person who is a beneficial owner of shares held in a voting trust or by a nominee as the record shareholder.” The rights of a partial dissenter are determined as if the shares of Vision common stock as to which such holder dissents and other shares held by the holder are registered in the names of different shareholders. Thus, if a beneficial shareholder owns shares of Vision common stock through a bank, broker or other nominee, such beneficial shareholder may assert dissenters’ rights, but only if the bank, broker or nominee provides Vision with the name and address of each such person wishing to assert dissenters’ rights. The beneficial shareholder must submit to Vision the consent of the record shareholder, i.e., the bank, broker or nominee holding for the dissenting beneficial shareholder, not later than the time the dissenting beneficial shareholder asserts dissenters’ rights.

 

A shareholder who dissents and obtains payment under these procedures may not challenge the Vision merger unless the merger is unlawful or fraudulent with respect to the shareholder or Vision.

 

Failure of a shareholder to comply with any requirements of the provisions relating to dissenters’ rights will result in a forfeiture by such shareholder of these dissenters’ rights.

 

References herein to applicable statutes are summaries of portions thereof and do not purport to be complete and are qualified in their entirety by reference to the applicable statutes. Sections 10-2B-13.01 through 10-2B-13.32 of the Alabama Business Corporation Act are attached hereto as Annex C. You should read Annex C carefully.

 

Subject to the terms and conditions set forth in the merger agreement, if the holders of at least two-thirds of the shares of Vision common stock vote to approve the merger agreement, the proposed acquisition of Vision and its subsidiaries by Park will be accomplished through the merger of Vision with and into Park.

 

Park.  Park is an Ohio bank holding company headquartered in Newark, Ohio. Park and its subsidiaries consist of 12 community banking divisions and two specialty finance companies, all based in Ohio. As of January 8, 2007, Park operated 138 offices across 29 Ohio counties and one Kentucky county through the following organizations: The Park National Bank, The Park National Bank of Southwest Ohio & Northern Kentucky division, Fairfield National Division, The Richland Trust Company, Century National Bank, The First-Knox National Bank of Mount Vernon, Farmers and Savings Division, United Bank, N.A., Second National Bank, The Security National Bank and Trust Co., Unity National Division, The Citizens National Bank of Urbana, Scope Leasing, Inc., and Guardian Financial Services Company.

At September 30, 2006, on a consolidated basis, Park had total assets of $5.39 billion; total loans, net of unearned income, of $3.39 billion; total deposits of $3.89 billion; and total stockholders’ equity of $558.21 million. Park’s common shares are listed on AMEX under the symbol “PRK.”

 

Recent Developments

 

Park recently completed the acquisition of Anderson, which was merged with and into The Park National Bank, effective as of December 18, 2006, pursuant to the terms of a Second Amended and Restated Agreement and Plan of Merger, dated to be effective as of August 14, 2006. Anderson was an Ohio state-chartered commercial bank with its main office located in Anderson Township on the east side of Cincinnati, Ohio and a second office located in Amelia, Ohio. Upon the completion of the Anderson merger transaction, the two offices of Anderson became part of the division of The Park National Bank known as The Park National Bank of Southwest Ohio & Northern Kentucky. At September 30, 2006, Anderson had total assets of $70.39 million; total loans, net of unearned income, of $55.24 million; total deposits of $62.36 million; and total shareholders’ equity of $7.51 million.

 

Subject to adjustment for cash paid in lieu of fractional shares in accordance with the terms of the Anderson merger agreement, the shareholders of Anderson are receiving aggregate consideration consisting of 86,137 common shares of Park and $9,052,093. The Anderson shareholders had the opportunity to elect to receive all cash, all Park common shares or a combination of cash and Park common shares in exchange for their Anderson common shares. However, the elections of Anderson shareholders were subject to allocation procedures set forth in the Anderson merger agreement to ensure that the aggregate consideration received by Anderson shareholders in the merger transaction consisted of the number of Park common shares and the amount of cash described above.

 

Vision.  Vision is an Alabama bank holding company headquartered in Panama City, Florida. Vision operates two community banks, both named Vision Bank, which are headquartered in Gulf Shores, Alabama and Panama City, Florida, respectively. Vision Florida, a Florida state banking corporation, provides general retail and commercial banking services to customers in Bay, Gulf, Okaloosa and Walton Counties in the panhandle of Florida through its eight full-service offices located in Panama City, Panama City Beach, Santa Rosa Beach, Wewahitchka, Port St. Joe, Port St. Joe Beach and Destin. Vision Alabama, an Alabama state banking corporation, provides general retail and commercial banking services principally to customers in Baldwin County, Alabama through its seven locations in Gulf Shores, Orange Beach, Point Clear, Foley, Fairhope, Elberta and Daphne. Vision Bancshares Financial Group, Inc., a wholly-owned subsidiary of Vision Alabama, conducts permissible insurance and securities networking activities and is licensed with the Alabama Department of Insurance as a provider.

 

On December 5, 2005, Vision, through its subsidiary, the Vision Trust, sold to institutional investors $15.0 million of floating rate preferred securities. Holders of the preferred securities are entitled to receive preferential cumulative cash distributions from the Vision Trust, at a rate per annum reset quarterly equal to the sum of three month LIBOR plus 148 basis points. Vision, through various contractual arrangements, fully and unconditionally guaranteed all of the Vision Trust’s obligations with respect to the preferred securities. The sole asset of the Vision Trust is $15.5 million of junior subordinated debentures issued by Vision. These junior subordinated debentures also carry the same floating rate as the preferred securities. Both the preferred securities and the junior subordinated debentures mature on December 30, 2035; however, the maturity of both may be shortened to a date not earlier than December 30, 2010. Vision can defer payment of interest on the junior subordinated debentures, and the Vision Trust can defer payment of the cash distributions on the preferred securities, at any time or from time to time for a period not to exceed twenty consecutive quarters.

 

At September 30, 2006, on a consolidated basis, Vision had total assets of $697.28 million; total loans, net of unearned income, of $559.49 million; total deposits of $594.65 million; and total stockholders’ equity of $54.96 million. Vision’s common stock is not listed on any exchange, nor is it included on NASDAQ. However, trades may be reported on the OTC Bulletin Board under the symbol “VBAL.OB”. Vision is aware that FIG Partners, LLC and Morgan Keegan & Company, Inc. currently make a market in Vision’s common stock.

 

Background of the merger

 

Vision commenced business with the formation of Vision Alabama in 1999. Since then, management and the Board of Directors of Vision have looked for ways to increase asset and earnings growth and enhance shareholder value. To some extent, management has attempted to achieve these goals through the opening of new branches and acquisition and formation of new banks. In 2003, Vision organized Vision Bank, FSB, a federal savings bank in Panama City, Florida. In 2004, Vision Bank, FSB merged with and into BankTrust of Florida (formerly Wewahitchka State Bank), a Florida state-chartered bank located in Wewahitchka, Florida. Prior to this merger, the name of BankTrust of Florida was changed to “Vision Bank.” Those transactions gave Vision two commercial bank subsidiaries, Vision Alabama and Vision Florida. Vision Alabama now has seven locations in Gulf Shores, Orange Beach, Point Clear, Foley, Fairhope, Elberta and Daphne, Alabama, and Vision Florida now has eight full-service offices located in Panama City, Panama City Beach, Santa Rosa Beach, Wewahitchka, Port St. Joe, Port St. Joe Beach and Destin, Florida. Thus, from two branches in Baldwin County, Alabama in 1999, Vision’s subsidiary banks have grown to seven locations in Baldwin County, Alabama and eight locations in the panhandle of Florida.

 

The Vision Board of Directors has periodically explored and assessed strategic options available to achieve Vision’s ultimate goals of fully utilizing its capital and returning value to shareholders. These strategic discussions have included the possibility of accelerating branch openings, acquisitions of smaller institutions by Vision, business combinations involving Vision and other equally-sized financial institutions, and a possible sale of Vision to a larger regional or national financial institution.

 

In 2005, Vision retained Burke Capital Group, L.L.C., Atlanta, Georgia (“BCG”) to assist Vision in evaluating ways in which the value of the Vision banking franchise could be enhanced. Vision decided to engage BCG as Vision’s financial advisor based on BCG’s extensive experience and other significant qualifications. BCG has detailed knowledge of Vision, is very familiar with the Southeastern U.S. banking market, and has significant knowledge of potential partners for a merger or sale of Vision. Vision and BCG discussed several alternatives, including raising additional capital to support increased growth as well as a possible strategic transaction pursuant to which Vision might be combined with another banking organization as a means of providing Vision shareholders with an opportunity of obtaining an ownership interest in a larger enterprise.

 

After discussion with the Vision Board of Directors, BCG conducted a market survey of possible partners for a business combination with Vision beginning in June 2005. In early October 2005, the Vision Board of Directors elected to terminate any ongoing negotiations and to continue to remain an independent organization due to the rapid growth and financial performance it was experiencing at that time.

 

Vision experienced significant improvements in both earnings and asset growth as well as the expansion of the branch network of its bank subsidiaries to proximate high growth locations between the second half of 2005 and the first quarter of 2006. In light of these improvements, Vision authorized BCG to revisit selected parties that had previously been approached to determine if these parties maintained an interest in acquiring Vision. Additionally, BCG continued to survey the market for new financial institutions that might have an interest in a combination with Vision. The Vision Board of Directors wanted to pursue a possible combination with another entity only if a transaction price could be agreed upon that would, in the opinion of the Board of Directors, represent not only a fair price for Vision shareholders in the current market, but also the potential for long-term strategic growth.

 

As part of this process, BCG contacted several parties and ultimately held management meetings with two parties, one of which was Park. After determining that there was an interest in exploring the possibility of an acquisition by Park, senior management representatives of Vision hosted Park’s Chairman of the Board and Chief Executive Officer, C. Daniel DeLawder, in Panama City, Florida and discussed the strategy and operating philosophies of their respective organizations. At that meeting in early July 2006, both Vision and Park agreed to the additional exchange of information to determine the likelihood of a possible combination.

 

Over the course of the next few weeks, representatives from BCG provided detailed information to Park regarding Vision’s financial profile, operating performance and franchise highlights. On July 31, 2006, BCG received an initial indication of interest from Park to acquire Vision.

During August 2006, there were several meetings between members of Park’s management team and Vision. Following the submission of the initial indication, representatives of Park visited the senior officers of Vision in both Florida and Alabama to assess Vision’s franchise and continue to discuss the two organizations’ operating philosophies. Representatives from Vision and BCG subsequently traveled to Ohio to meet with Park executives and to perform due diligence on Park. Concurrent with these meetings, representatives of both companies began negotiating a definitive merger agreement whereby Vision would be acquired by Park.

 

On September 14, 2006, the Vision Board of Directors met to evaluate and discuss the proposed merger agreement between Vision and Park. The Vision Board of Directors reviewed materials provided by BCG and consulted with its legal counsel regarding the Vision Board’s fiduciary duties in considering a business combination transaction or sale of the business under Vision’s amended and restated articles of incorporation. The Vision Board of Directors discussed all of the alternatives in detail and the likely impact a sale of Vision would have on Vision’s employees, customers, communities, and shareholders. BCG rendered to the Vision Board of Directors its oral opinion (subsequently confirmed in writing) that, as of the date of its opinion and based upon and subject to the considerations described in its opinion and other matters as BCG considered relevant, the proposed merger consideration was fair, from a financial point of view, to holders of shares of Vision common stock. Balch & Bingham, LLP, legal counsel to Vision, discussed with the Vision Board of Directors the legal standards applicable to its decisions and actions with respect to the proposed transaction and reviewed the legal terms of the proposed merger and the related agreements.

 

Following review and discussion among the members of the Vision Board of Directors, the Vision Board of Directors voted unanimously to adopt the merger agreement with Park at the meeting held on September 14, 2006. Vision and Park and their respective counsel finalized, and Vision and Park executed and delivered the definitive merger agreement on September 14, 2006. The transaction was announced on September 14, 2006 by a joint press release issued by Park and Vision after the close of trading on AMEX.

 

The Vision Board of Directors’ reasons for the merger

 

The Vision Board of Directors believes that the merger is fair to, and in the best interests of, Vision and its shareholders. The terms of the merger agreement, including the merger consideration, are the result of arm’s-length negotiations between representatives of Vision and Park. Accordingly, the Vision Board of Directors unanimously adopted the merger agreement and recommends that the holders of Vision common stock vote “FOR” approval of the merger agreement.

 

In reaching its decision to adopt the merger agreement, Vision’s Board of Directors consulted with legal counsel, BCG and management, and took into account its previous consideration of a possible transaction in 2005. In addition, the following factors were considered by the Vision Board of Directors in adopting the merger agreement and in recommending the approval of the merger agreement to the Vision shareholders:

 

 

 

The Board of Directors of Vision did not assign any relative or specific weight to any factor it considered in deciding to adopt the merger agreement.

 

The merger will enable Vision and its subsidiaries to become part of a larger and more diverse organization. This may help Vision and its subsidiaries to reach more customers, add additional products for their customers, diversify their risks, enhance their ability to make larger loans and, in general, compete more effectively with larger banking institutions. These factors should enhance shareholder value in the combined organization.

 

The Board of Directors concluded that the form of the consideration to be offered in the merger is beneficial to Vision’s shareholders. The combination of cash and Park common shares provides an opportunity for Vision shareholders to choose, subject to the election and allocation procedures set forth in the merger agreement, the form of consideration most suitable to their personal circumstances. Each holder of shares of Vision common stock has the opportunity (i) to share in the potential growth of Park following the merger by choosing to receive part or all of the consideration for the holder’s shares of Vision common stock in Park common shares or (ii) to receive what Vision believes is a fair value by choosing to receive part or all of the consideration in cash.

 

Park’s reasons for the merger

 

Park believes the merger will benefit Park shareholders by enabling Park to diversify and expand into the more robust markets currently served by Vision and its subsidiaries, gain a talented management team that has extensive experience operating in the Alabama and Florida “Gulf Coast” markets in which Vision and its subsidiaries operate, strengthen the competitive position of the combined organization, generate cost savings and enhance other opportunities for Park.

 

Vision retained BCG to act as its financial advisor in connection with a possible business combination. BCG is a nationally recognized investment banking firm whose principal business specialty is financial institutions. In the ordinary course of its investment banking business, BCG is regularly engaged in the valuation of financial institutions and their securities in connection with mergers and acquisitions and other corporate transactions.

 

BCG acted as financial advisor to Vision in connection with the proposed merger with Park and participated in certain of the negotiations leading to the execution of the merger agreement. In connection with BCG’s engagement, Vision asked BCG to evaluate the fairness of the merger consideration to Vision’s shareholders from a financial point of view. At the September 14, 2006 meeting of the Vision Board of Directors to evaluate the merger agreement, BCG delivered to the Board of Directors its oral opinion and, subsequently, its written opinion that, based upon and subject to various matters set forth in its opinion, the merger consideration was fair to Vision’s shareholders from a financial point of view. At that meeting, the Vision Board of Directors voted to adopt the merger agreement, and Vision subsequently executed the definitive merger agreement on September 14, 2006.

 

The full text of BCG’s written opinion is attached as Annex B to this prospectus/proxy statement. The opinion outlines matters considered and qualifications and limitations on the review undertaken by BCG in rendering its opinion. The description of the opinion set forth below is qualified in its entirety by reference to the opinion. We urge you to read the entire opinion carefully in connection with your consideration of the proposed merger.

 

BCG’s opinion speaks only as of the date of the opinion. The opinion was directed to the Vision Board of Directors and is directed only to the fairness of the merger consideration to Vision shareholders from a financial point of view. It does not address the underlying business decision of Vision to engage in the merger or any other aspect of the merger and is not a recommendation to any Vision shareholder as to how such shareholder should vote at the special meeting with respect to the approval of the merger agreement, or any other matter.

In connection with rendering its September 14, 2006 opinion, BCG reviewed and considered, among other things:

 

 

Vision’s Board of Directors did not limit the investigations made or the procedures followed by BCG in giving its opinion.

 

In performing its reviews and analyses and in rendering its opinion, BCG assumed and relied upon the accuracy and completeness of all the financial information, analyses and other information that was publicly available or otherwise furnished to, reviewed by or discussed with it and further relied on the assurances of management of Vision and Park that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. BCG was not asked to and did not independently verify the accuracy or completeness of such information and it did not assume responsibility or liability for the accuracy or completeness of any of such information. BCG did not make an independent evaluation or appraisal of the assets, the collateral securing assets or the liabilities, contingent or otherwise, of Vision or Park or any of their respective subsidiaries, or the ability to collect any such assets, nor was BCG furnished with any such evaluations or appraisals. BCG is not an expert in the evaluation of allowances for loan losses and it did not make an independent evaluation of the adequacy of the allowance for loan losses of Vision or Park, nor did BCG review any individual credit files relating to Vision or Park. With Vision’s consent, BCG assumed that the respective allowances for loan losses, on consolidated basis, for both Vision and Park were adequate to cover such losses and will be adequate on a pro forma basis for the combined organization. In addition, BCG did not conduct any physical inspection of the properties or facilities of Vision or Park. BCG is not an accounting firm and it relied on the reports of the independent registered public accounting firms of Vision and Park for the accuracy and completeness of the financial statements furnished to it.

 

BCG’s opinion was necessarily based upon market, economic and other conditions as they existed on, and could be evaluated as of, the date of its opinion. BCG assumed, in all respects material to its analysis, that all of the representations and warranties contained in the merger agreement and all related agreements were true and correct, that each party to such agreements will perform all of the covenants required to be performed by such party under such agreements and that the conditions precedent in the merger agreement will not be waived. BCG also assumed that there has been no material change in Vision’s and Park’s respective assets, financial condition, results of

operations, business or prospects since the date of the last financial statements made available to BCG and that Vision and Park will remain as going concerns for all periods relevant to BCG’s analyses.

 

In rendering its September 14, 2006 opinion, BCG performed a variety of financial analyses. The following is a summary of the material analyses performed by BCG, but is not a complete description of all the analyses underlying BCG’s opinion. The summary includes information presented in tabular format. In order to fully understand the financial analyses, these tables must be read together with the accompanying text. The tables alone do not constitute a complete description of the financial analyses. The preparation of a fairness opinion is a complex process involving subjective judgments as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances. The process, therefore, is not necessarily susceptible to a partial analysis or summary description. BCG believes that its analyses must be considered as a whole and that selecting portions of the factors and analyses considered without considering all factors and analyses, or attempting to ascribe relative weights to some or all of such factors and analyses, could create an incomplete view of the evaluation process underlying its opinion. Also, no company included in BCG’s comparative analyses described below is identical to Vision or Park and no transaction is identical to the merger. Accordingly, an analysis of comparable companies or transactions involves complex considerations and judgments concerning differences in financial and operating characteristics of the companies and other factors that could affect the public trading values or merger transaction values, as the case may be, of Vision or Park and the companies to which they are being compared.

 

The earnings projections used and relied upon by BCG in its analyses were based upon internal projections of Vision. BCG assumed for purposes of its analyses that such performance would be achieved. BCG expressed no opinion as to such financial projections or the assumptions on which they were based. The financial projections furnished to BCG by Vision were prepared for internal purposes only and not with a view towards public disclosure. These projections, as well as the other estimates used by BCG in its analyses, were based on numerous variables and assumptions which are inherently uncertain and, accordingly, actual results could vary materially from those set forth in such projections.

 

In performing its analyses, BCG also made numerous assumptions with respect to industry performance, business and economic conditions and various other matters, many of which cannot be predicted and are beyond the control of Vision, Park and BCG. The analyses performed by BCG are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. Estimates on the values of companies do not purport to be appraisals or necessarily reflect the prices at which companies or their securities may actually be sold. Such estimates are inherently subject to uncertainty and actual values may be materially different. Accordingly, BCG’s analyses do not necessarily reflect the value of Vision’s common stock or Park’s common shares or the prices at which Vision’s common stock or Park’s common shares may be sold at any time.

 

Summary of Proposed Merger

 

BCG reviewed the financial terms of the proposed merger transaction whereby the holders of shares of Vision common stock will be entitled to receive, in exchange for each share of Vision common stock, 0.2475 Park common shares or $25.00 cash, subject to the election and allocation procedures set forth in the merger agreement. Subject to adjustment for cash paid in lieu of fractional Park common shares in accordance with the terms of the merger agreement, Park will cause the requests of the Vision shareholders to be allocated on a pro-rata basis so that 50% of the shares of Vision common stock outstanding at the effective time of the merger will be exchanged for cash at the rate of $25.00 per share of Vision common stock and the other 50% of the outstanding shares of Vision common stock will be exchanged for Park common shares at the exchange rate of 0.2475 Park common shares for each share of Vision common stock. Each outstanding stock option (that is not exercised prior to the election deadline specified in the merger agreement) granted under one of Vision’s equity-based compensation plans will be cancelled and extinguished and converted into the right to receive an amount of cash equal to (1) (a) $25.00 multiplied by (b) the number of shares of Vision common stock subject to the unexercised portion of the stock option minus (2) the aggregate exercise price for the shares of Vision common stock subject to the unexercised portion of the stock option.

Based upon the terms of the definitive merger agreement and the closing price of Park’s common shares of $104.98 on September 13, 2006, BCG calculated a transaction value of $169,608,524 or $25.45 per share of Vision common stock on September 14, 2006, the date of the announcement. Utilizing Vision’s publicly available financial information on the date of announcement, which was June 30, 2006 unaudited financial information, BCG calculated the following ratios:

 

 

 

 

 

The fully diluted share count was based upon Vision’s 6,066,624 outstanding shares of common stock and 884,834 outstanding options to purchase shares of common stock at a weighted average strike price of $8.09 as of September 14, 2006. This analysis assumes no options are exercised prior to closing. Any exercise of options prior to closing would change the fully diluted share count and would change the aggregate transaction value.

 

Analysis of Vision

 

Selected Peer Group Analysis

 

BCG used publicly available information to compare selected financial information for Vision and a group of selected financial institutions. The group consisted of Vision and 80 Southeastern U.S. banks and bank holding companies, which BCG referred to as the “Vision Peer Group.” The Vision Peer Group consisted of selected Southeastern U.S. banks and bank holding companies with assets between $350 million and $1 billion.

 

The analysis calculated the median performance of the Vision Peer Group, based upon the latest publicly available financial data, compared to Vision’s June 30, 2006 unaudited financial results. The table below sets forth the comparative data.

 

Performance Comparison

 

 

Vision’s performance is in line with the Vision Peer Group.

Trading Comparison

 

BCG also used publicly available information to compare selected trading characteristics of Vision and the Vision Peer Group.

 

 

Vision’s trading characteristics are in line with the Vision Peer Group.

 

Analysis of Selected Merger Transactions

 

Deal Value Multiples

 

In order to address the specific valuation considerations within the Southeastern U.S. market that Vision serves, BCG selected a group of comparable Southeastern U.S. merger and acquisition transactions and compared the pricing multiples to the multiples implied by the merger consideration. Specifically, BCG selected bank merger and acquisition transactions according to the following criteria:

 

 

 

 

BCG selected 17 transactions fitting the criteria listed above as being comparable to the proposed merger. The 17 comparable transactions selected included the following:

 

BCG reviewed the multiples of transaction value at announcement to last twelve months’ earnings, transaction value to book value, transaction value to tangible book value, and tangible book premium to core deposits and computed high, low, mean, and median multiples and premiums for the transactions. These multiples and premiums were applied to Vision’s financial information as of and for the period ended June 30, 2006 and were used to impute a per share transaction price. As illustrated in the following table, BCG derived an imputed range of values per share of Vision’s common stock of $22.98 to $30.31 based upon the median multiples of the selected Southeastern U.S. transactions.

 

 

The analysis showed that the merger consideration of $25.45 is within the range of values imputed by the mean and median multiples of the comparable Southeastern U.S. transactions.

 

Transaction Price Premiums Paid

 

In order to address the specific valuation considerations within the Southeastern U.S. market that Vision serves, BCG selected a group of comparable Southeastern U.S. merger and acquisition transactions and compared the per share acquisition premium over each company’s trading price to the premium being paid in the merger. Specifically, BCG selected bank merger and acquisition transactions according to the following criteria:

 

 

 

 

BCG selected 8 transactions fitting the criteria listed above as being comparable to the proposed merger. The 8 comparable transactions selected included the following: