As filed with the Securities and Exchange Commission on August 14, 1995
Registration No. 33-61459
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
Amendment No. 1
to
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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First Commerce Corporation
(Exact name of registrant as specified in its charter)
Louisiana 6711 72-0701203
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of incorporation Classification Code Number) Identification Number)
or organization)
210 Baronne Street
New Orleans, Louisiana 70112
(504) 561-1371
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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Copy to: THOMAS L. CALLICUTT, Jr. Copy to:
ANTHONY J. CORRERO, III 925 Common St., 7th Floor BRIAN W. SMITH
Correro, Fishman & Casteix, L.L.P. New Orleans, Louisiana 70112 Mayer, Brown & Platt
47th Floor (504) 582-2913 2000 Pennsylvania Avenue, N.W.
201 St. Charles Avenue (Name, address, including zip code, and telephone Washington, D.C. 20006-1882
New Orleans, Louisiana 70170-4700 number, including area code, of agent for service)
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
Upon the date of the shareholders' meeting of Central Corporation described in
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, please check the following box. [_]
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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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
FIRST COMMERCE CORPORATION
CROSS REFERENCE SHEET
ITEM OF FORM S-4 LOCATION IN PROSPECTUS
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement and Cover Page
Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Inside Cover; Table of Contents
Pages of Prospectus
3. Risk Factors, Ratio of Earnings to Fixed Summary
Charges and Other Information
4. Terms of the Transaction Summary; The Plan; The Option Agreement
5. Pro Forma Financial Information Pro Forma Condensed Combined Financial
Statements (Unaudited)
6. Material Contacts with the Company Background of and Reasons for the Plan
Being Acquired
7. Additional Information Required for *
Reoffering by Persons and Parties
Deemed to be Underwriters
8. Interests of Named Experts and Counsel *
9. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3 Information About FCC
Registrants
11. Incorporation of Certain Information by Information About FCC
Reference
12. Information with Respect to S-2 or S-3 *
Registrants
13. Incorporation of Certain Information by *
Reference
14. Information with Respect to Registrants *
Other than S-2 or S-3 Registrants
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information with Respect to S-3 *
Companies
16. Information with Respect to S-2 or S-3 Information About Central
Companies
17. Information with Respect to Companies *
Other than S-2 or S-3 Companies
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents or
Authorizations are to be Solicited
(1) Date, Time and Place Introductory Statement-General
Information
(2) Revocability of Proxy Introductory Statement-Solicitation, Voting and
Revocation of Proxies
(3) Dissenters' Rights of Appraisal Central Shareholders' Dissenters' Rights
(4) Persons Making the Solicitation Introductory Statement - General
(5) Interests of Certain Persons in Summary; The Plan - Interests of Certain
Matters to be Acted upon; Persons;
Voting Securities and Principal Information About Central
Holders Thereof
(6) Vote Required for Approval Introductory Statement - Shares Entitled to
Vote; Quorum; Vote Required
(7) Directors and Executive Information About Central; Information About
Officers; Executive FCC
Compensation; Certain
Relationships and Related
Transactions
19. Information if Proxies, Consents or *
Authorizations are not to be Solicited or
in an Exchange Offer
_______________
* Not applicable.
CENTRAL CORPORATION
300 DESIARD STREET
MONROE, LA 71201
August 16, 1995
Dear Shareholder:
You are invited to attend a special meeting of shareholders of Central
Corporation ("Central") to be held on Monday, September 18, 1995 at 9:00 a.m.,
local time, at Central's main office, 300 DeSiard Street, Monroe, Louisiana.
At the meeting you will be asked to approve an Agreement and Plan of Merger
(the "Plan") pursuant to which, among other things, Central will merge into
First Commerce Corporation ("FCC"), Central Bank, the wholly owned bank
subsidiary of Central (the "Bank"), will become a wholly owned subsidiary of
FCC, and each outstanding share of common stock of Central will be converted
into 1.67 shares of FCC common stock, subject to possible adjustment as more
fully described in the attached Joint Proxy Statement and Prospectus. YOU ARE
URGED TO READ CAREFULLY THE JOINT PROXY STATEMENT AND PROSPECTUS IN ITS
ENTIRETY FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF THE PLAN.
The Plan has been approved by your Board of Directors as in the best
interests of shareholders. As a result of the proposed merger, you, as a new
shareholder of FCC, will own common stock in a bank holding company whose
stock is publicly traded on the NASDAQ Stock Market. Through its affiliation
with FCC, the Bank will be better able to offer a broad range of banking
services in our market area and to compete more effectively with bank holding
companies and other financial institutions in the changing economic and legal
environment facing all financial institutions. The Board also believes that
the Plan provides fair financial terms to Central's shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PLAN AND URGES YOU
TO EXECUTE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING
ENVELOPE.
Very truly yours,
[SIGNATURE OF JAMES ALTICK APPEARS
HERE]
James A. Altick
President and Chief Executive
Officer
CENTRAL CORPORATION
300 DESIARD STREET
MONROE, LOUISIANA 71201
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
Monroe, Louisiana
August 16, 1995
A special meeting of shareholders of Central Corporation ("Central") will be
held on Monday, September 18, 1995 at 9:00 a.m., local time, at Central's main
office, 300 DeSiard Street, Monroe, Louisiana, to vote upon the following
matters:
1. A proposal to approve an Agreement and Plan of Merger (the "Plan")
pursuant to which, among other things, Central will merge into First
Commerce Corporation ("FCC") and on the effective date of the merger each
outstanding share of common stock of Central will be converted into 1.67
shares of FCC common stock, subject to possible adjustment as determined in
accordance with the terms of the Plan.
2. Such other matters as may properly come before the meeting or any
adjournments thereof.
Only shareholders of record at the close of business on August 9, 1995, are
entitled to notice of and to vote at the meeting.
Dissenting shareholders who comply with the procedural requirements of the
Business Corporation Law of Louisiana will be entitled to receive payment of
the fair cash value of their shares if the Plan is effected upon approval by
less than eighty percent of the total voting power of Central.
Your vote is important regardless of the number of shares you own. Whether
or not you plan to attend the meeting, please mark, date and sign the enclosed
proxy and return it promptly in the enclosed stamped envelope. Your proxy may
be revoked by appropriate notice to Central's Secretary at any time prior to
the voting thereof.
By Order of the Board of Directors
[SIGNATURE OF THOMAS NICHOLSON
APPEARS HERE]
Thomas J. Nicholson, Secretary
[FIRST COMMERCE CORPORATION LOGO APPEARS HERE]
August 16, 1995
Dear Shareholder:
You are invited to attend a special meeting of shareholders of First
Commerce Corporation ("FCC") to be held on Monday, September 18, 1995 at 9:00
a.m., local time, at First Commerce Corporation's Board Room, Third Floor, 210
Baronne Street, New Orleans, Louisiana.
At the meeting you will be asked to approve an Agreement and Plan of Merger
(the "Plan") pursuant to which, among other things, Central Corporation
("Central") will merge into FCC, Central Bank, the wholly owned bank
subsidiary of Central, will become a wholly owned subsidiary of FCC, and each
outstanding share of common stock of Central will be converted into 1.67
shares of FCC common stock, subject to possible adjustment as more fully
described in the attached Joint Proxy Statement and Prospectus. YOU ARE URGED
TO READ CAREFULLY THE JOINT PROXY STATEMENT AND PROSPECTUS IN ITS ENTIRETY FOR
A MORE COMPLETE DESCRIPTION OF THE TERMS OF THE PLAN.
The Plan has been approved by your Board of Directors as in the best
interests of shareholders. As a result of the proposed merger, FCC will become
a significant presence in an important market area in Louisiana. The Board
also believes that the consideration to be paid to the shareholders of Central
is fair to FCC's shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PLAN AND URGES YOU
TO EXECUTE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ACCOMPANYING
ENVELOPE.
Very truly yours,
[SIGNATURE OF IAN ARNOF APPEARS HERE]
Ian Arnof
President and Chief Executive
Officer
[FIRST COMMERCE CORPORATION LOGO APPEARS HERE]
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
New Orleans, Louisiana
August 16, 1995
A special meeting of shareholders of First Commerce Corporation ("FCC") will
be held on Monday, September 18, 1995 at 9:00 a.m., local time, at FCC's Board
Room, Third Floor, 210 Baronne Street, New Orleans, Louisiana, to vote upon
the following matters:
1. A proposal to approve an Agreement and Plan of Merger (the "Plan")
pursuant to which, among other things, Central Corporation ("Central") will
merge into FCC and each outstanding share of common stock of Central will
be converted into 1.67 shares of FCC common stock, subject to possible
adjustment as determined in accordance with the terms of the Plan.
2. Such other matters as may properly come before the meeting or any
adjournments thereof.
Only shareholders of common stock and preferred stock of FCC of record at
the close of business on August 8, 1995, are entitled to notice of the
meeting, and only shareholders of common stock of FCC of record on such date
are entitled to vote at the meeting.
Your vote is important regardless of the number of shares you own. Whether
or not you plan to attend the meeting, please mark, date and sign the enclosed
proxy and return it promptly in the enclosed stamped envelope. Your proxy may
be revoked by appropriate notice to FCC's Secretary at any time prior to the
voting thereof.
By Order of the Board of Directors
[SIGNATURE OF MICHAEL FLICK APPEARS HERE]
Michael A. Flick, Secretary
FIRST COMMERCE CORPORATION
AND
CENTRAL CORPORATION
JOINT PROXY STATEMENT FOR SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD SEPTEMBER 18, 1995
----------------
FIRST COMMERCE CORPORATION
PROSPECTUS
COMMON STOCK, $5.00 PAR VALUE
----------------
First Commerce Corporation ("FCC") has filed a Registration Statement
pursuant to the Securities Act of 1933 covering up to 6,792,453 shares of
common stock of FCC ("FCC Common Stock") which may be issued in connection
with a proposed merger of Central Corporation ("Central") into FCC. This
document constitutes a Joint Proxy Statement of FCC and Central in connection
with the transactions described herein and a Prospectus of FCC with respect to
the shares of FCC Common Stock to be issued if the merger is consummated.
On the effective date of the proposed merger described herein each
outstanding share of common stock of Central ("Central Common Stock") would be
converted into 1.67 shares of FCC Common Stock, subject to downward adjustment
in the unlikely event the total expenses of Central in connection with the
transactions contemplated by the merger agreement (subject to certain
exceptions which exclude expenses Central incurs as a result of certain
actions taken by or affecting FCC) exceed $1,750,000. Applicable expenses of
Central incurred through August 8, 1995, which include the full amount of
investment banking fees payable if the merger is consummated, were
approximately $900,000, and additional applicable expenses, including legal
and accounting expenses and expenses related to the Central shareholders
meeting to which this Joint Proxy Statement and Prospectus relates and to the
consummation of the merger, are expected to be substantially less than
$850,000. Accordingly, while there is no limit on the amount of the downward
adjustment that could be made if applicable expenses exceed $1,750,000, the
possibility of applicable expenses exceeding $1,750,000 and therefore that any
downward adjustment in the conversion ratio would be made, is considered
remote.
On August 8, 1995, the closing sales price of a share of FCC Common Stock on
the NASDAQ Stock Market was $30.50 and, based on that price, the market value
of 1.67 shares of FCC Common Stock on such date would be $50.935. There can be
no assurance as to the market value of FCC Common Stock on the date the
proposed merger is consummated.
See "The Plan--Conversion of Central Common Stock."
----------------
THE SECURITIES TO BE ISSUED IN CONNECTION WITH THE PROPOSED MERGER HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMIS-
SION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADE-
QUACY OF THIS JOINT PROXY STATEMENT AND PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
This Joint Proxy Statement and Prospectus was mailed to shareholders of
Central and FCC on approximately August 16, 1995.
THIS JOINT PROXY STATEMENT AND PROSPECTUS IS DATED AUGUST 15, 1995.
No person has been authorized to give any information or to make any
representations other than those contained herein, and, if given or made, such
information or representations must not be relied upon as having been
authorized by FCC or Central. This Joint Proxy Statement and Prospectus shall
not constitute an offer by FCC to sell or the solicitation of an offer by FCC
to buy nor shall there be any sale of the securities offered hereby in any
state in which, or to any person to whom, it would be unlawful prior to
registration or qualification under the laws of such state for FCC to make
such an offer or solicitation. Neither the delivery of this Joint Proxy
Statement and Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of FCC or Central since the date hereof.
All information herein concerning FCC has been furnished by FCC and all
information herein concerning Central has been furnished by Central. FCC has
represented and warranted to Central, and Central has represented and
warranted to FCC, that the particular information so furnished is true and
complete.
AVAILABLE INFORMATION
FCC and Central are subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith are required to
file reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, together with proxy statements and other
information filed by FCC and Central can be inspected at, and copies thereof
may be obtained at prescribed rates from, the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and from the Commission's Regional Offices at 7 World Trade
Center, 13th Floor, New York, New York 10048, and Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
FCC has filed with the Commission a Registration Statement on Form S-4
("Registration Statement") under the Securities Act of 1933 with respect to
the common stock offered hereby. This Joint Proxy Statement and Prospectus
does not contain all of the information set forth in the Registration
Statement or the exhibits thereto. Statements contained herein as to the
contents of any documents are necessarily summaries of the documents, and each
statement is qualified in its entirety by reference to the copy of the
applicable document filed with the Commission. For further information with
respect to FCC and the transactions contemplated hereby, reference is made to
the Registration Statement, including the exhibits thereto.
AS MORE FULLY SET FORTH UNDER "INFORMATION ABOUT FCC" AND "INFORMATION ABOUT
CENTRAL" ELSEWHERE HEREIN, CERTAIN INFORMATION WITH RESPECT TO FCC AND CENTRAL
HAS BEEN INCORPORATED BY REFERENCE INTO THIS JOINT PROXY STATEMENT AND
PROSPECTUS. FCC HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH PERSON TO
WHOM A COPY OF THIS JOINT PROXY STATEMENT AND PROSPECTUS HAS BEEN DELIVERED,
UPON THE WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY OR ALL OF THE
INFORMATION OR DOCUMENTS WHICH HAVE BEEN INCORPORATED BY REFERENCE HEREIN,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES SHOULD BE
DIRECTED TO MR. THOMAS L. CALLICUTT, JR., SENIOR VICE PRESIDENT AND
CONTROLLER, FIRST COMMERCE CORPORATION, P.O. BOX 60279, NEW ORLEANS, LOUISIANA
70160, OR 925 COMMON STREET, 7TH FLOOR, NEW ORLEANS, LOUISIANA 70112,
TELEPHONE (504) 582-2913. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS,
ANY REQUEST SHOULD BE MADE BY SEPTEMBER 8, 1995.
TABLE OF CONTENTS
PAGE
----
SUMMARY.................................................................... i
INTRODUCTORY STATEMENT..................................................... 1
General.................................................................. 1
Purpose of the Meetings.................................................. 1
Shares Entitled to Vote; Quorum; Vote Required........................... 1
Solicitation, Voting and Revocation of Proxies........................... 1
THE PLAN................................................................... 2
General.................................................................. 2
Background of and Reasons for the Plan................................... 2
General................................................................ 2
Central................................................................ 2
FCC.................................................................... 7
Board Recommendations.................................................. 9
Opinions of Investment Bankers .......................................... 9
Opinion to Central..................................................... 9
Opinion to FCC......................................................... 11
Conversion of Central Common Stock....................................... 13
Effective Date........................................................... 14
Exchange of Certificates................................................. 14
Conditions............................................................... 15
Conduct of Business Prior to the Effective Date.......................... 15
Waiver, Amendment and Termination........................................ 17
Interests of Certain Persons............................................. 17
Indemnification and Insurance.......................................... 17
Management............................................................. 18
Employment Agreements.................................................. 18
Directors' and Officers' Commitments................................... 19
Employee Benefits...................................................... 19
Expenses................................................................. 20
Status Under Federal Securities Laws; Certain Restrictions on Resales.... 20
Accounting Treatment..................................................... 21
THE OPTION AGREEMENT....................................................... 21
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.................................... 23
CENTRAL SHAREHOLDERS' DISSENTERS' RIGHTS................................... 24
INFORMATION ABOUT CENTRAL.................................................. 25
INFORMATION ABOUT FCC...................................................... 25
COMPARATIVE RIGHTS OF SHAREHOLDERS......................................... 26
General.................................................................. 26
Preferred Stock.......................................................... 26
Vote Required for Corporate Action....................................... 26
Directors................................................................ 27
Business Combinations.................................................... 27
LEGAL MATTERS.............................................................. 27
EXPERTS.................................................................... 27
OTHER MATTERS.............................................................. 28
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED).............. F-1
Appendix A--Fairness Opinion of The Robinson-Humphrey Company, Inc......... A-1
Appendix B--Fairness Opinion of Keefe, Bruyette & Woods, Inc............... B-1
Appendix C--Agreement and Plan of Merger................................... C-1
Appendix D--Stock Option Agreement......................................... D-1
SUMMARY
The following summary is necessarily incomplete and is qualified in its
entirety by the more detailed information appearing elsewhere herein, the
accompanying documents, the appendices hereto and the documents incorporated
herein by reference. Shareholders are urged to read carefully all such
material.
THE COMPANIES
First Commerce Corporation, a Louisiana corporation ("FCC"), is a multi-bank
holding company with five wholly owned bank subsidiaries in New Orleans, Baton
Rouge, Alexandria, Lake Charles and Lafayette, Louisiana. FCC's principal
executive offices are at 210 Baronne Street, New Orleans, Louisiana 70112, and
its telephone number is (504) 561-1371. See "Information About FCC."
Central Corporation, a Louisiana corporation ("Central"), is a one bank
holding company that owns all of the outstanding stock of Central Bank (the
"Bank"). Central's principal executive offices are at 300 DeSiard Street,
Monroe, Louisiana 71201, and its telephone number is (318) 362-8500. See
"Information About Central."
Unless the context otherwise requires, FCC and its subsidiaries are referred
to collectively herein as "FCC", and Central and the Bank are referred to
collectively as "Central." FCC and Central are collectively referred to as the
"Companies."
THE SPECIAL MEETINGS
Date; Voting. A special meeting of shareholders of Central will be held on
September 18, 1995 at the time and place set forth in the accompanying Notice
of Special Meeting of Shareholders of Central (the "Central Meeting"). Only
record holders of the common stock of Central ("Central Common Stock") on
August 9, 1995 are entitled to notice of and to vote at the Central Meeting.
On that date there were 4,066,731 shares of Central Common Stock outstanding,
each of which is entitled to one vote on each matter properly to come before
the Central Meeting.
A special meeting of shareholders of FCC will be held on September 18, 1995
at the time and place set forth in the accompanying Notice of Special Meeting
of Shareholders of FCC (the "FCC Meeting"). Only record holders of the common
stock of FCC ("FCC Common Stock") and of the preferred stock of FCC on August
8, 1995 are entitled to notice of the FCC Meeting, and only record holders of
FCC Common Stock on such date are entitled to vote at the FCC Meeting. On that
date there were 29,986,657 shares of FCC Common Stock outstanding, each of
which is entitled to one vote on each matter properly to come before the FCC
Meeting.
The Central Meeting and the FCC Meeting are hereafter collectively referred
to as the "Meetings."
Purpose. The purpose of the Meetings is to vote upon proposals to approve an
Agreement and Plan of Merger (the "Plan"), pursuant to which, among other
things, Central will merge into FCC (the "Merger") and shareholders of Central
will receive FCC Common Stock as described below under "Conversion of Central
Common Stock." See "Introductory Statement--Purpose of the Meetings."
Vote Required. The Plan must be approved by the affirmative vote of holders
of at least two-thirds of the Central Common Stock present at the Central
Meeting and holders of at least two-thirds of the FCC Common Stock present at
the FCC Meeting. Directors and executive officers of Central beneficially
owning an aggregate of 1,519,548 shares, or approximately 37.4%, of the
outstanding Central Common Stock have agreed, subject to certain conditions,
to vote in favor of the Plan. Directors and executive officers of FCC owning
an aggregate of 3,181,521 shares, or approximately 10.6%, of the outstanding
FCC Common Stock have indicated that they intend to vote in favor of the Plan.
See "Introductory Statement--Shares Entitled to Vote; Quorum; Vote Required."
THE PLAN
Board Recommendations. The financial and other terms of the Plan were
arrived at through arm's length negotiations between representatives of the
Companies. The Boards of Directors of Central and FCC believe that the Plan is
in the best interests of Central and FCC, respectively, and their respective
shareholders and each has,
i
by unanimous vote, approved the Plan and recommended that its shareholders
vote FOR approval of the Plan. See "The Plan--Background of and Reasons for
the Plan" and "Interests of Certain Persons".
Opinions of Investment Bankers. The Robinson-Humphrey Company, Inc. has
delivered its written opinion to Central to the effect that, as of the date
the Plan was entered into, and based on and subject to the assumptions made,
the factors considered, the review undertaken and the limitations stated, the
exchange ratio of FCC Common Stock for Central Common Stock ("Exchange Ratio")
is fair to Central and its shareholders from a financial point of view. Keefe
Bruyette & Woods, Inc. has delivered its written opinion to FCC to the effect
that, as of the date the Plan was entered into, and based on and subject to
the assumptions made, the factors considered, the review undertaken and the
limitations stated, the Exchange Ratio is fair to the shareholders of FCC from
a financial point of view. The opinions are directed only to the fairness of
the Exchange Ratio from a financial point of view and do not constitute a
recommendation to any shareholder on how to vote at the Meetings. See "The
Plan--Opinions of Investment Bankers."
Conversion of Central Common Stock. On the date the Plan becomes effective
(the "Effective Date"), each outstanding share of Central Common Stock will be
converted into 1.67 shares of FCC Common Stock, subject to downward adjustment
in the unlikely event the total expenses of Central in connection with the
Plan (subject to certain exceptions which exclude expenses Central incurs as a
result of actions taken by or affecting FCC) exceed $1,750,000. To the extent
that applicable expenses exceed this amount, a formula will be applied to
reduce the conversion ratio. Applicable expenses of Central incurred through
August 8, 1995, which include the full amount of investment banking fees
payable if the Merger is consummated, were approximately $900,000, and
additional applicable expenses, including legal and accounting expenses and
expenses related to the Central shareholders meeting to which this Joint Proxy
Statement and Prospectus relates and to the consummation of the Merger, are
expected to be substantially less than $850,000. Accordingly, while there is
no limit on the amount of the downward adjustment that could be made if
applicable expenses exceed $1,750,000, the possibility of applicable expenses
exceeding $1,750,000 and, therefore, that any downward adjustment would be
made is considered remote. Nevertheless, in the unlikely event that applicable
expenses exceed $1,750,000 such that the conversion ratio would be reduced to
below 1.59 shares of FCC Common Stock, the further approval of Central
shareholders will be sought and proxies resolicited before the Merger is
consummated. See "The Plan--Conversion of Central Common Stock."
On August 8, 1995, the closing sales price of a share of FCC Common Stock on
the NASDAQ Stock Market was $30.50 and, based on that price, the market value
of 1.67 shares of FCC Common Stock on such date would be $50.935. There can be
no assurance as to the market value of FCC Common Stock on the Effective Date.
In lieu of issuing any fractional share of FCC Common Stock, each
shareholder of Central who would otherwise be entitled thereto will receive a
cash payment (without interest) equal to such fractional share multiplied by
the Market Value of a share of FCC Common Stock, as defined in the Plan. See
"The Plan--Conversion of Central Common Stock."
Exchange of Certificates. Promptly after consummation of the Plan, a letter
of transmittal, together with instructions for the exchange of Central Common
Stock certificates for FCC Common Stock certificates will be mailed to each
shareholder of record of Central on the Effective Date. Shareholders should
not send in their stock certificates until they have received the letter of
transmittal. FCC Common Stock certificates and payment for any fractional
shares will be sent as promptly as practicable after receipt of a properly
completed letter of transmittal accompanied by the appropriate Central Common
Stock certificates. Central shareholders who cannot locate their certificates
should contact promptly Diana Fontana or Edward F. Wheland, II, Central
Corporation, 300 DeSiard St., Monroe, Louisiana 71201. See "The Plan--Exchange
of Certificates."
Conditions. In addition to approval by the shareholders of the Companies,
consummation of the Plan is conditioned upon, among other things, (i) receipt
of required regulatory approval, (ii) the Merger being accounted for as a
pooling-of-interests, (iii) receipt by the Companies of an opinion from Arthur
Andersen LLP as to the qualification of the Merger as a tax-free
reorganization under applicable law, and (iv) certain other conditions
customary for agreements of this sort. The Companies intend to consummate the
Plan as soon as practicable after all of the conditions have been met or
waived. FCC has filed an application seeking the required regulatory
ii
approval and expects to receive it by October, 1995; however, there can be no
assurance that the approval will be obtained, or that the other conditions to
consummation of the Plan will be satisfied by such date or at all. See "The
Plan--Conditions."
Waiver, Amendment and Termination. Each of the Companies may waive any of
the conditions to its obligation to consummate the Plan other than shareholder
and regulatory approvals. The Plan may also be amended at any time before or
after shareholder approval by mutual agreement, but no amendment made after
such shareholder approval may alter the amount or type of shares into which
Central Common Stock will be converted or alter the Plan in a manner that
would adversely affect any shareholder of the Companies. The Plan may be
terminated at any time before the Effective Date by mutual consent or by
either party (i) if the other party breaches any representation, warranty or
covenant in the Plan which cannot be cured within 30 days after written notice
of such breach, (ii) if by June 30, 1996 the Merger has not occurred, (iii) if
any person or group acquires more than 25% of the outstanding shares of common
stock of the other party, or (iv) on the basis of certain other grounds
specified in the Plan. See "The Plan--Waiver, Amendment and Termination."
Certain Federal Income Tax Consequences. Consummation of the Plan is
conditioned upon receipt by the Companies of an opinion from Arthur Andersen
LLP to the effect that, among other things, each Central shareholder who
receives FCC Common Stock pursuant to the Plan will not recognize gain or loss
except with respect to the receipt of cash in lieu of fractional shares of FCC
Common Stock or pursuant to the exercise of dissenters' rights. BECAUSE OF THE
COMPLEXITY OF THE TAX LAWS, EACH SHAREHOLDER SHOULD CONSULT HIS TAX ADVISOR
CONCERNING THE APPLICABLE FEDERAL, STATE AND LOCAL INCOME TAX CONSEQUENCES OF
THE MERGER. See "Certain Federal Income Tax Consequences."
Dissenters' Rights. Under certain conditions, and by complying with the
specific procedures required by statute and described herein, shareholders of
Central will have the right to dissent from the Plan, in which event, if the
Plan is consummated, they may be entitled to receive in cash the fair value of
their shares of Central Common Stock. See "Central Shareholders' Dissenters'
Rights." Shareholders of FCC are not entitled to dissenters' rights.
INTERESTS OF CERTAIN PERSONS
Indemnification and Insurance. FCC has agreed to provide and to cause the
Bank to continue to provide for a period of 10 years after the Effective Date
rights of indemnification to officers and directors of Central or the Bank
against certain expenses and liability arising out of their service. FCC has
also agreed to provide, under certain conditions, officers and directors
liability insurance to Central's and the Bank's directors and officers, and to
indemnify Central's and the Bank's officers, directors and controlling persons
against expenses and liabilities arising out of alleged misstatements or
omissions in this Joint Proxy Statement and Prospectus or the Registration
Statement of which it is a part. See "The Plan--Interests of Certain Persons--
Indemnification and Insurance."
Management; Employment Contracts. On the Effective Date, Messrs. Robert C.
Cudd, III, Hugh G. McDonald, Jr., Saul A. Mintz and Tom H. Scott, who are
members of Central's Board of Directors, will become directors of FCC, and
James A. Altick, President and Chief Executive Officer and a director of
Central and the Bank, will become an executive officer of FCC and retain his
position at the Bank. In addition, Mr. Altick and four other executive
officers of Central will enter into employment contracts with FCC and the
Bank, and certain officers of the Bank, including such executive officers,
will receive stock options and stock appreciation rights covering in the
aggregate up to 200,000 shares of FCC Common Stock. The Board of Directors and
management of the Bank will not change as a result of the Merger, except that
two executive officers of FCC will become directors of the Bank. See "The
Plan--Interests of Certain Persons--Management" and "--Employment Contracts."
Directors' and Executive Officers' Commitments. Each director and executive
officer of Central has agreed, among other things, to vote as a shareholder in
favor of the Plan and against any other proposal that would prevent the
Merger, and that for two years after the Effective Date he or she will not
compete with the Bank. The agreements to vote were entered into solely in such
persons' individual capacities as beneficial owners of shares of Central and
not in their capacities as directors or officers, and the agreements are
terminable if the fiduciary duties of those individuals as directors or
officers so require. See "The Plan--Interests of Certain Persons--Directors'
and Executive Officers' Commitments."
iii
Employee Benefits. Subject to certain limitations, FCC will provide
employees of Central or the Bank who become employees of FCC or remain
employees of the Bank the same employee benefits as are provided by FCC to its
employees. FCC has also agreed to provide certain additional benefits under
plans of Central and the Bank. See "The Plan--Interests of Certain Persons--
Employee Benefits."
OPTION AGREEMENT
Central has granted FCC an option to purchase newly issued shares equal to
19.9% of the currently outstanding shares of Central Common Stock, with an
exercise price of $30 per share, exercisable only upon the occurrence of
certain events. At the request of FCC, under limited circumstances Central
will repurchase the option and any shares acquired upon exercise for a formula
price. See "The Option Agreement."
SELECTED FINANCIAL DATA OF CENTRAL
The following selected financial data with respect to each of the years in
the five-year period ended December 31, 1994 have been derived from the
consolidated financial statements of Central and should be read in conjunction
with Central's 1994 Report on Form 10-K and Central's Quarterly Report on Form
10-Q for the quarter ended June 30, 1995, which have been incorporated by
reference in this Joint Proxy Statement and Prospectus.
YEARS ENDED DECEMBER 31,
-----------------------------------------------------
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
AVERAGE BALANCE SHEET
DATA:
Total assets.......... $ 778,333 $ 741,044 $ 750,812 $ 708,566 $ 621,223
Earning assets........ 725,631 689,341 698,387 654,749 656,193
Loans and leases*..... 555,931 502,699 463,851 420,635 383,471
Securities............ 113,406 154,343 206,142 206,667 156,879
Deposits.............. 696,238 664,023 673,220 635,854 551,537
Long-term debt........ 693 1,067 5,322 4,798 4,664
Stockholders' equity.. 65,786 57,498 50,509 45,209 41,910
INCOME STATEMENT DATA:
Total interest income. $ 56,314 $ 52,889 $ 56,309 $ 62,448 $ 59,698
Net interest income... 35,230 32,805 30,330 26,739 23,189
Provision for loan
losses............... 1,025 3,080 4,185 4,500 4,175
Other income
(exclusive of
securities
transactions)........ 16,132 15,773 14,498 12,736 11,746
Operating expense..... 34,531 32,404 30,270 28,282 26,362
Net income............ 10,527 9,025 7,052 5,071 3,714
PER SHARE DATA:
Fully diluted earnings
per share............ $ 2.59 $ 2.22 $ 1.73 $ 1.25 $ .91
Primary earnings per
share................ 2.59 2.22 1.73 1.25 .91
Cash dividends........ .38 .31 .27 .21 .21
Book value (period-
end)................. 17.24 15.14 13.19 11.72 10.69
High stock price...... 24.00 16.67 9.25 8.00 8.18
Low stock price....... 14.67 8.89 7.55 7.47 7.29
KEY RATIOS:
Net income as a
percent of average
assets............... 1.35% 1.22% .94% .72% .60%
Net income as a
percent of average
total equity......... 16.00% 15.70% 13.96% 11.22% 8.86%
Net income as a
percent of average
common equity........ 16.00% 15.70% 13.96% 11.22% 8.86%
Net interest margin... 4.92% 4.84% 4.44% 4.20% 4.27%
Allowance for loan
losses to loans and
leases*.............. 1.66% 1.80% 1.75% 1.64% 1.65%
Leverage ratio........ 8.49% 7.79% 6.84% 6.09% 6.25%
Dividend payout ratio. 14.68% 13.82% 15.37% 17.12% 23.37%
--------
* Net of unearned income.
----------------
iv
SELECTED FINANCIAL DATA OF FCC
The following selected financial data with respect to each of the years in
the five-year period ended December 31, 1994 have been derived from the
consolidated financial statements of FCC and should be read in conjunction
with FCC's 1994 Report on Form 10-K, FCC's Report on Form 8-K dated May 8,
1995, FCC's Quarterly Report on Form 10-Q for the quarter ended June 30, 1995,
and FCC's Report on Form 8-K dated May 31, 1995, which have been incorporated
by reference in this Joint Proxy Statement and Prospectus. Selected financial
data for the years 1992 through 1994 have been restated to reflect the merger,
effective February 17, 1995, of First Bancshares, Inc. into FCC, which was
accounted for as a pooling-of-interests. Selected financial data for the years
1990 and 1991 would not be materially different if restated.
YEARS ENDED DECEMBER 31,
----------------------------------------------------------
1994 1993 1992
(RESTATED) (RESTATED) (RESTATED) 1991 1990
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
AVERAGE BALANCE SHEET
DATA:
Total assets.......... $6,695,681 $6,568,960 $5,969,877 $4,671,478 $4,482,019
Earning assets........ 6,148,715 6,028,927 5,486,604 4,257,388 4,035,104
Loans and leases*..... 2,975,045 2,555,754 2,329,899 2,323,018 2,402,541
Securities............ 3,094,496 3,166,901 2,786,965 1,515,299 1,290,487
Deposits.............. 5,438,314 5,391,832 5,164,378 3,931,612 3,552,578
Long-term debt........ 89,266 98,244 100,816 101,246 103,033
Stockholders' equity.. 521,668 486,256 366,786 235,385 239,011
INCOME STATEMENT DATA:
Total interest income. $ 427,790 $ 413,973 $ 419,196 $ 393,922 $ 408,996
Net interest income... 271,268 265,620 249,165 191,862 168,021
Provision for loan
losses............... (11,443) (5,804) 22,720 43,734 47,425
Other income
(exclusive of
securities
transactions)........ 113,049 105,387 98,338 83,419 73,213
Operating expense..... 253,659 231,665 213,515 185,963 165,325
Net income............ 66,762 101,202 76,155 34,029 22,038
PER SHARE DATA:
Fully diluted earnings
per share............ $ 2.10 $ 3.11 $ 2.58 $ 1.56 $ .94
Primary earnings per
share................ 2.15 3.36 2.73 1.56 .94
Cash dividends........ 1.10 .85 .70 .64 .64
Book value (period-
end)................. 14.95 16.31 13.59 11.38 10.45
High stock price...... 30.00 32.20 27.86 18.14 12.54
Low stock price....... 21.75 23.90 16.94 7.20 6.66
KEY RATIOS:
Net income as a
percent of average
assets............... 1.00% 1.54% 1.28% .73% .49%
Net income as a
percent of average
total equity......... 12.80% 20.81% 20.76% 14.46% 9.22%
Net income as a
percent of average
common equity........ 14.46% 23.74% 24.53% 14.46% 9.11%
Net interest margin... 4.50% 4.46% 4.63% 4.69% 4.37%
Allowance for loan
losses to loans and
leases*.............. 1.65% 2.49% 3.37% 3.11% 2.44%
Leverage ratio........ 8.07% 7.61% 6.72% 4.87% 4.66%
Dividend payout ratio. 51.16% 25.30% 25.64% 41.03% 68.09%
--------
* Net of unearned income.
----------------
v
COMPARATIVE PER SHARE DATA (UNAUDITED)
The following table presents certain information for FCC and Central on an
historical, unaudited pro forma combined and unaudited pro forma equivalent
basis. The unaudited pro forma combined information is based upon the
historical financial condition and results of operations of the Companies and
adjustments directly attributable to the Plan based on estimates derived from
information currently available. They do not purport to be indicative of the
results that would actually have been obtained if the Plan had been
consummated on the date or for the periods indicated below, or the results
that may be obtained in the future.
HISTORICAL
-------------- PRO FORMA CENTRAL
FCC CENTRAL COMBINED(1)(2) EQUIVALENT
------ ------- -------------- ----------
PRIMARY EARNINGS PER COMMON SHARE(3):
Years ended:
December 31, 1994.................. $ 2.15 $ 2.59 $ 2.04 $ 3.41
December 31, 1993.................. 3.36 2.22 2.97 4.96
December 31, 1992.................. 2.73 1.73 2.38 3.97
Six months ended June 30, 1995....... $ 1.11 $ 1.43 $ 1.06 $ 1.77
DIVIDENDS DECLARED PER COMMON
SHARE(4):
Years ended:
December 31, 1994.................. $ 1.10 $ .38 $ .93 $ 1.84
December 31, 1993.................. .85 .31 .72 1.42
December 31, 1992.................. .70 .27 .59 1.17
Six months ended June 30, 1995....... $ .60 $ .20 $ .51 $ 1.00
BOOK VALUE PER COMMON SHARE(5):
As of June 30, 1995.................. $18.67 $18.57 $17.23 $28.77
As of December 31, 1994.............. $14.95 $17.24 $14.07 $23.50
--------
(1) In accordance with generally accepted accounting principles, FCC expects
to account for the Merger using the pooling-of-interests method.
(2) To calculate pro forma combined per share information, it has been assumed
that the number of outstanding shares of FCC common stock includes shares
to be issued by FCC upon consummation of Merger. Under the terms of the
Plan, the shareholders of Central will receive 1.67 (the "Conversion
Rate") shares, subject to reduction in certain limited circumstances not
expected to occur, of FCC common stock for each share of Central common
stock outstanding. For purposes of this table, it has been assumed that
the number of shares issued is 6,791,441 based on the number of shares of
Central common stock outstanding as of June 30, 1995.
(3) Pro forma primary earnings per common share were calculated by dividing
the combined net income, adjusted for preferred stock dividends, of FCC
and Central during the periods presented by the weighted average
outstanding shares of FCC common stock during such periods, after
adjustment for shares of FCC common stock assumed to be issued in
connection with the Merger. The Central equivalent data presented is the
product of the pro forma combined per share information multiplied by the
Conversion Rate.
(4) Pro forma dividends were calculated by multiplying FCC's and Central's
dividend rates by the applicable weighted average outstanding shares of
FCC and Central common stock. Pro forma dividends per common share were
then calculated by dividing pro forma total dividends by the weighted
average outstanding shares of FCC common stock during such periods, after
adjustment for shares of FCC common stock assumed to be issued in
connection with the Merger. The Central equivalent data presented was
calculated by multiplying the historical per share FCC common stock
dividend by the Conversion Rate.
(5) Pro forma combined book value per common share was calculated by dividing
the total of FCC's and Central's common stockholders' equity by the total
number of shares of FCC common stock outstanding after adjustment for
unearned shares of FCC restricted stock and for shares of FCC common stock
assumed to be issued in connection with the Merger. The Central equivalent
data presented is the product of the pro forma combined per share
information multiplied by the Conversion Rate.
----------------
vi
In addition to the Plan, FCC had at June 30, 1995, two other merger
transactions pending, one of which, the merger with Lakeside Bancshares, Inc.,
was completed on August 3, 1995. There can be no assurance that the other
transaction will be completed. Pro forma information giving effect to all of
these transactions is included beginning at page F-1 of this Joint Proxy
Statement and Prospectus.
RECENT MARKET PRICES
On May 15, 1995, the day before the public announcement that the Companies
entered into the Plan, the closing sales price for a share of FCC Common
Stock, as quoted on the NASDAQ Stock Market, was $28.00. On August 8, 1995,
the closing sales price for a share of FCC Common Stock was $30.50. No
assurance can be given as to the sales price of a share of FCC Common Stock on
the Effective Date.
Central Common Stock is not traded on any exchange, and there is no
established public trading market for the stock. There is, however, very
limited and sporadic trading of Central Common Stock in Central's local area.
Based on the limited information available to management, during the 60 days
prior to the public announcement that the Companies entered into the Plan
sales of 124 shares, 16 shares and 2,497 shares were effected at prices per
share of $24, $24.125 and $25, respectively. There can be no assurance that
such sales represent all sales effected during the period or that they were
effected on an arms-length basis.
vii
INTRODUCTORY STATEMENT
GENERAL
This Joint Proxy Statement and Prospectus is furnished to the shareholders
of Central Corporation ("Central") and First Commerce Corporation ("FCC") in
connection with the solicitation of proxies on behalf of their respective
Boards of Directors for use at special meetings of shareholders of Central
(the "Central Meeting") and FCC (the "FCC Meeting") to be held on the date and
at the time and place specified in the accompanying notices.
Central and FCC (collectively, the "Companies") have each supplied all
information included herein with respect to it and its consolidated
subsidiaries. Unless the context otherwise requires, Central and Central Bank,
its wholly owned bank subsidiary (the "Bank"), are collectively referred to
herein as "Central," FCC and its subsidiaries are collectively referred to
herein as "FCC," and the Central Meeting and the FCC Meeting are collectively
referred to as the "Meetings."
PURPOSE OF THE MEETINGS
The purpose of the Meetings is to consider and vote upon proposals to
approve an Agreement and Plan of Merger between FCC and Central (the "Plan"),
pursuant to which, among other things, Central will merge into FCC (the
"Merger"), the Bank will as a result become a wholly owned banking subsidiary
of FCC, and each outstanding share of common stock of Central ("Central Common
Stock") will be converted into 1.67 shares of common stock of FCC ("FCC Common
Stock"), subject to possible adjustment as described under "The Plan--
Conversion of Central Common Stock."
SHARES ENTITLED TO VOTE; QUORUM; VOTE REQUIRED
Only holders of record of Central Common Stock at the close of business on
August 9, 1995 are entitled to notice of and to vote at the Central Meeting.
On that date, there were 4,066,731 shares of Central Common Stock outstanding,
each of which is entitled to one vote on each matter properly brought before
the Central Meeting. Only holders of record of FCC Common Stock and FCC
preferred stock at the close of business on August 8, 1995 are entitled to
notice of the FCC Meeting, and only holders of FCC Common Stock on that date
are entitled to vote at the FCC Meeting. On that date, there were 29,986,657
shares of FCC Common Stock outstanding, each of which is entitled to one vote
on each matter properly brought before the FCC Meeting. The presence at the
Meetings, in person or by proxy, of the holders of a majority of the
outstanding shares of common stock of the respective Companies is necessary to
constitute a quorum.
The Plan must be approved by the affirmative vote of the holders of at least
two-thirds of the Central Common Stock present at the Central Meeting and by
the holders of at least two-thirds of the FCC Common Stock present at the FCC
Meeting. An abstention will have the effect of a vote against the Plan and
will cause a Central shareholder otherwise entitled to dissenters' rights to
forfeit any claim to such rights. A broker non-vote will be counted for
purposes of determining a quorum but will not be counted in determining the
voting power present with respect to the vote on the Plan.
Directors and executive officers of Central beneficially owning an aggregate
of 1,519,548 shares, or approximately 37.4%, of the outstanding Central Common
Stock, have agreed to vote in favor of the Plan, and directors and executive
officers of FCC beneficially owning an aggregate of 3,181,521 shares, or
approximately 10.6%, of the outstanding FCC Common Stock, have indicated that
they intend to vote in favor of the Plan.
SOLICITATION, VOTING AND REVOCATION OF PROXIES
In addition to soliciting proxies by mail, directors, officers and employees
of Central and FCC, without receiving additional compensation therefor, may
solicit proxies by telephone and in person. Arrangements will also be made
with brokerage firms and other custodians, nominees and fiduciaries to forward
solicitation
1
materials to the beneficial owners of shares of Central Common Stock and FCC
Common Stock, and FCC and Central will reimburse such parties for reasonable
out-of-pocket expenses incurred in connection therewith. The cost of
soliciting proxies is being paid by FCC and Central. In addition, FCC has
retained Corporate Investor Communications, Inc. at its expense to aid in the
solicitation of proxies for a fee of $8,000, plus out-of-pocket expenses.
The form of proxy that accompanies this Joint Proxy Statement and Prospectus
permits each holder of record of Central Common Stock and FCC Common Stock on
the respective record dates to vote on all matters that properly come before
the respective Meetings. Where a shareholder specifies his choice on the
accompanying form of proxy with respect to the proposal to approve the Plan,
the shares represented by the proxy will be voted in accordance with such
specification. If no such specification is made, the shares will be voted in
favor of the Plan. If a Central shareholder does not sign and return a proxy
and specify on the proxy an instruction to vote against the Plan, he will not
be able to exercise dissenters' rights unless he attends the Meeting in person
and votes against the Plan and gives written notice of his dissent from the
Plan at or prior to the Meeting. See "Central Shareholders' Dissenters'
Rights." A proxy may be revoked by (i) giving written notice of revocation at
any time before its exercise to the Secretary of Central or FCC, as the case
may be, (ii) executing and delivering to the Secretary at any time before its
exercise a later dated proxy or (iii) attending the Meeting and voting in
person.
THE PLAN
GENERAL
The following brief description does not purport to be complete and is
qualified in its entirety by reference to the Plan, a copy of which is
attached as Appendix C.
BACKGROUND OF AND REASONS FOR THE PLAN
General. The financial and other terms of the Plan were arrived at through
arm's length negotiations between representatives of the Companies.
Determination of the consideration to be received by Central's shareholders in
exchange for their stock was based upon various factors considered by the
Boards of Directors of FCC and Central, including primarily the comparative
financial condition, historical results of operations, current business and
future prospects of the Companies, the market price, dividends, and historical
earnings per share of the common stock of the Companies, and the desirability
of combining the financial and managerial resources of FCC and the Bank to
pursue available consumer and commercial banking business in the market area
served by Central.
Central. As part of its continuing efforts to maximize shareholder value,
Central has considered various options from time to time, including the
possibility of merging with another bank holding company. Since 1985, when the
prohibition against multi-bank holding companies owning banks located in
different parishes was lifted, Central received from various bank holding
companies in Arkansas, Mississippi and Louisiana informal expressions of
interest regarding possible business combinations. Central did not respond to
these interests because, at the time, Central's Board of Directors deemed it
in the best interest of Central's shareholders to remain an independent
company. Beginning in late 1994, Central noted the industry trend of
consolidation in the Louisiana market. Central expects further competition to
result from the relaxation of interstate branching laws. Although Central has
continued to operate profitably, it believes its growth and success could be
enhanced by affiliating with a larger banking organization.
Central began to consider strategic alternatives aimed at enhancing
shareholder value and increasing its market share. During 1994, James A.
Altick, President and Chief Executive Officer of Central, had a number of
conversations with individual Board members concerning the strategic
alternatives available to Central. The
2
issues discussed by Mr. Altick and the directors included how a possible
strategic combination may enhance shareholder value, enable Central to offer
new products and services to its customers, enable Central to control expenses
and enable Central to expand its market coverage.
During December 1994 and January 1995, the Chief Executive Officer of a
regional bank holding company (not FCC) which had previously expressed strong
interest in Central approached Mr. Altick to discuss a possible combination
transaction with Central. These exploratory discussions included discussions
of potential transaction structures, an informal exchange of information about
both parties and consideration of a variety of other matters, but no specific
transaction was proposed.
During these two months, the exploratory discussions with the interested
party were conducted by Mr. Altick. Central's President's Advisory Committee
was constantly kept informed of these discussions. The purpose of the
President's Advisory Committee is to provide Mr. Altick with the guidance of
the Board in important decisions involving Central. The President's Advisory
Committee consists of directors Robert C. Cudd, III, Hugh G. McDonald, Jr.,
Saul A. Mintz, and T.H. Scott, whose combined holdings of Central equal
approximately 30.0% of the outstanding shares of Central Common Stock. Each
member of the President's Advisory Committee will serve on FCC's Board of
Directors after consummation of the Merger.
On December 5, 1994, Central received a written communication from the
regional bank holding company with which it had exploratory conversations in
early December 1994. The communication expressed interest in discussing a
possible combination with Central and set forth a preliminary proposal which
contemplated a stock for stock merger pursuant to which shareholders would
receive a fixed number of shares which had a value equal to a multiple of
Central's book value, based on the market price of the regional bank holding
company's stock at that time. The communication further provided that if a
merger was consummated, the Bank would be held as a separate subsidiary of the
company. Within a few days, the Chief Executive Officer of the regional bank
holding company contacted Mr. Altick to increase the number of shares and the
multiple of Central's book value initially proposed.
During the month of January 1995, Mr. Altick contacted The Robinson-Humphrey
Company, Inc. ("Robinson-Humphrey"), a nationally recognized investment
banking firm with substantial experience in mergers and acquisition
transactions, regarding the services it offered in the merger context.
Although Central did not immediately retain Robinson-Humphrey, pursuant to Mr.
Altick's request, Robinson-Humphrey performed a preliminary analysis for the
President's Advisory Committee which identified recommended strategic merger
partners for Central. The two noted companies that could provide outstanding
opportunities for Central were the regional bank holding company with which
Central had exploratory discussions and FCC.
At the direction of the President's Advisory Committee, Mr. Altick
approached FCC to ascertain its interest, if any, in a possible combination
with Central. On February 6, 1995, Mr. Altick met with FCC's President and
Chief Executive Officer, Ian Arnof, who presented an information booklet that
highlighted the potential advantages of a merger between the two companies,
including increased market share and profitability and returns to
shareholders. Copies of the information booklet were forwarded to the
President's Advisory Committee. In February and March 1995, Central received
letters from FCC which expressed interest in merging with Central and proposed
a general framework for an agreement. The letters suggested a stock for stock
exchange, pursuant to which Central's shareholders would receive approximately
2.6 times Central's December 1994 book value, based on the then current market
value of FCC's common stock. FCC's letters also stated that the Bank would
become a wholly-owned subsidiary of FCC when the merger was completed.
In late February 1995, Central hired Robinson-Humphrey to advise Central on
its strategic alternatives. Central also retained special merger counsel with
respect to a possible business combination.
During February and March, Mr. Altick, with the approval of the President's
Advisory Committee, had conversations with the Chief Executive Officers of FCC
and the other party to gain a better understanding of the extent of their
interest in Central. The President's Advisory Committee was informed of all
such discussions.
3
During this time period, in response to an inquiry from the President of the
regional bank holding company, Mr. Altick notified him that Central had
received a higher proposal. The other regional bank holding company for a
second time increased the number of shares offered, and its stock price had
risen during this time. Nevertheless, the aggregate price proposed by the
regional bank holding company still fell short of the current value offered by
FCC.
During the last several weeks of March and the first week of April,
Robinson-Humphrey conducted preliminary due diligence of FCC and the regional
bank holding company in order to determine the quality of their respective
earnings and their future prospects.
On April 6, 1995, at a meeting of the President's Advisory Committee,
Robinson-Humphrey presented a preliminary analysis and recommendations to
Central concerning independent internal growth and development prospects as
well as merger possibilities, particularly as to FCC and the other interested
bank holding company. During the following few days, Mr. Altick discussed his
conversations with FCC and the other interested party with the individual
members of the Central Board and informed them of the specific results of the
Robinson-Humphrey analysis.
On April 12, 1995, at a regular meeting of Central's Board of Directors, the
Board discussed the informal expressions of interest regarding the possible
acquisition of Central by FCC and the interest expressed by the other regional
bank holding company. The Board expressed a concern that although Central
would appear likely to continue to grow and prosper on its own, it might not
achieve its greatest potential without a strategic combination. The Board
recognized that a merger transaction would enable Central to gain access to
additional products and services, such as proprietary mutual funds, and to
achieve economies of scale for its expenses through consolidation of certain
functions and operations. A merger would also assist Central in expanding its
franchise in the region through acquisitions paid for with the more liquid
stock of a larger holding company. Further, as a part of a larger
organization, Central would have access to substantially more capital with
which to fund its expansion.
The Board also discussed in general terms the strategic benefits of a merger
transaction for Central's shareholders. The value of Central's shares and
dividends paid to Central's shareholders would be significantly increased in
the near term due to the significant value which an exchange of Central's
shares for those of a larger company would bring. In the long term, Central's
shareholders would benefit from the expected increase in value resulting from
the franchise strength of the combined entity in the marketplace. Shareholders
would also benefit from the ownership of more liquid stock when selling in the
secondary market.
The Board discussed the benefits of possible transactions with the two
parties who had expressed interest in a possible merger. Mr. Altick reported
the increased proposal from the regional bank holding company and FCC's
proposal. A comparison of the two proposals showed that Central's shareholders
would receive a higher nominal value for their shares with FCC than the other
interested party. The Board also discussed the long-term values that would
result from a merger with FCC or the other regional bank holding company,
based on the Robinson-Humphrey presentation on April 6, 1995. The Robinson-
Humphrey analysis illustrated that, based on currently available information,
it is anticipated that Central's shareholders would experience significantly
higher per share returns over the next four-year period by a merger with FCC
rather than either a merger with the previously described regional bank
holding company or remaining independent. FCC's strong presence in the State
of Louisiana would also provide a vehicle for the Bank to expand its market
into other areas and to provide additional products to the areas it currently
served. Further, as FCC's deposit area did not substantially overlap with
Central's, a merger of the two companies would not require large divestitures.
The Board also agreed that FCC's excellent reputation in the Louisiana banking
market would be advantageous to the Bank, as would its intent to hold the Bank
as a separate subsidiary.
After discussing the Board's fiduciary duties with respect to its
consideration of such a transaction, particularly those owed to Central's
shareholders and the advantages and disadvantages of the two offers, as well
4
as of remaining independent, the Board unanimously authorized the President's
Advisory Committee and Mr. Altick in consultation with investment bankers and
legal counsel to focus their efforts on reaching an agreement with FCC. If
acceptable terms could not be reached with FCC, the Board instructed Mr.
Altick and the President's Advisory Committee to pursue further discussions
with the other interested party.
On April 13, 1995, the President's Advisory Committee held a telephonic
meeting with special merger counsel to discuss how to proceed. The Committee
discussed negotiation strategies with its counsel based on information
presented in FCC's letters and from conversations with FCC's management.
On April 18, 1995, FCC sent an initial draft of an agreement and plan of
merger to Central. The draft was distributed to and reviewed by certain senior
officers of Central, its special merger counsel and Robinson-Humphrey.
Material terms of the agreement were communicated by Mr. Altick to the
President's Advisory Committee. The draft contained provisions which required
the parties to enter into a stock option agreement whereby FCC would receive
an option to purchase 19.9% of Central's common stock if certain events
occurred. The draft also contemplated that executive officers and directors
would sign an "insider commitment" to vote their shares in favor of the
merger. FCC did not provide copies of the proposed stock option agreement and
insider commitment at this time. The draft agreement also contained a
provision under which expenses incurred by Central in connection with the
merger which exceeded an unspecified limit would be deducted proportionately
from the shares to be received by individual shareholders. Central and its
advisors reviewed the proposed agreement and responded on April 29, 1995.
Thereafter, the parties engaged in intensive negotiations over the terms of
the agreement.
On May 8, 1995, a meeting was held in New Orleans between FCC and Central
which included Mr. Altick, Central's special merger counsel, a representative
of Robinson-Humphrey, executive officers of FCC, including Ian Arnof, FCC's
President and Chief Executive Officer, and FCC's outside counsel. A second
draft of the agreement was presented which provided for, among other things, a
conversion ratio of 1.67 shares of FCC Common Stock for every share of Central
Common Stock, subject to a deduction for expenses which exceeded an
undetermined amount, the stock option agreement provision and the insider
commitments. These provisions were vigorously negotiated. After lengthy
negotiations, it was clear that although FCC was willing to negotiate the
individual terms of the agreements, FCC would not agree to a merger with
Central in the absence of a stock option agreement, insider commitments and a
limit on expenses. Central's President's Advisory Committee determined that
the advantages associated with a merger with FCC outweighed the possible
disadvantages which might be associated with the stock option agreement,
insider commitments and an expense limit. Therefore, the President's Advisory
Committee instructed Mr. Altick and Central's outside counsel to continue to
negotiate with FCC to reach the most favorable terms which could be obtained
from FCC. A third draft of the merger agreement and initial drafts of the
stock option agreement and the insider commitments were sent by FCC on May 9,
1995.
In addition to the negotiations between counsel during the months of April
and May, Mr. Altick and Mr. Arnof conducted ongoing conversations concerning
the possible terms of the merger agreement and related agreements.
On May 8, 1995, Central received a letter from a Louisiana bank holding
company expressing its interest in discussing a possible merger with Central.
The letter generally addressed the benefits of a merger between Central and
the Louisiana bank holding company, but did not set forth any specific terms.
On May 11, 1995, the President's Advisory Committee held a telephonic
meeting with its special merger counsel and Robinson-Humphrey to discuss the
terms of the proposed agreement and the conversion ratio offered by FCC. The
President's Advisory Committee also discussed the terms of the proposed stock
option agreement. The Committee discussed the third letter of interest and the
advantages and disadvantages of such a merger, assuming that party was to make
a proposal more favorable than the FCC proposal. The Committee also discussed
its fiduciary duties in light of receipt of this letter. The Committee, having
considered the interests of Central and its shareholders as well as the
social, legal and economic effects on employees, customers and the
5
community, determined to continue with negotiations of a merger with FCC and
not the third interested party. This conclusion was based in part on the
Committee's understanding as to the third interested party's prospects for
remaining independent and the possible necessity of divestiture in markets
where Central and the third party may have overlapping business operations
which could have the effect of boosting a competitor's business as well as
altering existing relationships with customers.
Over the following weekend, outside counsel for Central and FCC negotiated
the Plan, the stock option agreement and the insider commitments. Further
negotiations regarding the limit on expenses also took place.
On May 15, 1995, the Central Board of Directors held a special meeting to
discuss the terms of the proposed merger agreement with FCC. Robinson-Humphrey
reviewed the proposed financial terms of the Plan with the Central Board and
compared the terms of the FCC offer with the preliminary proposal of the
regional bank holding company, as well as Central's prospects for remaining a
stand-alone company. After further discussion, Robinson-Humphrey delivered its
written opinion that, as of that date, from a financial point of view, the
terms of the merger as provided in the Plan were fair to the shareholders of
Central. See "--Opinions of Investment Bankers." Central's special merger
counsel also attended the meeting and assisted the Board in understanding the
legal implications of the Plan and the stock option agreement. The President's
Advisory Committee reported to the Board regarding the interest expressed by
the Louisiana bank holding company and recommended that a merger with such
company not be pursued. After deliberating with respect to the merger and the
other matters contemplated by the Plan, considering among other things, the
matters discussed below and the opinion of Robinson-Humphrey referred to
above, the Central Board, by unanimous vote of all directors, approved the
Plan and the transactions contemplated thereby as being in the best interest
of Central and its shareholders. Immediately following the Board vote, Central
entered into the Plan and the stock option agreement (the "Option Agreement")
with FCC. Central also entered into a confidentiality agreement with FCC in
connection with the proposed transaction.
In reaching its conclusion to approve the Plan and the Option Agreement, the
Central Board considered a number of factors, including the following:
(a) Information with respect to Central's financial condition on both a
historical and pro forma basis and future dividends. The Central Board
considered the financial prospects for Central and its shareholders if
Central determined to remain a stand-alone company.
(b) The written opinion of Robinson-Humphrey, that as of May 15, 1995,
from a financial point of view, the terms of the merger as provided in the
Plan were fair to Central shareholders. See "--Opinions of Investment
Bankers."
(c) The financial highlights of FCC and the effect of the merger on FCC.
(d) A comparison of the terms of the Plan with recent transactions
involving similar companies. Specifically, the Board discussed the premium
to be paid to shareholders of Central and how it compared with recent bank
merger transactions involving selling institutions with assets between $500
million and $1.5 billion as well as with recent transactions involving
Louisiana banks as sellers.
(e) The terms of FCC's offer, including the provision that the Bank would
be held as a separate subsidiary of FCC following the merger; the tax free
nature of the merger for Central shareholders; the exchange ratio; and the
Option Agreement.
(f) The effect on Central's shareholders' value if Central continued as a
stand-alone entity as compared to the effect of a merger with FCC,
including a comparison of earnings per share and book value per share on a
pro forma basis. The Board analyzed future dividends for Central
shareholders and post-merger shareholder dividends.
(g) The interests of Central and its shareholders as well as the social,
legal and economic effects on employees, customers and the community.
6
(h) The other potential benefits to Central shareholders in light of the
financial condition and prospects of the two companies as a combined
company and the current economic and financial environment, including, but
not limited to, other possible strategic alternatives.
In addition, in reaching its conclusion to approve the Plan and the
transactions contemplated thereby, the Central Board considered the terms of
the Option Agreement and the fact that the Plan generally prohibits Central
from proposing, discussing, negotiating or entering into agreements relating
to alternative transactions prior to the effective date of the Plan. The
Central Board determined that the price offered by FCC, the projected value of
FCC's shares as a result of the merger with Central and the potential growth
for the combined organization made a merger transaction with FCC an extremely
attractive opportunity for Central and its shareholders. Because FCC made it
clear that the Option Agreement and the insider commitments were essential to
its willingness to enter into the transaction, the Board determined that it
was in the best interest of Central shareholders to enter into the Option
Agreement and insider commitments in order to obtain the strong benefits of
the proposed merger with FCC and the outstanding economic terms which had been
negotiated and agreed to by FCC.
In the two months following the signing of the Plan, issues pertaining to
the Option Agreement arose which necessitated certain clarifying changes to
the Plan and the Option Agreement. Pursuant to these changes, in the unlikely
event that FCC exercises the stock option, sells the shares acquired pursuant
to such exercise ("Option Shares") to a third party and then attempts to
consummate the Merger, the Board of Directors of Central would have the right
to terminate the Plan if all of the Option Shares would not be cancelled by
virtue of the Merger. The Board of Directors could determine, pursuant to its
fiduciary duty, not to exercise such termination right even though all Option
Shares would not be cancelled, and to consummate the transaction with FCC. In
such event, Central shareholders would experience some dilution when their
shares of Central Common Stock are exchanged for shares of FCC Common Stock.
The amount of such dilution would be calculable at the time the Central Board
makes its determination as to whether or not to consummate the transaction
under these circumstances. Any dilution would depend upon, among other
factors, the number of Option Shares not cancelled, the stock price of FCC
Common Stock at the time of the Merger and the aggregate price paid to FCC for
the Option Shares. In addition, a termination provision was added to the
Option Agreement under which FCC's right to exercise the stock option will
expire upon the earlier of March 31, 1997 or the date that is one year
following the termination of the Plan, if such termination occurs after the
first "Purchase Event" to occur. See "The Option Agreement" for a description
of the material terms thereunder.
On July 12, 1995, upon the advice of Robinson-Humphrey that the
aforementioned changes to the Plan and the Option Agreement would not cause
Robinson-Humphrey to change its opinion that the consideration to be received
pursuant to the Plan is fair, from a financial point of view, to Central's
shareholders, the Central Board unanimously ratified these changes to the Plan
and the Option Agreement. See "--Opinions of Investment Bankers--Opinion to
Central."
The foregoing discussion of the information and factors considered by the
Central Board is not intended to be exhaustive, but is believed to include all
material factors considered by the Central Board. In reaching its
determination to approve and recommend the Plan, the Central Board did not
assign any relative or specific weight to different factors. The Central Board
is unanimous in its recommendation that Central shareholders vote for approval
of the Plan.
FCC. FCC's initial expansion in 1985 outside the New Orleans, Louisiana area
occurred in the southern region of the State, and subsequent acquisitions have
focused on expanding FCC's market share within that region, which is the more
populous part of the State and, generally, has had greater economic activity.
As a result, FCC has not had a physical presence in the North Louisiana
region. However, the Board of Directors of FCC has for some time considered it
desirable for FCC to enter the North Louisiana region if an appropriate
acquisition opportunity arose.
An acquisition opportunity in North Louisiana was considered appropriate if
the financial institution to be acquired were of substantial size, were
located in a metropolitan area within the region, had stable management
7
capable in FCC's judgment of continuing to manage the acquired institution as
a part of the FCC group of banks, and were consistently profitable. Central
was one of a small number of institutions in North Louisiana identified by
management of FCC as meeting these criteria, and from time to time in recent
years FCC management indicated to Central that FCC had a strong interest in
participating in discussions with Central should Central desire to explore the
possible benefits of affiliation with FCC.
After Central contacted FCC in early 1995 indicating a desire to explore its
available options, including an affiliation with FCC, management of FCC and
the Executive Committee of FCC's Board of Directors confirmed that an
affiliation with Central remained highly desirable and that, moreover, given
other acquisitions and events that had taken place in North Louisiana in
recent years, in 1995 Central best met FCC's criteria for expansion into the
region. In so concluding, FCC management and the Executive Committee noted the
following:
(1) Central was the largest remaining potential acquisition candidate in
the region; the second largest institution in the region that had not
affiliated with another institution is less than one third the size of
Central.
(2) Central is located in a sizable city and metropolitan area in North
Louisiana, and, moreover, has a market presence in other parts of the
region.
(3) Central has a stable, experienced management team that is fully
supportive of an affiliation with a larger financial institution and able
and willing to continue to manage the Bank cooperatively with FCC after the
affiliation.
(4) Central had maintained profitability and growth during the recent
period of economic adversity in Louisiana and in the face of substantially
increased competition resulting from the entry of larger financial
institutions into its markets. According to an independent source, Central
actually increased its deposit share in its primary market from 27.9% in
1990 to 37.5% in 1994 and was first in deposit share during all periods.
(5) Central's asset quality was strong, with non-performing assets only
.023 percent of assets, low non-performing assets and healthy reserves.
(6) Other opportunities for expansion such as denovo branching or
affiliation with other financial institutions in the area were considerably
less desirable than an affiliation with Central, because of size,
geographical location or other factors.
In recommending to the FCC Board of Directors the consideration to be
offered by FCC to shareholders of Central, FCC management and the Executive
Committee took into account (i) the foregoing factors, (ii) the likelihood
that Central would also receive one or more aggressive proposals from other
financial institutions for which Central was also a highly desirable
acquisition candidate, and (iii) FCC management's estimates that through
consolidation of functions and other cost-saving techniques, Central could
achieve additional annual pre-tax earnings in the range of $10-12 million as a
result of an affiliation with FCC. It was recognized that after taking into
account the cost saving estimates, the consideration proposed by FCC was, on a
pro-forma basis, slightly dilutive to FCC's post-merger earnings per share,
but management and the Executive Committee believed such potential dilution
was acceptable in light of the opportunities an affiliation with Central
presented to FCC to further enhance revenue and earnings and thus overcome the
potential dilution by providing a base for further market penetration in the
North Louisiana region and through offering additional products and services
to Central's substantial customer base.
On the basis of the foregoing, FCC presented a merger proposal to Central
and negotiated the terms of the proposal with Central as described under "--
Central," above. On May 15, 1995, the Board of Directors of FCC met to
consider the recommendations of management and the Executive Committee and the
terms of the Plan and related documents as negotiated by management. The Board
reviewed and considered the factors described in the preceding paragraphs,
additional information about Central provided by management, the financial and
other terms of the Plan as set forth in the Plan documents and as further
described by FCC's management and outside counsel, and the written opinion of
Keefe, Bruyette & Woods, Inc., that as of May 15, 1995, from a financial point
of view, the proposed exchange ratio of FCC Common Stock for Central Common
Stock was fair
8
to FCC's shareholders. In reaching its conclusion to approve and recommend the
Plan, FCC's Board did not assign relative or specific weight to the different
factors considered.
Board Recommendations. The Boards of Directors of Central and FCC have each
unanimously approved the Plan and recommend that their respective shareholders
vote FOR approval of the Plan.
OPINIONS OF INVESTMENT BANKERS
Opinion to Central. Central retained The Robinson-Humphrey Company, Inc.
("Robinson-Humphrey") to act as its financial adviser in connection with the
Merger. Robinson-Humphrey has rendered an opinion to Central's Board of
Directors that, based on the matters set forth therein, the consideration to
be received pursuant to the Merger is fair, from a financial point of view, to
Central's shareholders. The text of such opinion is set forth in Appendix A
and should be read in its entirety by shareholders of Central.
The consideration to be received by Central shareholders in the Merger was
determined by Central and FCC in their negotiations. No limitations were
imposed by the Board of Directors or management of Central upon Robinson-
Humphrey with respect to the investigations made or the procedures followed by
Robinson-Humphrey in rendering its opinion.
In connection with rendering its opinion to Central's Board of Directors,
Robinson-Humphrey performed a variety of financial analyses. However, the
preparation of a fairness opinion involves various determinations as to the
most appropriate and relevant methods of financial analysis and the
application of those methods to the particular circumstances, and, therefore,
such an opinion is not readily susceptible to summary description. Robinson-
Humphrey, in conducting its analysis and in arriving at its opinion, has not
conducted a physical inspection of any of the properties or assets of Central,
and has not made or obtained any independent valuation or appraisals of any
properties, assets or liabilities of Central. Robinson-Humphrey has assumed
and relied upon the accuracy and completeness of the financial and other
information that was provided to it by Central or that was publicly available.
Its opinion is necessarily based on economic, market and other conditions as
in effect on, and the information made available to it as of, the date of its
analyses.
In connection with its opinion on the Merger and the presentation of that
opinion to Central's Board of Directors, Robinson-Humphrey performed two
valuation analyses with respect to Central: (i) an analysis of comparable
prices and terms of recent transactions involving banks buying banks; and (ii)
a discounted cash flow analysis. For purposes of the comparable transaction
analyses, FCC's Common Stock was valued at $28.125 per share, the closing
price per share on May 12, 1995. Each of these methodologies is discussed
briefly below.
Comparable Transaction Analysis. Robinson-Humphrey performed two analyses of
premiums paid for selected banks with comparable characteristics to Central.
Comparable transactions were considered to be (i) transactions since January
1, 1994, where the seller was a bank with assets between $500 million and $1.5
billion, and (ii) all transactions since January 1, 1994, where the seller was
a bank located in Louisiana.
Based on the first of the foregoing transactions, banks buying banks since
January 1, 1994, the analysis yielded a range of transaction values to book
value of 1.34 times to 2.48 times, with a mean of 2.02 times and a median of
1.92 times. These compare to a transaction value for the Merger of
approximately 2.62 times Central's book value as of March 31, 1995.
The analysis yielded a range of transaction values as a multiple of tangible
book value for the comparable transactions ranging from 1.34 times to 2.64
times, with a mean of 2.14 times and a median of 2.19 times. These compare to
a transaction value to tangible book value at March 31, 1995 of approximately
2.65 times for the Merger.
9
The analysis yielded a range of transaction values as a multiple of trailing
twelve month earnings per share. These values ranged from 10.29 times to 21.62
times, with a mean of 16.28 times and a median of 16.46 times. These compare
to a transaction value to the March 31, 1995 trailing twelve months earnings
per share of 17.27 times for the Merger.
The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from 7.34 percent to 25.75 percent, with a mean of
16.47 percent and a median of 17.07 percent. These compare to a transaction
value of 22.90 percent of assets at March 31, 1995 for the Merger.
Based on transactions since January 1, 1994, where the seller was a bank
located in Louisiana, the analysis yielded a range of transaction values to
book value of 1.24 times to 3.73 times, with a mean of 2.12 times and a median
of 2.18 times. These compare to a transaction value for the Merger of
approximately 2.62 times Central's book value as of March 31, 1995.
The analysis yielded a range of transaction values as a multiple of tangible
book value for the comparable transactions ranging from 1.24 times to 3.74
times, with a mean of 2.14 times and a median of 2.20 times. These compare to
a transaction value to tangible book value at March 31, 1995 of approximately
2.65 times for the Merger.
The analysis yielded a range of transaction values as a multiple of trailing
twelve month earnings per share. These values ranged from 6.17 times to 27.80
times, with a mean of 14.08 times and a median of 12.81 times. These compare
to a transaction value to the March 31, 1995 trailing twelve months earnings
per share of 17.27 times for the Merger.
The analysis yielded a range of transaction values as a percent of total
assets. These values ranged from 10.70 percent to 30.69 percent, with a mean
of 18.52 percent and a median of 18.70 percent. These compare to a transaction
value of 22.90 percent of assets at March 31, 1995 for the Merger.
No company or transaction used in the comparable transaction analyses is
identical to Central. Accordingly, an analysis of the foregoing necessarily
involves complex considerations and judgments, as well as other factors that
affect the public trading value or the acquisition value of the company to
which it is being compared.
Discounted Cash Flow Analysis. Using discounted cash flow analysis,
Robinson-Humphrey estimated the present value of the future stream of after-
tax cash flows that Central could produce through 1999, under various
circumstances, assuming that Central performed in accordance with the
earnings/return projections of management at the time that Central entered
into acquisition discussions in April 1995. Robinson-Humphrey estimated the
terminal value for Central at the end of the period by applying multiples of
earnings ranging from 9.0 to 11.0x and then discounting the cash flow streams,
dividends paid to shareholders and terminal value using differing discount
rates (ranging from 9.0 percent to 11.0 percent) surrounding the underlying
projections. This discounted cash flow analysis indicated a reference range of
$130.6 million to $158.5 million, or $32.12 to $38.98 per share, for Central.
Pursuant to an engagement letter dated February 23, 1995 between Central and
Robinson-Humphrey, Central agreed to pay Robinson-Humphrey a $100,000 Fairness
Opinion Fee and an incremental Success Fee (to be paid at closing) equal to
$500,000 less the Fairness Opinion Fee. Central has also agreed to indemnify
and hold harmless Robinson-Humphrey and its officers and employees against
certain liabilities in connection with its services under the engagement
letter, except for liabilities resulting from the negligence of Robinson-
Humphrey.
As part of its investment banking business, Robinson-Humphrey is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed
10
and unlisted securities, private placements, and valuations for estate,
corporate and other purposes. Central's Board of Directors decided to retain
Robinson-Humphrey based on its experience as a financial advisor in mergers
and acquisitions of financial institutions, particularly transactions in the
Southeastern region of the U.S., and its knowledge of financial institutions
and Central in particular.
Opinion to FCC. The Board of Directors of FCC retained the investment
banking firm of Keefe, Bruyette & Woods, Inc. ("KBW") to render its opinion as
to the fairness to the shareholders of FCC of the exchange ratio of 1.67
shares of FCC Common Stock to be issued for each share of Central Common Stock
(the "Exchange Ratio") pursuant to the Merger Agreement.
KBW has delivered its written opinion to the Board of Directors of FCC to
the effect that, as of May 15, 1995 the Exchange Ratio pursuant to the Merger
Agreement is fair to the shareholders of FCC.
A copy of KBW's written opinion dated May 15, 1995, which sets forth the
assumptions made, matters considered and limits on the review taken is
attached as Appendix B to this Joint Proxy Statement and Prospectus and is
incorporated herein by reference. FCC shareholders are urged to read the
opinion in its entirety. The description of the opinion set forth herein is
qualified in its entirety by reference to the full text of such opinion. KBW's
opinion is directed only to the Exchange Ratio and does not constitute a
recommendation to any FCC shareholder as to how such shareholder should vote
at the FCC Meeting.
In arriving at its written opinion dated May 15, 1995, KBW, among other
things: (i) reviewed the Plan; (ii) reviewed Central's Annual Reports, Forms
10-K and related financial information for the three fiscal years ending
December 31, 1992 through December 31, 1994, and Central's Form 10-Q for the
quarter ending March 31, 1995; (iii) reviewed FCC's Annual Reports, Forms 10-K
for each of the three years ending December 31, 1992 through December 31,
1994, and the Quarterly Report on Form 10-Q for the quarter ending March 31,
1995; (iv) held discussions with members of the senior management of FCC
regarding the Merger, certain aspects of past and current business operation,
financial condition and future prospects of FCC and Central; (v) reviewed the
historical market prices and trading activity for the FCC Common Stock and
Central Common Stock and compared them with those of certain publicly traded
companies which it deemed to be relevant; (vi) compared the financial terms of
the transaction contemplated by the Plan with the financial terms of certain
other mergers and acquisitions which it deemed to be relevant; (vii)
considered the pro forma effect of the Merger on FCC's capitalization ratios,
earnings, and book value per share; and (viii) reviewed such other financial
studies and analyses and performed such other investigations and took into
account such other matters as it deemed necessary.
KBW has relied, without independent verification, upon the accuracy and
completeness of all of the financial and other information reviewed by it for
the purpose of its opinion. KBW also relied upon the management of FCC as to
the reasonableness and achievability of the financial and other operating
forecasts (and the assumptions and bases therefor) provided to it. In that
regard, KBW assumed with FCC's consent that such forecasts, including without
limitation, projected cost savings and operating synergies resulting from the
Merger and projections regarding underperforming and nonperforming assets, net
charge-offs and the adequacy of reserves, reflected the best currently
available estimates and judgments of such representative matters. KBW is not
an expert in the evaluation of allowances for loan losses and it has not made
an independent evaluation of the adequacy of the allowance for loan losses of
FCC or Central nor has it reviewed any individual credit files. In addition,
KBW has not made an independent evaluation or appraisal of the assets and
liabilities of FCC or Central or any of their subsidiaries, and has not been
furnished with any such evaluation or appraisal.
KBW's opinion has been rendered without regard to the necessity for, or
level of, any restrictions which may be imposed or divestitures which may be
required in the course of obtaining regulatory approvals for the Merger.
11
Set forth below is a summary of selected analyses performed by KBW in
reaching its opinion delivered on May 15, 1995.
Summary of Proposal. KBW described the terms of the proposed transaction as
reflected in the Plan, including the Exchange Ratio. Based on the aggregate
consideration offered, using a May 12, 1995 price for the FCC Common Stock,
KBW calculated the price to book and price to earnings multiples for Central.
This analysis yielded a price to book multiple of 2.61x and a price to
earnings multiple of 17.2x, based on Central's net earnings for the twelve
months ended March 31, 1995 and 15.6x based on Central's annualized three
month earnings ending March 31, 1995.
Pro Forma Merger Analysis. KBW analyzed certain pro forma effects resulting
from the Merger. This analysis indicated that the core earnings of Central
could be enhanced through cost savings and revenue enhancements. Accounting
for only estimates of core earnings and cost savings provided to KBW by FCC,
KBW's analysis showed approximately 1.0% earnings per share dilution in years
one and two. KBW also noted certain possible areas of revenue enhancement that
were not factored into the Central projections and concluded the transaction
could be modestly accretive to FCC if such areas of enhancement could be
achieved. Furthermore, KBW estimated that FCC's book value per share would
decline initially by approximately 7.7% on a proforma basis and begin to
increase thereafter through the retention of proforma consolidated earnings.
Internal Rate of Return Analysis. Using a projected net income stream, KBW
estimated the rate of return of the future streams of after tax earnings that
Central could produce through 2004. In this analysis, KBW assumed that Central
performed in accordance with the earnings forecasts and merger synergies
provided to KBW by FCC's management. KBW applied a range of terminal values
from nine to sixteen times Central's earnings in the year 2004. The net income
stream and terminal values were then applied to an internal rate of return
analysis, which reflected returns from 13.0% and 15.0. This analysis was based
upon FCC's management projections, which were based upon many factors and
assumptions, many of which are beyond the control of FCC and Central. As
indicated below, this analysis is not necessarily indicative of actual future
results and does not purport to reflect the prices at which any securities may
trade at the present or at any time in the future.
Analysis of Selected Bank Merger Transactions. KBW reviewed a number of
merger transactions which occurred since January 1, 1994. These transactions
included mergers and acquisitions within the southern region of the United
States for which the transaction size ranged between $50 million and $600
million in value. KBW calculated the price to earnings, price to book value
and price to tangible book value ratios in the contemplated transaction and
such selected bank merger transactions. This analysis, (using a May 12, 1995
price of FCC Common Stock), yielded a range of price to earnings multiples of
approximately 10.29x to 21.80x with a mean of 16.13x and a median of 15.39x, a
range of price to book value multiples of approximately 1.63x to 3.73x with a
mean of 2.38x and a median of 2.40x and a range of price to tangible book
value multiples of approximately 1.63x to 3.73x with a mean of 2.48x and a
median of 2.47x.
No company or transaction used in the above analyses as a comparison is
identical to FCC, Central or the contemplated transaction. Accordingly, an
analysis of the results of the foregoing necessarily involves complex
considerations and judgments concerning differences in the financial and
operating characteristics of the companies and other factors that could affect
the public trading value of the companies which were compared. Mathematical
analysis (such as determining the mean or the median) is not, in itself, a
meaningful method of using comparable company or transaction data.
Comparison of Selected Companies. In connection with the rendering of its
opinion, KBW compared selected operating data for Central to the corresponding
data of First United Bancshares, Inc., Carolina First Corporation, Piedmont
Bankgroup, Simmons First National Corp, F&M Bancorp, Triangle Bancorp,
ArgentBank, Allied Bankshares, FCNB Corporation, Century South Banks, Inc. and
Mason Dixon Bancshares (collectively, the "Peers"). This comparison showed,
among other things, that (i) for the three month period annualized ending
March 31, 1995, Central's return on average assets was 1.42%, compared to a
mean of 1.14% and a median of 1.12% for the Peers; (ii) for the three month
period annualized ending March 31, 1995, Central's
12
return on average equity was 16.28%, compared to a mean of 12.44% and a median
of 12.58% for the Peers; (iii) for the period ended March 31, 1995, Central's
equity to assets ratio was 8.72%, compared to a mean of 9.26% and a median of
9.08% for the Peers; and (iv) for the period ended March 31, 1995, Central's
nonperforming assets to assets ratio was .27%, compared to a mean of .48% and
a median of .47% for the Peers.
The summary of the KBW fairness opinion set forth above provides a
description of the principal elements of the analyses performed by KBW in
arriving at its opinion. It does not purport to be a complete description of
such analyses. The preparation of the fairness opinion is not necessarily
susceptible to partial analysis or summary description. KBW believes that its
analyses and the summary set forth above must be considered as a whole and
that selected portions of its analyses, without considering all the analyses,
or selecting all or part of the above summary, without considering all factors
and analyses, would create an incomplete view of the procedures underlying the
KBW opinion. In addition, while KBW gave the various analyses approximately
similar weight it may have used them for different purposes, and may have
deemed various assumptions more or less reliable than other assumptions, so
that the ranges of valuations resulting from any particular analysis described
above should not be taken to be KBWs view of the actual value of Central or
FCC. The fact that any specific analysis has been referred to in the summary
above is not meant to indicate that such analysis was given more weight than
any other analyses.
In performing its analyses, KBW made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of Central or FCC. The analyses
performed by KBW are not necessarily indicative of actual values or actual
future results, which may be significantly more or less favorable than
suggested by such analyses. Such analyses were prepared solely as part of KBWs
analysis of the fairness of the Exchange Ratio to shareholders of FCC, the
conclusions of which were provided to FCCs Board of Directors. The analyses do
not purport to be appraisals or to reflect the prices at which a company might
actually be sold or the prices at which any securities may trade at the
present time or at any time in the future. In addition, as described above,
KBWs opinion to the FCC Board of Directors is just one of many factors taken
into consideration by the FCC Board of Directors.
KBW is a nationally recognized investment banking firm with substantial
experience in transactions similar to the Merger and is familiar with FCC and
its business. KBW regularly engages in the valuation of banking businesses and
their securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes.
Pursuant to its engagement letter, KBW will receive a fee of $100,000 for
the delivery of its fairness opinion to the FCCs Board of Directors. KBW will
also be reimbursed for its reasonable out-of-pocket expenses incurred in
connection with its services, including reasonable attorneys' fees and
disbursements, and will be indemnified against certain liabilities, including
liabilities arising under the securities laws.
CONVERSION OF CENTRAL COMMON STOCK
Each share of Central Common Stock outstanding on the date the Plan becomes
effective (the "Effective Date") will be converted into 1.67 shares of FCC
Common Stock, less the "Deductible Shares," defined in the next sentence.
"Deductible Shares" are such number of shares of FCC Common Stock, if any,
equal to the quotient of (i) (a) the amount by which the total expenses of
Central in connection with the Plan (subject to certain exceptions described
below) exceed $1,750,000, divided by (b) the average of the closing sales
prices of a share of FCC Common Stock on the NASDAQ Stock Market for the
fifteen business days ending on the day before the Effective Date ("Market
Value"), divided by (ii) the number of shares of Central Common Stock
outstanding on the Effective Date. Expenses that are excluded in determining
whether applicable expenses exceed $1,750,000 are those expenses incurred as a
result of (1) any action or failure to act on the part of FCC, (2) any
circumstances or conditions surrounding the ongoing business operations or
regulatory compliance of FCC, or (3) any claims or proceedings, regulatory or
otherwise, with merit or not, brought against FCC in connection with the
transactions contemplated by the Plan or which significantly delay or impede
FCC's performance in such transactions. As of August 8, 1995, applicable
expenses incurred, which include the full
13
amount of investment banking fees payable if the Merger is consummated, were
approximately $900,000, and additional applicable expenses, including legal
and accounting expenses and expenses related to the Central shareholders
meeting to which this Joint Proxy Statement and Prospectus relates and to the
consummation of the Merger, are expected to be substantially less than
$850,000. Accordingly, the possibility of applicable expenses exceeding
$1,750,000 is considered remote. Nevertheless, in the unlikely event that
applicable expenses exceed $1,750,000 so as to reduce the conversion ratio
below 1.59 shares of FCC Common Stock the further approval of Central's
shareholders will be sought and proxies resolicited before consummation of the
Merger.
Shareholders of Central who perfect dissenters' rights will not receive FCC
Common Stock but instead will be entitled to receive the "fair cash value" of
their shares as determined under Section 131 of the Louisiana Business
Corporation Law (the "LBCL"). See "Dissenters' Rights."
In lieu of issuing any fractional shares of FCC Common Stock, each
shareholder of Central who would otherwise be entitled thereto will receive a
cash payment (without interest) equal to such fractional share multiplied by
the Market Value.
For information regarding restrictions on the transfer of FCC Common Stock
received pursuant to the Plan applicable to certain of Central's shareholders,
see "--Status Under Federal Securities Laws; Certain Restrictions on Resales."
EFFECTIVE DATE
A Certificate of Merger will be filed for recordation with the Secretary of
State of Louisiana as soon as practicable after shareholder and regulatory
approval of the Plan is obtained and all other conditions to the consummation
of the Merger have been satisfied or waived, and the Merger will be effective
at the date and time specified in a certificate issued by the Secretary of
State. The Companies are not able to predict the effective date of the Merger
and no assurance can be given that the Merger will be effected at any time.
See "--Conditions."
EXCHANGE OF CERTIFICATES
On the Effective Date, each Central shareholder will cease to have any
rights as a shareholder of Central, and his sole rights will pertain to the
shares of FCC Common Stock into which his shares of Central Common Stock have
been converted pursuant to the Plan, except for any Central shareholder who
exercises statutory dissenters' rights and except for the right to receive
cash for any fractional shares.
Promptly after consummation of the Plan, a letter of transmittal, together
with instructions for the exchange of certificates representing shares of
Central Common Stock for certificates representing shares of FCC Common Stock,
will be mailed to each person who was a shareholder of record of Central on
the Effective Date. Shareholders are requested not to send in their Central
Common Stock certificates until they have received a letter of transmittal and
further written instructions. FCC Common Stock certificates and payment for
any fractional shares will be sent as promptly as practicable after receipt of
a properly completed letter of transmittal accompanied by the appropriate
Central Common Stock certificates.
After the Effective Date and until surrendered, certificates representing
Central Common Stock will be deemed for all purposes, other than the payment
of dividends or other distributions, if any, in respect of FCC Common Stock,
to represent the number of whole shares of FCC Common Stock into which such
shares of Central Common Stock have been converted. FCC, at its option, may
decline to pay former shareholders of Central who become holders of FCC Common
Stock pursuant to the Plan any dividends or other distributions that may have
become payable to holders of record of FCC Common Stock following the
Effective Date until they have surrendered their certificates for Central
Common Stock. Any dividends not paid after one year from the date they first
became payable will revert in full ownership to FCC, and FCC will have no
further obligation to pay such dividends.
14
Central shareholders who cannot locate their certificates are urged to
contact promptly Ms. Diana Fontana or Mr. Edward F. Wheland, II, Central
Corporation, 300 DeSiard St., Monroe, Louisiana 71201, telephone number (318)
362-8548. A new certificate will be issued to replace the missing certificates
only upon execution by the shareholder of an affidavit certifying that his or
her certificates cannot be located and an agreement to indemnify against any
claim that may be made by the holder of the certificates claimed to have been
missing. Central will, and FCC may, also require the shareholder to post a
bond in such sum as is sufficient to indemnify Central and FCC against any
claim made as a result of issuing such certificate.
CONDITIONS
In addition to shareholder approvals, consummation of the Merger will
require the approval of the Board of Governors of the Federal Reserve System
("Federal Reserve Board"). FCC has filed an application seeking the required
approval and expects to receive it by October, 1995; however, there can be no
assurance that the approval will be obtained by that time or at all.
The obligations of the parties to consummate the Merger are also subject to
customary conditions for transactions of this sort and, in addition, to the
receipt of an opinion of Arthur Andersen LLP as to certain tax aspects of the
Merger. The obligation of FCC to consummate the Merger is also subject to the
condition that neither the Securities and Exchange Commission (the
"Commission") nor FCC's or Central's independent public accountants shall have
taken the position that FCC is not permitted to account for the Merger as a
pooling-of-interests.
The Companies intend to consummate the Plan as soon as practicable after all
of the conditions to the Plan have been met or waived; however, there can be
no assurance that the conditions will be satisfied.
CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE DATE
FCC and Central have agreed that unless the prior written consent of the
other party is obtained, except as otherwise contemplated or permitted by the
Plan or previously disclosed, each of them will, and will cause its
subsidiaries to, operate its business only in the ordinary course consistent
with past practices, preserve intact its business organizations and assets and
maintain its rights and franchises, and take no action which would adversely
affect its ability to consummate the Merger. Central and FCC have also agreed
that until the earlier of the Effective Date or the termination of the Plan,
neither of them will, without the prior written consent of the other, make any
changes in its dividend record or payment dates, except as required to
coordinate with one another as to the declaration and payment of cash
dividends on the shares of FCC Common Stock and Central Common Stock to be
declared in 1995 and 1996 so as to ensure that FCC and Central have declared,
with the record dates prior to the Effective Date, the same number of
quarterly dividends from January 1, 1995 through the Effective Date.
Central has agreed that until the earlier of the Effective Date or the
termination of the Plan, neither it nor the Bank will, without the prior
written consent of the chief executive officer or chief administrative officer
of FCC:
(a) except as previously disclosed or as expressly contemplated by the
Plan, amend its articles of incorporation or association or by-laws;
(b) impose, or suffer the imposition, on any share of stock held by it,
of any material lien, charge or encumbrance, or permit any such lien,
charge or encumbrance to exist;
(c) except as otherwise expressly permitted by the Plan, repurchase,
redeem, or otherwise acquire or exchange, directly or indirectly, any
shares of its capital stock or any securities convertible into any shares
of its capital stock,
(d) except as expressly contemplated by the Plan or as previously
disclosed, acquire direct or indirect control over any entity, other than
in connection with (i) internal reorganizations or consolidations involving
existing subsidiaries, (ii) good faith foreclosures in the ordinary course
of business, (iii) acquisitions of control by the Bank in a bona fide
fiduciary capacity, (iv) investments made by small business investment
15
corporations or by subsidiaries that invest in unaffiliated companies in
the ordinary course of business, or (v) the creation of new subsidiaries
organized to conduct or continue activities otherwise permitted by the
Plan;
(e) except as previously disclosed, sell or otherwise dispose of (i) any
shares of its capital stock, (ii) any substantial part of its assets or
earning power, or (iii) any asset other than in the ordinary course of
business for reasonable and adequate consideration;
(f) except as previously disclosed, incur any additional material debt
obligation or other obligation for borrowed money other than (i) in
replacement of existing short-term debt with other short-term debt, (ii)
financing of banking related activities consistent with past practices,
(iii) indebtedness to any of its affiliates, except in the ordinary course
of the business consistent with past practices, or (iv) inter-company
indebtedness;
(g) except as contemplated by the Plan, grant any general increase in
compensation or benefits to its employees or to its officers, except in
accordance with past practice or as required by law; pay any bonus except
in accordance with past practice or the provisions of any applicable
program or plan as in effect prior to May 15, 1995, and which was
previously disclosed; enter into any severance agreements with any of its
directors or officers except as previously disclosed; grant any increase in
fees or other increases in compensation or other benefits to any of its
present or former directors; or effect any change in retirement benefits
for any class of its employees or officers (unless such change is required
by applicable law or, in the opinion of counsel, is necessary or advisable
to maintain the tax qualification of any plan under which the retirement
benefits are provided) that would materially increase its retirement
benefit liabilities on a consolidated basis;
(h) except as contemplated by the Plan or as previously disclosed, amend
any existing employment contract with any person having a salary thereunder
in excess of $50,000 per year (unless such amendment is required by law) to
increase the compensation or benefits payable thereunder or extend the term
thereof or enter into any new employment contract with any person having a
salary thereunder in excess of $50,000 that it does not have the
unconditional right to terminate without liability (other than liability
for services already rendered), at any time on or after the Effective Date;
or
(i) except as contemplated by the Plan, adopt any new employee benefit
plan or make any material change in or to any existing employee benefit
plan other than (i) as previously disclosed or (ii) any such change that is
required by law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan.
Central has also agreed that until the earlier of the Effective Date or the
termination of the Plan, it will not declare or pay any dividend or other
distribution to its shareholders except regular quarterly cash dividends on
the shares of Central Common Stock, at a rate not in excess of the regular
quarterly cash dividend most recently declared by Central prior to May 15,
1995.
Central has also agreed that neither it nor the Bank will (except as may, in
the written opinion of its counsel promptly delivered to FCC, be required by
fiduciary duty) solicit, initiate, participate in discussions of, or encourage
or take any other action to facilitate (including by way of the disclosing or
furnishing of any information that it is not legally obligated to disclose or
furnish) any inquiry or the making of any proposal relating to an acquisition
transaction or a potential acquisition transaction involving it (and, if any
information is furnished, it will be furnished only under a confidentiality
agreement containing the same provisions as the confidentiality agreement
between Central and FCC.) Central must instruct and otherwise use its best
efforts to cause its directors, officers, employees, agents, advisors,
consultants and other representatives to comply with the foregoing
prohibitions. Central also agreed to cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any such activities. Except as may, in the written
opinion of its counsel promptly delivered to FCC, be required by fiduciary
duty, Central may not negotiate with respect to any such proposal, nor reach
any agreement or understanding (formal or informal, written or otherwise) with
respect to any such proposal; Central also must promptly notify FCC orally and
in
16
writing if it receives any such inquiry or proposal. This agreement does not
prohibit accurate disclosure to the extent required by the securities laws or
other applicable law if in the opinion of Central's Board of Directors
disclosure is required under applicable law as to transactions contemplated by
the Plan.
WAIVER, AMENDMENT AND TERMINATION
The parties may waive in writing any of the conditions to their respective
obligations to consummate the Plan other than the receipt of necessary
regulatory and shareholder approvals. The Plan, including all related
agreements, may also be amended or modified at any time, before or after its
approval by the shareholders of Central or FCC, by mutual agreement, provided
that any amendment made after shareholder approval may not alter the amount or
type of shares into which Central Common Stock will be converted or alter any
term or condition of the Plan in a manner that would adversely affect any
shareholder of FCC or Central, without the additional approval of
shareholders.
The Plan may be terminated at any time prior to the Effective Date by mutual
consent or by either of the Companies if (i) there is a material breach by the
other Company of any representation, warranty or covenant by it contained in
the Plan which cannot be cured by the earlier of 30 days after written notice
of such breach or June 30, 1996, (ii) all conditions to consummating the
Merger have not been met or waived, cannot be met, or the Merger has not
occurred, by June 30, 1996, (iii) any person or group acquires beneficial
ownership of 25% or more of the Common Stock of the other Company; (iv)
required regulatory applications are denied or the shareholders of either
Company fail to approve the Plan by the requisite vote at either of the
Meetings; or (v) the other Company suffers a Material Adverse Change, as
defined in the Plan, that is uncured after 30 days notice. The Board of
Directors of Central may terminate the Plan if all or a portion of the shares
of Central Common Stock issued pursuant to the exercise of the stock option
granted by the Option Agreement would not be cancelled by virtue of the
Merger. See "The Plan--Background and Reasons for the Plan." The Board of
Directors of FCC may terminate the Plan if Central's Board of Directors
resolves to withdraw, modify or change its recommendation to Central's
shareholders of the Plan, or recommends any acquisition of Central other than
the Merger, and Central may terminate the Plan within 30 days of notice to it
by FCC that its Common Stock has been converted into or exchanged for
securities of another issuer.
INTERESTS OF CERTAIN PERSONS
Indemnification and Insurance. FCC has agreed to provide and to cause
Central and the Bank to continue to provide, for a period of 10 years from the
Effective Date, all rights of indemnification currently provided by Central
and the Bank in favor of their respective current and former employees,
directors and officers, on terms no less favorable than those provided in the
Articles of Incorporation and By-laws of Central and the Bank, respectively,
on May 15, 1995, or as otherwise in effect on that date, with respect to
matters occurring prior to the Effective Date, except that (i) the aggregate
liability of FCC, Central and the Bank shall not exceed $30 million less the
amount of any indemnification liability incurred by Central or the Bank in
favor of their respective current and former employees, directors and officers
after May 15, 1995, but prior to the Effective Date; and (ii) no person shall
be entitled to indemnification unless, with respect to the matter for which
indemnification is sought, such person acted in good faith and in a manner
such person reasonably believed to be in, or not opposed to, the best
interests of Central or the Bank, as the case may be, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such
person's conduct was unlawful.
FCC has also agreed to indemnify and hold harmless Central and the Bank, and
each of their respective directors and officers, and each controlling person
of Central within the meaning of the Securities Act of 1933, against any
claims, suits, proceedings, investigations or other actions ("Claims"), and
any related losses, damages, costs, expenses, liabilities or judgments,
whether joint, several or solidary, insofar as they arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact made
in this Joint Proxy Statement and Prospectus or the Registration Statement of
which it is a part, or an omission or alleged omission therefrom of a material
fact necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading, and will reimburse
each such person promptly as incurred for legal
17
and other expenses reasonably incurred in connection with investigating or
defending any such Claims; provided, that FCC will not be liable to the extent
that any such Claim arises out of or is based upon any such untrue statement
or omission or alleged untrue statement or omission made in reliance on and in
conformity with information furnished to FCC by Central or the Bank or, with
respect to any indemnified person, by that person.
For ten years after the Effective Date, FCC will also provide, if available,
officers' and directors' liability insurance in respect of acts or omissions
of officers and directors of Central and the Bank occurring prior to the
Effective Date, including but not limited to the transactions contemplated by
the Plan, covering each such person currently covered by Central's officers
and directors' liability insurance policy, or who becomes covered by such
policy prior to the Effective Date, on terms with respect to coverage and
amount not materially less favorable than those of such policy in effect on
May 15, 1995, provided that FCC is not obligated to pay premiums in excess of
$150,000 per year. If the foregoing insurance is not available for that
amount, then FCC will provide the maximum coverage that can be obtained for
that amount.
Management. On the Effective Date, the Bank will become a wholly-owned
subsidiary of FCC. The Plan provides that the Bank will retain its name and
bank charter thereafter for the foreseeable future to no less an extent as
FCC's other principal banking subsidiaries retain theirs. After the Effective
Date, FCC will amend the Articles of Incorporation and By-laws of the Bank so
as to be substantially identical to the Articles of Incorporation and By-laws
of its other Louisiana state bank subsidiary.
On the Effective Date, the Board of Directors of FCC will consist of those
persons who were directors of FCC on that date (currently 20 persons) and, in
addition, Messrs. Robert C. Cudd, III, Hugh G. McDonald, Jr., Saul A. Mintz
and Tom H. Scott, each of whom is a director of Central and the Bank. All
directors of FCC, including such persons, will serve until the next annual
meeting of FCC shareholders or until their successors have been elected and
qualified. The Merger will not itself change the Board of Directors of the
Bank, except that it is anticipated that Messrs. Howard C. Gaines and Thomas
C. Jaeger, executive officers of FCC, will become directors of the Bank at the
Effective Date. After the Effective Date, the Board of Directors of the Bank
will serve at the discretion of FCC, which will be the Bank's sole
shareholder.
Employment Agreements. FCC and the Bank will enter into employment contracts
with each of Messrs. James A. Altick, Edmund L. Pennington, Thomas J.
Nicholson, Willis T. McGhinnis and Cary S. Davis (collectively, the
"Executives") for a term of five years in the case of Mr. Altick and three
years in the cases of the other Executives. Mr. Altick will be employed as
President and Chief Executive Officer of the Bank and an Executive Vice
President of FCC, and the other Executives will be initially employed in
executive positions with the Bank.
Generally, each Executive will each be paid a base salary equal to the base
salary he was receiving from the Bank as of the Effective Date (plus an amount
equal to the value of certain benefits he received from the Bank that will not
be received after the Merger) and will be entitled to participate in FCC's
bonus and benefit plans. The base salary will be reviewed annually and may be
increased. If the Executive's employment is terminated for any reason other
than "cause," as defined in the contract, or his death or disability, he will
continue to receive his base salary and certain benefits for the remainder of
the term of the contract. In addition, if his employment is terminated without
cause or his termination is "involuntary," as defined, he will also receive a
pro rata portion of his bonus for the year in which his employment terminates.
The foregoing payments are subject to the condition that the Executive does
not engage in the business of banking which is directly competitive with FCC
or its affiliates in the State of Louisiana for a period that is the lesser of
two years or the remaining term of the contract.
Each Executive will receive a lump sum cash payment within 45 days of the
consummation of the Merger of $50,000 in the case of Mr. Altick and $35,000 in
the cases of the other Executives.
The Compensation Committee of the Board of Directors of FCC will award
within 30 days after the Effective Date, to officers of the Bank to be
selected by the Bank's Board of Directors, stock options and stock
appreciation rights under FCC's 1992 Stock Incentive Plan covering in the
aggregate up to 200,000 shares of
18
FCC Common Stock. It is anticipated that the options and rights would be
exercisable at the fair market value of FCC Common Stock on the date of grant,
the options will entitle the holder to purchase shares of FCC Common Stock at
the exercise price, and the rights will entitle the holder to receive cash in
an amount equal to the appreciation of FCC Common Stock from the date of grant
until the date of exercise. It is also anticipated that the options and rights
will not be exercisable for one year from the date of grant, will become
exercisable thereafter in 25% increments each year (unless accelerated by
reason of certain events affecting FCC or by action of the FCC Compensation
Committee) and will expire eight years from the date of grant.
As of the date of the Joint Proxy Statement and Prospectus, the officers of
the Bank who will receive such options and rights, and the number of shares
subject to such options and rights that each would receive, had not been
determined, but it is anticipated that each of the Executives will receive
options and rights.
For information as to benefits to be provided employees of Central and the
Bank generally, including the Executives, see "Employee Benefits".
Directors' and Officers' Commitments. Each Central director and executive
officer has executed an agreement with FCC pursuant to which he or she has
agreed, solely in his or her capacity as an owner of shares of Central Common
Stock and not in his or her capacity as a director or officer of Central, (i)
to vote in favor of the Plan and against any other proposal that would prevent
or impede the Merger, unless compliance with this provision would be a breach
of fiduciary duty as a director or officer of Central, (ii) not to transfer
any of his or her Central Common Stock, or grant any proxy or other rights
with respect thereto not approved by FCC, except for transfers by operation of
law or transfers in connection with which the transferee agrees to be bound by
the agreement, (iii) to release FCC, as of the Effective Date, from any
obligation to indemnify such shareholder for acts taken as an officer,
director or employee of Central, except to the extent set forth in the Plan,
and (iv) for a period of two years following the Effective Date not to serve
as a management official or advisor of any business that competes with the
business of the Bank in the Parishes of Ouachita, Lincoln, Rapides and
Natchitoches (the "Restricted Parishes"), or to solicit customers of the
business of the Bank within the Restricted Parishes.
Employee Benefits. After the Effective Date, FCC will perform the
obligations of Central under its Severance Plan established in connection with
the transactions described herein to provide severance benefits to eligible
employees of the Bank who are terminated on or before the first anniversary of
the consummation of the Merger. The executive officers named under "Employment
Agreements" are not eligible for benefits under the Severance Plan.
The Severance Plan will generally provide a lump sum cash benefit to
eligible employees whose employment with the Bank is terminated for reasons
other than voluntary resignation, death, cause or disability. No benefits are
payable under the Severance Plan on account of an employee's termination of
employment with the Bank if (a) the Bank transfers him to a position with an
affiliate, or (b) his termination occurs in connection with the sale or other
disposition of any assets, business, division, facility or operating unit of
the Bank and he is offered employment with the purchaser or transferee or with
an affiliate in a position at least comparable in pay and position to that
held with the Bank immediately prior to his termination and is within 50 miles
of his principal place of employment with the Bank immediately prior to his
termination. The amount of the benefit generally depends on his years of
service and his pay: 3 months' pay if he has completed less than 4 years of
service, 4 months' if he has completed between 4 and 10 years, 7 months if he
has completed between 10 and 20 years, and 9 months if he has completed 20 or
more years. "Pay" means the employee's salary or wages at the rate in effect
immediately prior to his termination, excluding bonuses, overtime and premium
pay, shift differentials, incentive compensation and all other compensation.
At or prior to the Effective Date, all contributions to be made to the
Central Employee Stock Ownership Plan ("ESOP") and the Bank's 401(k) Plan on
behalf of participants in such plans for periods prior to the Effective Date
will be made, and all participants in such plans will at the Effective Date
have a fully vested and nonforfeitable interest in their respective account
balances thereunder. No contributions will be made to such plans for periods
after the Effective Date. As soon as possible after the Effective Date, FCC
will take all actions that may be necessary or required to terminate the ESOP
and make available to participants distributions from the ESOP in accordance
with the terms of the ESOP and applicable law, and to the extent that the ESOP
does
19
not provide for distributions to a participant prior to such participant's
termination of employment, FCC will amend the ESOP to permit such
distributions to the extent permitted by law.
For periods after the Effective Date employees of Central and the Bank will
be eligible to participate in the FCC Savings Plan, subject to the terms and
conditions of such plan, as it may be amended from time to time.
At the election of FCC at any time after the Effective Date, Central's
Retirement Plan may be terminated and/or future benefit accruals thereunder
may be frozen. Until such time as such plan is terminated, to the extent not
prohibited by applicable law, the plan will continue to be maintained by the
Bank or FCC after the Effective Date for the benefit of each person who was
employed by Central or the Bank as of the Effective Date. If (i) the plan is
terminated, or (ii) future benefit accruals under the plan are frozen, then
highly compensated employees of Central will thereupon be permitted to
participate in FCC's Retirement Benefit Restoration Plan if they meet the
eligibility criteria set forth in such Retirement Benefit Restoration Plan.
To the extent not prohibited by applicable law, the Bank or FCC will
continue to maintain the Central Retiree Benefit Plan for the benefit of any
employee or former employee of Central or the Bank (or their eligible
dependents) who, as of the Effective Date (i) was receiving benefits
thereunder, or (ii) had satisfied the requirements for benefits thereunder
(without regard to any requirement that the employee terminate employment or
commence receipt of benefits under any other plan).
To the extent applicable, employees of Central and the Bank will be given
credit under each employee benefit plan, policy, program and arrangement
maintained by FCC after the Effective Date for their service with Central or
the Bank prior to the Effective Date for all purposes other than benefit
accrual under a defined benefit plan (as defined in section 3(35) of the
Employee Retirement Income Security Act), including eligibility to
participate, vesting, satisfying any waiting periods, evidence of insurability
requirements, seniority or the application of any pre-existing condition
limitations.
EXPENSES
The Plan provides generally that expenses incurred in connection with the
Plan and the transactions contemplated thereby will be borne by the party that
has incurred them. Notwithstanding the foregoing, a party (the "Expense Paying
Party") must pay all of the costs and expenses incurred by the other party
(the "Reimbursed Party") in connection with the Plan, including fees and
expenses of such Reimbursed Party's financial or other consultants, investment
bankers, accountants and counsel, if:
(a) (i) the Plan is terminated by reason of a material breach by the
Expense Paying Party, (ii) the Reimbursed Party was the party who
terminated it, and (iii) the Expense Paying Party is at the time of the
termination not also entitled to terminate the Plan by reason of a material
breach by the Reimbursed Party; or
(b) a Purchase Event (as defined below under the caption "The Option
Agreement") occurs with respect to the Option Agreement if Central is the
Expense Paying Party and the Merger has not been, or thereafter is not,
consummated for any reason other than a termination because of a material
breach by the Reimbursed Party.
In addition, if Central's expenses in connection with the Plan, subject to
certain exceptions, exceed $1,750,000, the exchange ratio in the Merger will
be reduced in proportion to the amount of the excess. See "--Conversion of
Central Common Stock."
STATUS UNDER FEDERAL SECURITIES LAWS; CERTAIN RESTRICTIONS ON RESALES
The shares of FCC Common Stock to be issued pursuant to the Plan have been
registered under the Securities Act of 1933 (the "Securities Act"), thereby
allowing such shares to be freely traded without restriction by persons who
will not be "affiliates" of FCC or who were not "affiliates" of Central, as
that term is defined in Rule 405 under the Securities Act.
20
Directors and certain officers of Central may be deemed to be "affiliates"
of Central, and those directors of Central who will become directors of FCC
may also be deemed to be "affiliates" of FCC. Such persons will not be able to
resell the FCC Common Stock received by them unless such stock is registered
for resale under the Securities Act or an exemption from the registration
requirements of the Securities Act is available. All such affiliates have
entered into agreements not to sell shares of FCC Common Stock received by
them in violation of the Securities Act and the rules and regulations
thereunder.
In accordance with the requirements for using the pooling-of-interests
method of accounting, Central shareholders who are deemed "affiliates" have
agreed not to sell the shares of FCC Common Stock received by them until at
least 30 days of combined earnings of FCC and Central have been published by
FCC.
ACCOUNTING TREATMENT
It is a condition to FCC's obligation to consummate the Plan that its or
Central's independent public accountants or the Commission shall not have
taken the position that the Merger may not be accounted for as a pooling-of-
interests. Under the pooling-of-interests method of accounting, after certain
adjustments, the recorded assets and liabilities of the Companies will be
carried forward to FCC's consolidated financial statements at their recorded
amounts, the consolidated earnings of FCC will include earnings of the
Companies for the entire fiscal year in which the Plan is consummated, and the
reported earnings of the Companies for prior periods will be combined and
restated as consolidated earnings of FCC. See "--Conditions" and "--Status
Under Federal Securities Laws; Certain Restrictions on Resales."
THE OPTION AGREEMENT
As an inducement to FCC to enter into the Plan, Central executed the Option
Agreement, pursuant to which it granted an option to FCC to acquire Central
Common Stock (the "Option"). One effect of the Option Agreement is to increase
the likelihood that the Merger will be consummated by making it more difficult
and more expensive for another party to obtain control of or acquire Central.
Among other things, the exercise of the Option would likely bar any acquiror
from accounting for an acquisition of Central using the pooling-of-interests
accounting method for a period of up to two years. The following description
does not purport to be complete and is qualified in its entirety by reference
to the Option Agreement attached hereto as Appendix D.
The Option Agreement provides for the purchase by FCC of up to 809,279
shares (the "Option Shares") of Central Common Stock at an exercise price of
$30 per share, subject to adjustment as provided therein, payable in cash. The
Option Shares, if issued pursuant to the Option Agreement, would represent
approximately 19.9% of the Central Common Stock outstanding on the date
hereof. The number of Option Shares will be increased to the extent that
additional shares of Central Common Stock are issued or otherwise become
outstanding (otherwise than pursuant to an exercise of the Option) such that,
after such issuance, the number of Option Shares will continue to equal 19.9%
of the Central Common Stock then outstanding without giving any effect to the
issuance of any Central Common Stock subject to the Option. The number of
shares of Central Common Stock subject to the Option, and the applicable
exercise price per Option Share, also will be appropriately adjusted in the
event of any stock dividends, split-ups, mergers, recapitalizations,
combinations, subdivisions, conversions, exchanges of shares, or the like,
relating to Central.
Unless FCC shall have breached in any material respect any covenant or
agreement contained in the Plan and such breach shall not have been cured
after notice from Central, FCC may exercise the Option, in whole or in part,
subject to regulatory approval, at any time after a Purchase Event (as defined
below) shall have occurred prior to termination of the Option. A "Purchase
Event" is the occurrence of any of the following:
(a) any person (other than FCC) shall have commenced a bona fide tender
or exchange offer to purchase shares of Central Common Stock such that upon
consummation of such offer such person would own or control 20% or more of
the outstanding shares of Central Common Stock;
21
(b) Central or the Bank, without having received FCC's prior written
consent, shall have entered into an agreement with any person (other than
FCC), or any person other than FCC shall have filed an application or
notice with the Federal Reserve Board or any other federal or state
regulatory agency for clearance or approval to, (i) merge or consolidate,
or enter into any similar transaction with Central or the Bank other than
with respect to any requirement of divestiture in connection with the Plan
under the federal banking or antitrust laws, (ii) purchase, lease, or
otherwise acquire any substantial portion of the assets of Central or the
Bank other than in the ordinary course of business, or (iii) purchase or
otherwise acquire (including by way of merger, consolidation, share
exchange, or any similar transaction) securities representing 20% or more
of the voting power of Central or the Bank;
(c) any person (other than FCC, any FCC subsidiary, or the Bank in a
fiduciary capacity) shall have acquired beneficial ownership or the right
to acquire beneficial ownership of 10% or more of the outstanding shares of
Central Common Stock or common stock of the Bank, excluding shares
beneficially owned prior to May 15, 1995;
(d) any person (other than FCC or any FCC subsidiary) shall have made a
bona fide proposal to Central by public announcement or written
communication that is or becomes the subject of public disclosure to (i)
acquire Central or the Bank by merger, consolidation, share exchange,
purchase of all or substantially all of its assets or any other similar
transaction or (ii) make an offer described in clauses (a) or (b), above;
or
(e) Any person shall have solicited proxies in a proxy solicitation
subject to Regulation 14A under the Securities Exchange Act of 1934 in
opposition to approval of the Plan by Central's shareholders.
The Option terminates (a) on the Effective Date, (b) upon termination of the
Plan in accordance with the terms thereof prior to the occurrence of the first
Purchase Event, or (c) upon the earlier of (i) March 31, 1997, or (ii) the
date that is one year following the termination of the Plan, if such
termination occurs after the first Purchase Event.
Upon the occurrence of a Purchase Event that occurs prior to the termination
of the Option, FCC may demand while the Option is exercisable that the Option
(or part thereof) and the related Option Shares (or part thereof) be
registered under the Securities Act at Central's expense. Upon receipt of such
notice, Central must promptly effect such registration, subject to certain
exceptions. FCC is entitled to a second such registration at FCC's expense.
Upon the occurrence of a Purchase Event prior to termination of the Option,
subject to applicable law and regulatory approval, Central is required (a) at
the request of FCC delivered while the Option (in whole or in part) is
exercisable, to repurchase the Option at a price equal to the amount by which
(i) the market/offer price (as defined below) exceeds (ii) the option exercise
price multiplied by the number of shares for which the Option may then be
exercised; and (b) at the request of the owner of Option Shares from time to
time (the "Owner"), delivered while the Option is exercisable (or if it has
been fully exercised, would have been exercisable had such exercise not been
made), to repurchase such number of the Option Shares from the Owner as the
Owner designates at a price equal to the market/offer price multiplied by the
number of shares so designated. The term "market/offer price" means the
highest of (i) the price per share of Central Common Stock at which a tender
offer or exchange offer therefor has been made after May 15, 1995, (ii) the
price per share of Central Common Stock to be paid by any third party pursuant
to any merger, consolidation, share exchange or other agreement with Central
entered into after May 15, 1995, (iii) the highest closing price for shares of
Central Common Stock within the 30-day period immediately preceding the date
FCC gives notice of the required repurchase of the Option or the Owner gives
notice of the required repurchase of Option Shares, as the case may be, or
(iv) in the event of a sale of all or substantially all of Central's assets,
the sum of the price paid in such sale for such assets and the current market
value of the remaining assets of Central as determined by a nationally
recognized investment banking firm selected by the parties (or by an
arbitrator if they cannot agree) divided by the number of shares of Central
Common Stock outstanding at the time of such sale. In determining the
market/offer price, the value of consideration other than cash shall be
determined by a nationally recognized investment banking
22
firm selected by the parties (or by an arbitrator if they cannot agree), and
such determination shall be conclusive and binding on all parties.
Neither Central nor FCC may assign any of its respective rights and
obligations under the Option Agreement or the Option to any other person
without the express written consent of the other party, except that if a
Purchase Event shall have occurred and be continuing, FCC, subject to the
terms of the Option Agreement, may assign in whole or in part its rights and
obligations thereunder, provided that until 30 days after the date on which
the Federal Reserve Board approves an application by FCC to acquire the Option
Shares, FCC may not assign its rights under the Option except in (a) a widely
dispersed public distribution, (b) a private placement in which no one party
acquires the right to purchase in excess of 2% of the Central Common Stock,
(c) an assignment to a single party for the purpose of conducting a widely
dispersed public distribution on FCC's behalf, or (d) any other manner
approved by the Federal Reserve Board.
The rights and obligations of Central and FCC under the Option Agreement are
subject to receipt of any required regulatory approvals. Without the prior
approval of the Federal Reserve Board, FCC may not acquire more than 5% of the
outstanding Central Common Stock. FCC has filed an application for such
approval.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the opinion of Arthur Andersen LLP which the
Companies expect to receive concerning the material federal income tax
consequences to holders of Central Common Stock resulting from the Plan.
Consummation of the Merger is conditioned upon receipt by the Companies of
such opinion dated the date set for consummation of the Plan. The following is
based upon applicable federal law and judicial and administrative
interpretations on the date hereof, any of which is subject to change at any
time:
(a) The Merger qualifies as a reorganization under Section 368(a)(1)(A)
of the Internal Revenue Code (the "Code"), and Central and FCC each will be
a "party to a reorganization" within the meaning of Section 368(b) of the
Code.
(b) No material gain or loss will be recognized by Central or FCC as a
result of the Merger.
(c) No gain or loss will be recognized by a shareholder of Central on the
receipt solely of FCC Common Stock in exchange for his shares of Central
Common Stock.
(d) The basis of the shares of FCC Common Stock to be received by
Central's shareholders pursuant to the Plan will, in each instance, be the
same as the basis of the shares of Central Common Stock surrendered in
exchange therefor, increased by any gain recognized on the exchange.
(e) The holding period of the shares of FCC Common Stock to be received
by Central's shareholders pursuant to the Plan will, in each instance,
include the holding period of the respective shares of Central Common Stock
exchanged therefor, provided that the shares of Central Common Stock are
held as capital assets on the date of the consummation of the Plan.
(f) The payment of cash to Central's shareholders in lieu of fractional
share interests of FCC Common Stock will be treated as if the fractional
shares were distributed as part of the exchange and then redeemed by FCC.
These cash payments will be treated as having been received as a
distribution in redemption of that fractional share interest subject to the
conditions and limitations of Section 302 of the Code. If a fractional
share of FCC Common Stock would constitute a capital asset in the hands of
a redeeming shareholder, any resulting gain or loss will be characterized
as capital gain or loss in accordance with the provisions and limitations
of Subchapter P of Chapter 1 of the Code.
(g) A Central shareholder who perfects his statutory right to dissent and
who receives solely cash in exchange for his Central Common Stock will be
treated as having received such cash payment as a distribution in
redemption of his shares of Central Common Stock, subject to the provisions
and limitations of Section 302 of the Code. After such distribution, if the
former Central shareholder does not actually or
23
constructively own any Central Common Stock, the redemption will constitute
a complete termination of interest and be treated as a distribution in full
payment in exchange for Central Common Stock redeemed.
The opinion of Arthur Andersen LLP is not binding on the Internal Revenue
Service, which could take positions contrary to the conclusions in such
opinion.
AS A RESULT OF THE COMPLEXITY OF THE TAX LAWS, AND BECAUSE THE TAX
CONSEQUENCES TO ANY PARTICULAR SHAREHOLDER MAY BE AFFECTED BY MATTERS NOT
DISCUSSED HEREIN, IT IS RECOMMENDED THAT EACH SHAREHOLDER CONSULT HIS PERSONAL
TAX ADVISOR CONCERNING THE APPLICABLE FEDERAL, STATE AND LOCAL INCOME TAX
CONSEQUENCES OF THE PLAN.
CENTRAL SHAREHOLDERS' DISSENTERS' RIGHTS
With respect to Central, unless the Plan is approved by the holders of at
least 80% of its outstanding Common Stock, Section 131 of the LBCL allows a
shareholder of Central who objects to the Plan and who complies with the
provisions of that section to dissent from the Plan and to have paid to him in
cash the fair cash value of his shares of Central Common Stock as of the day
before the Central Meeting, as determined by agreement between the shareholder
and FCC or by the Civil District Court for the Parish of Orleans if the
shareholder and FCC are unable to agree. Shareholders of FCC are not entitled
to dissenters' rights.
To exercise the right of dissent, a Central shareholder (i) must file with
Central a written objection to the Plan prior to or at the Central Meeting and
(ii) must also vote his shares (in person or by proxy) against the Plan at
such Meeting. Neither a vote against the Plan nor a specification in a proxy
to vote against the Plan will in and of itself constitute the necessary
written objection to the Plan. Moreover, by voting in favor of, or abstaining
from voting on, the Plan, or by returning the enclosed proxy without
instructing the proxy holders to vote against the Plan, a shareholder waives
his rights under Section 131. The right to dissent may be exercised only by
the record owners of the shares and not by persons who hold shares only
beneficially. Beneficial owners who wish to dissent to the Plan should have
the record ownership of the shares transferred to their names or instruct the
record owner to follow the Section 131 procedure on their behalf.
If the Plan is approved by less than 80% of the total number of shares of
Central Common Stock outstanding, then promptly after the Effective Date
written notice of the consummation of the Plan will be given by FCC by
registered mail to each former shareholder of Central who filed a written
objection to the Plan and voted against it at such shareholder's last address
on Central's records. Within 20 days after the mailing of such notice, the
shareholder must file with FCC a written demand for payment for his shares at
their fair cash value as of the day before the Central Meeting and must state
the amount demanded and a post office address to which FCC may reply. He must
also deposit the certificates formerly representing his shares of Central
Common Stock in escrow with a bank or trust company located in Orleans Parish,
Louisiana. The certificates must be duly endorsed and transferred to FCC upon
the sole condition that they be delivered to FCC upon payment of the value of
the shares in accordance with Section 131. With the above-mentioned demand,
the shareholder must also deliver to FCC the written acknowledgment of such
bank or trust company that it holds the certificate(s), duly endorsed as
described above.
Unless the shareholder objects to and votes against the Plan, demands
payment, endorses and deposits his certificates and delivers the required
acknowledgment in accordance with the procedures and within the time periods
set forth above, the shareholder will conclusively be presumed to have
acquiesced to the Plan and will forfeit any right to seek payment pursuant to
Section 131.
If FCC does not agree to the amount demanded by the shareholder, or does not
agree that payment is due, it will, within 20 days after receipt of such
demand and acknowledgment, notify such shareholder in writing at the
designated post office address of either (i) the value it will agree to pay or
(ii) its belief that no payment is due. If the shareholder does not agree to
accept the offered amount, or disagrees with FCC's assertion that no payment
24
is due, he must, within 60 days after receipt of such notice, file suit
against FCC in the Civil District Court for the Parish of Orleans for a
judicial determination of the fair cash value of the shares. Any shareholder
entitled to file such suit may, within such 60-day period but not thereafter,
intervene as a plaintiff in any suit filed against FCC by another former
shareholder for a judicial determination of the fair cash value of such other
shareholder's shares. If a shareholder fails to bring or to intervene in such
a suit within the applicable 60-day period, he will be deemed to have
consented to accept FCC's statement that no payment is due or, if FCC does not
contend that no payment is due, to accept the amount specified by FCC in its
notice of disagreement.
If upon the filing of any such suit or intervention FCC deposits with the
court the amount, if any, which it specified in its notice of disagreement,
and if in that notice FCC offered to pay such amount to the shareholder on
demand, then the costs (not including legal fees) of the suit or intervention
will be taxed against the shareholder if the amount finally awarded to him,
exclusive of interest and costs, is equal to or less than the amount so
deposited; otherwise, the costs (not including legal fees) will be taxed
against FCC.
Upon filing a demand for the value of his shares, a shareholder ceases to
have any rights of a shareholder except the rights created by Section 131. The
shareholder's demand may be withdrawn voluntarily at any time before FCC gives
its notice of disagreement, but thereafter only with the written consent of
FCC. If his demand is properly withdrawn, or if the shareholder otherwise
loses his dissenters' rights, he will be restored to his rights as a
shareholder as of the time of filing of his demand for fair cash value.
Until the Effective Date, dissenting shareholders of Central should send any
communications regarding their rights to Mr. Thomas J. Nicholson, Secretary,
Central Corporation, 300 DeSiard Street, Monroe, Louisiana 71201. After the
Effective Date, dissenting shareholders should send any communications
regarding their rights to Ms. Holly E. Hobson, Director of Investor Relations,
First Commerce Corporation, 925 Common Street, 7th Floor, New Orleans,
Louisiana 70112, or P. O. Box 60279, New Orleans, Louisiana 70160. All such
communications should be signed by or on behalf of the dissenting shareholder
in the form in which his shares are registered on the books of Central.
INFORMATION ABOUT CENTRAL
Copies of Central's Annual Report to Shareholders and Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995 accompany this Joint Proxy
Statement and Prospectus and should be read in conjunction herewith. In
addition, the following documents have been filed by Central with the
Commission and are incorporated by reference into this Joint Proxy Statement
and Prospectus: Central's Annual Report on Form 10-K for the year ended
December 31, 1994, Central's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995, and Central's Report on Form 8-K dated
May 25, 1995. See "Available Information" for information with respect to
securing copies of documents incorporated by reference in this Joint Proxy
Statement and Prospectus.
INFORMATION ABOUT FCC
The following documents, or the indicated portions thereof, have been filed
by FCC with the Commission, and are incorporated by reference into this Joint
Proxy Statement and Prospectus: FCC's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994; FCC's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995 and June 30, 1995; FCC's Report on Form 8-K
dated March 3, 1995, as amended by FCC's report on Form 8-K/A dated March 31,
1995; FCC's Report on Form 8-K dated May 8, 1995; FCC's Report on Form 8-K
dated May 31, 1995; and the description of FCC Common Stock set forth in FCC's
Applications for Registration on Form 8-A filed with the Commission on
November 9, 1972 and December 22, 1976, as amended by a report on Form 8 filed
with the Commission on June 19, 1989 and by a report on Form 8-A/A filed with
the Commission on August 12, 1993.
In addition, all other documents that will be filed by FCC with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934 between the date of this Joint Proxy Statement and
25
Prospectus and the date of FCC's Meeting are incorporated herein by reference
from the date of filing. See "Available Information" for information with
respect to securing copies of documents incorporated by reference in this
Joint Proxy Statement and Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded to the
extent that a statement contained herein or in any other document subsequently
filed and incorporated or deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Joint Proxy Statement and Prospectus.
COMPARATIVE RIGHTS OF SHAREHOLDERS
GENERAL
If the shareholders of Central approve the Plan and it is subsequently
consummated, all shareholders of Central, other than those exercising
dissenters' rights, will become shareholders of FCC and their rights will be
governed by and be subject to the Articles of Incorporation ("Articles") and
Bylaws of FCC rather than the Articles and Bylaws of Central. The following is
a brief summary of certain of the principal differences between the rights of
shareholders of FCC and Central not described elsewhere herein.
PREFERRED STOCK
The Board of Directors of FCC is authorized, without action of its
shareholders, to issue FCC preferred stock (the "Preferred Stock") from time
to time and to establish the designations, preferences and relative, optional
or other special rights and qualifications, limitations and restrictions
thereof, as well as to establish and fix variations in the relative rights as
between holders of any one or more series of such Preferred Stock. The
authority of the Board of Directors includes but is not limited to the
determination or fixing of the following with respect to each series of
Preferred Stock which may be issued: (i) the designation of such series; (ii)
the number of shares initially constituting such series; (iii) the dividend
rate and conditions and the dividend preferences, if any, in respect of the
FCC Common Stock and among the series of Preferred Stock; (iv) whether, and
upon what terms, the Preferred Stock would be convertible into or exchanged
for shares of any other class or other series of the same class; (v) whether,
and to what extent, holders of one or more shares of a series of Preferred
Stock will have voting rights; and (vi) the restrictions, if any, that are to
apply on the issue or reissue of any additional Preferred Stock.
Shares of Preferred Stock that are authorized would be available for
issuance in connection with the acquisition of other businesses, infusion of
capital, or for other lawful corporate purposes, at the discretion of the
Board of Directors. The Board of Directors could issue Preferred Stock to a
person or persons who would support management in connection with a proxy
contest to replace an incumbent director or in opposition to an unsolicited
tender offer. As a result, such proposals or tender offers could be defeated
even though favored by the holders of a majority of the FCC Common Stock. As
of August 8, 1995, FCC had 2,397,370 shares of Preferred Stock outstanding.
The Articles of Central authorize the issuance of preferred stock and
authorize Central's Board of Directors to fix the terms thereof, but any
preferred stock so issued is required to be non-voting stock, and the vote of
80% of the total number of directors of Central is required to authorize the
issuance of any preferred stock.
VOTE REQUIRED FOR CORPORATE ACTION
In general, the affirmative vote of the holders of two-thirds of the voting
power of FCC present at a meeting of shareholders is necessary whenever FCC
shareholder approval is required for an amendment of its Articles or a merger,
consolidation, sale of assets or dissolution. Central's Articles generally
have higher vote requirements,
26
up to 80% of the total voting power of Central, for similar actions not
approved by at least 80% of the total number of directors of Central.
DIRECTORS
All of FCC's directors are elected annually and may be removed without cause
at any time by the vote of shareholders owning a majority of FCC's voting
power. Vacancies in FCC's Board of Directors may be filled by a majority vote
of the remaining directors. The Board of Directors of Central is divided into
three approximately equal classes, with only one class elected each year for
three year terms. Directors may be removed only by shareholders holding at
least 70% of Central's voting power, and vacancies may be filled only by the
vote of two-thirds of the remaining directors. In addition, Central's By-Laws
contain provisions requiring advance notice of intended director nominations;
FCC's By-Laws do not contain a similar requirement.
BUSINESS COMBINATIONS
Central's Articles contain extensive provisions requiring the vote of up to
80% of Central's voting power to approve a merger, consolidation or sale of
assets not approved by at least 80% of the members of the Board of Directors
of Central. FCC's Articles do not contain similar provisions. Central's
Articles also require its Board of Directors, in considering a business
combination, to consider factors that the Board deems relevant, including the
effect on employees, customers and the community. FCC's Articles do not have a
similar provision but the LBCL allows its directors to consider such factors.
LEGAL MATTERS
Correro, Fishman & Casteix, L.L.P., New Orleans, Louisiana, has rendered its
opinion that the shares of FCC Common Stock to be issued in connection with
the Plan have been duly authorized and, if and when issued pursuant to the
terms of the Plan, will be validly issued, fully paid and non-assessable.
EXPERTS
The 1994 and 1993 consolidated financial statements of Central incorporated
in this Joint Proxy Statement and Prospectus by reference from Central's
Annual Report on Form 10-K for the year ended December 31, 1994 have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which has been incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
The 1992 consolidated financial statements of Central incorporated by
reference in Central's Annual Report (Form 10-K) for the year ended December
31, 1994, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
The audited consolidated financial statements of FCC and its subsidiaries
incorporated by reference herein have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and have been so incorporated by reference in reliance upon the
authority of such firm as experts in accounting and auditing.
With respect to the unaudited consolidated interim financial information of
FCC and its subsidiaries incorporated by reference herein from FCC's quarterly
report on Form 10-Q, Arthur Andersen LLP has applied limited procedures in
accordance with professional standards for a review of that information.
However, their separate report thereon states that they did not audit and they
do not express an opinion on that interim financial information. Accordingly,
the degree of reliance on their report on that information should be
restricted in light
27
of the limited nature of the review procedures applied. In addition, Arthur
Andersen LLP is not subject to the liability provisions of Section 11 of the
Securities Act for their report on the unaudited interim financial information
because that report is not a "report" or a "part" of the registration
statement prepared or certified by them within the meaning of Sections 7 and
11 of the Securities Act.
OTHER MATTERS
At the time of the preparation of this Joint Proxy Statement and Prospectus,
neither Central nor FCC had been informed of any matters to be presented for
action at the Meetings other than consideration of approval of the Plan. If
any other matters come before the Meetings or any adjournment thereof, the
persons named in the enclosed proxy will vote on such matters according to
their best judgment.
Shareholders are urged to sign the enclosed proxy and return it at once in
the enclosed envelope.
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FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
In addition to the proposed merger with Central Corporation (Central), First
Commerce Corporation (FCC) has a merger pending with Peoples Bancshares, Inc.
and affiliated entities (Peoples). Additionally, FCC's merger with Lakeside
Bancshares, Inc. (Lakeside) was completed on August 3, 1995. The unaudited pro
forma condensed combined balance sheet as of June 30, 1995 and the unaudited
pro forma condensed combined statements of income for the six months ended
June 30, 1995 and for the years ended December 31, 1994, 1993 and 1992
appearing on the following pages give effect to the proposed mergers of
Central and Peoples and the recently completed merger of Lakeside
(collectively, the "Mergers") into FCC. A brief description of each of the
mergers follows.
FCC and Central, the parent company of Central Bank, Monroe, Louisiana, have
signed a definitive agreement to merge Central into FCC. Under the terms of
the agreement, Central Bank will retain separate bank status and will become a
wholly owned subsidiary of FCC. Shareholders of Central will receive 1.67
shares, subject to reduction in certain limited circumstances not expected to
occur, of FCC common stock for each share of Central common stock outstanding.
The exact number of shares will be determined at the time the merger is
effected.
FCC and Peoples have signed a definitive agreement to merge the two
companies. Peoples' majority owned subsidiary, Peoples Bank and Trust Company
of St. Bernard (Peoples Bank), will be merged with FCC's wholly owned
subsidiary, First National Bank of Commerce. Shareholders of Peoples and the
minority shareholders of Peoples Bank will receive shares of FCC common stock
with a value of approximately $30.8 million. The exact number of shares will
be determined at the time the mergers are effected. Also, under the terms of
the Merger Agreement with Peoples, upon the closing of the merger, certain
properties which are leased by Peoples Bank from Peoples Properties Limited
Partnership (Partnership) will be purchased by FCC for a price of $2,504,000.
The payment of this consideration will be effected through the assumption by
FCC of the debt owed on these properties with an outstanding principal balance
of $2,504,000.
FCC and Lakeside and their respective subsidiaries, The First National Bank
of Lake Charles (FNBLC) and Lakeside National Bank of Lake Charles (LNB)
completed their merger on August 3, 1995. Shareholders of Lakeside received
approximately 984,220 shares of FCC Common Stock with a value of approximately
$30 million. The Lakeside mergers were accounted for as poolings-of-interests.
The proposed mergers are expected to be accounted for as poolings-of-
interests. The pro forma financial statements have been prepared to reflect
the consummation of all of the proposed mergers. No assurance can be given,
however, that any or all of the mergers will be consummated, and consummation
of one or more of the proposed mergers is not a condition to the consummation
of any other proposed merger.
On February 17, 1995, FCC completed mergers with First Bancshares, Inc.
(First) and City Bancorp, Inc. (City). The First merger was accounted for as a
pooling-of-interests; accordingly, FCC's financial statements have been
restated. The City merger was accounted for using the purchase method of
accounting. FCC's results of operations include nonrecurring costs associated
with these mergers of approximately $1.5 million after taxes for the six
months ended June 30, 1995 and $2 million after taxes for the year ended
December 31, 1994.
No provision has been made for nonrecurring charges or credits directly
related to the proposed mergers in the pro forma financial statements. Such
charges are estimated to be $6 to $11 million after taxes. The unaudited pro
forma condensed combined balance sheet includes adjustments directly
attributable to the proposed mergers based on estimates derived from
information currently available.
The pro forma financial statements do not purport to be indicative of the
financial position or results of operations that would actually have been
obtained if the proposed mergers had been in effect at such dates or for such
periods, or of the results that may be obtained in the future.
F-1
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
JUNE 30, 1995
(IN THOUSANDS)
HISTORICAL PRO
------------------------------------------ LAKESIDE FORMA PRO FORMA
FCC CENTRAL LAKESIDE PEOPLES(6) DIVESTITURE(1) ADJUSTMENT(2) COMBINED
---------- -------- -------- ---------- -------------- ------------- ----------
ASSETS
Cash and due from banks. $ 370,317 $ 39,897 $ 12,752 $ 8,615 $ (4,916) $ -- $ 426,665
Interest-bearing
deposits in other
banks.................. 151 119 8,957 -- -- -- 9,227
Securities held to
maturity............... 10,170 88,688 39,471 19,755 -- -- 158,084
Securities available for
sale................... 2,622,667 53,239 9,110 73,825 -- -- 2,758,841
Trading account
securities............. 14,928 -- -- -- -- -- 14,928
Federal funds sold and
securities purchased
under resale
agreements............. 52,625 8,350 40 12,200 -- -- 73,213
Loans and leases, net of
unearned income........ 3,773,585 606,050 92,955 53,397 (25,194) -- 4,500,793
Allowance for loan
losses................ (58,358) (9,481) (2,889) (2,329) -- -- (73,057)
---------- -------- -------- -------- -------- -------- ----------
Net loans and leases... 3,715,227 596,569 90,066 51,068 (25,194) -- 4,427,736
Premises and equipment.. 130,804 17,359 7,811 6,199 (667) -- 161,506
Goodwill and other
intangible assets...... 20,398 813 -- 385 -- -- 21,596
Other assets............ 123,457 20,351 1,622 4,681 (93) -- 150,018
---------- -------- -------- -------- -------- -------- ----------
Total assets........... $7,060,744 $825,385 $169,829 $176,728 $(30,870) $ -- $8,201,816
========== ======== ======== ======== ======== ======== ==========
LIABILITIES
Noninterest-bearing
deposits............... $1,232,092 $115,121 $ 43,941 $ 33,196 $(10,222) $ -- $1,414,128
Interest-bearing
deposits............... 4,513,707 623,279 104,702 121,467 (23,665) -- 5,339,490
---------- -------- -------- -------- -------- -------- ----------
Total deposits......... 5,745,799 738,400 148,643 154,663 (33,887) -- 6,753,618
Short-term borrowings... 538,464 3,369 2,200 688 -- -- 544,721
Other liabilities....... 87,697 7,378 1,145 5,370 1,029 -- 102,619
Long-term debt.......... 88,640 739 -- -- -- -- 89,379
---------- -------- -------- -------- -------- -------- ----------
Total liabilities...... 6,460,600 749,886 151,988 160,721 (32,858) -- 7,490,337
---------- -------- -------- -------- -------- -------- ----------
STOCKHOLDERS' EQUITY
Preferred stock......... 59,934 -- -- -- -- -- 59,934
Common stock............ 147,341 4,067 1,250 602 -- 38,024 (3) 191,284
Capital surplus......... 140,767 15,904 2,500 3,026 -- (38,290)(3) 123,907
Retained earnings....... 246,068 55,433 14,114 12,706 1,988 -- 330,309
Unearned restricted
stock compensation..... (1,590) -- -- -- -- -- (1,590)
Treasury stock.......... (13,115) -- -- (266) -- 266 (3) (13,115)
Unrealized gain(loss) on
securities available
for sale............... (20,739) 95 (23) (61) -- -- (20,750)
---------- -------- -------- -------- -------- -------- ----------
Total stockholders'
equity................ 600,144 75,499 17,841 16,007 1,988 -- 711,479
---------- -------- -------- -------- -------- -------- ----------
Total liabilities and
stockholders' equity.. $7,060,744 $825,385 $169,829 $176,728 $(30,870) $ -- $8,201,816
========== ======== ======== ======== ======== ======== ==========
(See accompanying notes)
F-2
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
----------------------------------------- FORMA FORMA
FCC CENTRAL LAKESIDE PEOPLES(6) ADJUSTMENTS COMBINED
---------- --------- -------- ---------- ----------- ----------
Interest income......... $ 245,053 $ 32,831 $ 5,968 $5,920 $ -- $ 289,772
Interest expense........ 102,297 13,828 1,444 2,098 -- 119,667
---------- --------- ------- ------ ----- ----------
Net interest income..... 142,756 19,003 4,524 3,822 -- 170,105
Provision for loan loss-
es..................... 5,963 320 (150) -- -- 6,133
---------- --------- ------- ------ ----- ----------
Net interest income af-
ter provision for loan
losses................. 136,793 18,683 4,674 3,822 -- 163,972
Other income............ 47,736 8,477 1,481 901 -- 58,595
Operating expense....... 133,097 18,605 4,318 4,192 -- 160,212
---------- --------- ------- ------ ----- ----------
Income before income tax
expense................ 51,432 8,555 1,837 531 -- 62,355
Income tax expense...... 17,076 2,728 696 191 -- 20,691
---------- --------- ------- ------ ----- ----------
Net income.............. 34,356 5,827 1,141 340 -- 41,664
Preferred dividend re-
quirements............. 2,173 -- -- -- -- 2,173
---------- --------- ------- ------ ----- ----------
Income applicable to
common shares.......... $ 32,183 $ 5,827 $ 1,141 $ 340 $ -- $ 39,491
========== ========= ======= ====== ===== ==========
Earnings per share(4)
Primary............... $ 1.11 $ 1.43 $ 2.28 $13.98 $ 1.04
Fully diluted......... $ 1.08 $ 1.43 $ 2.28 $13.98 $ 1.02
Weighted average shares
outstanding(4)
Primary............... 29,104,220 4,066,731 500,000 24,326 37,892,907
Fully diluted......... 31,911,423 4,066,731 500,000 24,326 40,700,110
(See accompanying notes)
F-3
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
----------------------------------------- FORMA FORMA
FCC CENTRAL LAKESIDE PEOPLES(6) ADJUSTMENTS COMBINED
---------- --------- -------- ---------- ----------- ----------
Interest income......... $ 427,790 $ 56,314 $11,533 $11,601 $ -- $507,238
Interest expense........ 156,522 21,084 2,724 3,625 -- 183,955
---------- --------- ------- ------- ----- ----------
Net interest income..... 271,268 35,230 8,809 7,976 -- 323,283
Provision for loan loss-
es..................... (11,443) 1,025 -- -- -- (10,418)
---------- --------- ------- ------- ----- ----------
Net interest income af-
ter provision for loan
losses................. 282,711 34,205 8,809 7,976 -- 333,701
Other income............ 69,564 16,132 3,238 1,707 -- 90,641
Operating expense....... 253,659 34,531 9,710 7,624 -- 305,524
---------- --------- ------- ------- ----- ----------
Income before income tax
expense................ 98,616 15,806 2,337 2,059 -- 118,818
Income tax expense...... 31,854 5,279 775 619 -- 38,527
---------- --------- ------- ------- ----- ----------
Net income.............. 66,762 10,527 1,562 1,440 -- 80,291
Preferred dividend re-
quirements............. 4,347 -- -- -- -- 4,347
---------- --------- ------- ------- ----- ----------
Income applicable to
common shares.......... $ 62,415 $ 10,527 $ 1,562 $ 1,440 $ -- $ 75,944
========== ========= ======= ======= ===== ==========
Earnings per share(4)
Primary............... $ 2.15 $ 2.59 $ 3.12 $ 59.20 $ 2.01
Fully diluted......... $ 2.10 $ 2.59 $ 3.12 $ 59.20 $ 1.98
Weighted average shares
outstanding(4)
Primary............... 29,022,779 4,066,731 500,000 24,326 37,811,466
Fully diluted......... 31,817,158 4,066,731 500,000 24,326 40,605,845
(See accompanying notes)
F-4
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
----------------------------------------- FORMA FORMA
FCC CENTRAL LAKESIDE PEOPLES(6) ADJUSTMENTS COMBINED
---------- --------- -------- ---------- ----------- ----------
Interest income......... $ 413,973 $ 52,889 $11,999 $12,525 $ -- $ 491,386
Interest expense........ 148,353 20,084 3,207 3,819 -- 175,463
---------- --------- ------- ------- ----- ----------
Net interest income..... 265,620 32,805 8,792 8,706 -- 315,923
Provision for loan loss-
es..................... (5,804) 3,080 -- 300 -- (2,424)
---------- --------- ------- ------- ----- ----------
Net interest income af-
ter provision for loan
losses................. 271,424 29,725 8,792 8,406 -- 318,347
Other income............ 104,964 15,898 3,256 1,816 -- 125,934
Operating expense....... 231,665 32,404 9,764 7,859 -- 281,692
---------- --------- ------- ------- ----- ----------
Income before income tax
expense................ 144,723 13,219 2,284 2,363 -- 162,589
Income tax expense...... 43,521 4,194 822 804 -- 49,341
---------- --------- ------- ------- ----- ----------
Net income(5)........... 101,202 9,025 1,462 1,559 -- 113,248
Preferred dividend re-
quirements............. 4,348 -- -- -- -- 4,348
---------- --------- ------- ------- ----- ----------
Income applicable to
common shares.......... $ 96,854 $ 9,025 $ 1,462 $ 1,559 $ -- $ 108,900
========== ========= ======= ======= ===== ==========
Earnings per share(4)
Primary............... $ 3.36 $ 2.22 $ 2.92 $ 64.09 $ 2.89
Fully diluted......... $ 3.11 $ 2.22 $ 2.92 $ 64.09 $ 2.76
Weighted average shares
outstanding(4)
Primary............... 28,837,748 4,066,731 500,000 24,326 37,626,435
Fully diluted......... 34,830,540 4,066,731 500,000 24,326 43,619,227
(See accompanying notes)
F-5
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
---------------------------------------- FORMA FORMA
FCC CENTRAL LAKESIDE PEOPLES(6) ADJUSTMENTS COMBINED
---------- --------- -------- ---------- ----------- ----------
Interest income......... $ 419,196 $ 56,309 $13,593 $14,633 $ -- $ 503,731
Interest expense........ 170,031 25,979 4,798 5,197 -- 206,005
---------- --------- ------- ------- ----- ----------
Net interest income..... 249,165 30,330 8,795 9,436 -- 297,726
Provision for loan loss-
es..................... 22,720 4,185 675 1,506 -- 29,086
---------- --------- ------- ------- ----- ----------
Net interest income af-
ter provision for loan
losses................. 226,445 26,145 8,120 7,930 -- 268,640
Other income............ 98,682 14,498 4,167 1,882 -- 119,229
Operating expense....... 213,515 30,270 10,383 7,862 -- 262,030
---------- --------- ------- ------- ----- ----------
Income before income tax
expense and minority
interest............... 111,612 10,373 1,904 1,950 -- 125,839
Income tax expense...... 34,539 3,321 689 660 -- 39,209
---------- --------- ------- ------- ----- ----------
Net income before minor-
ity interest........... 77,073 7,052 1,215 1,290 -- 86,630
Earnings of minority in-
terest................. 918 -- -- -- -- 918
---------- --------- ------- ------- ----- ----------
Net income.............. 76,155 7,052 1,215 1,290 -- 85,712
Preferred dividend re-
quirements............. 4,076 -- -- -- -- 4,076
---------- --------- ------- ------- ----- ----------
Income applicable to
common shares.......... $ 72,079 $ 7,052 $ 1,215 $ 1,290 $ -- $ 81,636
========== ========= ======= ======= ===== ==========
Earnings per share(4)
Primary............... $ 2.73 $ 1.73 $ 2.43 $ 53.03 $ 2.32
Fully diluted......... $ 2.58 $ 1.73 $ 2.43 $ 53.03 $ 2.26
Weighted average shares
outstanding(4)
Primary............... 26,434,077 4,066,731 500,000 24,326 35,222,764
Fully diluted......... 32,273,902 4,066,731 500,000 24,326 41,062,589
(See accompanying notes)
F-6
FIRST COMMERCE CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
(1) In order to eliminate any concern about the competitive impact of the
merger with Lakeside, FCC and Lakeside committed to the divestiture of two
branches of LNB as required by regulators. The sale of the two branches
included loans, deposits, premises and equipment, and cash related to the
branches. The amounts shown represent the estimated book values of the
assets and liabilities sold as a result of these divestitures, for a
premium of $3.1 million before taxes. The pro forma condensed combined
income statements do not reflect any adjustments for the divestiture. Any
such adjustments are estimated to be immaterial to the pro forma combined
results of operations.
(2) To calculate pro forma information, it has been assumed that the number of
outstanding shares of FCC common stock includes shares to be issued upon
consummation of the mergers. In connection with the proposed mergers, FCC
will issue shares of its common stock to the shareholders of Central,
Peoples and to the minority shareholders of Peoples Bank. The total number
of shares issued in the transaction with Lakeside was approximately
984,220.
Under the terms of the proposed merger with Central, the number of shares
of FCC common stock to be issued will be 1.67 shares for each Central
common share outstanding at the date of the merger. These pro formas assume
the issuance of 6,791,441 shares of FCC common stock based on the number of
shares of Central common stock outstanding as of June 30, 1995, without
giving effect to any deductible amount.
Under the terms of the proposed merger with Peoples, the number of shares
of FCC common stock to be delivered will be determined by reference to the
average of the closing sales prices of a share of FCC common stock for the
10 trading days ending on the last trading day before the closing date for
the merger. For purposes of these pro formas, the conversion rate has been
assumed to be 41.69 for each share of Peoples common stock and 40.50 for
each share of Peoples Bank common stock owned by the minority interest,
based on the average closing sales prices of a share of FCC common stock
for the 10 trading days ending July 27, 1995 of $30.40, without giving
effect to any deductible amount.
(3) Calculation of Pro Forma Capital. As required by generally accepted
accounting principles under the pooling-of-interests method of accounting,
FCC's common stock account has been decreased by the balance in common
stock for Central, Lakeside and Peoples and increased by the par value of
the FCC common stock assumed to be issued under the proposed mergers. An
analysis of these adjustments follows (in thousands):
STOCKHOLDERS' EQUITY
-------------------------------------------------------------
LOSS ON
SECURITIES TOTAL
COMMON CAPITAL RETAINED TREASURY AVAILABLE STOCKHOLDERS'
STOCK SURPLUS EARNINGS STOCK FOR SALE EQUITY
------- -------- -------- -------- ---------- -------------
Central(A).... $33,957 $(13,986) $ -- $-- $ -- $ 19,971
(4,067) (15,904) -- -- -- (19,971)
Lakeside(B)... 4,921 (1,171) -- -- -- 3,750
(1,250) (2,500) -- -- -- (3,750)
Peoples(C).... 5,065 (1,703) -- -- -- 3,362
(602) (3,026) -- 266 -- (3,362)
------- -------- ----- ---- ----- --------
$38,024 $(38,290) $ -- $266 $ -- $ --
======= ======== ===== ==== ===== ========
F-7
FIRST COMMERCE CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS--(CONTINUED)
(UNAUDITED)
--------
(A) Issuance of 6,791,441 shares of FCC common stock for 4,066,731 shares
of Central common stock in a transaction accounted for as a pooling-of-
interests. FCC's common stock account has been decreased by the balance
in Central's common stock account ($4,067,000) and increased by the par
value of the FCC common stock issued ($33,957,000).
(B) Issuance of 984,220 shares of FCC common stock for 500,000 shares of
Lakeside common stock in a transaction accounted for as a pooling-of-
interests. FCC's common stock account has been decreased by the balance
in Lakeside's common stock account ($1,250,000) and increased by the
par value of the FCC common stock issued ($4,921,000).
(C) Issuance of 1,013,026 shares of FCC common stock for 24,082 shares of
Peoples common stock (less 674 shares of treasury stock retired) and
for the minority interest in Peoples Bank in a transaction accounted
for as a pooling-of-interests. FCC's common stock account has been
decreased by the balance in Peoples common stock account ($602,000) and
increased by the par value of the FCC common stock issued ($5,065,000).
(4) Pro forma earnings per share have been computed on the pro forma combined
weighted average shares outstanding. Pro forma combined weighted average
shares outstanding include weighted average outstanding shares of FCC
common stock, after adjustment for shares of FCC common stock assumed to
be issued in connection with the proposed mergers. Income for primary
earnings per share is adjusted for preferred stock dividends. Income for
fully diluted earnings per share is adjusted for interest related to
convertible debentures, net of the related income tax effect, and
preferred stock dividends. For the six-month period of 1995, the
convertible debentures were antidilutive; therefore, that period's fully
diluted earnings per share computation did not include that adjustment.
(5) Lakeside and Peoples adopted Statement of Financial Accounting Standards
No. 109, "Accounting for Income Taxes" in 1993 and reported the cumulative
effect of this change in their respective 1993 consolidated statements of
income. The effect of this change was a $131,000 decrease in net income
for Lakeside and a $36,000 decrease in net income for Peoples. These
amounts are not considered to be components of ongoing results and,
accordingly, have not been included in the historical or combined pro
forma amounts presented.
(6) The Peoples historical information presented reflects Peoples Bancshares,
Inc., the Peoples Bank minority interest, and certain properties of the
Peoples Properties Limited Partnership. They are reflected in the pro
forma financial statements on a combined basis.
F-8
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
(CENTRAL CORPORATION TRANSACTION ONLY)
The unaudited pro forma condensed combined balance sheet as of June 30, 1995
and the unaudited pro forma condensed combined statements of income for the
six months ended June 30, 1995 and for the years ended December 31, 1994, 1993
and 1992 appearing on the following pages give effect to the proposed merger
of Central Corporation (Central) into First Commerce Corporation (FCC) using
the pooling-of-interests method of accounting. A brief description of the
proposed plan of merger follows.
FCC and Central, the parent company of Central Bank, Monroe, Louisiana, have
signed a definitive agreement to merge Central into FCC. Under the terms of
the agreement, Central Bank will retain separate bank status and will become a
wholly owned subsidiary of FCC. Shareholders of Central will receive 1.67
shares, subject to reduction in certain limited circumstances not expected to
occur, of FCC common stock for each share of Central common stock outstanding.
The exact number of shares will be determined at the time the merger is
effected.
On February 17, 1995, FCC completed mergers with First Bancshares, Inc.
(First) and City Bancorp, Inc. (City). The First merger was accounted for as a
pooling-of-interests; accordingly, FCC's financial statements have been
restated. The City merger was accounted for using the purchase method of
accounting. FCC's results of operations include nonrecurring costs associated
with these mergers of approximately $1.5 million after taxes for the six
months ended June 30, 1995 and $2 million after taxes for the year ended
December 31, 1994.
No provision has been made for nonrecurring charges or credits directly
related to the proposed merger in the pro forma financial statements. Such
charges are estimated to be $3 to $7 million after taxes. The unaudited pro
forma condensed combined balance sheet includes adjustments directly
attributable to the proposed merger based on estimates derived from
information currently available.
The pro forma financial statements do not purport to be indicative of the
financial position or results of operations that would actually have been
obtained if the proposed merger had been in effect at such dates or for such
periods, or of the results that may be obtained in the future.
F-9
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED BALANCE SHEET
(UNAUDITED)
JUNE 30, 1995
(IN THOUSANDS)
HISTORICAL PRO PRO
-------------------- FORMA FORMA
FCC CENTRAL ADJUSTMENTS(1) COMBINED
---------- -------- -------------- ----------
ASSETS
Cash and due from banks...... $ 370,317 $ 39,987 $ -- $ 410,214
Interest-bearing deposits in
other banks................. 151 119 -- 270
Securities held to maturity.. 10,170 88,688 -- 98,858
Securities available for
sale........................ 2,622,667 53,239 -- 2,675,906
Trading account securities... 14,928 -- -- 14,928
Federal funds sold and
securities purchased under
resale agreements........... 52,625 8,350 -- 60,975
Loans and leases, net of
unearned income............. 3,773,585 606,050 -- 4,379,635
Allowance for loan losses.. (58,358) (9,481) -- (67,839)
---------- -------- -------- ----------
Net loans and leases..... 3,715,227 596,569 -- 4,311,796
Premises and equipment....... 130,804 17,359 -- 148,163
Goodwill and other intangible
assets...................... 20,398 813 -- 21,211
Other assets................. 123,457 20,351 -- 143,808
---------- -------- -------- ----------
Total assets............. $7,060,744 $825,385 $ -- $7,886,129
========== ======== ======== ==========
LIABILITIES
Noninterest-bearing deposits. $1,232,092 $115,121 $ -- $1,347,213
Interest-bearing deposits.... 4,513,707 623,279 -- 5,136,986
---------- -------- -------- ----------
Total deposits........... 5,745,799 738,400 -- 6,484,199
Short-term borrowings........ 538,464 3,369 -- 541,833
Other liabilities............ 87,697 7,378 -- 95,075
Long-term debt............... 88,640 739 -- 89,379
---------- -------- -------- ----------
Total liabilities........ 6,460,600 749,886 -- 7,210,486
---------- -------- -------- ----------
STOCKHOLDERS' EQUITY
Preferred stock.............. 59,934 -- -- 59,934
Common stock................. 147,341 4,067 29,890 (2) 181,298
Capital surplus.............. 140,767 15,904 (29,890)(2) 126,781
Retained earnings............ 246,068 55,433 -- 301,501
Unearned restricted stock
compensation................ (1,590) -- -- (1,590)
Treasury stock............... (13,115) -- -- (13,115)
Unrealized gain(loss) on
securities available for
sale........................ 20,729 95 -- 20,834
---------- -------- -------- ----------
Total stockholders'
equity.................. 600,144 75,499 -- 675,643
---------- -------- -------- ----------
Total liabilities and
stockholders' equity.... $7,060,744 $825,385 $ -- $7,886,129
========== ======== ======== ==========
(See accompanying notes)
F-10
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1995
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
-------------------- FORMA FORMA
FCC CENTRAL ADJUSTMENTS COMBINED
---------- --------- ----------- ----------
Interest income.................... $ 245,053 $ 32,831 $ -- $ 277,884
Interest expense................... 102,297 13,828 -- 116,125
---------- --------- ----- ----------
Net interest income................ 142,756 19,003 -- 161,759
Provision for loan losses.......... 5,963 320 -- 6,283
---------- --------- ----- ----------
Net interest income after provision
for loan losses................... 136,793 18,683 -- 155,476
Other income....................... 47,736 8,477 -- 56,213
Operating expense.................. 133,097 18,605 -- 151,702
---------- --------- ----- ----------
Income before income tax expense... 51,432 8,555 -- 59,987
Income tax expense................. 17,076 2,728 -- 19,804
---------- --------- ----- ----------
Net income......................... 34,356 5,827 -- 40,183
Preferred dividend requirements.... 2,173 -- -- 2,173
---------- --------- ----- ----------
Income applicable to common shares. $ 32,183 $ 5,827 $ -- $ 38,010
========== ========= ===== ==========
Earnings per share(3)
Primary.......................... $ 1.11 $ 1.43 $ 1.06
Fully diluted.................... $ 1.08 $ 1.43 $ 1.04
Weighted average shares
outstanding(3)
Primary.......................... 29,104,220 4,066,731 35,895,661
Fully diluted.................... 31,911,423 4,066,731 38,702,864
(See accompanying notes)
F-11
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1994
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
--------------------- FORMA FORMA
FCC CENTRAL ADJUSTMENTS COMBINED
---------- --------- ----------- ----------
Interest income.................. $ 427,790 $ 56,314 $ -- $ 484,104
Interest expense................. 156,522 21,084 -- 177,606
---------- --------- ----- ----------
Net interest income.............. 271,268 35,230 -- 306,498
Provision for loan losses........ (11,443) 1,025 -- (10,418)
---------- --------- ----- ----------
Net interest income after
provision for loan losses....... 282,711 34,205 -- 316,916
Other income..................... 69,564 16,132 -- 85,696
Operating expense................ 253,659 34,531 -- 288,190
---------- --------- ----- ----------
Income before income tax expense. 98,616 15,806 -- 114,422
Income tax expense............... 31,854 5,279 -- 37,133
---------- --------- ----- ----------
Net income....................... 66,762 10,527 -- 77,289
Preferred dividend requirements.. 4,347 -- -- 4,347
---------- --------- ----- ----------
Income applicable to common
shares.......................... $ 62,415 $ 10,527 $ -- $ 72,942
========== ========= ===== ==========
Earnings per share(3)
Primary........................ $ 2.15 $ 2.59 $ 2.04
Fully diluted.................. $ 2.10 $ 2.59 $ 2.00
Weighted average shares
outstanding(3)
Primary........................ 29,022,779 4,066,731 35,814,220
Fully diluted.................. 31,817,158 4,066,731 38,608,599
(See accompanying notes)
F-12
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
--------------------- FORMA FORMA
FCC CENTRAL ADJUSTMENTS COMBINED
---------- --------- ----------- ----------
Interest income.................. $ 413,973 $ 52,889 $ -- $ 466,862
Interest expense................. 148,353 20,084 -- 168,437
---------- --------- ----- ----------
Net interest income.............. 265,620 32,805 -- 298,425
Provision for loan losses........ (5,804) 3,080 -- (2,724)
---------- --------- ----- ----------
Net interest income after
provision for loan losses....... 271,424 29,725 -- 301,149
Other income..................... 104,964 15,898 -- 120,862
Operating expense................ 231,665 32,404 -- 264,069
---------- --------- ----- ----------
Income before income tax expense. 144,723 13,219 -- 157,942
Income tax expense............... 43,521 4,194 -- 47,715
---------- --------- ----- ----------
Net income....................... 101,202 9,025 -- 110,227
Preferred dividend requirements.. 4,348 -- -- 4,348
---------- --------- ----- ----------
Income applicable to common
shares.......................... $ 96,854 $ 9,025 $ -- $ 105,879
========== ========= ===== ==========
Earnings per share(3)
Primary........................ $ 3.36 $ 2.22 $ 2.97
Fully diluted.................. $ 3.11 $ 2.22 $ 2.82
Weighted average shares
outstanding(3)
Primary........................ 28,837,748 4,066,731 35,629,189
Fully diluted.................. 34,830,540 4,066,731 41,621,981
(See accompanying notes)
F-13
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME (UNAUDITED)
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS, EXCEPT SHARE DATA)
HISTORICAL PRO PRO
-------------------- FORMA FORMA
FCC CENTRAL ADJUSTMENTS COMBINED
---------- --------- ----------- ----------
Interest income.................... $ 419,196 $ 56,309 $ -- $ 475,505
Interest expense................... 170,031 25,979 -- 196,010
---------- --------- ----- ----------
Net interest income................ 249,165 30,33 -- 279,495
Provision for loan losses.......... 22,720 4,185 -- 26,905
---------- --------- ----- ----------
Net interest income after provision
for loan losses................... 226,445 26,145 -- 252,590
Other income....................... 98,682 14,498 -- 113,180
Operating expense.................. 213,515 30,270 -- 243,785
---------- --------- ----- ----------
Income before income tax expense
and minority interest............. 111,612 10,373 -- 121,985
Income tax expense................. 34,539 3,321 -- 37,860
---------- --------- ----- ----------
Net income before minority
interest.......................... 77,073 7,052 -- 84,125
Earnings of minority interest...... 918 -- -- 918
---------- --------- ----- ----------
Net income......................... 76,155 7,052 -- 83,207
Preferred dividend requirements.... 4,076 -- -- 4,076
---------- --------- ----- ----------
Income applicable to common shares. $ 72,079 $ 7,052 $ -- $ 79,131
========== ========= ===== ==========
Earnings per share(3)
Primary.......................... $ 2.73 $ 1.73 $ 2.38
Fully diluted.................... $ 2.58 $ 1.73 $ 2.31
Weighted average shares
outstanding(3)
Primary.......................... 26,434,077 4,066,731 33,225,518
Fully diluted.................... 32,273,902 4,066,731 39,065,343
(See accompanying notes)
F-14
FIRST COMMERCE CORPORATION
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
(1) In connection with the proposed merger, FCC will issue shares of its
common stock to the shareholders of Central. To calculate pro forma
information, it has been assumed that the number of outstanding shares of
FCC common stock includes shares to be issued upon consummation of the
merger. Under the terms of the proposed merger with Central, the number of
shares of FCC common stock to be issued will be 1.67 shares for each
Central common share outstanding at the date of the merger. These pro
formas assume the issuance of 6,791,441 shares of FCC common stock based
on the number of shares of Central common stock outstanding as of June 30,
1995, without giving effect to any deductible amount.
(2) Calculation of Pro Forma Capital. As required by generally accepted
accounting principles under the pooling-of-interests method of accounting,
FCC's common stock account has been decreased by the balance in common
stock for Central and increased by the par value of the FCC common stock
assumed to be issued under the proposed merger. An analysis of these
adjustments follows (in thousands):
STOCKHOLDERS' EQUITY
--------------------------------------------------
TOTAL
COMMON CAPITAL RETAINED TREASURY STOCKHOLDERS'
STOCK SURPLUS EARNINGS STOCK EQUITY
------- -------- -------- -------- -------------
Central(A)................ $33,957 $(13,986) $ -- $ -- $ 19,971
(4,067) (15,904) -- -- (19,971)
------- -------- ----- ----- --------
Total................... $29,890 $(29,890) $ -- $ -- $ --
======= ======== ===== ===== ========
--------
(A) Issuance of 6,791,441 shares of FCC common stock for 4,066,731 shares
of Central common stock in a transaction accounted for as a pooling-of-
interests. FCC's common stock account has been decreased by the balance
in Central's common stock account ($4,067,000) and increased by the par
value of the FCC common stock issued ($33,957,000).
(3) Pro forma earnings per share have been computed on the pro forma combined
weighted average shares outstanding. Pro forma combined weighted average
shares outstanding include weighted average outstanding shares of FCC
common stock, after adjustment for shares of FCC common stock assumed to
be issued in connection with the proposed merger. Income for primary
earnings per share is adjusted for preferred stock dividends. Income for
fully diluted earnings per share is adjusted for interest related to
convertible debentures, net of the related income tax effect, and
preferred stock dividends. For the six-month period of 1995, the
convertible debentures were antidilutive; therefore, that period's fully
diluted earnings per share computation did not include that adjustment.
F-15
APPENDIX A
FAIRNESS OPINION OF THE ROBINSON-HUMPHREY COMPANY, INC.
[LETTERHEAD OF ROBINSON-HUMPHREY APPEARS HERE]
May 15, 1995
Board of Directors
Central Corporation
300 DeSiard Street
Monroe, Louisiana 71211
Ladies and Gentlemen:
In connection with the proposed acquisition of Central Corporation
("Central") by First Commerce Corporation ("FCC") (the "Merger"), you have
asked us to render an opinion as to whether the financial terms of the Merger,
as provided in the Agreement and Plan of Merger dated as of May 15, 1995 among
such parties (the "Merger Agreement"), are fair, from a financial point of
view, to the stockholders of Central. Under the terms of the Merger, holders of
all outstanding shares of Central common stock will receive consideration equal
to 1.67 shares of FCC common stock per share of Central common stock, subject
to certain conditions.
Our firm, as part of its investment banking business, is frequently involved
in the valuation of securities as related to public underwritings, private
placements, mergers, acquisitions, recapitalizations and other purposes.
In connection with our study for rendering this opinion, we have reviewed the
Merger Agreement, Central's financial results for fiscal years 1990 through
1994 and for the quarter ended March 31, 1995, and certain documents and
information we deem relevant to our analysis. We have also held discussions
with senior management of Central for the purpose of reviewing the historical
and current operations of, and outlook for Central, industry trends, the terms
of the proposed Merger, and related matters.
We have also studied published financial data concerning certain other
publicly traded financial institutions which we deem comparable to Central as
well as certain financial data relating to acquisitions of other financial
institutions that we deem relevant or comparable. In addition, we have reviewed
other published information, performed certain financial analyses and
considered other factors and information which we deem relevant.
We have reviewed similar information and data relating to FCC including its
historical financial statements, from fiscal 1990 up through and including the
quarter ended March 31, 1995.
In rendering this opinion, we have relied upon the accuracy of the Merger
Agreement, the financial information listed above, and other information
furnished to us by Central and FCC. We have not separately verified this
information nor have we made an independent evaluation of any of the assets or
liabilities of Central and FCC.
Based upon the foregoing and upon current market and economic conditions, we
are of the opinion that, from a financial point of view, the terms of the
Merger as provided in the Merger Agreement are fair to the stockholders of
Central.
Very truly yours,
[SIGNTURE OF ROBINSON-HUMPHREY APPEARS HERE]
THE ROBINSON-HUMPHREY COMPANY, INC.
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APPENDIX B
FAIRNESS OPINION OF KEEFE, BRUYETTE & WOODS, INC.
(LETTERHEAD OF KEEFE, BRUYETTE & WOODS, INC. APPEARS HERE)
May 15, 1995
The Board of Directors
First Commerce Corporation
210 Baronne Street
New Orleans, LA 70160
Members of the Board:
You have requested our opinion as investment bankers as to the fairness, from
a financial point of view, to the stockholders of First Commerce Corporation
("First Commerce") of the proposed merger (the "Proposed Merger") of Central
Corporation ("Central") with and into First Commerce. Pursuant to an Agreement
and Plan of Merger (the "Merger Agreement") dated May 15, 1995 by and among
First Commerce and Central, Central would be merged with and into First
Commerce, with First Commerce as the surviving entity, and each share of Common
Stock of Central issued and outstanding prior to the effective time of the
Proposed Merger will be exchanged for 1.67 shares of Common Stock of First
Commerce (the "Exchange Ratio"). It is our understanding that the Proposed
Merger will be accounted for as a pooling-of-interests under generally accepted
accounting principles.
Keefe, Bruyette & Woods, Inc., as part of its investment banking business, is
continually engaged in the valuation of bank and thrift company securities in
connection with acquisitions, negotiated underwritings, secondary distributions
of listed and unlisted securities, private placements and valuations for
various other purposes. As specialists in the securities of banking companies,
we have experience in, and knowledge of, the valuation of banking enterprises.
In the ordinary course of our business as a broker-dealer, we may, from time to
time, purchase securities from, and sell securities to, First Commerce and
Central, and as a market maker in securities we may from time to time have a
long or short position in, and buy or sell, equity securities of First Commerce
and Central for our own account and for the accounts of our customers. To the
extent we have any such position as of the date of this opinion it has been
disclosed to First Commerce. We have acted exclusively for the Board of
Directors of First Commerce in rendering this fairness opinion and will receive
a fee from First Commerce for our services.
In arriving at our opinion, we have reviewed, analyzed and relied upon
material bearing upon the financial and operating condition of First Commerce
and Central, including, among other things, the following: (i) Annual Reports
to Stockholders for the three years ended December 31, 1994 for First Commerce
and Central (ii) certain interim reports to stockholders of First Commerce and
Central, Quarterly Reports of First Commerce and Central, and certain other
communications from First Commerce and Central (ii) certain interim reports to
stockholders of First Commerce and Central, Quarterly Reports of First Commerce
and Central, and certain other communications from First Commerce and Central
to their respective stockholders; (iii) other financial information concerning
the businesses and the businesses and operations of First Commerce and Central
furnished to us by First Commerce for purposes of our analysis, including
certain internal financial analyses and forecasts for First Commerce prepared
by the senior management of First Commerce; (iv) certain publicly available
information concerning trading of, and the trading market for, the Common Stock
of First Commerce and Central; and (v) certain publicly available information
with respect to banking companies and the nature and
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terms of certain other transactions that we consider relevant to our inquiry.
Additionally, we have held discussions with senior management at First
Commerce concerning the past and current operations, financial conditions and
prospects and, results of regulatory examinations.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including among others the following: (i)
the historical and current financial position, results of operations and
assets and liabilities of First Commerce and Central; and (ii) the nature and
terms of certain other transactions involving banks, bank holding companies
and thrift institutions. We have also taken into account our assessment of
general economic, market and financial conditions and our experience in other
transactions, as well as our experience in securities valuation and our
knowledge of banks, bank holding companies and thrift institutions generally.
Our opinion is necessarily based upon conditions as they exist and can be
evaluated on the date hereof and the information made available to us through
the date hereof.
In conducting our review and arriving at our opinion, we have relied upon
and assumed the accuracy and completeness of all of the financial and other
information provided to us or publicly available and we have not attempted
independently to verify such information. We have relied upon the management
of First Commerce as to the reasonableness and achievability of the financial
and operating forecasts (and the assumptions and bases therefor) provided to
us, and we have assumed that such forecasts reflect the best currently
available estimates and judgments of such managements and that such forecasts,
will be realized in the amounts and in the time periods currently estimated by
such managements. We have also assumed, without independent verification, that
the aggregate allowances for loan losses for First Commerce and Central are
adequate to cover such losses. We have not made or obtained any evaluations or
appraisals of the property of First Commerce and Central, nor have we examined
any individual loan credit files.
Based upon and subject to the foregoing, we are of the opinion that, as of
the date hereof, the Exchange Ratio in the Proposed Merger is fair, from a
financial point of view, to the stockholders of First Commerce.
Very truly yours,
(SIGNATURE OF KEEFE, BRUYETTE & WOODS,
INC. APPEARS HERE)
Keefe, Bruyette & Woods, Inc.
B-2
APPENDIX C
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made as of this 15th
day of May, 1995, by and among CENTRAL CORPORATION, a Louisiana corporation
("Central"); and FIRST COMMERCE CORPORATION, a Louisiana corporation ("FCC").
RECITALS
1. Each of Central and FCC is a registered bank holding company under the
BHC Act (such term and other capitalized terms used in this Agreement are used
as defined in Section I).
2. The Board of Directors of each of Central and FCC believes that the
transactions described in this Agreement are in the best interests of such
Party and its shareholders.
3. By virtue of the reorganization that is effectuated by this Agreement,
(a) Central will be merged into FCC, and (b) as a result of the foregoing
Merger, except as provided in this Agreement, the then outstanding shares of
Central Common Stock will be converted into shares of FCC Common Stock.
4. The Merger is subject to prior approval of, among others, the
shareholders of each of Central and FCC, and the Federal Reserve, and the
prior satisfaction of certain other conditions set forth in this Agreement.
5. Central has simultaneously executed and delivered its Stock Option
Agreement to FCC, by which Central grants to FCC an option to purchase shares
of Central Common Stock under certain circumstances described therein.
6. The Parties intend that the reorganization contemplated by this Agreement
be accounted for as a pooling-of-interests and that it qualify for federal
income tax purposes as a tax-free reorganization under Section 368(a)(1)(A) of
the Internal Revenue Code.
AGREEMENT
In consideration of the foregoing and of the mutual warranties,
representations, covenants and agreements set forth herein, and for other good
and valuable consideration the receipt and sufficiency of which are
acknowledged, the parties to this Agreement agree as follows:
SECTION I.
DEFINITIONS
Except as may otherwise be provided in this Agreement, the capitalized terms
set forth below shall have the following respective meanings, in their
singular or plural forms as applicable:
1.1 "Acquisition Transaction" shall mean, with respect to each Party, any of
the following: (i) a merger or consolidation or share exchange, or any similar
transaction (other than the Merger), (ii) a purchase, lease or other
acquisition of all or substantially all the assets of such Party or any
significant subsidiary (as defined in Rule 1.02 of Regulation S-X of the SEC)
(a "Significant Subsidiary") of such Party, (iii) a purchase or other
acquisition of beneficial ownership by any person or "group" (as such term is
defined in Section 13(d)(3) of the 1934 Act) (including by way of merger,
consolidation, share exchange or otherwise) of securities representing 10% or
more of the voting power of such Party or any Significant Subsidiary of such
Party, but excluding the acquisition of beneficial ownership by any employee
benefit plan maintained or sponsored by such Party, (iv) a tender or exchange
offer to acquire securities representing 10% or more of the voting power of
such Party, (v) a
C-1
public proxy or consent solicitation made to shareholders of such Party
seeking proxies in opposition to any proposal that has been recommended by the
Board of Directors of such Party, (vi) the filing of an application or notice
with the Federal Reserve, or other federal or state bank regulatory authority
(which application has been accepted for processing) seeking approval to
engage in one or more of the transactions referenced in clauses (i) through
(iv) above, or (vii) the making of a bona fide proposal to such Party or its
shareholders by public announcement or written communication that is or
becomes the subject of public disclosure to engage in one or more of the
transactions or events referenced in clauses (i) through (v) above.
1.2 "Agreement" shall mean this Agreement and Plan of Merger.
1.3 "BCL" shall mean the Louisiana Business Corporation Law, as amended.
1.4 "BHC Act" shall mean the federal Bank Holding Company Act of 1956, as
amended.
1.5 "Closing" shall mean the closing of the transactions contemplated
hereunder which will take place as described in Section 3.1 of this Agreement.
1.6 "Central Bank" shall mean Central Bank, a Subsidiary of Central.
1.7 "Central Common Stock" shall mean the Common Stock, par value $1.00 per
share, of Central.
1.8 "Central Companies" shall mean, collectively, Central and all Central
Subsidiaries.
1.9 "Central ESOP" shall mean the Central Corporation Employee Stock
Ownership Plan.
1.10 "Central 401(k) Plan" shall mean the Central Bank 401(k) Savings Plan.
1.11 "Central Retiree Benefit Plan" shall mean the Central Bank Group
Medical Plan, which plan provides post-retirement medical and life insurance
benefits to eligible retired employees of the Central Companies and their
dependents.
1.12 "Central Retirement Plan" shall mean Retirement Plan for Employees of
Central Bank.
1.13 "Central Subsidiaries" shall mean the Subsidiaries of Central, which
shall include Central Bank and the Central Subsidiaries described in Section
5.3 of this Agreement and any corporation, bank, savings bank, association or
other entity that becomes a Subsidiary of Central in the future.
1.14 "Dissenters' Shares" shall mean shares of Central Common Stock as to
which dissenters' rights have been perfected and not withdrawn or otherwise
forfeited under Section 131 of the BCL.
1.15 "Effective Time" shall mean the date and time at which the Merger
contemplated by this Agreement becomes effective, as described in Section 3.2
of this Agreement.
1.16 "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
1.17 "FCC Common Stock" shall mean the Common Stock, par value $5.00 per
share, of FCC.
1.18 "FCC Companies" shall mean, collectively, FCC and all FCC Subsidiaries.
1.19 "FCC Retirement Plan" shall mean the Retirement Plan for Employees of
First Commerce Corporation.
1.20 "FCC Savings Plan" shall mean the First Commerce Corporation Tax-
Deferred Savings Plan.
1.21 "FCC Stock Incentive Plan" shall mean FCC's Amended and Restated 1992
Stock Incentive Plan.
C-2
1.22 "FCC Stock Option Plans" shall mean the following employee and/or
director stock option and/or stock appreciation rights plans of FCC: the FCC
Stock Incentive Plan; and any additional employee stock option plans and stock
appreciation rights plans assumed by FCC in connection with any acquisition
transaction involving FCC, in each case as such plans may be amended.
1.23 "FCC Subsidiaries" shall mean the Subsidiaries of FCC, which shall
include the FCC Subsidiaries described in Section 5.3 of this Agreement and
any corporation, bank, savings bank, association or other entity that becomes
or is acquired as a Subsidiary of FCC in the future.
1.24 "Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System.
1.25 "Financial Statements" shall mean (i) the consolidated balance sheets
(including related notes and schedules, if any) of a Party as of December 31,
1994 and 1993, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows (including related notes and schedules,
if any) for the respective periods then ended, as filed by such Party in SEC
Documents and (ii) the consolidated balance sheets of such Party (including
related notes and schedules, if any) and related consolidated statements of
income, changes in stockholders' equity, and cash flows (including related
notes and schedules, if any) included in SEC Documents filed by such Party
with respect to periods ended subsequent to December 31, 1994.
1.26 "GAAP" shall mean generally accepted accounting principles consistently
applied.
1.27 "Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended.
1.28 "Joint Proxy Statement" shall mean the proxy statement used by FCC and
Central to solicit the approval of their respective shareholders of the
transactions contemplated by this Agreement and the Merger Agreement.
1.29 "Market Value" shall mean the average of the closing sales prices of a
share of FCC Common Stock on the NASDAQ Stock Market for the 15 business days
ended on the last business day before the Effective Time. In the event FCC
changes the number of shares of FCC Common Stock issued and outstanding as a
result of any stock split, stock dividend or other similar change in FCC's
capitalization, or if a distribution of securities is made in respect of the
FCC Common Stock as a result of any dividend (other than regular quarterly
cash dividends), spinoff or other reorganization in which FCC Common Stock is
not changed into or exchanged for a different kind of securities, and in any
such case the record date is before the Effective Time and the ex-dividend or
ex-distribution date is subsequent to, or during, the period during which
Market Value is determined such that such event is not reflected in any one or
more of the closing sales prices used to determine Market Value, the
appropriate adjustment shall be made in such closing sales price or prices so
as to reflect such change.
1.30 "Material Adverse Change" has the meaning given to such term in Section
6.3.
1.31 "Merger Agreement" shall mean the Agreement of Merger, substantially in
the form attached hereto as Exhibit I, providing for the Merger.
1.32 "Merger Parties" shall mean, collectively, FCC and Central.
1.33 "Merger" shall mean the merger of Central into FCC.
1.34 "1933 Act" shall mean the Securities Act of 1933, as amended.
1.35 "1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
1.36 "Party" shall mean either FCC or Central, and "Parties" shall mean FCC
and Central.
1.37 "Previously Disclosed" shall mean, with respect to a Party, information
set forth in a disclosure schedule by such Party to the other Party delivered
to such other Party prior to or contemporaneously with the
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execution and delivery of this Agreement and accepted by such other Party
(such acceptance to be evidenced by such other Party executing an
acknowledgment of acceptance on such disclosure schedule). Following
termination of (but not during) the Notice Period that is referred to in
Section 9.1(h), "Previously Disclosed" shall also mean all information about a
Party that had been publicly disclosed in SEC Documents filed by that Party
prior to the date of this Agreement. The preceding sentence shall not apply in
determining the right of either Party to terminate this Agreement during the
Notice Period under Section 9.1(h).
1.38 "Purchase Event" shall have the meaning given to such term in the Stock
Option Agreement.
1.39 "Registration Statement" shall mean the Registration Statement on Form
S-4 (or other appropriate form) and all amendments and supplements thereto
filed with the SEC by FCC under the 1933 Act in connection with the
transactions contemplated by this Agreement.
1.40 "Regulatory Authorities" shall mean, collectively, the Federal Reserve,
the State Regulatory Commissioners and any other federal or state banking,
insurance, securities or other regulatory authority whose approval is
necessary to consummate the transactions contemplated by this Agreement.
1.41 "SEC" shall mean the United States Securities and Exchange Commission.
1.42 "SEC Documents" shall mean all reports, proxy statements, registration
statements and other documents filed by a Party or any of its Subsidiaries
pursuant to the Securities Laws.
1.43 "Securities Laws" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of the SEC promulgated under each of such Acts.
1.44 "Shareholders' Meetings" shall mean the meetings of the shareholders of
FCC and Central to be held pursuant to Section 7.1 of this Agreement,
including any adjournments thereof.
1.45 "State Regulatory Commissioners" shall mean any state banking,
insurance, securities or other regulatory authority whose approval is
necessary to consummate the transactions contemplated by this Agreement, the
Merger Agreement and the Stock Option Agreement.
1.46 "Stock Option Agreement" shall mean the Stock Option Agreement, in the
form attached hereto as Exhibit II, to be dated May 15, 1995, among Central
and FCC.
1.47 "Subsidiaries" shall mean all those corporations, banks, savings banks,
associations and other entities of which the Party in question owns or
controls 5% or more of the outstanding equity securities either directly or
through an unbroken chain of entities as to each of which 5% or more of the
outstanding equity securities is owned directly or indirectly by such Party;
provided, however, there shall not be included any such entity acquired in
good faith through foreclosure, or any such entity to the extent that the
equity securities of such entity are owned or controlled in a bona fide
fiduciary capacity, through a small business investment corporation or
otherwise as an investment by an entity that invests in unaffiliated companies
in the ordinary course of business.
In Section V of this Agreement, the capitalized terms set forth below shall
have the following respective meanings, in their singular or plural forms, as
applicable:
1.48 "Warrantor" shall mean FCC or Central, as the case may be.
1.49 "Warrantor Capital Stock" shall mean the FCC Capital Stock or the
Central Common Stock, as the context shall require, which shall in this and
each of the following cases depend on whether the Warrantor is FCC or Central
and will correspond therewith.
C-4
1.50 "Warrantor Common Stock" shall mean the FCC Common Stock or the Central
Common Stock, as the context shall require.
1.51 "Warrantor Companies" shall mean the FCC Companies or the Central
Companies, as the context shall require.
1.52 "Warrantor Financial Statements" shall mean the Financial Statements of
Warrantor.
1.53 "Warrantor Shareholders' Meeting" shall mean the Shareholders' Meeting
of Warrantor.
1.54 "Warrantor Stock Option Plans" shall mean the FCC Stock Option Plans or
the Central Stock Option Plans, as the context shall require.
1.55 "Warrantor Subsidiaries" shall mean the Subsidiaries of Warrantor.
Other terms are defined as set forth hereinbelow.
SECTION II.
CERTAIN TRANSACTIONS AND TERMS OF MERGER
2.1 Execution of Stock Option Agreement. Simultaneously with the execution
of this Agreement and as a condition thereto, Central has approved the
execution and delivery of the Stock Option Agreement and, on May 15, 1995,
Central will execute and deliver the Stock Option Agreement.
2.2 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time, Central will be merged into and with FCC in accordance with
the Merger Agreement and the provisions of Section 112 of the BCL, and FCC
shall be the corporation surviving such merger.
2.3 Conversion of Central Common Stock
(a) Except for Dissenters' Shares, at the Effective Time each outstanding
share of Central Common Stock will be converted into that number of shares of
FCC Common Stock as is equal to (A) 1.670 (the "Conversion Ratio"), minus (B)
the quotient of (i)(a) the amount (if any) by which all expenses of the
Central Companies in connection with the transactions contemplated by this
Agreement exceed $1,750,000 divided by (b) the Market Value of one share of
FCC Common Stock; divided by (ii) the number of shares of Central Common Stock
outstanding at the Effective Time. In calculating expenses of the Central
Companies for purposes of the preceding clause (B)(i)(a), expenses which
Central incurs directly or indirectly as a result of the following shall not
be included: (1) any action or failure to act on the part of FCC; (2) any
circumstances or conditions surrounding the ongoing business operations or
regulatory compliance of FCC; or (3) any claims or proceedings, regulatory or
otherwise, with merit or not, brought against FCC in connection with the
transactions contemplated herein or which significantly delay or impede FCC's
performance in such transactions. Central shall, at the Closing, deliver to
FCC an itemized list of all expenses of the type contemplated by clause
(B)(i)(a), including those to be excluded by reason of the preceding sentence.
The aggregate number of shares of FCC Common Stock to be issued in the Merger,
prior to any adjustment in accordance with Section 2.3(c) or in accordance
with clause (B)(i)(a) of this Section 2.3(a), shall in no event exceed
6,792,453, plus, in the event of any issuance by Central of shares of Central
Common Stock pursuant to the Stock Option Agreement ("Central Option Shares")
the number of shares of FCC Common Stock into which such Central Option Shares
are converted by virtue of the Merger.
(b) Shares of Central Common Stock that are held by Central or any Central
Subsidiary (other than shares held by such a Subsidiary in a fiduciary
capacity other than for Central or any other Subsidiary of Central) shall not
be considered to be outstanding and shall be cancelled (and not converted) by
virtue of the Merger at the Effective Time and without any further action by
either Party. Central Option Shares (as defined in Section
C-5
2.3(a)) that are held by FCC or any FCC Subsidiary (other than Central Option
Shares held by such a Subsidiary in a fiduciary capacity other than for FCC or
any other Subsidiary of FCC) shall be cancelled (and not converted) by virtue
of the Merger at the Effective Time and without any further action by either
Party.
(c) If, prior to the Effective Time, Central (subject to any restrictions
contained in this Agreement) or FCC, as the case may be, should split or
combine the Central Common Stock or the FCC Common Stock, or pay a stock
dividend in Central Common Stock or FCC Common Stock, or otherwise change the
Central Common Stock or FCC Common Stock into any other securities, or make
any other dividend or distribution in respect of the Central Common Stock or
the FCC Common Stock (other than normal cash dividends as the same may be
adjusted from time to time in accordance with or not in violation of this
Agreement), then the Conversion Ratio (and, correspondingly, the maximum
aggregate number of shares of FCC Common Stock that may be issued in the
Merger, as provided in the last sentence of Section 2.3(a)) will be
appropriately adjusted to reflect such split, combination, dividend or other
distribution or change. No such change will be made that would prevent the
transactions contemplated by this Agreement from being accounted for as a
pooling-of-interests.
(d) In lieu of issuing any fractional share of FCC Common Stock, each holder
of Central Common Stock who would otherwise be entitled thereto, after
aggregating into whole shares all fractional shares of FCC Common Stock to
which such holder is entitled by virtue of the Merger, upon surrender of the
certificate(s) which represented Central Common Stock, will receive cash equal
to such fractional share multiplied by the Market Value.
(e) After the Effective Time, each holder of Central Common Stock (other
than Dissenters' Shares), upon surrender of such holder's certificates
therefor to FCC together with a completed letter of transmittal in the form
furnished by FCC, will be entitled to receive the shares of FCC Common Stock
into which such holder's shares have been converted and cash in lieu of any
fractional share as provided above, less any applicable tax withholding. Until
then, each certificate for Central Common Stock will represent the number of
whole shares of FCC Common Stock into which the shares of Central Common Stock
represented thereby were converted, except that FCC may refuse to pay any
dividend or other distribution payable to holders of any unsurrendered
certificate for Central Common Stock until surrender or if such dividend or
distribution has reverted in full ownership to FCC under its Articles of
Incorporation. Whether or not a certificate for Central Common Stock is
surrendered, after the Effective Time it will not represent any interest in
any person other than FCC.
SECTION III.
CLOSING AND EFFECTIVE TIME
3.1 Time and Place of Closing. The Closing will take place at 10:00 a.m. on
a mutually agreeable date as soon as practicable following the last to occur
of (i) the date that is the required number of days after the date of the
order of the Federal Reserve approving the Merger pursuant to the BHC Act,
(ii) the effective date (including expiration of any applicable waiting
period) of the order of the final federal or state regulatory agency approving
the Merger or the expiration of all required waiting periods after the filing
of all required notices to all federal or state regulatory agencies required
to consummate the Merger, and (iii) the date on which the shareholders of the
Merger Parties approve this Agreement; or if no date has been agreed to, on
the earliest date specified by either Party to the other upon 10 days notice
following the last to occur of the foregoing. If all conditions in Section
VIII hereof are satisfied, or waived by the Party entitled to grant such
waiver, at the Closing (a) the Parties shall each provide to the other such
proof of satisfaction of the conditions in Section VIII as the Party whose
obligations are conditioned upon such satisfaction may reasonably request, (b)
the certificates, letters and opinions required by Section VIII shall be
delivered, (c) the appropriate officers of the Parties shall execute, deliver
and acknowledge the Merger Agreement, and (d) the Parties shall take such
further action including (without limitation) filing the Merger Agreement as
is required to consummate the transactions contemplated by this Agreement. If
on any date established for the Closing all conditions in Section VIII hereof
have not been satisfied or waived by each Party entitled to grant such waiver,
then either Party, on one or more occasions, may
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declare a delay of the Closing of such duration, not exceeding 10 business
days, as the declaring party shall select, but no such delay shall extend
beyond the date set forth in subparagraph (c) of Section 9.1, and no such
delay shall interfere with the right of any party to declare a termination
pursuant to Section IX. The place of Closing shall be the Board Room of FCC,
210 Baronne Street, 3rd floor, New Orleans, Louisiana.
3.2 Effective Time. The Merger shall become effective on the date of the
Closing at the time at which the Merger Agreement is accepted for filing by
the Louisiana Secretary of State (or such other time as is specified in the
Merger Agreement).
SECTION IV.
MANAGEMENT AND RELATED MATTERS FOLLOWING MERGER
4.1 Boards of Directors of FCC and Central Bank
(a) At the Effective Time, by virtue of the Merger, the Board of Directors
of FCC shall consist of those persons serving as Directors of FCC immediately
prior to the Effective Time and, in addition, Robert C. Cudd, III, Hugh G.
McDonald, Jr., Saul A. Mintz and Tom H. Scott. FCC shall take the appropriate
steps to effectuate the foregoing.
(b) The Merger will itself not change the Board of Directors of Central Bank
but the Parties shall take all required action so that Howard C. Gaines shall
become a Director of Central Bank at the Effective Time.
4.2 Management of FCC and Central Bank
(a) At the Effective Time, by virtue of the Merger, the officers of FCC
shall consist of those persons serving as officers of FCC immediately prior to
the Effective Time and, in addition, James A. Altick will at the Effective
Time become an Executive Vice-President of FCC with responsibility for FCC's
Northern Louisiana operations.
(b) At the Closing, Central will cause Central Bank to enter into (i) a 5-
year employment contract with James A. Altick, as President and Chief
Executive Officer of Central Bank, in the form annexed hereto as Exhibit III,
and (ii) a 3-year employment contract with each of Cary S. Davis, Willis T.
McGinnis, Thomas J. Nicholson, and Edmund L. Pennington, in the forms annexed
hereto as Exhibits IV-A through IV-D, respectively.
(c) FCC represents that the Committee that administers the FCC Stock
Incentive Plan has agreed, in connection with the transactions contemplated by
this Agreement, to award within 30 days following the Closing (to the extent
by then selected) to officers of Central Bank to be selected by Central Bank's
Board of Directors conformably with the provisions of such Plan, in amounts so
selected and conforming, stock options and stock appreciation rights covering
in the aggregate up to 200,000 shares of FCC Common Stock under the FCC Stock
Incentive Plan, which number of shares is subject to adjustment in the manner
provided in the Plan with respect to stock splits, stock dividends and similar
events affecting FCC Common Stock.
4.3 Corporate Structure. At the Effective Time Central Bank will become a
wholly owned subsidiary of FCC and will retain its name and bank charter
thereafter for the foreseeable future to no less an extent as FCC's other
principal banking subsidiaries retain theirs.
4.4 Employees and Benefits
(a) After the Effective Time, FCC will perform the obligations of Central
under its Severance Plan that is annexed hereto as Exhibit V.
(b) At or prior to the Closing, the Central Companies shall cause all
contributions to be made to the Central ESOP on behalf of participants in the
Central ESOP for periods prior to the Closing, and all participants in the
Central ESOP shall at the Effective Time have a fully vested and
nonforfeitable interest in their respective account balances thereunder. The
parties agree that no contributions shall be made to the Central ESOP for
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periods after the Closing and, as soon as possible after the Effective Time,
FCC, as successor to Central under and with respect to the Central ESOP, shall
take all actions that may be necessary or required to terminate the Central
ESOP and make available to participants distributions from the Central ESOP in
accordance with the terms of the ESOP and applicable law. To the extent that
the Central ESOP does not provide for distributions to a participant prior to
such participant's termination of employment, FCC shall amend the Central ESOP
to permit such distributions to the extent permitted by law.
(c) At or prior to the Closing, the Central Companies shall cause all
contributions to be made to the Central 401(k) Plan on behalf of participants
in the Central 401(k) Plan for periods prior to the Closing, and all
participants in the Central 401(k) Plan shall at the Effective Time have a
fully vested and nonforfeitable interest in their respective account balances
thereunder. For periods on and after the Closing, employees of the Central
Companies shall be eligible to participate in the FCC Savings Plan, subject to
the terms and conditions of such Plan, as it may be amended from time to time.
No contributions shall be made to the Central 401(k) Plan for periods after
the Closing.
(d) The parties hereby agree that at the election of FCC at any time after
the Effective Time, the Central Retirement Plan may be terminated and/or
future benefit accruals thereunder may be frozen. Until such time as such Plan
is terminated, to the extent not prohibited by applicable law, the Central
Retirement Plan shall continue to be maintained by Central Bank or the FCC
Companies after the Closing for the benefit of each person who was employed by
the Central Companies as of the Closing. If (i) the Central Retirement Plan is
terminated, or (ii) future benefit accruals under the Central Retirement Plan
are frozen, then highly compensated employee(s) of Central will thereupon be
permitted to participate in FCC's Benefit Restoration Plan (a "Top Hat" plan
of FCC) if they meet the eligibility criteria set forth in such Benefit
Restoration Plan.
(e) The parties hereby agree that, to the extent not prohibited by
applicable law, Central Bank or the FCC Companies shall continue to maintain
the Central Retiree Benefit Plan for the benefit of any employee or former
employee of the Central Companies (or their eligible dependents) who, as of
the Closing (i) was receiving benefits thereunder, or (ii) had satisfied the
requirements for benefits thereunder (without regard to any requirement that
the employee terminate employment or commence receipt of benefits under any
other plan).
(f) To the extent applicable, employees of the Central Companies shall be
given credit under each employee benefit plan, policy, program and arrangement
maintained by the FCC Companies after the Closing for their service with the
Central Companies prior to the Closing for all purposes other than benefit
accrual under a defined benefit plan (as defined in section 3(35) of ERISA),
including, eligibility to participate, vesting, satisfying any waiting
periods, evidence of insurability requirements, seniority or the application
of any pre-existing condition limitations.
4.5 Indemnification and Insurance.
(a) FCC agrees to provide and to cause the Central Subsidiaries to continue
to provide for a period of 10 years from and after the Effective Time, all
rights of indemnification currently provided by Central and the Central
Subsidiaries in favor of their respective current and former employees,
directors and officers, on terms no less favorable than those provided in the
charter and by-laws of Central and the Central Subsidiaries, respectively, on
the date of this Agreement, or as otherwise in effect on the date of this
Agreement, with respect to matters occurring prior to the Effective Time,
except that (i) the aggregate liability of FCC and the Central Subsidiaries
under this Section 4.5(a) shall not exceed $30 million less the amount of any
indemnification liability incurred by Central or the Central Subsidiaries in
favor of their respective current and former employees, directors and officers
after the date of this Agreement but prior to the Effective Time; and (ii) no
person shall be entitled to indemnification unless, with respect to the matter
for which indemnification is sought, such person acted in good faith and in a
manner such person reasonably believed to be in, or not opposed to, the best
interests of Central or the Central Subsidiary, as the case may be, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe such person's conduct was unlawful.
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(b) FCC will indemnify and hold harmless the Central Companies, and each of
their respective directors and officers, and each controlling person of
Central within the meaning of the 1933 Act, against any claims, suits,
proceedings, investigations or other actions ("Claims"), and any related
losses, damages, costs, expenses, liabilities or judgments, whether joint,
several or solidary, insofar as they arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact made in the
Registration Statement or the Joint Proxy Statement, or an omission or alleged
omission therefrom of a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, and will reimburse each such person promptly as incurred
for legal and other expenses reasonably incurred in connection with
investigating or defending any such Claims; provided, that FCC will not be
liable to the extent that any such Claim arises out of or is based upon any
such untrue statement or omission or alleged untrue statement or omission made
in reliance on and in conformity with information furnished to FCC by any
Central Company or, with respect to any indemnified person, by that person.
(c) Any indemnified person wishing to claim indemnification under Section
4.5, upon learning of any claim, shall notify FCC thereof as promptly as is
practicable, but the failure so to notify FCC shall not relieve FCC from any
obligation it has under this Section 4.5 except to the extent it is actually
prejudiced by such failure. FCC shall have the right to assume the defense
thereof and shall not be liable for any expenses subsequently incurred by such
indemnified person in connection with the defense thereof, except that if FCC
does not assume or continue to pursue such defense, or counsel for the
indemnified person advises in writing that there are material substantive
issues that raise conflicts of interest between FCC and the indemnified
person, then the indemnified person may retain counsel satisfactory to such
person (and reasonably satisfactory to FCC), and FCC shall pay all reasonable
fees and expenses of such counsel promptly as incurred, provided that (i) FCC
shall not be obligated to pay for more than one counsel for all indemnified
persons in any jurisdiction except as may be required due to conflicts of
interest, (ii) the indemnified persons will cooperate (to the extent
reasonably appropriate under the circumstances) in the defense of any such
claim, and (iii) FCC shall not be liable for any settlement effected without
its prior written consent.
(d) For ten years after the Effective Time, FCC shall provide, if available,
officers' and directors' liability insurance in respect of acts or omissions
of officers and directors of the Central Companies occurring prior to the
Effective Time, including but not limited to the transactions contemplated by
this Agreement, covering each such Person currently covered by Central's
officers' and directors' liability insurance policy, or who becomes covered by
such policy prior to the Effective Time, on terms with respect to coverage and
amount not materially less favorable than those of such policy in effect on
the date hereof, provided that in satisfying its obligation under this
Section, FCC shall not be obligated to pay premiums in excess of $150,000 per
year. If the foregoing insurance is not available for that amount, then FCC
shall provide the maximum coverage that can be obtained for that amount.
Determinations as to the availability and comparability and selection of
coverage, and all other determinations necessary to implement this Section
4.5(d), shall be made in FCC's sole discretion (but in good faith), and FCC
shall have no liability for any such determination so made.
(e) In the event FCC or any of its successors or assigns (i) reorganizes or
consolidates with or merges into or enters into another business combination
transaction with any other person or entity and is not the resulting,
continuing or surviving corporation or entity of such reorganization,
consolidation, merger or transaction or (ii) liquidates, dissolves or
transfers all or substantially all of its properties and assets to any person
or entity, then, and in each such case, proper provisions will be made so that
such surviving corporation or transferee and its successors and assigns assume
the obligations set forth in this Section 4.5.
SECTION V.
REPRESENTATIONS AND WARRANTIES OF FCC AND CENTRAL
Each of FCC and Central (each a "Warrantor") hereby represents and warrants
to the other of them the following information, to the extent such information
pertains to itself, its Subsidiaries, and/or its or their business or affairs:
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5.1 Organization, Standing, and Authority. Warrantor is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Louisiana, and is duly qualified to do business and in good standing in the
States of the United States and foreign jurisdictions where its ownership or
leasing of property or the conduct of its business requires it to be so
qualified and in which the failure to be duly qualified would, either
individually or in the aggregate, have a material adverse effect on the
financial condition, results of operations or, to Warrantor's best knowledge,
business prospects of the Warrantor Companies taken as a whole on a
consolidated basis or Warrantor's ability to consummate the transactions
contemplated by this Agreement and the Stock Option Agreement on the terms
herein and therein provided (a "Warrantor Material Adverse Effect"). Warrantor
has corporate power and authority to carry on its business as now conducted,
to own, lease and operate its assets, properties and business, and to execute
and deliver, and to perform its obligations under, this Agreement and the
Stock Option Agreement. Warrantor is duly registered as a bank holding company
under the BHC Act. Warrantor has in effect all federal, state, local and
foreign governmental authorizations necessary for it to own or lease its
properties and assets and to carry on its business as it is now conducted, the
absence of which would, either individually or in the aggregate, have a
Warrantor Material Adverse Effect.
5.2 Capital Stock.
(a) The authorized, issued and outstanding capital stock of Warrantor as of
the date of this Agreement, the number of shares of Warrantor Common Stock
reserved for issuance under the Warrantor Stock Option Plans as of such date
and the number of shares of Warrantor Common Stock that are subject to
outstanding options under such Plans as of such date, are set forth in the
section of Schedule 5.2(a) attached hereto that pertains to Warrantor. All of
the issued and outstanding shares of Warrantor Capital Stock are duly and
validly authorized and issued and are fully paid and non-assessable. None of
the outstanding shares of Warrantor Capital Stock has been issued in violation
of any preemptive rights of the current or past shareholders of Warrantor.
(b) Except as Previously Disclosed or set forth in Section 5.2(a) or
Schedule 5.2(a) and except as provided under the Stock Option Agreement, there
are, as of the date of this Agreement and, with respect to Central, will be at
the Effective Time no shares of capital stock or other equity securities of
Warrantor outstanding and, with respect to Central, no outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of Central or contracts,
commitments, understandings or arrangements by which Central is or may be
bound to issue additional shares of its capital stock or options, warrants or
rights to purchase or acquire any additional shares of its capital stock.
5.3 Warrantor Subsidiaries. Exhibit 22 to Warrantor's Annual Report on Form
10-K for the fiscal year ended December 31, 1994, as supplemented or updated
by information Previously Disclosed, lists all of the Warrantor Subsidiaries
that are Significant Subsidiaries (as defined in Section 1.1) ("Warrantor
Significant Subsidiaries") as of the date of this Agreement. Each of the
Warrantor Significant Subsidiaries that is a bank is an "insured depository
institution" as defined in the Federal Deposit Insurance Act and applicable
regulations thereunder. No equity securities of any of the Warrantor
Significant Subsidiaries are or may become required to be issued (other than
to Warrantor) by reason of any options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the
capital stock of any Warrantor Significant Subsidiary, and there are no
contracts, commitments, understandings or arrangements by which any Warrantor
Significant Subsidiary is bound to issue (other than to Warrantor) additional
shares of its capital stock or options, warrants or rights to purchase or
acquire any additional shares of its capital stock. There are no contracts,
commitments, understandings or arrangements by which any of the Warrantor
Companies is or may be bound to sell or otherwise transfer any shares of the
capital stock of any Warrantor Significant Subsidiary, except for a transfer
to any of the Warrantor Companies, and there are no contracts, commitments,
understandings or arrangements relating to the rights of any Warrantor Company
to vote or to dispose of such shares. Except as provided in 12 U.S.C. Section
55 in the case of Warrantor Significant Subsidiaries that are national banks
or Louisiana Revised Statutes 6:262 in the case of Warrantor Significant
Subsidiaries that are state banks, all of the shares of capital stock of each
Warrantor Significant Subsidiary held by Warrantor or a Warrantor Subsidiary
are fully paid and non-assessable and are
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owned by Warrantor or a Warrantor Subsidiary free and clear of any claim, lien
or encumbrance. Except as Previously Disclosed, each Warrantor Significant
Subsidiary is either a national banking association, a state bank, a state
savings bank or a corporation, and is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated
or organized, and is duly qualified to do business and in good standing in the
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and in which the failure to be duly
qualified could, either individually or in the aggregate, have a Warrantor
Material Adverse Effect. Each Warrantor Significant Subsidiary has the
corporate power and authority necessary for it to own or lease its properties
and assets and to carry on its business as it is now being conducted, and has
all federal, state, local and foreign governmental authorizations necessary
for it to own or lease its properties and assets and to carry on its business
as it is now being conducted, the absence of which governmental authorizations
would, either individually or in the aggregate, have a Warrantor Material
Adverse Effect.
5.4 Authority
(a) The execution and delivery of this Agreement, the Merger Agreement and
the Stock Option Agreement and the consummation of the transactions
contemplated herein or therein, including the Merger, have been duty and
validly authorized by all necessary corporate action on the part of Warrantor,
subject, with respect to this Agreement and the Merger Agreement, to the
approval of the shareholders of Warrantor to the extent required by applicable
law. This Agreement and the Merger Agreement, subject to any requisite
shareholder approval hereof and thereof, and the Stock Option Agreement
represent valid and legally binding obligations of Warrantor, enforceable
against Warrantor in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding may be brought.
(b) Neither the execution and delivery of this Agreement, the Merger
Agreement or the Stock Option Agreement by Warrantor, nor the consummation by
Warrantor of the transactions contemplated herein or therein, nor compliance
by any Warrantor Company with any of the provisions hereof or thereof, will
(i) conflict with or result in a breach of any provision of any Warrantor
Company's certificate or articles of incorporation or by-laws, or (ii) except
as Previously Disclosed, constitute or result in the breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right or termination, cancellation or acceleration with respect to, or result
in the creation of any lien, charge or encumbrance upon any property or assets
of any of the Warrantor Companies pursuant to, any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation to
which any of them is a party or by which any of them or any of their
properties or assets may be subject, and that would, either individually or in
the aggregate, have a Warrantor Material Adverse Effect, or (iii) subject to
receipt of the requisite approvals, authorizations, filings, registrations and
notifications referred to in Section 8.5 of this Agreement, violate any order,
writ, injunction, decree, statute, rule or regulation applicable to any of the
Warrantor Companies or any of their properties or assets.
(c) Other than in connection or compliance with the provisions of applicable
state corporate and securities laws, the Securities Laws and the rules and
regulations thereunder, and other than consents, authorizations, approvals or
exemptions required from the Federal Reserve and the State Regulatory
Commissioners or by virtue of Warrantor's interests in small business
investment corporations, no notice to, filing with, authorization of,
exemption by or consent or approval of any public body or authority is
necessary for the consummation by Warrantor of the Merger and the other
transactions contemplated by this Agreement, the Merger Agreement and the
Stock Option Agreement.
(d) The Board of Directors of Warrantor (at a meeting duly called and held)
has by requisite vote (i) determined that the Merger is in the best interests
of Warrantor and its shareholders, among others, (ii) authorized and approved
this Agreement, the Merger Agreement, the Stock Option Agreement and the
transactions contemplated hereby and thereby, including the Merger, (iii)
directed that the Merger be submitted for consideration to Warrantor's
shareholders at the Warrantor Shareholders' Meeting, and (iv) approved
execution
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of the Stock Option Agreement in accordance with Section 134C(1)(b) of the
BCL, with the result that such Section will not apply to the execution and
delivery by Warrantor of the Stock Option Agreement or the issuance of shares
of Central Common Stock pursuant to the Stock Option Agreement, the
consummation of the Merger, or any other transaction to be carried out
pursuant to this Agreement, the Merger Agreement or the Stock Option
Agreement.
5.5 Financial Statements; Accounting. Warrantor has delivered to the other
Party, prior to the execution of this Agreement, Warrantor Financial
Statements in respect of periods ending on or prior to December 31, 1994, and
will promptly deliver when available copies of Warrantor Financial Statements
in respect of periods ending after December 31, 1994. The Warrantor Financial
Statements (as of the dates thereof and for the periods covered thereby): (i)
are (and, in the case of Warrantor Financial Statements in respect of periods
ending after December 31, 1994, will be) in accordance with the books and
records of the Warrantor Companies, and have been and will continue to be
maintained in accordance with GAAP and good business practices in all material
respects, and (ii) present (and, in the case of Warrantor Financial Statements
in respect of periods ending after December 31, 1994, will present) fairly the
consolidated financial position and the consolidated results of operations,
changes in stockholders' equity and cash flows of the Warrantor Companies as
of the dates and for the periods indicated, in all material respects in
accordance with GAAP applicable to banks or bank holding companies applied on
a basis consistent with prior periods (subject in the case of interim
financial statements to normal recurring year-end adjustments normal in nature
and amount).
5.6 Absence of Undisclosed Liabilities. Except as Previously Disclosed, none
of the Warrantor Companies has any obligation or liability (contingent or
otherwise) that is material, either individually or in the aggregate, to the
financial condition, results of operations or, to the Warrantor Companies'
best knowledge, business prospects of the Warrantor Companies on a
consolidated basis, or that when combined with all similar obligations or
liabilities would, either individually or in the aggregate, be material to the
financial condition, results of operations or, to the Warrantor Companies'
best knowledge, business prospects of the Warrantor Companies on a
consolidated basis, except (i) as reflected in the Warrantor Financial
Statements delivered prior to the date of this Agreement, (ii) as reflected by
this Agreement and (iii) for commitments and obligations made, or liabilities
incurred, since December 31, 1994 in the ordinary course of its business
consistent with past practices.
5.7 Tax Matters.
(a) All material federal, state, local and foreign tax returns required to
be filed by or on behalf of any of Warrantor and all other corporations,
banks, savings banks, associations and other entities of which Warrantor owns
or controls 50% or more of the outstanding equity securities have been timely
filed or requests for extensions have been timely filed, granted and have not
expired. All taxes shown on filed returns have been paid. There is no audit
examination, deficiency, refund litigation or matter in controversy with
respect to any taxes that might result in a determination that would, either
individually or in the aggregate, have a Warrantor Material Adverse Effect,
except as reserved against in the Warrantor Financial Statements or as
Previously Disclosed. All taxes, interest, additions and penalties which are
material in amount and which are due with respect to completed and settled
examinations or concluded litigation have been paid or adequately reserved
for.
(b) Except as Previously Disclosed, none of the Warrantor Companies has
executed an extension or waiver of any statute of limitations on the
assessment or collection of any tax due that is currently in effect.
(c) Adequate provision for any federal, state, local or foreign taxes due or
to become due for any of the Warrantor Companies for any period or periods
through and including December 31, 1994, has been made and is reflected in the
December 31, 1994, financial statements included in the Warrantor Financial
Statements.
(d) Deferred taxes of the Warrantor Companies have been provided for in
accordance with GAAP.
5.8 Loans, Reserves, and Investments.
(a) All loans, discounts and financing leases (in which a Warrantor Company
is lessor) (collectively, "Credits") reflected in the Warrantor Financial
Statements were, as of the respective dates of such Financial
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Statements (i) made for adequate consideration in the ordinary course of
business, (ii) evidenced by instruments that were true and genuine, and (iii)
if secured, secured by valid perfected security interests, except in each case
for such discrepancies that would not, individually or in the aggregate, have
a Warrantor Material Adverse Effect. Accurate lists of all such Credits of the
Central Companies and of the investment portfolios of the Central Companies as
of the date of the latest Financial Statements of Central delivered on or
prior to the date of this Agreement have been made available to FCC.
(b) The aggregate allowances for losses on Credits and other real estate and
foreclosed assets owned reflected on the latest Warrantor Financial Statement
delivered on or prior to the date of this Agreement were, as of the date of
such Financial Statements, adequate in accordance with regulatory guidelines
and GAAP in all material respects, and there are no circumstances likely to
require in accordance with such guidelines or GAAP a future material increase
in any provisions for such losses or a material decrease in such allowances.
Such allowances reflected on all Warrantor Financial Statements prepared after
the above-mentioned Financial Statements will be adequate in accordance with
such guidelines and GAAP in all material respects.
5.9 Properties and Insurance. Except as disclosed or reserved against in the
Warrantor Financial Statements, the Warrantor Companies have good and
marketable title, free and clear of all liens, encumbrances, charges, defaults
or equities of any character, to all of the material properties and assets,
tangible or intangible, reflected in the Warrantor Financial Statements as
being owned by the Warrantor Companies as of the dates thereof other than
those that would not, individually or in the aggregate, have a Warrantor
Material Adverse Effect. To the knowledge of Warrantor's management, (a) all
buildings and all fixtures, equipment and other property and assets which are
material to its business on a consolidated basis and are held under leases or
subleases by any of the Warrantor Companies are held under valid leases or
subleases enforceable in accordance with their respective terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought), other
than any such exceptions to validity or enforceability that would not,
individually or in the aggregate, have a Warrantor Material Adverse Effect;
and (b) the policies of fire, theft, liability, fidelity and other insurance
maintained with respect to the assets or businesses of the Warrantor Companies
provide adequate coverage against loss.
5.10 Compliance with Laws. Except as Previously Disclosed, each of the
Warrantor Companies:
(a) Is in compliance in all material respects with all laws, regulations,
reporting and licensing requirements and orders applicable to its business
or to the employees conducting its business, the breach or violation of
which would, either individually or in the aggregate, have a Warrantor
Material Adverse Effect;
(b) Has received no notification or communication from any agency or
department of federal, state or local government (including the Federal
Reserve, State Regulatory Commissioners and other bank, insurance and
securities regulatory authorities) or the staff thereof (i) threatening to
revoke any license, franchise, permit or governmental authorization which
is material, either individually or in the aggregate, to the financial
condition, results of operations or, to the Warrantor Companies' best
knowledge, business prospects of the Warrantor Companies on a consolidated
basis or the ability of Warrantor to consummate the transactions
contemplated under this Agreement, the Merger Agreement or the Stock Option
Agreement, under the terms hereof and thereof, or (ii) requiring any of the
Warrantor Companies (or any of their officers, directors or controlling
persons) to enter into a cease and desist order, agreement or memorandum of
understanding (or requiring the board of directors thereof to adopt any
resolution or policy); and
(c) Has complied in all material respects with the Community Reinvestment
Act ("CRA") and the rules and regulations thereunder, and has a CRA rating
of not less than "satisfactory".
5.11 Employee Benefit Plans.
(a) (i) Warrantor has delivered or made available to the other Party, prior
to the execution of this Agreement, copies of each pension, retirement, profit
sharing, supplemental or excess retirement, stock option,
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stock purchase, savings, employee stock ownership, restricted stock, phantom
stock, stock ownership, life insurance, disability, vacation pay, severance
pay (including, without limitation change of control or golden parachute
arrangements), incentive, deferred compensation, bonus or benefit arrangement,
health or hospitalization program, fringe benefit or perquisite arrangement or
other similar plan as in effect on the date of this Agreement, including,
without limitation, any "employee benefit plan", as that term is defined in
Section 3(3) of ERISA, in respect of any of the present or former directors,
officers, employees or independent contractors of, or dependents, spouses or
other beneficiaries of any of such directors, officers, employees or
independent contractors of, any of the Warrantor Companies (collectively, the
"Warrantor Benefit Plans"), and (ii) Central has delivered or made available
to FCC, prior to the execution of this Agreement, copies of each employment or
consulting agreement as in effect on the date of this Agreement which provides
any benefit or perquisites to or in respect of any of the present or former
directors or officers of, or dependents, spouses or other beneficiaries of any
of such directors or officers of, any of the Central Companies, which
employment and consulting agreements are, with respect to Central, included in
the term "Warrantor Benefit Plans" as defined above. Any of the Warrantor
Benefit Plans which is an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA, is referred to herein as a "Warrantor ERISA
Plan". No Warrantor Company has participated in or been a member of, and no
Warrantor Benefit Plan is or has been, a multi-employer plan within the
meaning of Section 3(37) of ERISA. Except as Previously Disclosed the
Warrantor Benefit Plans of Central and its Subsidiaries are terminable on
their terms without penalty or payment except for accrued and vested benefits
thereunder.
(b) All Warrantor Benefit Plans comply in all material respects with the
applicable provisions of ERISA and the Internal Revenue Code, and any other
applicable laws, rules and regulations the breach or violation of which could
result in a liability, either individually or in the aggregate, material to
the financial condition, results of operations or prospects of the Warrantor
Companies on a consolidated basis. With respect to the Warrantor Benefit
Plans, no event has occurred and, to the best knowledge of Warrantor's
management, there exists no condition or set of circumstances, in connection
with which any of the Warrantor Companies could be subject to any liability
that is reasonably likely to have, either individually or in the aggregate, a
Warrantor Material Adverse Effect (except liability for benefit claims,
Pension Benefit Guaranty Corporation premiums, and funding obligations payable
in the ordinary course). No notice of a "reportable event," as that term is
defined in Section 4043 of ERISA, for which the 30-day reporting requirement
has not been waived has been required to be filed for any Warrantor ERISA Plan
which is subject to Title IV of ERISA within the 12-month period ending on the
date of this Agreement. None of the Warrantor Companies has provided, or is
required to provide, security to any Warrantor ERISA Plan which is subject to
Title IV of ERISA pursuant to Section 401(a)(20) of the Internal Revenue Code.
(c) Except as Previously Disclosed, no Warrantor ERISA Plan which is subject
to Title IV of ERISA has any "unfunded current liability," as that term is
defined in Section 302(d)(8)(A) of ERISA, and the present fair market value of
the assets of each such plan exceeds the plan's "benefit liabilities," as that
term is defined in Section 4001(a)(16) of ERISA, when determined under
actuarial factors that would apply if the plan terminated as of the date of
this Agreement in accordance with all applicable legal requirements.
5.12 Material Contracts. Except as Previously Disclosed, none of the
Warrantor Companies, nor any of their respective assets, businesses or
operations, as of the date of this Agreement, is a party to, or is bound or
affected by, or receives benefits under, any contract or agreement or
amendment thereto that in each case would be required to be filed as an
exhibit to a Form 10-K filed by Warrantor as of the date of this Agreement
that has not been filed as an exhibit to Warrantor's Form 10-K filed for the
fiscal year ended December 31, 1994.
5.13 Material Contract Defaults. None of the Warrantor Companies is in
default under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which its
respective assets, business or operations may be bound or affected, or under
which it or its respective assets, business or operations receives benefits,
and which default is reasonably likely to have, either individually or in the
aggregate, a Warrantor Material Adverse Effect, and there has not occurred any
event that, with the lapse of time or the giving of notice or both, would
constitute such a default.
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5.14 Legal Proceedings. Except as Previously Disclosed, there are no
actions, suits or proceedings instituted or pending or, to the best knowledge
of Warrantor's management, threatened against any of the Warrantor Companies,
or affecting any property, asset, interest or right of any of them, that are
reasonably expected to have, either individually or in the aggregate, a
Warrantor Material Adverse Effect.
5.15 Absence of Certain Changes or Events. Since December 31, 1994, the
Warrantor Companies, taken as a whole on a consolidated basis, have not
suffered any Material Adverse Change (such term is defined in Section 6.3) or
failed in any respect that is likely to have a Warrantor Material Adverse
Effect to operate their business consistent with their past practices.
5.16 Reports. Since January 1, 1990, or, with respect to each Warrantor
Subsidiary, the date of its acquisition by Warrantor if later than January 1,
1990, each of the Warrantor Companies has filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with (i) the SEC, including, but not limited to, Forms
10-K, Forms 10-Q, Forms 8-K and proxy statements, (ii) the Federal Reserve,
(iii) the OTS, (iv) the Office of the Comptroller of the Currency, (v) the
Federal Deposit Insurance Corporation, and (vi) any applicable state banking,
insurance, securities or other regulatory authorities. As of their respective
dates (and without giving effect to any amendments or modifications filed
after the date of this Agreement with respect to reports and documents filed
before the date of this Agreement), each of such reports and documents,
including the financial statements, exhibits and schedules thereto, complied
in all material respects with all of the statutes, rules and regulations
enforced or promulgated by the authority with which they were filed and did
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein in light
of the circumstances under which they were made not misleading.
5.17 Statements True and Correct. None of the information supplied or to be
supplied by Warrantor for inclusion in (i) the Registration Statement to be
filed by FCC with the SEC in connection with the FCC Common Stock to be issued
in the Merger, (ii) the Joint Proxy Statement to be mailed to each Warrantor's
shareholders in connection with the Shareholders' Meetings, and (iii) any
other documents to be filed with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
times such documents are filed, and, in the case of the Registration
Statement, when it becomes effective and, with respect to the Joint Proxy
Statement, when first mailed to the shareholders of either Party, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary in order to make the statements therein not misleading, or, in
the case of the Joint Proxy Statement or any amendment thereof or supplement
thereto, at the time of the Shareholders' Meetings, be false or misleading
with respect to any material fact, or omit to state any material fact
necessary to make the statements therein in light of the circumstances under
which they were made not misleading. All documents that Warrantor is
responsible for filing with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, by the Merger Agreement
or by the Stock Option Agreement will comply in all material respects with the
provisions of applicable law including applicable provisions of the Securities
Laws.
5.18 Environmental Matters.
(a) To the best knowledge of Warrantor's management, Warrantor and each
Warrantor Subsidiary (for purposes of this Section 5.18, the term "Warrantor
Subsidiary" shall include small business investment corporations and entities
that invest in unaffiliated companies in the ordinary course of business in
which Warrantor owns or controls 5% or more of the outstanding equity
securities either directly or through an unbroken chain of entities as to each
of which 5% or more of the outstanding equity securities is owned directly or
indirectly by Warrantor), the Participation Facilities, the Loan Properties
and the Trust Properties (each as defined below) are, and have been, in
compliance with all applicable laws, rules, regulations and standards, and all
requirements of the United States Environmental Protection Agency ("EPA") and
of state and local agencies with jurisdiction over pollution or protection of
health or the environment, except for violations which, individually or in the
aggregate, do not or would not result in a Warrantor Material Adverse Effect.
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(b) To the best knowledge of Warrantor's management, there is no suit,
claim, action or proceeding, pending or threatened, before any court,
governmental agency, board or other forum pursuant to which Warrantor or any
of the Warrantor Subsidiaries or any Loan Property, Participation Facility or
Trust Property (or in respect of such Loan Property, Participation Facility or
Trust Property) has been or, with respect to threatened proceedings, may be
named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any environmental law, rule or regulation or (ii) relating
to the release into the environment of any Hazardous Material (as defined
below) or oil, whether or not occurring at or on any site owned (including as
trustee), leased or operated by it or any of its subsidiaries or any Loan
Property, Participation Facility or Trust Property, except where such
noncompliance or release does not or would not, individually or in the
aggregate, result in a Warrantor Material Adverse Effect.
(c) To the best knowledge of Warrantor's management, there is no reasonable
basis for any suit, claim, action or proceeding of a type described in Section
5.18, except as would not, individually or in the aggregate, have a Warrantor
Material Adverse Effect.
(d) During the period of (i) Warrantor's or any of the Warrantor
Subsidiaries' ownership (including as trustee) or operation of any of their
respective current properties, (ii) Warrantor's or any of the Warrantor
Subsidiaries' participation in the management of any Participation Facility,
(iii) Warrantor's or any of the Warrantor Subsidiaries' holding of a security
interest in a Loan Property, or (iv) Warrantor or any of the Warrantor
Subsidiaries acting as a trustee or fiduciary with respect to a Trust
Property, to the best knowledge of Warrantor's management, there has been no
release of Hazardous Material or oil in, on, under or affecting such property,
Participation Facility, Loan Property or Trust Property, except where such
release does not or would not result, individually or in the aggregate, in a
Warrantor Material Adverse Effect. Prior to the period of (w) Warrantor's or
any of the Warrantor Subsidiaries' ownership (including as trustee) or
operation of any of their respective current properties, (x) Warrantor's or
any of the Warrantor Subsidiaries' participation in the management of any
Participation Facility, (y) Warrantor's or any of the Warrantor Subsidiaries
acting as trustee or other fiduciary with respect to Trust Property, or (z)
Warrantor's or any of the Warrantor Subsidiaries' holding of a security
interest in a Loan Property, to the best knowledge of Warrantor's management,
there was no release of Hazardous Material or oil in, on, under or affecting
any such property, Participation Facility, Loan Property or Trust Property,
except where such release does not or would not result, individually or in the
aggregate, in a Warrantor Material Adverse Effect.
(e) The following definitions apply for purposes of this Section 5.18: (i)
"Loan Property" means any property in which Warrantor (or a Warrantor
Subsidiary) holds a security interest and, where required by the context,
includes the owner or operator of such property, but only with respect to such
property; (ii) "Participation Facility" means any property in which Warrantor
(or a Warrantor Subsidiary) participates in the management of such property
and, where required by the context, includes the owner or operator of such
property, but only with respect of such property; (iii) "Trust Property" means
any property with respect to which Warrantor (or a Warrantor Subsidiary) acts
or has acted as a trustee or other fiduciary, directly or indirectly, and
includes any trust or similar legal vehicle that owns or controls (or that
owned or controlled) such property and, where required by the context,
includes the trustee or other fiduciary, but only with respect to such
property; and (iv) "Hazardous Material" means any pollutant, contaminant or
hazardous substance within the meaning of the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., or
any similar federal, state or local law.
5.19 Knowledge as to Conditions. On the date of this Agreement, Warrantor
knows of no reason why the approvals, authorizations, filings, registrations
and notices contemplated by Section 8.5 should not be obtained without the
imposition of any material and adverse condition or restriction or why the
accountants' letters referred to in Section 8.7 or the Tax Opinion referred to
in Section 7.3 cannot be obtained.
5.20 Labor Matters. Neither Warrantor nor any of the Warrantor Companies is
a party to, or is bound by, any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is Warrantor or any of the Warrantor Companies the subject of any proceeding
asserting that
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Warrantor or any Warrantor Company has committed an unfair labor practice or
seeking to compel Warrantor or any Warrantor Company to bargain with any labor
union or labor organization as to wages and conditions of employment, nor is
there any strike or other labor dispute involving Warrantor or any of the
Warrantor Companies pending or threatened.
5.21 Fairness Opinions. Warrantor has delivered to the other Party a copy of
the opinion Warrantor has received from Warrantor's financial advisor, dated
within 5 days prior to the date of this Agreement, to the effect that the
terms of the Merger are fair to Warrantor's shareholders from a financial
point of view.
SECTION VI.
COVENANTS AND AGREEMENTS
Each Party hereby covenants and agrees with the other Party as follows:
6.1 Conduct of Business--Negative Covenants. From the date of this Agreement
until the earlier of the Effective Time or until the termination of this
Agreement, Central will not do, or agree or commit to do, and will cause each
of its Subsidiaries not to do or agree to commit to do, any of the following
without the prior written consent of the chief executive officer or chief
administrative officer of FCC, which consent shall not be unreasonably
withheld or delayed:
(a) Except as Previously Disclosed or as expressly contemplated by this
Agreement, amend its articles of incorporation or association or by-laws,
or
(b) Impose, or suffer the imposition, on any share of stock held by it or
by one of its Subsidiaries, of any material lien, charge or encumbrance, or
permit any such lien, charge or encumbrance to exist, or
(c) Except as expressly permitted in this Agreement or in connection with
(1) the use of Common Stock by optionees to pay an option exercise price or
to satisfy tax liabilities under the various Central Stock Option Plans and
(2) the repurchase of Central Common Stock in accordance with the Stock
Option Agreement, repurchase, redeem, or otherwise acquire or exchange,
directly or indirectly, any shares of its capital stock or any securities
convertible into any shares of its capital stock, or
(d) Except as expressly contemplated by this Agreement or as Previously
Disclosed, acquire direct or indirect control over any corporation,
association, firm or organization, other than in connection with
(i) internal reorganizations or consolidations involving existing
Subsidiaries, (ii) good faith foreclosures in the ordinary course of
business, (iii) acquisitions of control by a banking Subsidiary in a bona
fide fiduciary capacity, (iv) investments made by small business investment
corporations or by Subsidiaries that invest in unaffiliated companies in
the ordinary course of business, or (v) the creation of new Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement, or
(e) Except as Previously Disclosed, sell or otherwise dispose of, or
permit any of its Subsidiaries to sell or otherwise dispose of: (i) any
shares of capital stock of such Party or any Subsidiary of such Party
(unless any such shares of stock are sold or otherwise transferred to such
Party or any of its Subsidiaries), (ii) any substantial part of the assets
or earning power of such Party or any Subsidiary of such Party, or
(iii) any asset other than in the ordinary course of business for
reasonable and adequate consideration, or
(f) Except as Previously Disclosed, incur, or permit any of its
Subsidiaries to incur, any additional material debt obligation or other
material obligation for borrowed money (other than (i) in replacement of
existing short-term debt with other short-term debt, (ii) financing of
banking related Subsidiary activities consistent with past practices, (iii)
indebtedness of any of its Companies to another of its Companies or
(iv) indebtedness of any of its Companies to any of their respective
affiliates), except in the ordinary course of the business of such Party
and its Subsidiaries consistent with past practices (and such ordinary
course of business shall include, but shall not be limited to, the creation
of deposit liabilities, purchases of federal funds, sales of certificates
of deposit and entry into repurchase agreements), or
(g) Except as contemplated by this Agreement, the Merger Agreement or any
of the agreements, documents or instruments contemplated hereby or thereby,
grant any general increase in compensation or
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benefits to its employees or to its officers, except in accordance with
past practice or as required by law; pay any bonus except in accordance
with past practice or the provisions of any applicable program or plan of
the Central Companies as in effect prior to the date of this Agreement and
which has been Previously Disclosed; enter into any severance agreements
with any of its directors or officers or the directors or officers of any
Subsidiary except as Previously Disclosed; grant any increase in fees or
other increases in compensation or other benefits to any of its present or
former directors; or effect any change in retirement benefits for any class
of its employees or officers (unless such change is required by applicable
law or, in the opinion of counsel, is necessary or advisable to maintain
the tax qualification of any plan under which the retirement benefits are
provided) that would materially increase the retirement benefit liabilities
of the Central Companies on a consolidated basis, or
(h) Except as contemplated by this Agreement, the Merger Agreement or any
of the agreements, documents or instruments contemplated hereby or thereby,
or except as Previously Disclosed, amend any existing employment contract
between such Party or any Subsidiary thereof and any person having a salary
thereunder in excess of $50,000 per year (unless such amendment is required
by law) to increase the compensation or benefits payable thereunder or
extend the term thereof or enter into any new employment contract with any
person having a salary thereunder in excess of $50,000 that such Party or
its applicable Subsidiary does not have the unconditional right to
terminate without liability (other than liability for services already
rendered), at any time on or after the Effective Time, or
(i) Except as contemplated by this Agreement, the Merger Agreement or any
of the agreements, documents or instruments contemplated hereby or thereby,
adopt any new employee benefit plan of Central or any Central Subsidiary or
make any material change in or to any existing employee benefit plan of
such Party or any Subsidiary thereof other than (i) as Previously Disclosed
or (ii) any such change that is required by law or that, in the opinion of
counsel, is necessary or advisable to maintain the tax qualified status of
any such plan.
6.2 Conduct of Business--Affirmative Covenants. Unless the prior written
consent of the other Party shall have been obtained, except as otherwise
contemplated or permitted hereby or Previously Disclosed, each Party shall and
shall cause its Subsidiaries: to operate its business only in the ordinary
course of business of such Party and its Subsidiaries consistent with past
practices, to preserve intact its business organizations and assets and
maintain its rights and franchises, and to take no action which would (i)
adversely affect the ability of any of them to obtain any necessary approvals
of Regulatory Authorities required for the transactions contemplated hereby
without imposition of a condition or restriction of the type referred to in
the second sentence of Section 8.5 of this Agreement, (ii) adversely affect
the ability of such Party to perform its obligations under this Agreement, the
Merger Agreement and Stock Option Agreement, or (iii) cause or permit a breach
of any of its covenants or cause or permit any representation or warranty of
it to become untrue in any material respect, as if each such representation
and warranty were continuously made from the date hereof.
6.3 Adverse Changes in Condition. Each Party shall give written notice
promptly to the other Party concerning (i) any material adverse change in the
condition (financial or otherwise), results of operations or business
prospects of such Party and its Subsidiaries, taken as a whole on a
consolidated basis ("Material Adverse Change"), or (ii) the occurrence or
impending occurrence of any event or circumstance known to such Party which
would cause or constitute a material breach of any of the representations,
warranties or covenants of such Party contained herein or that would
reasonably be expected to materially and adversely affect the timely
consummation of the transactions contemplated hereby or under the Merger
Agreement or Stock Option Agreement. Each Party shall use its best efforts to
prevent or to promptly remedy the same.
6.4 Investigation and Confidentiality. Prior to the Effective Time, each
Party will keep the other Party promptly advised of all material developments
relevant to its business and to the consummation of the Merger and may make or
cause to be made such investigation, if any, of the business, properties,
operations and financial and legal condition of the other Party and its
Subsidiaries as such Party reasonably deems necessary or advisable to
familiarize itself and its advisors with such business, properties, operations
and condition, provided that such investigation shall be reasonably related to
the transactions contemplated hereby and shall not interfere
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unnecessarily with normal operations. Each Party agrees to furnish the other
Party and the other Party's respective advisors with such financial and
operating data and other information with respect to its business, properties
and employees as the other Party shall from time to time reasonably request.
No investigation by one Party shall affect the representations and warranties
of the other Party and, subject to Section 9.3 of this Agreement, each such
representation and warranty shall survive any such investigation. Each Party
shall maintain the confidentiality of all confidential information furnished
to it by the other Party in accordance with the terms of the confidentiality
agreement dated May 15, 1995, between the Parties (the "Confidentiality
Agreement").
6.5 Reports. Each Party shall file all reports required to be filed by it
with the SEC and the Federal Reserve between the date of this Agreement and
the Effective Time and shall deliver to the other Party copies of all such
reports promptly after the same are filed. Each Party shall cause each of its
Subsidiaries that is a depository institution to file all reports required to
be filed with the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, the Federal Reserve, the OTS and any applicable
State Regulatory Commissioner.
6.6 Dividends.
(a) From the date of this Agreement to the earlier of the Effective Time or
the termination of this Agreement, Central will not declare or pay any
dividend or other distribution to its shareholders except regular quarterly
cash dividends on the shares of Central Common Stock, at a rate not in excess
of the regular quarterly cash dividend most recently declared by Central prior
to the date of this Agreement.
(b) From the date of this Agreement to the earlier of the Effective Time or
the termination of this Agreement, no Party shall, without the prior written
consent of the other Party, make any changes in its dividend record or payment
dates, except as required to comply with paragraph (c) below.
(c) The Parties shall coordinate with one another as to the declaration and
payment of cash dividends on the shares of FCC Common Stock and Central Common
Stock to be declared in 1995 and 1996 so as to ensure that FCC and Central
have declared, with the record dates prior to the Effective Time, the same
number of quarterly dividends from January 1, 1995 through the Effective Time.
6.7 Capital Stock. Except for or as otherwise permitted in or contemplated
by this Agreement, the Merger Agreement or the Stock Option Agreement, or as
Previously Disclosed, without the prior written consent of FCC, from the date
of this Agreement to the earlier of the Effective Time or the termination of
this Agreement, Central shall not, and shall not enter into any agreement to,
issue, sell, or otherwise permit to become outstanding any additional shares
of Central Common Stock or any other capital stock of Central, or any stock
appreciation rights, or any option, warrant, conversion or other right to
acquire any such stock, or any security convertible into any such stock.
6.8 Agreement of Affiliates. Central shall deliver to FCC, no later than 30
days after the date of this Agreement, a letter identifying each person whom
it reasonably believes is an "affiliate" of Central for purposes of Rule 145
under the 1933 Act. Thereafter and until the date on which the Merger is
approved by the Federal Reserve, Central shall identify to FCC each additional
person whom Central reasonably believes to have thereafter become an
"affiliate". Central shall use its best efforts to cause each person who is
identified as an "affiliate" of such Party pursuant to the two immediately
preceding sentences to deliver to FCC, not later than the date on which the
Merger is approved by the Federal Reserve, a written agreement, substantially
in the form of Exhibit VI.
6.9 Certain Actions. Neither Central nor any of its Subsidiaries shall
(except as may, in the written opinion of its counsel promptly delivered to
the other Party, be required by fiduciary duty) solicit, initiate, participate
in discussions of, or encourage or take any other action to facilitate
(including by way of the disclosing or furnishing of any information that it
is not legally obligated to disclose or furnish) any inquiry or the making of
any proposal relating to an Acquisition Transaction or a potential Acquisition
Transaction involving such Party or any of its Subsidiaries (and, if any
information is furnished, it will be furnished only
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under a confidentiality agreement containing substantially the same provisions
as the Confidentiality Agreement referred to in Section 6.4). Central shall
immediately instruct and otherwise use its best efforts to cause its
directors, officers, employees, agents, advisors (including, without
limitation, any investment banker, attorney or accountant retained by it or
any of its Subsidiaries), consultants and other representatives to comply with
the provisions of this Section 6.9. Central will immediately cease and cause
to be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any such activities. Except as
may, in the written opinion of its counsel promptly delivered to the other
Party, be required by fiduciary duty, Central shall not negotiate with respect
to any such proposal, nor shall it reach any agreement or understanding
(formal or informal, written or otherwise) with respect to any such proposal.
Central shall promptly notify FCC orally and in writing in the event it
receives any such inquiry or proposal. This Section 6.9 shall not prohibit
accurate disclosure by a Party in any SEC Document (including the Joint Proxy
Statement and the Registration Statement) or other disclosure to the extent
required by the Securities Laws or other applicable law if in the opinion of
the Board of Directors of such Party (as of the date of such SEC Document or
other disclosure) disclosure is required under applicable law as to
transactions contemplated hereby.
6.10 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement and its fiduciary duties under applicable law,
each of the Parties agrees to use its best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, all things, necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective, as soon as practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including, without limitation,
using its best efforts to lift or rescind any injunction or restraining order
or other order adversely affecting the ability of the Parties to consummate
the transactions contemplated hereby. Each of the Parties shall use, and shall
cause each of its Subsidiaries to use, its best efforts to obtain consents of
all third parties and governmental bodies necessary or desirable for the
consummation of the transactions contemplated by this Agreement. This section
shall not require either Party to waive any condition to such Party's
obligation to consummate the Merger.
6.11 Operating Functions. The Central Companies will cooperate with FCC in
connection with planning for the efficient and orderly combination of the
parties and the operation of Central Bank after the Merger, and in the
consolidation of appropriate operating functions to be effective on the
Effective Date, provided that this covenant shall not require any action that,
in the opinion of Central's Board, would adversely affect the operations of
any Central Company if the Merger were not consummated.
6.12 Issuance of FCC Stock. FCC shall, prior to the Closing, take such
action as is required to permit the issuance of the FCC Common Stock issuable
to the shareholders of Central pursuant to the Merger, and to permit such
stock to be approved for listing and quotation on the NASDAQ Stock Market.
6.13 Insider Commitments. Central has delivered to FCC on the date of this
Agreement Insider's Commitments in the form of Exhibit VII from the directors
and executive officers of Central and from each person who owns as much as 5%
of the outstanding shares of Central Common Stock.
6.14 Material Adverse Effect and Change. In determining whether there has
occurred with respect to FCC a Material Adverse Change or whether any
circumstance has had a Warrantor Material Adverse Effect with respect to FCC,
unrealized securities losses shall be ignored, and realized securities losses
shall be ignored except to the extent such realized securities losses (A)
cause FCC to have (i) a Tier I capital ratio (as defined in Appendix A to 12
C.F.R. 225) of less than 6%, or (ii) a leverage-based capital ratio (as
defined in Appendix B to 12 C.F.R. 225) of less than 5%; or (B) result in an
enforcement action against FCC by a federal Regulatory Authority.
6.15 P&A Agreement. FCC and Central agree to use their best efforts to cause
their respective subsidiaries, Rapides Bank & Trust Company in Alexandria
("RBT") and Central Bank, (i) to enter into a purchase and assumption
agreement pursuant to which specified assets and liabilities of Central Bank
that are associated with the trade area of RBT will be transferred to RBT at
the Effective Time or as soon as practicable thereafter (provided that such
transfer shall be conditioned upon and shall not occur sooner than the
occurrence
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of the Merger), and (ii) to apply expeditiously for and diligently pursue
regulatory approval of such agreement. The consummation of the Merger is not
conditioned upon the consummation of such agreement.
SECTION VII.
ADDITIONAL AGREEMENTS
7.1 Registration Statement; Shareholder Approval. The Parties shall
cooperate in the preparation of the Registration Statement. FCC shall, as soon
as practicable, file the Registration Statement with the SEC, and the Parties
shall use their best efforts to cause the Registration Statement to become
effective under the 1933 Act. FCC will take, and Central will cooperate with
it in connection with, any action required to be taken under the applicable
state Blue Sky or securities laws in connection with the issuance of shares of
FCC Common Stock upon consummation of the Merger. Each party shall furnish all
information concerning it and the holders of its capital stock as the other
Party may reasonably request in connection with such action. FCC and Central
shall each call a Shareholders' Meeting to be held as soon as reasonably
practicable after the date of this Agreement for the purpose of voting upon
the Merger. In connection with the Shareholders' Meetings, (i) FCC and Central
shall prepare and file a Joint Proxy Statement with the SEC and mail it to
their shareholders, (ii) each Party shall furnish to the other Party all
information concerning it that the other Party may reasonably request in
connection with such Joint Proxy Statement, (iii) the Board of Directors of
FCC and Central shall recommend to their respective shareholders the approval
of this Agreement and the Merger Agreement, provided, however, that such
recommendation may be withdrawn, modified or amended by the Board of Directors
of a Party after the receipt by such Party of an offer to effect an
Acquisition Transaction with such Party to the extent the Board of Directors
of such Party reasonably determines that, in the exercise of its fiduciary
obligations, it is required to do so; provided, further, that such
determination must be based on a written opinion of counsel promptly delivered
to the other Party, and (iv) FCC and Central shall otherwise use their best
efforts to obtain such shareholders' approval, subject to their respective
fiduciary duties under applicable law. This Section 7.1 shall not prohibit
accurate disclosure by a Party in any SEC Document (including the Joint Proxy
Statement and the Registration Statement) and other disclosure to the extent
required by the Securities Laws or other applicable law if in the opinion of
the Board of Directors of such party (as of the date of such SEC Document or
other disclosure) disclosure is required as to transactions contemplated
hereby or as to any proposal for an Acquisition Transaction. The Parties shall
use all reasonable efforts to hold the Shareholders' Meetings on the same date
or otherwise as close together as may be practicable.
7.2 Filings with the State Offices. Promptly following, or contemporaneous
with, the Closing, the Parties will cause the Merger Agreement to be filed
with the Secretary of State of Louisiana, and will cause to be made all such
other filing as are required by the BCL.
7.3 Tax Opinion. The Parties agree to use their reasonable efforts to obtain
a written opinion of Arthur Andersen LLP, addressed to the Parties and
reasonably satisfactory to their respective counsel, dated the date of the
Closing, subject to the customary representations and assumptions, and
substantially to the effect that (a) the Merger will constitute a tax-free
reorganization within the meaning of Section 368(a)(1)(A) of the Internal
Revenue Code and FCC and Central will each be a party to the reorganization,
(b) the exchange in the Merger of Central Common Stock for FCC Common Stock
will not give rise to income, gain or loss to FCC and Central, or shareholders
of Central with respect to such exchange (except to the extent of any cash
paid in lieu of fractional shares), (c) the adjusted tax basis of the FCC
Common Stock received by shareholders of Central who exchange all of their
Central Common Stock in the Merger will be the same as the adjusted tax basis
of the shares of Central Common Stock surrendered in exchange therefor
(reduced by any amount allocable to a fractional share for which cash is
received) and (d) the holding period of the shares of FCC Common Stock
received in the Merger will include the period during which the shares of
Central Common Stock surrendered in exchange therefor were held, provided such
shares of Central Common Stock were held as capital assets at the Effective
Time.
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7.4 Accounting Treatment. No Party will take, cause or to the best of its
ability permit to be taken any action that would adversely affect the
qualification of the Merger for pooling of interests accounting treatment;
provided that nothing herein shall preclude any Party from exercising its
rights under the Stock Option Agreement.
7.5 Press Releases. Prior to the Effective Time, the Parties shall give when
practicable prior notice to each other as to the form and substance of any
press release or other public disclosure materially related to this Agreement
or any other transaction contemplated hereby; provided, however, that nothing
in this Section 7.5 shall be deemed to prohibit a Party from making any
disclosure which its counsel deems necessary in order to satisfy such Party's
disclosure obligations imposed by law.
7.6 Applications. The parties shall prepare and file applications with the
Federal Reserve, the State Regulatory Commissioners and any other appropriate
governmental authorities seeking the approvals necessary to consummate the
transactions contemplated by this Agreement. The Parties shall provide copies
of all such filings to each other within five business days after such filings
are made and shall promptly inform each other of all substantive regulatory
contacts concerning the transactions contemplated by this Agreement.
SECTION VIII.
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
The obligation of each Party to consummate the Merger is subject to the
satisfaction of each of the following conditions, unless waived by such Party
pursuant to Section 10.5 of this Agreement:
8.1 Representations and Warranties. The representations and warranties of
the other Party set forth or referred to in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and as of
the time of the Closing with the same effect as though all such
representations and warranties had been made on and as of the time of the
Closing, except (i) for any such representations and warranties made as of a
specified date, which shall be true and correct in all material respects as of
such date, (ii) as expressly contemplated or permitted by this Agreement, or
(iii) to the extent that the facts constituting any untruth or incorrectness
in such representations and warranties as of the time of the Closing do not
reflect a Material Adverse Change from that represented and warranted by such
other Party, provided, however, that the exception in this clause (iii) shall
not apply to (A) the requirement that representations and warranties be true
and correct in all material respects as of the date of this Agreement, or (B)
the representations and warranties in Sections 5.1, 5.2 and 5.4, which
representations and warranties must be true and correct as of the time of the
Closing.
8.2 Performance of Agreements and Covenants. Each and all of the agreements
and covenants of the other Party to be performed and complied with pursuant to
this Agreement and the other agreements contemplated hereby prior to the time
of the Closing shall have been duly performed and complied with by it in all
material respects.
8.3 Certificates. Each of the Parties shall have delivered to the other
Party a certificate, dated as of the time of the Closing and signed on its
behalf by its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section 8.1 and
Section 8.2 of this Agreement with respect to it have been satisfied, all in
such reasonable detail as the other Party shall request.
8.4 Shareholder Approvals. The shareholders of each Party shall have
approved this Agreement, the Merger Agreement, the Merger and the consummation
of the transactions contemplated hereby and thereby, as and to the extent
required by law and by the provisions of any governing instruments, and each
Party shall have furnished to the other certified copies of resolutions duly
adopted by such Party's shareholders evidencing the same. In addition, the
holders of the requisite percentage of shares of FCC Common Stock and Central
Common Stock sufficient, either alone or in combination with other factors, to
preclude accounting for the Merger as a pooling of interests shall not have
perfected dissenters' rights under applicable law with respect to the adoption
of this Agreement and the Merger Agreement.
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8.5 Consents and Approvals. All material approvals and authorizations of,
filings and registrations with, and notifications to, all Regulatory
Authorities required for consummation of the Merger and for the prevention of
any termination of any material right, privilege, license or agreement of any
Party or any of its Subsidiaries shall have been obtained or made and shall be
in full force and effect and all waiting periods required by law shall have
expired. Any approval obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall not be
conditioned or restricted in a manner which in the reasonable judgment of the
Board of Directors of either of the Parties so materially and adversely
affects the economic or business assumptions of the transactions contemplated
by this Agreement so as to render inadvisable the consummation of the Merger.
To the extent that any lease, license, loan or financing agreement or other
contract or agreement to which any Party or any of its Subsidiaries, as the
case may be, is a party requires the consent of or waiver from the other party
thereto as a result of the transactions contemplated by this Agreement, such
consent or waiver shall have been obtained, unless the failure to obtain such
consent or waiver would not, following the Merger, have a material adverse
effect on the consolidated financial condition, results of operations or, to
the best of such Party's knowledge, business prospects of such Party and its
Subsidiaries on a consolidated basis from that reflected on the December 31,
1994 financial statements included in the Financial Statements.
8.6 Legal Proceedings. No Party shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits consummation of any of the transactions contemplated by this
Agreement.
8.7 Accountants' Letters. Each Party shall have received "comfort" letters
from the other Party's independent public accountants dated, respectively,
within three days prior to the mailing of the Joint Proxy Statement and the
Closing Date, in form and substance as are usual and customary for comfort
letters of this type.
8.8 Tax Matters. Each Party shall have received the tax opinion addressed to
it referred to in Section 7.3 of this Agreement.
8.9 Registration Statement. The Registration Statement shall be effective
under the 1933 Act and no stop orders suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the SEC.
8.10 Simultaneous Transactions. The Closing shall have occurred and the
other Party shall have executed all documents and taken all such other action
as is necessary to effectuate the Merger other than filing the Merger
Agreement as referred to in Section 7.2, and each Party shall have irrevocably
authorized its agents to make such filing in its behalf.
8.11 Legal Opinions. Each Party shall have received an opinion,
substantially in the form of Exhibit VIII-A or VIII-B annexed hereto, as
applicable, from counsel for the other Party.
8.12 Pooling of Interests. Neither the independent public accountants of
either Party, nor the SEC, shall have taken the position that the Merger does
not qualify for pooling-of-interests accounting treatment under GAAP.
8.13 Employment Contracts. The employment contracts referred to in Section
4.2(b) shall have been entered into (provided that any failure by any of the
employees so to do shall be a condition solely as to FCC).
SECTION IX.
TERMINATION
9.1 Termination. Notwithstanding any other provision of this Agreement or
the Merger Agreement and notwithstanding the approval of this Agreement and
the Merger Agreement by the shareholders of the Parties, as
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applicable, this Agreement and the Merger Agreement may be terminated and the
Merger abandoned at any time prior to the Closing:
(a) By mutual consent of the Boards of Directors of FCC and Central; or
(b) By the Board of Directors of a Party in the event of a material
breach by the other Party of any representation, warranty, covenant or
agreement of such other Party contained herein which would result in the
failure to satisfy the closing condition set forth in Section 8.1 or 8.2 of
this Agreement, which breach cannot be or has not been cured within 30 days
after the giving of a written notice to the breaching Party of such
material breach; or
(c) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by June 30, 1996; or
(d) By the Board of Directors of either Party in the event (i) any
approval of any governmental or other Regulatory Authority required for
consummation of the Merger and the other transactions contemplated hereby
shall have been denied by final non-appealable action of such authority or
if any such action taken by such authority is not appealed within the time
limit for appeal or (ii) if the shareholders of FCC or Central fail to have
approved this Agreement, the Merger Agreement and the Merger, as
applicable, and the consummation of the transactions contemplated hereby
and thereby, as applicable, at the Shareholders' Meetings to the extent
required by law and by the provisions of any governing instruments; or
(e) By the Board of Directors of a Party in the event that any of the
conditions precedent to the obligations of such Party to consummate the
Merger cannot be satisfied or fulfilled on or before June 30, 1996 (other
than by reason of a breach by the Party seeking to terminate); or
(f) By the Board of Directors of a Party in the event of the acquisition,
by any person or group of persons, of beneficial ownership of 25% or more
of the outstanding shares of Common Stock of the other Party (the terms
"person", "group" and "beneficial ownership" having the meanings assigned
thereto in Section 13(d) of the 1934 Act and the regulations promulgated
thereunder); or
(g) By the Board of Directors of FCC if the Board of Directors of Central
shall or shall have resolved to withdraw, modify or change its
recommendation to Central's shareholders of this Agreement, the Merger
Agreement or the Merger, or recommend any Acquisition Transaction other
than the Merger; or
(h) By the Board of Directors of a Party (the "Terminating Party"), if
such Party has determined in its discretion (but in good faith) (i) that,
based on its due diligence investigation of the other Party (the "Other
Party"), including (without limitation) its review of the matters that have
been Previously Disclosed by the Other Party, (A) the representations and
warranties of such Other Party in this Agreement were not true and correct
in all material respects on the date of this Agreement, and/or (B) there is
a material possibility that a Material Adverse Change may in the future
occur with respect to such Other Party or that the Terminating Party will
not achieve from the transactions contemplated by this Agreement the
expectations that lead it to enter into this Agreement, and (ii) that, had
the Terminating Party known, prior to the date of this Agreement, of such
untruth, incorrectness and/or material possibility, it would not have
entered into this Agreement; provided, that termination pursuant to this
Section 9.1(h) may be declared only by notice of termination given by the
Terminating Party to the Other Party during the period ("Notice Period") of
30 days following the date on which the Other Party first offers, by letter
delivered in accordance with Section 10.7 of this Agreement, to make access
to the Other Party available to the Terminating Party for the latter's due
diligence purposes. Any notice of termination shall certify to the
determinations set forth in clauses (i) and (ii) above. A notice of
termination given in accordance with Section 9.1(h) shall become effective
on the 10th day after it is given unless prior to that time the Other Party
requests the Terminating Party to provide the details supporting the
determination referred to in clause (i), in which event (A) the Terminating
Party will supply such details by the 15th day after such request, (B) the
Terminating Party will, during the succeeding 10-day period, discuss its
findings with the Other Party on request by the Other Party, and (C) the
notice of termination shall become effective at the end of such 10-day
period unless by then withdrawn by the Terminating Party by a written
notice of withdrawal; or
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(i) By the Board of Directors of Central if there has occurred any
conversion of FCC Common Stock into or exchange of FCC Common Stock for the
securities of any other issuer, provided that the right of termination in
accordance with this Section 9.1(i) shall itself terminate on the 30th day
following the date on which FCC provides written notice to Central of any
such conversation or exchange; or
(j) By the Board of Directors of a Party if an action or failure to act
by the other Party results in a Material Adverse Change, as defined in
Section 6.3 of this Agreement, with respect to such other Party which is
not remedied or cured within 30 days after notice of intention to terminate
is given by the Party invoking this Section 9.1(j), which notice shall
specify the action or failure to act that is the basis of such intention;
provided that the right to terminate with respect to the action or failure
to act that is specified in such notice of intention shall itself terminate
unless notice of termination is given by such Party within 15 days
following the end of such remedial or curative period; or
(k) By the Board of Directors of Central if Central Option Shares shall
have been issued pursuant to any exercise of the Stock Option Agreement
and, at the time scheduled for Closing, all or any portion of such Central
Option Shares would not be cancelled in accordance with Section 2.3(b) by
virtue of the Merger.
9.2 Effect of Termination. In the event of the termination and abandonment
of this Agreement and the Merger Agreement pursuant to Section 9.1 of this
Agreement, this Agreement and the Merger Agreement shall become void and have
no effect and the Parties will be relieved of all obligations and liabilities
under this Agreement and the Merger Agreement, except that (i) the provisions
of the last sentence of Section 6.4, Section 7.5, and Section X of this
Agreement shall survive any such termination and abandonment, (ii) the Stock
Option Agreement shall be governed by its own terms as to termination, (iii) a
termination pursuant to Section 9.1(b) or 9.1(e) or 9.1(g) of this Agreement
shall not relieve a breaching Party from liability for any breach giving rise
to such termination and (iv) the Parties shall remain obligated under, and
liable for any breach of, any of the provisions of this Agreement that survive
its termination.
9.3 Survival of Representations, Warranties and Covenants. The respective
representations, warranties, obligations, covenants and agreements of the
Parties shall not survive the Effective Time except for (i) this Section 9.3,
Section 2.3 and Section IV of this Agreement and (ii) the Merger Agreement,
provided that no such representations, warranties or covenants shall be deemed
to be terminated or extinguished so as to deprive any Party (or any director,
officer or controlling person thereof) of any defense in law or equity which
otherwise would be available against the claims of any person, including,
without limitation, any shareholder or former shareholder of any Party, the
aforesaid representations, warranties and covenants being material inducements
to consummation by the Parties of the transactions contemplated hereby.
SECTION X.
MISCELLANEOUS
10.1 Expenses.
(a) Except as provided in Section 2.3(a) and Section 10.1(b) of this
Agreement, each of the Parties shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial or
other consultants, investment bankers, accountants and counsel.
(b) Notwithstanding the foregoing, a Party (the "Expense Paying Party")
shall pay all of the costs and expenses incurred by the other Party (the
"Reimbursed Party") (without duplication pursuant to this Agreement or any
other agreement or instrument) in connection with this Agreement and the
transactions contemplated hereunder, including fees and expenses of such
Reimbursed Party's financial or other consultants, investment bankers,
accountants and counsel, if:
(i) (a) this Agreement is terminated pursuant to Section 9.1(b) by reason
of a material breach by the Expense Paying Party, (b) the Reimbursed Party
was the Party who terminated it, and (c) the Expense
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Paying Party is at the time of the termination not also entitled to
terminate this Agreement pursuant to Section 9.1(b) by reason of a material
breach of the Reimbursed Party; or
(ii) a Purchase Event occurs with respect to the Stock Option Agreement
if Central is the Expense Paying Party and the Merger has not been, or
thereafter is not, consummated for any reason other than a termination
pursuant to Section 9.1(b) because of a material breach by the Reimbursed
Party.
Nothing contained in this Section 10.1(b) shall constitute or shall be
deemed to constitute liquidated damages for the breach by a Party of the terms
of this Agreement or otherwise limit the rights of the nonbreaching Party.
(c) Final settlement with respect to payment of fees and expenses by the
Parties pursuant to Section 10.1 of this Agreement shall be made within 30
days of the termination of this Agreement and the Merger Agreement. If more
than one Party is responsible as an Expense Paying Party, then the costs and
expenses which the Expense Paying Parties are obligated to pay shall be
equally shared between them, regardless of whether their relative degree of
fault is or is not equal.
10.2 Brokers and Finders. Except as Previously Disclosed, each of the
Parties represents and warrants that neither it nor any of its officers,
directors, employees, affiliates or Subsidiaries has employed any broker or
finder or incurred any liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a
claim by any broker or finder based upon its representing or being retained by
or allegedly representing or being retained by any Party, such Party agrees to
indemnify and hold the other Party harmless of and from such claim.
10.3 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement, the Merger Agreement, the Stock Option Agreement and the
Confidentiality Agreement contain the entire agreement among the Parties with
respect to the transactions contemplated hereunder and thereunder, and such
agreements supersede all prior arrangements or understanding with respect
thereto, written or oral. The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the Parties and their respective
successors. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the Parties or their respective successors,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement except for the rights of shareholders of Central to receive the
merger consideration following the Effective Time and except as otherwise may
be provided in Section IV.
10.4 Amendments. To the extent permitted by law, this Agreement or the
Merger Agreement may be amended by a subsequent writing signed by each of the
Parties upon the approval of the Boards of Directors of such Parties;
provided, however, that the provisions of this Agreement and the Merger
Agreement relating to the manner or basis in which shares of Central Common
Stock will be exchanged for FCC Common Stock shall not be amended after the
Shareholders' Meetings without the requisite approval of the holders of the
issued and outstanding shares of FCC Common Stock and Central Common Stock
entitled to vote thereon. The Parties may, without approval of their
respective Boards of Directors, make such technical changes to this Agreement
or the Merger Agreement, not inconsistent with the purposes hereof and
thereof, as may be required to effect or facilitate any governmental approval
or acceptance of the Merger or of this Agreement or the Merger Agreement or to
effect or facilitate any filing or recording required for the consummation of
any of the transactions contemplated hereby or thereby.
10.5 Waivers. Prior to or at the Effective Time, each Party, acting through
its Board of Directors or chief executive officer or other authorized officer,
shall, as to such Party's rights hereunder, have the right (i) to waive any
default in the performance of any term of this Agreement by the other Party,
(ii) to waive or extend the time for the compliance or fulfillment by the
other Party of any and all of its obligations under this Agreement, and (iii)
to waive any or all of the conditions precedent to the obligations of such
Party under this Agreement.
10.6 No Assignment. Neither of the Parties may assign any of its rights or
obligations under this Agreement or the Merger Agreement to any other persons,
and any such purported assignment shall be deemed null and void.
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10.7 Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand,
by facsimile transmission or by registered or certified mail, postage pre-
paid, to the persons at the addresses set forth below (or at such other
address as may be provided hereunder), and shall be deemed to have been
delivered as of the date so delivered:
If to FCC:
First Commerce Corporation
210 Baronne Street
New Orleans, LA 70112
Attention: Ian Arnof
With a copy to:
Correro, Fishman & Casteix, L.L.P.
201 St. Charles Avenue, 47th Floor
New Orleans, LA 70170-4700
Attention: Louis Y. Fishman
If to Central:
Central Corporation
300 DeSiard Street
Monroe, LA 71201-4928
Attention: James A. Altick
With a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-1882
Attention: Brian W. Smith
10.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana without regard to the
conflict of laws principles thereof.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
10.10 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
In Witness Whereof, each of the Parties has caused this Agreement to be
executed on its behalf and attested by officers thereunto duly authorized all
as of the day and year first above written.
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APPENDIX D
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Option Agreement") is dated as of May 15,
1995, between Central Corporation ("Central"), a Louisiana corporation
registered as a bank holding company under the Bank Holding Company Act of
1956, as amended ("Bank Holding Company Act"), and First Commerce Corporation
("FCC"), a Louisiana corporation registered as a bank holding company under
the Bank Holding Company Act.
WITNESSETH
Whereas, the Boards of Directors of Central and FCC have approved an
Agreement and Plan of Merger ("Merger Agreement") dated as of the date hereof
providing for certain transactions pursuant to which Central would be merged
with and into FCC;
Whereas, as a condition to FCC's entry into the Merger Agreement and to
induce such entry, Central has agreed to grant to FCC the option set forth
herein to purchase authorized but unissued shares of Central Common Stock;
Now, Therefore, in consideration of the premises herein contained, the
parties agree as follows:
1.Definitions.
Capitalized terms defined in the Merger Agreement and used herein shall have
the same meanings as in the Merger Agreement.
2.Grant of Option.
Subject to the terms and conditions set forth herein, Central hereby grants
to FCC an option ("Option") to purchase up to 809,279 shares of Central Common
Stock, at a price of $30 per share payable in cash as provided in Section 4
hereof; provided, however, that in the event Central issues or agrees to issue
any shares of Central Common Stock (other than as permitted under the Merger
Agreement) at a price less than $30 per share (as adjusted pursuant to Section
6 hereof), the exercise price shall be equal to such lesser price; in no
event, however, shall the number of shares for which the Option is exercisable
exceed 19.9% of Central's issued and outstanding Common Stock.
3.Exercise of Option.
(a) Unless FCC shall have breached in any material respect any covenant or
agreement contained in the Merger Agreement and such breach shall not have
been cured after notice from Central, FCC may exercise the Option, in whole or
part, at any time or from time to time within six months (which period of time
shall be extended pursuant to Section 10(a)) following the occurrence of a
Purchase Event (as defined below); provided that to the extent the Option
shall not have been exercised, it shall terminate and be of no further force
and effect (i) on the Effective Date of the Merger under the Merger Agreement,
or (ii) upon termination of the Merger Agreement in accordance with the
provisions thereof if such termination occurs prior to the first Purchase
Event to occur, or (iii) upon the earlier of (A) March 31, 1997, or (B) the
date that is one year following the termination of the Merger Agreement, if
such termination occurs after the first Purchase Event to occur.
Notwithstanding the foregoing, this Option Agreement shall terminate, and all
unexercised rights hereunder will simultaneously terminate, whether or not a
Purchase Event has occurred, upon any termination of the Merger Agreement
(i) under Section 9.1(a) thereof, (ii) by Central under Section 9.1(b)
thereof, or (iii) by either Party under Section 9.1(h) thereof.
(b) As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
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(i) any person (other than FCC or any FCC Subsidiary) shall have
commenced a bona fide tender or exchange offer to purchase shares of
Central Common Stock such that upon consummation of such offer such person
would own or control 20% or more of the outstanding shares of Central
Common Stock;
(ii) Central or any Central Subsidiary, without having received FCC's
prior written consent, shall have entered into an agreement with any person
(other than FCC or any FCC Subsidiary), or any person (other than FCC or
any FCC Subsidiary), other than in connection with a transaction to which
FCC has given its prior written consent, shall have filed an application or
notice with the Federal Reserve Board or any other federal or state
regulatory agency for clearance or approval, to (x) merge or consolidate,
or enter into any similar transaction, with Central or any Central
Subsidiary other than with respect to any requirement of divestiture in
connection with the Merger Agreement under the federal banking or antitrust
laws, (y) purchase, lease or otherwise acquire any substantial portion of
the assets of Central or any Central Subsidiary other than in the ordinary
course of business of Central or such Central Subsidiary, or (z) purchase
or otherwise acquire (including by way of merger, consolidation, share
exchange or any similar transaction) securities representing 20% or more of
the voting power of Central or any Central Subsidiary;
(iii) any person (other than FCC, any FCC Subsidiary or the Central
Subsidiaries in a fiduciary capacity) shall have acquired beneficial
ownership or the right to acquire beneficial ownership of 10% or more of
the outstanding shares of Central Common Stock or the common stock of any
Central Subsidiary (the term "beneficial ownership" for purposes of this
Option Agreement having the meaning assigned thereto in Section 13(d) of
the 1934 Act and the regulations promulgated thereunder); provided,
however, that in calculating the number of shares owned by any person, no
shares which were beneficially owned prior to the effective date of this
Agreement shall be included;
(iv) any person (other than FCC or any FCC Subsidiary) shall have made a
bona fide proposal to Central by public announcement or written
communication that is or becomes the subject of public disclosure to (x)
acquire Central or any Central Subsidiary by merger, consolidation, share
exchange, purchase of all or substantially all of its assets or any other
similar transaction, or (y) make an offer described in clause (i) or (ii)
above;
(v) any person shall have solicited proxies in a proxy solicitation
subject to Regulation 14A under the Exchange Act in opposition to approval
of the Merger Agreement by Central's shareholders; or
(vi) any transaction of the type referred to in clause (ii) above shall
have been consummated.
If more than one of the transactions giving rise to a Purchase Event under
this Section 3(b) is undertaken or effected, then all such transactions shall
give rise to successive Purchase Events, but the successive nature of such
Purchase Events shall not increase the number of shares of Central Common
Stock as to which the Option may be exercised. As used in this Option
Agreement, "person" shall have the meanings specified in Sections 3(a)(9) and
13(d)(3) of the 1934 Act.
(c) In the event FCC wishes to exercise the Option, it shall send to Central
a written notice (the date of which being herein referred to as "Notice Date")
specifying (i) the total number of shares it will purchase pursuant to such
exercise, and (ii) a place and date not earlier than three business days nor
later than 60 business days from the Notice Date for the closing of such
purchase ("Closing Date"); provided that if prior notification to or approval
of the Federal Reserve Board or any other Regulatory Authority is required in
connection with such purchase, FCC shall promptly file the required notice or
application for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification period has expired or
been terminated or such approval has been obtained and any requisite waiting
period shall have passed.
4.Payment and Delivery of Certificates.
(a) At the closing referred to in Section 3 hereof, FCC shall pay to Central
the aggregate purchase price for the shares of Central Common Stock purchased
pursuant to the exercise of the Option in immediately available
D-2
funds by a wire transfer to a bank account designated by Central or by federal
funds check if no account has been designated.
(b) At such closing, simultaneously with the delivery of cash as provided in
subsection (a), Central shall deliver to FCC a certificate or certificates
representing the number of shares of Central Common Stock purchased by FCC and
FCC shall deliver to Central a letter agreeing that FCC will not offer to sell
or otherwise dispose of such shares in violation of applicable law or the
provisions of this Option Agreement.
(c) Certificates for Central Common Stock delivered at a closing hereunder
may be endorsed with a restrictive legend which shall read substantially as
follows:
"The transfer of the shares represented by this certificate is subject to
certain provisions of an agreement between the registered holder hereof and
Central Corporation and to resale restrictions arising under the Securities
Act of 1933, as amended, a copy of which agreement is on file at the
principal office of Central Corporation. A copy of such agreement will be
provided to the holder hereof without charge upon receipt by Central
Corporation of a written request."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if FCC shall have delivered
to Central a copy of a letter from the staff of the SEC, or an opinion of
counsel, in form and substance reasonably satisfactory to Central, to the
effect that such legend is not required for purposes of the 1933 Act.
5.Representations.
Central hereby represents, warrants and covenants to FCC as follows:
(a) Central shall at all times maintain sufficient authorized but
unissued shares of Central Common Stock so that the Option may be exercised
without authorization of additional shares of Central Common Stock.
(b) The shares to be issued upon due exercise, in whole or in part, of
the Option, when paid for as provided herein, will be duly authorized,
validly issued, fully paid and nonassessable and will be delivered free and
clear of all claims, liens, encumbrances and security interests and not
subject to any preemptive rights.
(c) Central will not, by amendment of its Articles of Incorporation or
through reorganization, consolidation, merger, dissolution or sale of
assets, or by any other voluntary act, avoid or seek to avoid the
observance or performance of any of the covenants, stipulations or
conditions to be observed or performed hereunder by it; and will promptly
take all action as may from time to time be required (including cooperating
fully with FCC in preparing applications or notices and providing
information with respect to regulatory approval) in order to permit FCC to
exercise the Option and Central duly and effectively to issue shares of
Central Common Stock pursuant hereto.
6.Adjustment Upon Changes in Capitalization.
If Central should split or combine the Central Common Stock, or pay a stock
dividend or other stock distribution in Central Common Stock, or otherwise
change the Central Common Stock into any other securities, or make any other
dividend or distribution in respect of the Central Common Stock (other than
normal cash dividends), then the number of shares of Central Common Stock
subject to the Option shall be adjusted so that, after such issuance, it
equals 19.9% of the number of shares of Central Common Stock then issued and
outstanding without giving effect to any shares subject or issued pursuant to
the Option. Nothing contained in this Section 6 shall be deemed to authorize
Central to breach any provisions of the Merger Agreement. Whenever the number
of shares of Central Common Stock purchasable upon exercise hereof is adjusted
as provided in this Section 6, the option exercise price shall be adjusted by
multiplying the option exercise price by a fraction, the numerator of which
shall be equal to the number of shares of Central Common Stock purchasable
prior to the
D-3
adjustment and the denominator of which shall be equal to the number of shares
of Central Common Stock purchasable after the adjustment.
7.Registration Rights.
Central shall, if requested by FCC, as expeditiously as possible file a
registration statement on a form of general use under the 1933 Act if
necessary in order to permit the sale or other disposition of this Option
and/or the shares of Central Common Stock acquired upon exercise of the Option
in accordance with the intended method of sale or other disposition requested
by FCC. FCC shall provide all information reasonably requested by Central for
inclusion in any registration statement to be filed hereunder. Central will
use its reasonable best efforts to cause such registration statement first to
become effective and then to remain effective for such period not in excess of
270 days from the day such registration statement first becomes effective as
may be reasonably necessary to effect such sales or other dispositions. The
first registration effected under this Section 7 shall be at Central's expense
except for underwriting commissions and the fees and disbursements of FCC's
counsel attributable to the registration. A second registration may be
requested hereunder at FCC's expense. In no event shall Central be required to
effect more than two registrations hereunder. If requested by Central, in
connection with any such registration, FCC will become a party to any
underwriting agreement relating to the sale of such shares, but only to the
extent of obligating itself in respect of representations, warranties,
indemnities and other agreements customarily included by a selling shareholder
in such underwriting agreements.
8.Certain Puts.
(a) Upon the occurrence of a Purchase Event that occurs prior to termination
of the Option, (i) at the request of FCC, delivered while the Option (in whole
or part) is exercisable, Central shall repurchase the Option from FCC at a
price equal to (x) the amount by which (a) the market/offer price (as defined
below) exceeds (b) the option exercise price, multiplied by (y) the number of
shares for which the Option may then be exercised; and (ii) at the request
from time to time of the owner of shares purchased pursuant to the Option,
delivered while the Option (in whole or part) is exercisable (or, if it has
been fully exercised, would have been exercisable had such exercise not been
made), Central shall repurchase such number of the shares issued pursuant to
the Option from the owner as the owner shall designate at a price equal to (x)
the market/offer price multiplied by the number of such shares so designated.
The term "market/offer price" shall mean the highest of (i) the price per
share of Central Common Stock at which a tender offer or exchange offer
therefor has been made after the date hereof, (ii) the price per share of
Central Common Stock to be paid by any third party pursuant to any merger,
consolidation, share exchange or other agreement with Central entered into
after the date hereof, (iii) the highest closing price for shares of Central
Common Stock within the 30-day period immediately preceding the date FCC gives
notice of the required repurchase of this Option or the owner gives notice of
the required repurchase of shares, as the case may be, or (iv) in the event of
a sale of all or substantially all of Central's assets, the sum of the price
paid in such sale for such assets and the current market value of the
remaining assets of Central as determined by a nationally recognized
investment banking firm selected by the parties (or by an arbitrator if they
cannot agree) divided by the number of shares of Central Common Stock
outstanding at the time of such sale. In determining the market/offer price,
the value of consideration other than cash shall be determined by a nationally
recognized investment banking firm selected by the parties (or by an
arbitrator if they cannot agree), and such determination shall be conclusive
and binding on all parties.
(b) FCC or the owner, as the case may be, may exercise its right to require
Central to repurchase the Option and any shares pursuant to this Section 8 by
surrendering for such purpose to Central, at its principal office, this Option
Agreement or certificates for the shares, as applicable, accompanied by a
written notice or notices stating that FCC or the owner, as the case may be,
elects to require Central to repurchase the Option and/or the shares in
accordance with the provisions of this Section 8. As promptly as practicable,
and in any event within five business days after the surrender of the Option
and/or certificates representing shares and the receipt of such notice or
notices relating thereto, Central shall deliver or cause to be delivered to
FCC or the owner the applicable repurchase price therefor or the portion
thereof that Central is not then prohibited from so delivering under
applicable law and regulation or as a consequence of administrative policy.
D-4
(c) Central hereby undertakes to use its best efforts to obtain all required
regulatory and legal consents and to file any required notices in order to
accomplish any repurchase contemplated by this Section 8. Nonetheless, to the
extent that Central is prohibited under applicable law or regulation, or as a
consequence of administrative policy, from repurchasing the Option and/or the
shares in full, Central shall immediately so notify FCC and the owner and
thereafter deliver or cause to be delivered, from time to time, the portion of
the repurchase price that it is no longer prohibited from delivering. If
Central at any time after delivery of a notice of repurchase pursuant to
Section 8 is prohibited under applicable law or regulation, or as a
consequence of administrative policy, from delivering the repurchase price in
full (and Central hereby undertakes to use its best efforts to obtain all
required regulatory and legal approvals and to file any required notices as
promptly as practicable in order to accomplish such repurchase), FCC and/or
the owner may revoke its notice of repurchase either in whole or to the extent
of the prohibition.
9.Severability.
If any term, provision, covenant or restriction contained in this Option
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions and covenants and restrictions contained in this Option
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option will not permit the holder to acquire the
full number of shares of Central Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express intention of Central
to allow the holder to acquire or to require Central to repurchase such lesser
number of shares as may be permissible, without any amendment or modification
hereof.
10.Miscellaneous.
(a) Extension. The period for exercise by FCC and its assignees of any
rights under this Option Agreement shall be extended (i) to the extent
necessary to obtain all regulatory approvals for the exercise of such rights,
and for the expiration of all statutory waiting periods; and (ii) to the
extent necessary to avoid liability under Section 16(b) of the 1934 Act by
reason of such exercise.
(b) Consents. Each of FCC and Central will use its best efforts to make all
filings with, and to obtain consents of, all third parties and Regulatory
Authorities necessary to the consummation of the transactions contemplated by
this Option Agreement, including without limitation applying to the Federal
Reserve Board under the Bank Holding Company Act for approval to acquire the
shares issuable hereunder.
(c) Expenses. Except as otherwise expressly provided herein or in the Merger
Agreement each of the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the transactions
contemplated hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
(d) Entire Agreement. Except as otherwise expressly provided herein or in
the Merger Agreement, this Option Agreement contains the entire agreement
between the parties with respect to the transactions contemplated hereunder
and supersedes all prior agreements or understandings with respect thereto,
written or oral. The terms and conditions of this Option Agreement shall inure
to the benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Option Agreement, expressed or
implied, is intended to confer upon any party, other than the parties hereof,
and their respective successors and assigns, any rights, remedies, obligations
or liabilities under or by reason of this Option Agreement, except as
expressly provided herein.
(e) Assignment. Neither of the parties hereto may assign any of its rights
or obligations under this Option Agreement or the Option created hereunder to
any other person, without the express written consent of the other party,
except that in the event a Purchase Event shall have occurred and be
continuing FCC may assign in whole or in part its rights and obligations
hereunder; provided, however, that until the date 30 days following the date
D-5
on which the Federal Reserve Board approves an application by FCC under the
Bank Holding Company Act to acquire the shares of Central Common Stock subject
to the Option, FCC may not assign its rights under the Option except in (i) a
widely dispersed public distribution, (ii) a private placement in which no one
party acquires the rights to purchase in excess of 2% of the Central Common
Stock, (iii) an assignment to a single party (e.g., a broker or investment
banker) for the purpose of conducting a widely dispersed public distribution on
FCC's behalf, or (iv) any other manner approved by the Federal Reserve Board.
(f) Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered personally
or sent by overnight express or by registered or certified mail, postage
prepaid, addressed as follows:
If to FCC:
First Commerce Corporation
210 Baronne Street
New Orleans, LA 70112
Attention: Ian Arnof
With a copy to:
Correro, Fishman & Casteix, L.L.P.
201 St. Charles Avenue, 47th Floor
New Orleans, LA 70170-4700
Attention: Louis Y. Fishman
If to Central:
Central Corporation
300 DeSiard Street
Monroe, LA 71201-4928
Attention: James A. Altick
With a copy to:
Mayer, Brown & Platt
2000 Pennsylvania Avenue, N.W.
Washington, D.C. 20006-1882
Attention: Brian W. Smith
A party may change its address for notice purposes by written notice to the
other party hereto.
(g) Counterparts. This Option Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
(h) Specific Performance. The parties agree that damages would be an
inadequate remedy for a breach of the provisions of this Option Agreement by
either party hereto and that this Option Agreement may be enforced by either
party hereto through injunctive or other equitable relief.
(i) Governing Law. This Option Agreement shall be governed by and construed
in accordance with the laws of the Louisiana applicable to agreements made and
entirely to be performed within such state, and such federal laws as may be
applicable.
In Witness Whereof, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
D-6
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 83 of the Louisiana Business Corporation Law ("LBCL") permits
a corporation to indemnify its directors and officers against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any action, suit or
proceeding to which he is or was a party or is threatened to be made a party
(including any action by or in the right of the corporation) if such action
arises out of the fact that he is or was a director, officer, employee or agent
of the corporation and he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The indemnification provisions of Section
83 are not exclusive, but no corporation may indemnify any person for willful or
intentional misconduct. A corporation has the power to obtain and maintain
insurance, or to create a form of self-insurance on behalf of any person who is
or was acting for the corporation, regardless of whether the corporation has the
legal authority to indemnify the insured person against such liability.
Section 11 of FCC's by-laws (the "Indemnification By-Law") provides
for mandatory indemnification for current and former directors and officers to
the full extent permitted by Louisiana law. As permitted by FCC's Articles of
Incorporation, FCC has entered into contracts with its directors and certain
officers providing for indemnification to the fullest extent permitted by law
("Indemnification Contracts"). The rights of the directors and officers under
the Indemnification Contracts substantially mirror those granted under the
Indemnification By-law.
FCC maintains an insurance policy covering the liability of its
directors and officers for actions taken in their official capacity.
The Indemnification Contracts provide that, to the extent insurance is
reasonably available, FCC will maintain comparable insurance coverage for each
contracting party as long as he or she serves as an officer or director and
thereafter for so long as he or she is subject to possible personal liability
for actions taken in such capacities. The Indemnification Contracts also
provide that if FCC does not maintain comparable insurance, it will hold
harmless and indemnify a contracting party to the full extent of the coverage
that would otherwise have been provided for his benefit.
II-1
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following Exhibits are filed as part of this Registration Statement:
Exhibit No. Description
----------- -----------
2 Agreement and Plan of Merger, including exhibits.
4.1 Indenture between Registrant and Republic Bank Dallas, N.A.
(now NationsBank, Texas, N.A.), Trustee, including the form of
12-3/4% Convertible Debenture due 2000, Series A, included as
Exhibit 4.1 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1985 and incorporated herein by
reference.
4.2 Indenture between Registrant and Republic Bank Dallas, N.A.
(now NationsBank, Texas, N.A.), Trustee, including the form of
12-3/4% Convertible Debenture due 2000, Series B, included as
Exhibit 4.2 to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1985 and incorporated herein by
reference.
5 Opinion of Correro, Fishman & Casteix, L.L.P.*
8 Form of opinion of Arthur Andersen LLP as to certain tax
matters.*
15 Letter of Arthur Andersen LLP regarding unaudited interim
financial information.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Deloitte & Touche LLP.*
23.3 Consent of Ernst & Young LLP*
23.4 Consent of The Robinson-Humphrey Company, Inc.*
23.5 Consent of Keefe, Bruyette & Woods, Inc.*
23.6 Consent of Robert C. Cudd, III*
II-2
Exhibit No. Description
----------- -----------
23.7 Consent of Hugh G. McDonald, Jr.*
23.8 Consent of Saul A. Mintz*
23.9 Consent of Tom H. Scott*
23.10 Consent of Correro, Fishman & Casteix, L.L.P., included in
Exhibit 5
24 Powers of Attorney of directors and certain executive
officers of Registrant contained on page S-1 of the
registration statement*
99 Forms of Proxy of Registrant and of Central Corporation*
----------------------------------------
*Previously filed
(b) Financial Statement Schedules.
None
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes as follows:
(1) To respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of Form
S-4 within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(2) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
(3) That, for the purpose of determining any liability under the
Securities Act of 1933 each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (the "Exchange Act") that is incorporated by reference in the
Registration Statement shall be deemed to be a new
II-3
registration statement related to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(4) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this Registration
Statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the Registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other Items
of the applicable form.
(5) That every prospectus (i) that is filed pursuant to paragraph (4)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act of 1933 and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part
of an amendment to the Registration Statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
in response to Item 20 of this Registration Statement, the Registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Amendment No. 1 to its Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of New Orleans,
State of Louisiana on the 11th day of August, 1995.
FIRST COMMERCE CORPORATION
By: /s/ THOMAS L. CALLICUTT, JR.
-------------------------------------
Pursuant to the requirements of the Securities Act, this Amendment No. 1 to
the Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE
--------- -----
* President and Chief Executive Officer and Director
----------------------------
Ian Arnof
* Chairman of the Board
----------------------------
Hermann Moyse, Jr.
/s/ THOMAS L. CALLICUTT, JR.
---------------------------- Senior Vice President and Controller (Principal
Thomas L. Callicutt, Jr. Accounting Officer)
* Director
----------------------------
Thomas C. Jaeger
* Director
----------------------------
James J. Bailey III
* Director
----------------------------
John W. Barton
S-1
SIGNATURE TITLE
--------- -----
* Director
----------------------------
Sydney J. Bestoff III
* Director
----------------------------
Robert H. Bolton
* Director
----------------------------
Frances B. Davis
* Director
----------------------------
Laurance Eustis, Jr.
* Director
----------------------------
William P. Fuller
* Director
----------------------------
Arthur Hollins III
* Director
----------------------------
F. Ben James, Jr.
* Director
----------------------------
Erik F. Johnsen
* Director
----------------------------
Joseph Merrick Jones, Jr.
* Director
----------------------------
Edwin Lupberger
* Director
----------------------------
O. Miles Pollard, Jr.
S-2
SIGNATURE TITLE
--------- -----
* Director
----------------------------
G. Frank Purvis, Jr.
* Director
----------------------------
Edward M. Simmons
* Director
----------------------------
H. Leighton Steward
* Director
----------------------------
Joseph B. Storey
* Director
----------------------------
Robert A. Weigle
*By: /s/ THOMAS L. CALLICUTT, JR.
-------------------------------------
Thomas L. Callicutt, Jr.
Attorney-in-fact
August 11th, 1995
S-3
SEQUENTIALLY
NUMBERED
EXHIBITS PAGES
-------- ------------
2 Agreement and Plan of Merger, including exhibits.
4.1 Indenture between First Commerce Corporation and Republic Bank
Dallas, N.A. (now NationsBank Texas, N.A.), Trustee, including the
form of 12-3/4% Convertible Debenture due 2000, Series A included as
Exhibit 4.1 to First Commerce Corporation's Annual Report on Form
10-K for the year ended December 31, 1985 and incorporated herein by
reference.
4.2 Indenture between First Commerce Corporation and Republic Bank
Dallas, N.A. (now NationsBank Texas, N.A.), Trustee, including the
form of 12-3/4% Convertible Debenture due 2000, Series B included as
Exhibit 4.2 to First Commerce Corporation's Annual Report on Form
10-K for the year ended December 31, 1985 and incorporated herein by
reference.
5 Opinion of Correro, Fishman & Casteix, L.L.P.*
8 Form of opinion of Arthur Andersen LLP as to certain tax matters.*
15 Letter of Arthur Andersen LLP regarding unaudited interim financial
information.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Deloitte & Touche LLP.*
23.3 Consent of Ernst & Young LLP.*
23.4 Consent of The Robinson-Humphrey Company, Inc.*
23.5 Consent of Keefe, Bruyette & Woods, Inc.*
23.6 Consent of Robert C. Cudd, III.*
23.7 Consent of Hugh G. McDonald, Jr.*
23.8 Consent of Saul A. Mintz.*
23.9 Consent of Tom H. Scott.*
23.10 Consent of Correro, Fishman & Casteix, L.L.P. included in Exhibit 5.*
24 Powers of Attorney of directors of First Commerce Corporation
contained on page S-1 of the registration statement.*
99 Form of Proxy of Registrant and of Central Corporation.*
------------------
*Previously filed