<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
POST-EFFECTIVE AMENDMENT NO. 1 TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
NATIONAL COMMERCE BANCORPORATION
(Exact name of registrant as specified in its charter)
---------------------
TENNESSEE 6711 62-0784645
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification
incorporation or Classification Number)
organization) Code Number)
ONE COMMERCE SQUARE
MEMPHIS, TENNESSEE 38150
(901) 523-3434
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive officers)
---------------------
LEWIS E. HOLLAND
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
NATIONAL COMMERCE BANCORPORATION
ONE COMMERCE SQUARE
MEMPHIS, TENNESSEE 38150
(901) 523-3434
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
with a copy to:
PHILIP A. THEODORE, ESQ.
KING & SPALDING
191 PEACHTREE STREET
ATLANTA, GEORGIA 30303-1763
(404) 572-4676
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable following the effectiveness of this
Registration Statement.
---------------------
If any securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 21: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
An amended index to Exhibits appears at pages II-4 through II-5 hereof.
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Post-effective Amendment No. 1 to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Memphis, State of
Tennessee, on March 9, 1998.
NATIONAL COMMERCE BANCORPORATION
By: /s/ Charles A. Neale
----------------------
Charles A. Neale
Vice President and General Counsel
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ THOMAS M. GARROTT* Chairman of the Board, President and March 9, 1998
- ------------------------------------- Chief Executive Officer
Thomas M. Garrott (Principal Executive Officer)
/s/ LEWIS E. HOLLAND* Executive Vice President, March 9, 1998
- ------------------------------------- Treasurer and Chief Financial
Lewis E. Holland Officer (Principal Financial Officer
and Principal Accounting Officer)
/s/ FRANK G. BARTON, JR.* Director March 9, 1998
- -------------------------------------
Frank G. Barton, Jr.
/s/ R. GRATTAN BROWN, JR.* Director March 9, 1998
- -------------------------------------
R. Grattan Brown, Jr.
Bruce E. Campbell, Jr. Director January __, 1998
- -------------------------------------
/s/ JOHN D. CANALE, III* Director March 9, 1998
- -------------------------------------
John D. Canale, III
/s/ THOMAS C. FARNSWORTH, JR.* Director March 9, 1998
- -------------------------------------
Thomas C. Farnsworth, Jr.
/s/ R. LEE JENKINS* Director March 9, 1998
- -------------------------------------
R. Lee Jenkins
/s/ W. NEELY MALLORY, JR.* Director March 9, 1998
- -------------------------------------
W. Neely Mallory, Jr.
- ------------------------------------- Director January __, 1998
James E. McGehee, Jr.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ HARRY J. PHILLIPS, SR.* Director March 9, 1998
- -------------------------------------
Harry J. Phillips, Sr.
- ------------------------------------- Director January __, 1998
Sidney A. Stewart, Jr.
/s/ G. MARK THOMPSON* Director March 9, 1998
- -------------------------------------
G. Mark Thompson
</TABLE>
- -------------------
* Charles A. Neale by signing his name hereto, does hereby sign this
Registration Statement on behalf of each of the directors and officers of
Registrant after whose typed names asterisks appear pursuant to powers duly
executed by such directors and officers, and filed with the Securities and
Exchange Commission in Part II of the Registration Statement.
II-3
<PAGE>
AMENDED INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- -------- -----------------------
2.1 Agreement and Plan of Merger among National Commerce
Bancorporation, National Commerce Community Bancorp, Inc. and
Bancshares of West Memphis, Inc. dated January 26, 1998
(included as Appendix I to the Information Statement/Prospectus
in Part I of this Registration Statement). The exhibits and
schedules to this Exhibit, comprising the form of Plan of
Merger, Non-Competition Agreement, Affiliate Agreement and
certain disclosure schedules, have been omitted. The Registrant
hereby undertakes to furnish supplementally to the Commission
any such omitted exhibit or schedule. (Filed previously)
3.1 Charter of National Commerce Bancorporation as amended and
restated (filed as Exhibit 3.1 to the Registrant's Form 10-K
for the year ended December 31, 1996 (File No. 0-6094) and
incorporated herein by reference).
3.2 Bylaws of National Commerce Bancorporation as amended (filed as
Exhibit 3.2 to the Registrant's Form 10-K for the year ended
December 31, 1995 (File No. 0-6094) and incorporated herein by
reference).
4.1 Specimen Stock Certificate (filed as Exhibit 4.1 to the
Registrant's Form 10-K for the year ended December 31, 1996
(File No. 0-6094) and incorporated herein by reference).
5.1 Opinion of Susan Warner, associate counsel of the Registrant,
as to the legality of the shares of the Registrant's Common
Stock being registered. (Filed previously)
8.1 Opinion of Ernst & Young LLP, tax advisors to the Registrant,
as to certain federal income tax consequences of the Merger.
(Filed herewith)
10.1 Form of Promissory Notes of NBC payable to The Mallory Partners
(filed as Exhibit 10.1 to the Registrant's Form 10-K for the
year ended December 31, 1987 (File No. 0-6094) and incorporated
herein by reference).
10.2 Employment Agreement as of October 1, 1991, by and between
National Bank of Commerce and Bruce E. Campbell, Jr. (filed as
Exhibit 10.5 to the Registrant's Form 10-K for the year ended
December 31, 1987 (File No. 0-6094) and incorporated herein by
reference).
10.3 Employment Agreement dated as of January 1, 1992, by and
between National Bank of Commerce and John S. Evans (filed as
Exhibit 10.6 to the Registrant's Form 10-K for the year ended
December 31, 1992 (File No. 0-6094) and incorporated herein by
reference).
10.4 Employment Agreement dated as of January 1, 1992, by and
between National Bank of Commerce and William R. Reed, Jr.
(filed as Exhibit 10.8 to the Registrant's Form 10-K for the
year ended December 31, 1992 (File No. 0-6094) and incorporated
herein by reference).
10.5 Employment Agreement dated as of September 1, 1993, by and
between National Bank of Commerce and Thomas M. Garrott (filed
as Exhibit 10.9 to the Registrant's Form 10-K for the year
ended December 31, 1994 (File No. 0-6094) and incorporated
herein by reference).
10.6 Employment Agreement dated as of September 1, 1993, by and
between National Bank of Commerce and Gary L. Lazarini (filed
as Exhibit 10.10 to the Registrant's Form 10-K for the year
ended December 31, 1994 (File No. 0-6094) and incorporated
herein by reference).
10.7 Employment Agreement dated as of September 1, 1993, by and
between National Bank of Commerce and Mackie H. Gober (filed as
Exhibit 10.11 to the Registrant's Form 10-K for the year ended
December 31, 1994 (File No. 0-6094) and incorporated herein by
reference).
10.8 Deferred Compensation Agreement for Thomas M. Garrott (filed as
Exhibit 10c(2) to the Registrant's Form 10-K for the year ended
December 31, 1984 (File No. 0-6094) and incorporated herein by
reference).
10.9 Employment Agreement dated as of July 1, 1994, by and between
National Bank of Commerce and Lewis E. Holland (filed as
Exhibit 10.14 to the Registrant's Form 10-K for the year ended
December 31, 1994 (File No. 0-6094) and incorporated herein by
reference).
10.10 Split Dollar Insurance Plan (filed as Exhibit 10c(3) to the
Registrant's Form 10-K for the year ended December 31, 1984
(File No. 0-6094) and incorporated herein by reference).
10.11 Bonus Incentive Plan (filed as Exhibit 10c(1) to the
Registrant's Form 10-K for the year ended December 31, 1980
(File No. 0-6094) and incorporated herein by reference).
II-4
<PAGE>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
10.12 1982 Incentive Stock Option Plan, as amended. (filed as Exhibit
10.8 to the Registrant's Form 10-K for the year ended December
31, 1988 (File No. 0-6094)) and incorporated herein by
reference).
10.13 1986 Stock Option Plan (filed as Exhibit A to the Registrant's
Proxy Statement for the 1987 Annual Meeting of Shareholders and
incorporated herein by reference).
10.14 1990 Stock Plan (filed as Exhibit A to the Registrant's Proxy
Statement for the 1990 Annual Meeting of Shareholders and
incorporated herein by reference).
10.15 Form of Amendment to 1986 Stock Option Plan (filed as Exhibit
10.10 to the Registrant's Form 10-K for the year ended December
31, 1988 (File No. 0-6094) and incorporated herein by
reference).
10.16 1994 Stock Plan (filed as Exhibit A to the Registrant's Proxy
Statement for the 1994 Annual Meeting of Shareholders and
incorporated herein by reference).
10.17 Resolution authorizing Pension Restoration Plan (filed as
Exhibit 10(c)(7) to the Registrant's Form 10-K for the year
ended December 31, 1986 (File No. 0-6094) and incorporated
herein by reference).
11 Statement re: Earnings Per Share.
21 Subsidiaries of the Registrant. (Filed previously)
23.1 Consent of Ernst & Young LLP. (Filed previously)
23.2 Consent of Ernst & Young LLP. (Filed previously)
23.3 Consent of Erwin & Co. (Filed previously)
23.4 Consent of Ernst & Young LLP (included in the opinion filed on
Exhibit 8.1).
24 Powers of Attorney (see signature pages). (Filed previously)
II-5
<PAGE>
EXHIBIT 8.1
Ernst & Young LLP
Suite 1500
2121 San Jacinto Street
Dallas, Texas 75201
March 5, 1998
Board of Directors
National Commerce Bancorporation
One Commerce Square
Memphis, Tennessee 38150
Board of Directors
Bancshares of West Memphis, Inc.
626 East Broadway
West Memphis, Arkansas 72301
Gentlemen:
This letter is in response to your request that we provide you with our opinion
concerning certain federal income tax consequences which should arise from
consummation of the proposed merger of Bancshares of West Memphis, Inc. ("BWM")
with and into National Commerce Community Bancorp II, Inc. ("Merger Subsidiary")
utilizing the stock of National Commerce Bancorporation ("NCBC") (hereinafter
the "Proposed Merger").
In rendering this opinion, we have relied upon the facts, summarized below, as
they have been represented to us orally by the management of NCBC and as set
forth in the Statement of Facts and Representations dated January 26, 1998
provided by the respective managements of BWM and NCBC and the Agreement and
Plan of Merger made and entered into by and between BWM, Merger Subsidiary, and
NCBC as of January 26, 1998 (the "Agreement"), hereinafter collectively referred
to as the "Documents."
You have represented to us that the facts contained in the Documents provide an
accurate and complete description of the facts and circumstances concerning the
Proposed Merger. We have made no independent investigation of the factual
matters and circumstances and, therefore, have relied upon the facts and
representations in the Documents for purposes of this letter. Any changes to
the facts or Documents may affect the conclusions stated herein.
We understand that reference to Ernst & Young LLP and our opinion may be
included in a Proxy Statement relating to the issuance of NCBC Common Stock in
connection with the Proposed Merger and a special meeting of the BWM
shareholders with respect thereto. We consent to such reference in a Proxy
Statement. We also understand that NCBC is obligated to undertake the
registration of the stock issued to the BWM shareholders pursuant to the terms
of the Agreement and our opinion will be included in the Registration
<PAGE>
National Commerce Bancorporation Page 2
Bancshares of West Memphis, Inc. March 5, 1998
Statement (Form S-4) to be filed with the Securities and Exchange Commission. We
consent to such reference in the Form S-4.
REPRESENTATIONS OF FACTS
The facts as set forth below, unless otherwise indicate, are as stated in the
Agreement.
BWM is a corporation organized and existing under the laws of the State of
Arkansas, and is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended. As of January 26, 1998, the authorized capital
stock of BWM was 100,000 shares of common stock, $1.00 par value ("BWM Common
Stock"). As of January 26, 1998, 81,284 shares of BWM Common Stock were issued
and outstanding.
BWM is historically the beneficial owner and holder of record of 98% of the
issued and outstanding shares of capital stock of Bank of West Memphis (the "BWM
Bank Subsidiary"). Pursuant to and as a condition of the Agreement, BWM will
own 100% of the issued and outstanding shares of capital stock of the BWM Bank
Subsidiary on or before the closing date. BWM Bank Subsidiary is a depository
institution and is an "insured institution" as defined in the Federal Deposit
Insurance Act and applicable regulations thereunder.
As of January 26, 1998, there are no options, rights, warrants, scrip or similar
rights of any nature, including stock options, stock appreciation or similar
rights, issued and outstanding by BWM or any BWM affiliate to purchase shares of
BWM Common Stock, or any securities or instruments of any nature which are
convertible into or exchangeable for, or which derive their value, in whole or
in part from, shares of BWM Common Stock.
NCBC is a corporation chartered and existing under the laws of the State of
Tennessee which is registered both as a bank holding company and a savings and
loan holding company. The presently authorized capital stock of NCBC is
75,000,000 shares of common stock, par value $2.00 per share (the "NCBC Common
Stock"), which shares collectively have unlimited voting rights and the right to
receive the net assets of NCBC on dissolution and 5,000,000 shares of preferred
stock without par value (the "NCBC Preferred Stock"). As of January 26, 1998,
48,761,980 shares of NCBC Common Stock were issued and outstanding and no shares
of NCBC Preferred Stock were issued and outstanding.
According to Form 10-K as filed with the Securities and Exchange Commission by
NCBC for the year ended December 31, 1996, NCBC had 1,582,552 stock options
outstanding at December 31, 1996 pursuant to the 1994 Stock Plan (the "Plan")
with exercise prices ranging from $8.66 per share to $36.00 per share. During
1994, the shareholders approved the Plan, which reserved an additional 1,050,000
shares of NCBC's common stock for use under the Plan. Options become
exercisable in equal parts over the succeeding five years from the date of
grant. Shares that were the subject of unexercised options under previous
<PAGE>
National Commerce Bancorporation Page 3
Bancshares of West Memphis, Inc. March 5, 1998
plans were transferred to reserved shares for the 1994 Plan. The 1990 Stock Plan
reserved an additional 675,000 shares of NCBC's common stock for the granting of
options and restricted stock to key employees. The 1990 Plan amended NCBC's 1986
Stock Option Plan and the 1982 Incentive Stock Option Plan and merged such
amended and restated plans into the 1990 Stock Plan. Options became exercisable
six months subsequent to the date of grant under the 1982 Plan and became
exercisable in equal parts over the succeeding five to 10 years under the 1986
and 1990 Plans. At the discretion of the 1982 Plan's administering committee
(the "Committee"), stock appreciation rights were attached to some of the
options, whereby the optionee may receive cash for the difference between the
exercise price of the related option and the fair market value of NCBC's common
stock. The Plans are restricted to eligible officers and key employees. In early
1997 the Committee authorized a one million share addition to the option
reserve, which received shareholder approval in April, 1997.
Additionally, NCBC and its subsidiaries previously maintained an Employee Stock
Ownership Plan (ESOP) which was generally available to all full-time employees.
During 1996, the ESOP was merged with NCBC's Taxable Income Retirement Account
Plan (TIRA). The TIRA Plan and Retirement Plan net assets include equity
securities of NCBC.
Merger Subsidiary is a corporation chartered and existing under the laws of the
State of Arkansas and is a direct, wholly-owned subsidiary of NCBC. Merger
Subsidiary was formed to effect the Proposed Merger.
BUSINESS PURPOSE
The management of NCBC has represented to us that NCBC desires to consummate the
Proposed Merger in order to improve its presence in the Arkansas market. The
Board of Directors of BWM believes the shareholders of BWM will benefit from
being part of a larger banking entity, the stock of which is publicly traded.
PROPOSED TRANSACTIONS
In accordance with the above-stated business purpose, the following transactions
have been proposed:
1. After all necessary regulatory and shareholder approvals have been granted,
there will be a merger (i.e., the Proposed Merger) of BWM with and into
Merger Subsidiary in accordance with the Arkansas Code of 1987 Annotated
(the "Arkansas Code"), and in accordance with the provisions of Bank Merger
Act, 12 U.S.C. Sections 1828 et. seq. and 12 U.S.C. Section 215a ("Bank
Merger Act").
<PAGE>
National Commerce Bancorporation Page 4
Bancshares of West Memphis, Inc. March 5, 1998
2. In the Proposed Merger, Merger Subsidiary will acquire all of the assets
and assume all of the liabilities of BWM in constructive exchange for NCBC
Common Stock. The terms of the Agreement provide each share of the issued
and outstanding BWM Common Stock shall cease to represent any interest
(equity, shareholder or otherwise) in BWM and shall, except for those
shares held by any BWM Record Holders who shall properly perfect such
Holders' dissenters rights, automatically be converted exclusively into,
and constitute only the right of each BWM Record Holder to receive for such
Holder's shares of BWM Common Stock, the Consideration to which the BWM
Record Holder is entitled.
3. Holders of BWM Common Stock (other than Dissenting Shares) shall have each
one (1) share of BWM Common Stock outstanding at and as of the Effective
Time converted to the right to receive that number of shares of NCBC Common
Stock (the "Exchange Number"), $2.00 par value, equal to the quotient of
(I) the greater of (x) 850,000 shares of NCBC Common Stock or (y) the
quotient of the Net Purchase Price (defined below) divided by the NCBC
"Current Market Price Per Share" (defined below) divided by (II) the number
of shares of BWM Common Stock outstanding at and as of the Effective Time.
Each share of BWM Common Stock held of record by a BWM Dissenting
Shareholder shall be converted into the right to receive payment from
Merger Subsidiary with respect thereto in accordance with the provision of
the Arkansas Code.
According to the terms of the Agreement, the Net Purchase Price is equal to
$25,500,000 provided BWM owns 100% of the stock of BWM Bank Subsidiary.
The Current Market Price Per Share is the average of the closing price per
share of the NCBC Common Stock on the NASDAQ (as reported by The Wall
Street Journal or, if not reported thereby, any other authoritative sources
selected by NCBC) on the last five trading days prior to the Effective
Date.
4. No fractional shares will be issued. Each holder of BWM Common Stock who
would otherwise have been entitled to receive a fraction of a share of NCBC
Common Stock shall receive in lieu thereof, cash (without interest) in an
amount equal to such fractional part of a share multiplied by the average
of the mean of the high and low prices of one share of NCBC Common Stock
for the five business days preceding the last trading day immediately prior
to the Closing Date as reported in The Wall Street Journal or, if not
reported thereby, any other authoritative source selected by NCBC.
REPRESENTATIONS
For purposes of our opinion, we have relied upon the Documents which include the
representations set forth below. References to the "Code" are to the Internal
Revenue Code of 1986, as amended.
<PAGE>
National Commerce Bancorporation Page 5
Bancshares of West Memphis, Inc. March 5, 1998
The following representations have been made in connection with the Proposed
Merger:
(a) The fair market value of the NCBC Common Stock to be received by each
BWM shareholder will be approximately equal to the fair market value
of the BWM Common Stock surrendered in the exchange.
(b) There is no plan or intention by the shareholders of BWM who own five
percent or more of the BWM Common Stock, and to the best of the
knowledge of the management of BWM, there is no plan or intention on
the part of the remaining shareholders of BWM to sell, exchange, or
otherwise dispose of a number of shares of NCBC Common Stock received
in the transaction that would reduce the BWM shareholders' ownership
of NCBC Common Stock to a number of shares having a value, as of the
date of the transaction, of less than 50 percent of the value of all
of the formerly outstanding stock of BWM as of the same date. For
purposes of this representation, shares of BWM Common Stock
surrendered by dissenters or exchanged for cash in lieu of fractional
shares of NCBC Common Stock will be treated as outstanding BWM Common
Stock on the date of the transaction. Moreover, shares of BWM Common
Stock and shares of NCBC Common Stock held by BWM shareholders and
otherwise sold, redeemed, or disposed of prior to the Effective Time,
in contemplation of this transaction, subsequent to that date, or
subsequent to this transaction will be considered in making this
representation.
(c) Immediately before the commencement of negotiations between the
management of NCBC and the management of BWM with respect to the
Proposed Merger, BWM owned 50% or more of the issued and outstanding
stock of BWM Bank Subsidiary and such ownership was not attained in
contemplation of the Proposed Merger.
(d) NCBC has no plan or intention to reacquire any of its Common Stock
issued in the Proposed Merger other than to acquire a nominal amount
of shares of Common Stock that may be acquired in ordinary business
transactions (including, but not limited to, open market purchases in
brokers' transactions).
(e) Neither NCBC nor Merger Subsidiary have plans or intentions to sell or
otherwise dispose of any of the assets of BWM acquired in the
transaction except for dispositions made in the ordinary course of
business.
<PAGE>
National Commerce Bancorporation Page 6
Bancshares of West Memphis, Inc. March 5, 1998
(f) The liabilities of BWM assumed by Merger Subsidiary and the
liabilities to which the transferred assets of BWM are subject were
incurred by BWM in the ordinary course of its business.
(g) Following the transaction, NCBC will continue through Merger
Subsidiary, substantially unchanged, the business of BWM as operated,
prior to the Proposed Merger, through the BWM Bank Subsidiary.
(h) Except for expenses relating to the registration of the NCBC Common
Stock and certain proxy printing and mailing expenses to be paid
solely by NCBC, which are directly related to the Proposed Merger in
accordance with the guidelines established in Revenue Ruling 73-54,
1973-1 C.B. 187, NCBC, Merger Subsidiary, BWM, and the shareholders of
BWM will pay their respective expenses, if any, incurred in connection
with the transactions.
(i) There is no intercorporate indebtedness existing between BWM and its
affiliate on the one hand and NCBC and its affiliates on the other
hand that was issued, acquired, or will be settled at a discount.
(j) No parties to the transaction are investment companies as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code.
(k) BWM is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of Section 368(a)(3)(A) of the Code.
(l) The fair market value of the assets of BWM to be transferred to Merger
Subsidiary will equal or exceed the sum of the liabilities assumed by
Merger Subsidiary plus the amount of liabilities, if any, to which the
transferred assets are subject.
(m) The payment of cash in lieu of fractional shares of NCBC Common Stock
is solely for the purpose of avoiding the expense and inconvenience to
NCBC of issuing fractional shares and does not represent separately
bargained for consideration. The total cash consideration that will
be paid in the transaction to the BWM shareholders instead of issuing
fractional shares of NCBC Common Stock will not exceed one percent of
the total consideration that will be issued in the transaction to the
BWM shareholders in exchange for their shares of BWM Common Stock.
The fractional share interests of each BWM shareholder will be
aggregated, and no BWM shareholder will receive cash in an amount
equal to or greater than the value of one full share of NCBC Common
Stock for its BWM Common Stock (with the exception of BWM dissenting
shareholders).
<PAGE>
National Commerce Bancorporation Page 7
Bancshares of West Memphis, Inc. March 5, 1998
(n) None of the compensation received by any shareholder-employees of BWM
or its affiliate will be separate consideration for, or allocable to,
any of their shares of BWM Common Stock; none of the shares of NCBC
Common Stock received by any shareholder-employees will be separate
consideration for, or allocable to, any employment agreement; and the
compensation paid to any shareholder-employees will be for services
actually rendered and will be commensurate with amounts paid to third
parties bargaining at arm's-length for similar services.
(o) The Proposed Merger will qualify as a statutory merger under the
Arkansas Code and the Bank Merger Act.
(p) The shareholders of BWM (immediately before the proposed transaction)
receiving shares of NCBC Common Stock will not own (immediately after
the proposed transaction) more than 50 percent of the fair market
value of NCBC Common Stock.
(q) Merger Subsidiary will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market
value of the gross assets held by BWM immediately prior to the
Proposed Merger. For purposes of this representation, amounts paid by
BWM to dissenters, BWM assets used to pay its reorganization expenses,
and all redemptions and distributions (except for regular, normal
dividends) made by BWM immediately preceding the transfer, will be
included as assets of BWM held immediately prior to the transaction.
(r) Prior to the transaction, NCBC will be in control of Merger Subsidiary
within the meaning of Section 368(c)(1) of the Code wherein "control"
is defined to mean the ownership of stock possessing at least 80
percent of the total combined voting power of all classes of stock
entitled to vote and at least 80 percent of the total number of shares
of all other classes of the corporation.
(s) Following the transaction, Merger Subsidiary will not issue additional
shares of its Common Stock that would result in NCBC losing control of
Merger Subsidiary within the meaning of Section 368(c)(1) of the Code.
(t) NCBC has no plan or intention to liquidate Merger Subsidiary; to merge
Merger Subsidiary into another corporation; to sell or otherwise
dispose of the Common Stock of Merger Subsidiary; or to cause Merger
Subsidiary to sell or otherwise dispose of any of the assets of BWM
acquired in the transaction, except for dispositions made in the
ordinary course of business. As NCBC consummates other mergers, it is
likely that some or all of the
<PAGE>
National Commerce Bancorporation Page 8
Bancshares of West Memphis, Inc. March 5, 1998
merged banks will be merged with and into Merger Subsidiary. However,
no Common Stock of Merger Subsidiary will be issued as consideration
in any of the pending mergers.
(u) Management knows of no plan or intention for NCBC to be sold to or
otherwise acquired by another entity.
(v) No stock of Merger Subsidiary will be issued in the transaction.
(w) Following the transaction, Merger Subsidiary will continue the
historic business of BWM and the BWM Bank Subsidiary or will use a
significant portion of BWM's historic business assets in its business.
(x) BWM will own 100% of the issued and outstanding stock of BWM Bank
Subsidiary at the Effective Time.
FEDERAL INCOME TAX CONSEQUENCES
Based on the facts as represented to us, including those set forth in the
Documents, it is our opinion that the following federal income tax consequences
should result.
In the Proposed Merger of BWM with and into Merger Subsidiary:
(1) Provided the proposed merger of BWM with and into Merger Subsidiary
qualifies as a statutory merger under Arkansas law, the Arkansas Code and
the Bank Merger Act, the acquisition by Merger Subsidiary of substantially
all of the assets of BWM solely in exchange for NCBC Common Stock and the
assumption by Merger Subsidiary of the liabilities of BWM, should qualify
as a reorganization under the provisions of Sections 368(a)(1)(A) and
368(a)(2)(D) of the Code. For purposes of this opinion, "substantially
all" means at least 90 percent of the fair market value of the net assets
and at least 70 percent of the fair market value of the gross assets of BWM
held immediately prior to the proposed transaction. BWM, Merger Subsidiary
and NCBC should all be parties to the reorganization within the meaning of
Section 368(b) of the Code.
(2) No gain or loss should be recognized by BWM upon the transfer of
substantially all of its assets to Merger Subsidiary in exchange solely for
NCBC Common Stock, cash in lieu of fractional shares, cash for dissenters,
if any, and the assumption by Merger Subsidiary of the liabilities of BWM
(Sections 361(a), 361(b), and 357(a) of the Code).
(3) No gain or loss should be recognized by Merger Subsidiary or NCBC on the
acquisition by Merger Subsidiary of substantially all of BWM assets in
exchange
<PAGE>
National Commerce Bancorporation Page 9
Bancshares of West Memphis, Inc. March 5, 1998
for NCBC Common Stock, cash and the assumption by Merger Subsidiary of the
liabilities of BWM (See Section 1.1032-2 of the Regulations and Rev. Rul.
57-278, 1957-1 C.B. 124).(4) The basis of the assets of BWM in the hands of
Merger Subsidiary should, in each case, be the same as the basis of those
assets in the hands of BWM immediately prior to the transaction (Section
362(b) of the Code).
(5) The holding period of the assets of BWM in the hands of Merger Subsidiary
should, in each case, include the period for which such assets were held by
BWM (Section 1223(2) of the Code).
(6) No gain or loss should be recognized, with respect to the receipt of NCBC
Common Stock, by the shareholders of BWM who receive solely NCBC Common
Stock in exchange for their shares of BWM Common Stock (Section 354(a)(1)
of the Code). With respect to the cash received in lieu of fractional
shares, see Item 12 below.
(7) The cash received from Merger Subsidiary by a dissenting shareholder of BWM
in exchange for his or her BWM Common Stock should be treated as having
been received by such shareholder as a distribution in redemption of his or
her stock subject to the provisions and limitations of Section 302 of the
Code. If, as a result of such distribution, a shareholder owns no BWM
Common Stock either directly or indirectly through the application of
Section 318, the redemption should be treated as a complete termination of
interest under Section 302(b)(3) and such cash should be treated as a
distribution in exchange for stock under Section 302(a).
(8) The basis of NCBC Common Stock to be received by the shareholders of BWM
Common Stock should be, in each instance, the same as the basis of their
stock surrendered in exchange therefor, decreased by the amount of cash
received, if any, and increased by the amount of gain, if any, recognized
in the exchange (Section 358(a)(1) of the Code).
(9) The holding period of the NCBC Common Stock to be received by the
shareholders of BWM should include, in each instance, the period during
which the BWM Common Stock surrendered therefor was held, provided the
stock of BWM is a capital asset in the hands of the shareholders of BWM on
the date of the exchange (Section 1223(1) of the Code).
(10) Merger Subsidiary should succeed to and take into account, as of the date
of the proposed transfer, those tax attributes of BWM described in Section
381(c) of the Code (Section 381(a) of the Code and Section 1.381(a)-1 of
the Regulations). These items should be taken into account by Merger
Subsidiary subject to the
<PAGE>
National Commerce Bancorporation Page 10
Bancshares of West Memphis, Inc. March 5, 1998
conditions and limitations specified in Sections 381, 382, 383, and 384 of
the Code and the Regulations thereunder.
(11) As provided by Section 381(c)(2) of the Code and Section 1.381(c)(2)-1 of
the Regulations, Merger Subsidiary should succeed to and take into account
the earnings and profits, or deficit in earnings and profits, of BWM as of
the date of transfer. Any deficit in the earnings and profits of BWM
should be used only to offset the earnings and profits accumulated after
the date of transfer.
(12) The payment of cash in lieu of fractional share interests of NCBC Common
Stock should be treated for Federal income tax purposes as if the
fractional shares were distributed as part of the exchange and then were
redeemed by NCBC. These cash payments should be treated as distributions
in full payment in exchange for the stock redeemed, subject to the
provisions and limitations of Section 302(a) of the Code (Rev. Rul. 66-365,
1966-2 C.B. 116 and Rev. Proc. 77-41, 1977-2 C.B. 574).
(13) BWM should close its taxable year as of the date of the distribution or
transfer. NCBC and Merger Subsidiary should not close their taxable year
merely because of the Proposed Merger (Section 381(b) of the Code).
(14) The basis of the Merger Subsidiary Common Stock in the hands of NCBC should
be increased by an amount equal to the basis of the BWM assets in the hands
of Merger Subsidiary and decreased by the sum of the amount of the
liabilities of BWM assumed by Merger Subsidiary and the amount of
liabilities to which the assets of BWM are subject (Section 1.358-6(c)(1)
of Regulations).
SCOPE OF OPINION
The scope of this opinion is expressly limited to the federal income tax issues
specifically addressed in (1) through (14) in the section entitled "Federal
Income Tax Consequences" above. Specifically, our opinion has not been
requested and none is expressed with regard to any foreign, state, or local
income tax consequences for NCBC, Merger Subsidiary, BWM or any of their
shareholders. Our opinion has not been requested and none is expressed with
regard to the federal, state, or local bank regulatory consequences for BWM,
NCBC, and Merger Subsidiary. We have made no determination nor expressed any
opinion as to any limitations, including those which may be imposed under
Section 382, on the availability of net operating loss carryovers (or built-in
gains or losses), if any, after the Proposed Merger, the application (if any) of
the alternative minimum tax to this transaction, nor the application of any
consolidated return or employee benefit issues which may arise as a result of
the Proposed Merger unless expressly stated above. Further, we have made no
determination as whether BWM dividend distributions have been sufficient to
eliminate any undistributed personal holding company tax liability, if
applicable. We have made no
<PAGE>
National Commerce Bancorporation Page 11
Bancshares of West Memphis, Inc. March 5, 1998
determination nor expressed any opinion as to the fair market value of any of
the assets being transferred in the Proposed Merger nor the common shares being
exchanged in the Proposed Merger.
Our opinion, as stated above, is based upon the analysis of the Code, the
Regulations thereunder, current case law, and published rulings as of the date
of this letter (the "Authorities"), as well as representations made to us by the
management of Merger Subsidiary, NCBC, and BWM (and their representatives). The
foregoing Authorities are subject to change, and such change may be
retroactively effective. If so, our views, as set forth above, may be affected
and may not be relied upon. Further, any variation or differences in the facts
or representations recited herein, for any reason, might affect our conclusions,
perhaps in an adverse manner, and make them inapplicable. In addition, we have
undertaken no obligation to update, and therefore will not be updating, this
opinion for changes in facts or law occurring subsequent to the date hereof.
This opinion is being rendered only to the addresses in connection with the
Proposed Merger, and is solely for their benefit and solely for the purpose set
forth above. This opinion may not be relied upon by any other person or
persons, or used for any other purposes, including, but not necessarily limited
to, filings with governmental agencies without our prior written consent.
This letter is an opinion of our firm as to the interpretation of existing law
and, as such, is not binding on the Internal Revenue Service or the courts.
This letter may be used by NCBC and BWM in responding to inquiries from the
Internal Revenue Service regarding the Merger.
Very truly yours,
/s/ Ernst & Young LLP
