<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 10, 1998
REGISTRATION NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
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
(PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER)
(I.R.S. EMPLOYER
(STATE OR OTHER IDENTIFICATION NUMBER)
JURISDICTION OF
INCORPORATION OR
ORGANIZATION)
ONE COMMERCE SQUARE
MEMPHIS, TENNESSEE 38150
(901) 523-3434
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
LEWIS E. HOLLAND
VICE CHAIRMAN, TREASURER 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 COPIES TO:
PHILIP A. THEODORE, ESQ. THOMAS O. POWELL, ESQ.
KING & SPALDING TROUTMAN SANDERS LLP
191 PEACHTREE STREET NATIONSBANK PLAZA
ATLANTA, GEORGIA 30303-1763 600 PEACHTREE STREET, N.E., SUITE
(404) 572-4676 5200
ATLANTA, GEORGIA 30308-2216
(404) 885-3294
----------------
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. [_]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $2.00 par
value................. 1,608,688 $20.21 $8,698,627.00 $2,566.09
</TABLE>
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- -------------------------------------------------------------------------------
(1) This amount is based upon the maximum number of shares anticipated to be
issued pursuant to an Agreement and Plan of Merger dated as of August 5,
1998 between the Registrant and First Community Bancorp, Inc. ("FCB").
(2) Computed in accordance with Rule 457(f) under the Securities Act of 1933,
as amended, based on the book value as of June 30, 1998 of the securities
to be received by the Registrant in exchange for the securities registered
hereby. On the date hereof, there were 430,204 shares of the Common Stock,
$1.00 par value per share, of FCB outstanding.
----------------
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
FIRST COMMUNITY BANCORP, INC.
827 JOE FRANK HARRIS PARKWAY, S.E.
CARTERSVILLE, GEORGIA 30120
Dear Shareholder:
A Special Meeting of the Shareholders of First Community Bancorp, Inc.
("FCB") will be held on , 1998, at p.m., local time, at the main
office of First Community Bank & Trust, 827 Joe Frank Harris Parkway, S.E.,
Cartersville, Georgia.
The purpose of the meeting is to ask you to approve the merger (the
"Merger") of FCB into National Commerce Bancorporation ("NCBC"). The Merger is
subject, among other things, to the approval of the holders of a majority of
the outstanding shares of common stock of FCB ("FCB Stock"). If the Merger is
consummated, each holder of FCB Stock will receive 3.2684 shares of NCBC
common stock.
FCB'S BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND APPROVAL OF THE MERGER.
Enclosed with this letter are a Notice of Special Meeting and a Proxy
Statement/Prospectus, which contains a detailed description of the entire
transaction. Please read the enclosed material carefully. It is important that
your shares be represented at the Special Meeting either in person or by
proxy. A form of proxy for the FCB Stock is enclosed. Whether or not you plan
to attend the Special Meeting, please complete, sign and date the proxy card
and return it in the enclosed postage paid envelope. If you attend the Special
Meeting, you may vote in person if you wish, even if you have previously
returned your proxy card. Your prompt cooperation will be greatly appreciated.
We look forward to seeing you at the Special Meeting.
Sincerely,
/s/ J. Steven Walraven
By: _________________________________
J. Steven Walraven, President
and Chief Executive Officer
Cartersville, Georgia
, 1998
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------
To the Shareholders of First Community Bancorp, Inc.
Notice is hereby given that a Special Meeting of the Shareholders of First
Community Bancorp, Inc. ("FCB") will be held on , 1998, at p.m., local
time, at the main office of the First Community Bank & Trust, 827 Joe Frank
Harris Parkway, S.E., Cartersville, Georgia, for the following purposes:
1. To consider and act upon a proposal to approve a plan of merger
providing for the merger (the "Merger") of FCB into National Commerce
Bancorporation ("NCBC"), as a result of which each outstanding share of
common stock of FCB ("FCB Stock") will be converted into the right to
receive 3.2684 shares of the Common Stock, par value $2.00 per share, of
NCBC ("NCBC Common Stock"). Such approval, if voted, shall be deemed to
constitute the ratification, confirmation and approval of the execution and
delivery by FCB of the Agreement and Plan of Merger ("Agreement") dated as
of August 5, 1998, between NCBC and FCB, a copy of which is an exhibit to
the accompanying Proxy Statement/Prospectus.
2. To transact such other business as may properly be brought before the
Special Meeting or at any adjournment thereof.
Information regarding the matters to be acted upon at the meeting is
contained in the accompanying Proxy Statement/Prospectus.
Consummation of the Merger is conditioned upon approval by the holders of a
majority of the outstanding shares of FCB Stock. The Board of Directors has
fixed the close of business on , 1998, as the record date for the
determination of the shareholders entitled to receive notice of and to vote at
the Special Meeting and at any adjournment thereof. A list of shareholders who
are entitled to vote at the Special Meeting will be available for inspection
by any shareholder, his agent or attorney at the time and place of the Special
Meeting.
Dissenting shareholders who comply with the procedural requirements of
Article 13 of the Georgia Business Corporation Code will be entitled to
receive payment of the cash value of their shares if the Merger is approved.
Your vote is important regardless of the number of shares you own. Please
plan to attend the meeting.
By Order of the Board of Directors
/s/ H. Boyd Pettit, III
By: _________________________________
H. Boyd Pettit, III, Chairman
Cartersville, Georgia
, 1998
A FORM OF PROXY IS ENCLOSED. PLEASE COMPLETE, DATE AND SIGN THE PROXY CARD
AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON
IF YOU WISH, EVEN IF YOU HAVE PREVIOUSLY RETURNED YOUR PROXY CARD.
<PAGE>
PROSPECTUS
PROXY STATEMENT
OF
FIRST COMMUNITY BANCORP, INC.
827 JOE FRANK HARRIS PARKWAY, S.E.
CARTERSVILLE, GEORGIA 30120
FOR THE SPECIAL MEETING OF SHAREHOLDERS
OF FIRST COMMUNITY BANCORP, INC.
TO BE HELD ON , 1998
This Proxy Statement/Prospectus is being furnished to the holders of shares
("FCB Shareholders") of Common Stock, $1.00 par value ("FCB Common Stock"), of
First Community Bancorp, Inc., a Georgia corporation ("FCB"), in connection
with the Special Meeting of Shareholders (the "Meeting") to be held on ,
1998, at the main office of First Community Bank & Trust, 827 Joe Frank Harris
Parkway, S.E., Cartersville, Georgia 30120, and any adjournments of the
Meeting. This Proxy Statement/Prospectus also constitutes a prospectus of
National Commerce Bancorporation, a Tennessee corporation ("NCBC"), relating
to the shares of NCBC Common Stock, par value $2.00 per share ("NCBC Common
Stock"), to be issued to FCB Shareholders pursuant to the terms of the
Agreement and Plan of Merger, dated as of August 5, 1998 (the "Merger
Agreement"), described in this Proxy Statement/Prospectus. Under the terms of
the Merger Agreement, FCB will be merged (the "Merger") with and into NCBC,
and each outstanding share of FCB Common Stock (excluding treasury shares and
shares held by FCB Shareholders who perfect their dissenters' rights) shall be
converted into the right to receive 3.2684 shares of NCBC Common Stock (the
"Exchange Ratio"). Cash will be paid in lieu of any fractional shares
otherwise issuable in the Merger. FCB Shareholders who perfect their
dissenters rights under Georgia law will receive cash equal to the statutory
fair value of their FCB Common Stock in lieu of NCBC Common Stock otherwise
issuable. After the Merger, NCBC will be the surviving corporation and First
Community Bank & Trust, the wholly owned bank subsidiary of FCB, will become a
subsidiary of NCBC.
THIS PROXY STATEMENT/PROSPECTUS IS FIRST BEING MAILED TO FCB SHAREHOLDERS ON
OR ABOUT , 1998.
----------------
THE SHARES OF NCBC COMMON STOCK TO BE ISSUED UNDER THE MERGER AGREEMENT
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
No person is authorized to give any information or to make any
representations other than those contained in this Proxy Statement/Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized. This Proxy Statement/Prospectus does not
constitute an offer or solicitation by anyone in any state in which such offer
or solicitation is not authorized or in which the person making such offer or
solicitation is not qualified to do so or to any person to whom it is unlawful
to make such offer or solicitation. Neither the delivery of this Proxy
Statement/Prospectus nor any distribution of such NCBC Common Stock shall,
under any circumstances, create any implication that the information contained
herein is correct as of any time subsequent to the date hereof. All
information concerning FCB contained in this Proxy Statement/Prospectus has
been furnished by FCB, and all information concerning NCBC has been furnished
by NCBC.
----------------
The date of this Proxy Statement/Prospectus is , 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
AVAILABLE INFORMATION.................................................... ii
FORWARD-LOOKING STATEMENTS............................................... ii
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................... ii
SUMMARY.................................................................. 1
The Parties............................................................ 1
The Meeting............................................................ 1
The Merger............................................................. 2
Market Prices of NCBC and FCB Common Stock............................. 4
NCBC and FCB Selected Historical Financial Data........................ 5
NCBC and FCB Equivalent Per Common Share Data.......................... 8
RISK FACTORS............................................................. 9
Transfer of Control to NCBC............................................ 9
Competition............................................................ 9
Risk from General Economic Conditions.................................. 9
Less Attractive Acquisition Target..................................... 9
INFORMATION CONCERNING THE MEETING....................................... 10
The Meeting............................................................ 10
Vote Required.......................................................... 10
Voting of Proxies...................................................... 10
Revocability of Proxies................................................ 10
Solicitation of Proxies................................................ 10
Other Matters to be Considered......................................... 10
THE MERGER............................................................... 11
General................................................................ 11
Background of the Merger............................................... 11
Reasons for the Merger; Board of Directors' Recommendation............. 11
Opinion of Financial Advisor to FCB.................................... 12
Exchange of Certificates Representing FCB Common Stock................. 16
Covenants; Conditions; Representations and Warranties; Amendment and
Termination........................................................... 17
Resale of NCBC Common Stock by Affiliates.............................. 18
Regulatory and Other Legal Considerations.............................. 19
Accounting Treatment................................................... 20
Federal Income Tax Considerations...................................... 20
Expenses............................................................... 21
Stock Exchange Listing................................................. 21
No Solicitation of Transactions; Break-Up Fee.......................... 21
Dissenters' Rights..................................................... 22
COMPARISON OF RIGHTS OF FCB AND NCBC SHAREHOLDERS........................ 24
DESCRIPTION OF NCBC CAPITAL STOCK........................................ 29
LEGAL OPINIONS........................................................... 30
EXPERTS.................................................................. 30
APPENDIX I--FORM OF MERGER AGREEMENT..................................... I-1
APPENDIX II -- OPINION OF MORGAN KEEGAN & COMPANY, INC................... II-1
APPENDIX III--GEORGIA BUSINESS CORPORATION CODE (S)(S) 14-2-1320, ET
SEQ..................................................................... III-1
</TABLE>
<PAGE>
AVAILABLE INFORMATION
Both NCBC and FCB are subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, file reports, proxy statements and other information with the
Securities and Exchange Commission (the "SEC"). Copies of such material can be
obtained, at prescribed rates, from the Public Reference Section of the SEC at
Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In
addition, such material can be inspected and copied at the public reference
facilities referred to above and at Regional Offices of the SEC as follows:
the New York Regional Office, 7 World Trade Center, Suite 1300, New York, New
York 10048 and the Chicago Regional Office, Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. The SEC also maintains a Web site
that contains reports, proxy statements and other information regarding
registrants that file electronically with the SEC. The address of such site is
http://www.sec.gov. NCBC Common Stock is traded over-the-counter on the Nasdaq
National Market tier and is quoted under the trade symbol "NCBC," and such
reports, proxy statements and other information concerning NCBC can be
inspected and copied at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006 or obtained by calling the Nasdaq Public Reference Room
Disclosure Group at (800) 638-8241. This Proxy Statement/Prospectus does not
contain all the information set forth in the Registration Statement on Form S-
4 and exhibits thereto (the "Registration Statement") that NCBC has filed with
the SEC under the Securities Act of 1933 (the "Securities Act"), to which
reference is hereby made.
FORWARD-LOOKING STATEMENTS
This Proxy Statement/Prospectus may contain or incorporate by reference
certain forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Exchange Act with respect to the
financial condition, results of operations and business of NCBC and FCB.
Statements in this document that are not historical facts are hereby
identified as "forward-looking statements" for the purpose of the safe harbor
provided by Section 12E of the Exchange Act and Section 27A of the Securities
Act. NCBC and FCB caution readers that such "forward-looking statements,"
including without limitation, those relating to NCBC's and FCB's future
business prospects, revenues, working capital, liquidity, capital needs,
interest costs and income, wherever they occur in this document or in other
statements attributable to NCBC or FCB, are necessarily estimates reflecting
the best judgment of NCBC and FCB senior management and involve a number of
risks and uncertainties that could cause actual results to differ materially
from those suggested by the "forward-looking statements." Such "forward-
looking statements" should, therefore, be considered in light of various
important factors, including those set forth in this Proxy
Statement/Prospectus. Important factors currently known to management that
could cause actual results to differ materially from those in forward-looking
statements include significant fluctuations in interest rates, inflation,
economic recession, significant changes in the federal and state legal and
regulatory environment, significant underperformance in NCBC's and FCB's
portfolio of outstanding loans, and competition in NCBC's and FCB's markets.
Other factors set forth from time to time in NCBC's reports and registration
statements filed with the SEC should also be considered. NCBC undertakes no
obligation to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to future
operating results over time.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of NCBC are incorporated by reference into this
Proxy Statement/Prospectus:
(1) the Annual Report on Form 10-K of NCBC for the year ended December
31, 1997;
(2) the Quarterly Reports on Form 10-Q of NCBC for the quarters ended
March 31, 1998 and June 30, 1998; and
(3) the Registration Statement on Form S-8 (File No. 33-38552) filed with
the SEC on January 11, 1991, which provides a description of the Common
Stock to be issued pursuant to the Merger.
ii
<PAGE>
The following documents of FCB are incorporated by reference into this Proxy
Statement/Prospectus:
(1) the Annual Report on Form 10-KSB of FCB for the year ended December
31, 1997;
(2) the Quarterly Report on Form 10-QSB of FCB for the quarters ended
March 31, 1998 and June 30, 1998; and
(3) the description of FCB Common Stock set forth in FCB's Registration
Statement on Form S-8 (File No. 333-06692) filed with the SEC on March 28,
1997.
All documents filed by NCBC or FCB pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date of this Proxy Statement/Prospectus
and prior to the date on which the Meeting is held, which date is expected to
be , 1998, shall be deemed to be incorporated by reference into this Proxy
Statement/Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
into this Proxy Statement/Prospectus shall be deemed to be modified or
superseded for purposes of this Proxy Statement/Prospectus to the extent that
a statement contained in this Proxy Statement/Prospectus (or in any other
subsequently filed document which also is incorporated by reference into this
Proxy Statement/Prospectus) modifies or supersedes such document. Any
statement so modified or superseded shall not be deemed to constitute a part
of this Proxy Statement/Prospectus except as so modified or superseded.
THIS PROXY STATEMENT/PROSPECTUS IS ACCOMPANIED BY FCB'S LATEST ANNUAL REPORT
ON FORM 10-KSB AND QUARTERLY REPORT ON FORM 10-QSB AND INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF
THESE DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS, UNLESS SUCH EXHIBITS
ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE
WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS
PROXY STATEMENT/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, WITH
RESPECT TO DOCUMENTS THAT RELATE TO NCBC, FROM LEWIS E. HOLLAND, VICE
CHAIRMAN, TREASURER AND CHIEF FINANCIAL OFFICER, NATIONAL COMMERCE
BANCORPORATION, ONE COMMERCE SQUARE, MEMPHIS, TENNESSEE 38150; TELEPHONE NO.
(901) 523-3242, AND WITH RESPECT TO DOCUMENTS THAT RELATE TO FCB, FROM J.
STEVEN WALRAVEN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, FIRST COMMUNITY
BANCORP, INC., 827 JOE FRANK HARRIS PARKWAY, S.E., CARTERSVILLE, GEORGIA
30120; TELEPHONE NO. (706) 382-1495. IN ORDER TO ENSURE TIMELY DELIVERY OF
SUCH DOCUMENTS, ANY REQUEST SHOULD BE MADE BY , 1998.
iii
<PAGE>
SUMMARY
Certain significant matters discussed in this Proxy Statement/Prospectus are
summarized below. These summaries are not intended to be complete and are
qualified in all respects by reference to the detailed information appearing
elsewhere in this Proxy Statement/Prospectus. FCB Shareholders are urged to
review carefully the entire Proxy Statement/Prospectus (including the
Appendices and other documents to which this Proxy Statement/Prospectus
refers).
THE PARTIES
NCBC. National Commerce Bancorporation ("NCBC") is a registered bank holding
company and owns National Bank of Commerce; Nashville Bank of Commerce; NBC
Bank, F.S.B. (Knoxville); NBC Bank, F.S.B. (Roanoke) and 49 percent of First
Market Bank, F.S.B. (Richmond). At present, NCBC provides its financial
institutions with financial advice and counsel and performs the record-keeping
functions necessary to comply with accounting and regulatory requirements. In
addition, NCBC owns National Commerce Bank Services, Inc., which provides in-
store bank consulting services; Commerce General Corporation and NBC Capital
Markets Group, Inc., which provide data processing and broker-dealer services,
respectively; NBC Insurance Services, Inc., a consumer insurance subsidiary;
Commerce Capital Management, Inc. and Brooks, Montague & Associates, Inc.,
which provide investment advisory services; Commerce Finance Company, a
consumer finance subsidiary; TransPlantinum Service Corp., a provider of
electronic payment systems, data processing and card services; Kenesaw Leasing,
Inc. and J&S Leasing, Inc., both equipment leasing firms; and USI Alliance
Corp., a lockbox leasing company.
NCBC, a Tennessee corporation, was formed in February 1966 as a Tennessee
financial corporation. The corporate name was changed in 1970, and the present
name was adopted in May 1978. NCBC common stock, par value $2.00 per share (the
"Common Stock"), is traded on The Nasdaq Stock Market's National Market System
under the symbol "NCBC." Unless the context otherwise requires, references to
NCBC include National Commerce Bancorporation and its subsidiaries. NCBC's
principal executive offices are located at One Commerce Square, Memphis,
Tennessee 38150, and its telephone number is (901) 523-3242.
FCB. First Community Bancorp, Inc. ("FCB"), a Georgia corporation, was
organized on May 31, 1989, for the purpose of acquiring all of the issued and
outstanding common stock of First Community Bank & Trust (the "Bank"). Pursuant
to a Plan of Reorganization, effective December 1, 1989, FCB acquired all of
the issued and outstanding shares of common stock of the Bank. As a result of
this transaction, the former shareholders of the Bank became the shareholders
of FCB, and the Bank became a wholly owned subsidiary of FCB. FCB's principal
executive offices are located at 827 Joe Frank Harris Parkway, S.E.,
Cartersville, Georgia 30120, and its telephone number is (706) 382-1495.
The Bank is a financial institution which was organized under the laws of the
State of Georgia on July 11, 1988 and, on October 23, 1989, began operation of
a full-service commercial banking business based in Bartow County, Georgia. The
Bank provides such customary banking services as checking and savings accounts,
various types of time deposits, safe deposit facilities and individual
retirement accounts. It also makes secured and unsecured loans and provides
other financial services to its customers. While the Bank has trust powers,
such powers are currently exercised only to permit the Bank to serve as
custodian of its individual retirement accounts. The Bank engages in a general
commercial banking business in its community, emphasizing the banking needs of
individuals and small- to medium-sized businesses and professional concerns.
THE MEETING
The Special Meeting of FCB Shareholders (the "Meeting") will be held at the
main office of the Bank at 827 Joe Frank Harris Parkway, S.E., Cartersville,
Georgia 30120, on , 1998 at p.m., local
1
<PAGE>
time. The purpose of the Meeting is to consider and vote upon the approval and
adoption of the Merger Agreement. Only holders of shares of FCB Common Stock of
record at the close of business on , 1998 (the "Record Date"), will be
entitled to vote at the Meeting. As of the Record Date, there were 430,204
shares of FCB Common Stock outstanding and entitled to vote, with each share
entitled to one vote. As of the Record Date, approximately [33.45]% of the
outstanding shares of FCB Common Stock were beneficially owned by officers and
directors of FCB and their affiliates. The presence in person or by proxy of
the holders of a majority of the shares of FCB Common Stock outstanding as of
the Record Date is necessary to constitute a quorum at the Meeting. The
affirmative vote of the holders of a majority of the shares of FCB Common Stock
entitled to vote is necessary to approve and adopt the Merger Agreement. See
"Information Concerning the Meeting--Vote Required."
A form of proxy for the FCB Common Stock is enclosed with this Proxy
Statement/Prospectus. Holders of FCB Common Stock are requested to sign and
return the proxy. All shares of FCB Common Stock represented by properly
executed proxies, unless such proxies have been previously revoked, will be
voted in accordance with the instructions indicated on such proxies. If no
instructions are indicated, such shares will be voted for approval of the
Merger Agreement and, in the discretion of the proxy holder, as to any other
matter which may properly come before the Meeting. See "The Information
Concerning the Meeting--Revocability of Proxies" and "--Solicitation of
Proxies."
THE MERGER
General. The Merger Agreement, a copy of which is attached as Appendix I and
incorporated by reference in this Proxy Statement/Prospectus, provides for the
Merger of FCB with and into NCBC in accordance with the applicable provisions
of the Georgia Business Corporation Code (the "GBCC") and the Tennessee Code
Annotated (the "Tennessee Code"). NCBC will be the surviving corporation of the
Merger. The separate existence of FCB will cease following the Merger and the
Bank will become a wholly owned bank subsidiary of NCBC. Subject to the terms,
conditions and procedures set forth in the Merger Agreement, upon consummation
of the Merger at the time and date specified in the articles of merger to be
filed to effect the Merger (the "Effective Time"), each of the issued and
outstanding shares of FCB Common Stock (excluding treasury shares and shares
held by FCB Shareholders who perfect their dissenters' rights) will be
converted, without any further action on the part of FCB Shareholders, into the
right to receive 3.2684 shares of NCBC Common Stock (the "Exchange Ratio"). FCB
believes it will satisfy this requirement. FCB Shareholders who properly
exercise and perfect their dissenters' rights under the GBCC will be paid the
statutory fair value of their shares in cash. In addition, cash will be paid to
FCB Shareholders in lieu of fractional shares otherwise issuable in the Merger
based on a price of $21.519 per share of NCBC Common Stock.
Background of the Merger. The managements of NCBC and FCB began considering a
potential combination in March 1998. A letter of intent was finalized and
executed on April 9, 1998. The Merger Agreement was approved by the FCB Board
of Directors on August 3, and by the NCBC Board of Directors on April 22. The
Merger Agreement was executed on August 5, 1998. See "The Merger--Background of
the Merger."
Board of Directors' Recommendation. The Board of Directors of FCB voted to
approve the Merger Agreement as being in the best interests of FCB and FCB
Shareholders and recommends that FCB Shareholders vote for the approval of the
Merger and the approval and adoption of the Merger Agreement. See "The Merger--
Reasons for the Merger; Board of Directors' Recommendation."
Covenants; Conditions; Representations and Warranties; Amendment and
Termination. The respective obligations of the parties to consummate the Merger
are subject to, among other things, the requisite vote of FCB Shareholders
approving the Merger and compliance with certain regulatory requirements.
Additional conditions to the obligations of NCBC and FCB to consummate the
Merger are discussed in "The Merger--Covenants; Conditions; Representations and
Warranties; Amendment and Termination."
2
<PAGE>
The Merger Agreement may be amended by agreement between FCB and NCBC, but no
amendment reducing the consideration to be received by FCB Shareholders is
valid unless approved by the FCB Shareholders. The Merger Agreement may be
terminated by either NCBC or Merger Subsidiary, on the one hand, or FCB, on the
other hand, if by November 30, 1998, specified conditions in the Merger
Agreement have not been satisfied or waived.
In addition to the conditions described in the preceding sentence, the
obligation of NCBC to consummate the Merger is subject the following
conditions: (i) exclusive of gains or losses on transactions in securities,
total consolidated shareholders equity of FCB at the time of the closing shall
not be less than $8,330,000; (ii) FCB shall own, free and clear of any liens,
not less than 100% of the outstanding capital stock of the Bank; (iii) from and
after December 31, 1997, neither FCB nor the Bank shall have consummated any
extraordinary sale of assets nor any material investment portfolio
restructuring; and (v) certain FCB officers shall have entered into non-compete
agreements with NCBC and the Bank.
Regulatory or Other Legal Considerations. The Merger is subject to approval
by the Board of Governors of the Federal Reserve System (the "FRB") under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"), and the
expiration of the 30-day Department of Justice waiting period. NCBC filed an
application for such approval on or about , 1998. The approval was granted
on , 1998. The Merger is also subject to approval by the State of Georgia
Department of Banking and Finance. NCBC filed an application for such approval
on or about , 1998. The approval was granted on , 1998. See "The Merger--
Regulatory and Other Legal Considerations."
Federal Income Tax Considerations. NCBC and FCB will receive an opinion of
NCBC's counsel that the Merger will constitute a "reorganization," within the
meaning of Section 368(a) of the Internal Revenue Code of 1986 (the "Code"),
and that no gain or loss will be recognized by the FCB Shareholders for federal
income tax purposes upon the conversion of FCB Common Stock into NCBC Common
Stock pursuant to the Merger (except with respect to cash received in lieu of
fractional shares of NCBC Common Stock) or by holders of FCB Options (as
defined, see "The Merger--General") upon the conversion of such options into
rights with respect to NCBC Common Stock. See "The Merger--Federal Income Tax
Considerations."
Comparison of Rights of FCB and NCBC Shareholders. FCB is incorporated under
the laws of the State of Georgia. NCBC is incorporated under the laws of the
State of Tennessee. FCB Shareholders, whose rights as shareholders are
currently governed by Georgia law and the FCB Articles of Incorporation and
Bylaws, upon consummation of the Merger will become shareholders of NCBC and
their rights as NCBC shareholders will be governed by Tennessee law and the
NCBC Restated Charter (the "NCBC Charter") and Bylaws. The NCBC Charter and
Bylaws contain certain provisions intended to deter certain takeover attempts.
The FCB Articles of Incorporation and Bylaws contain similar, but not
identical, provisions. See "Comparison of Rights of FCB and NCBC Shareholders."
Dissenters' Rights. FCB Shareholders who do not vote in favor of the Merger
and who comply with the applicable provisions of the GBCC, which provisions
require, among other things, the filing of a written notice of the
shareholder's intention to demand payment for his shares before the vote with
respect to the Merger Agreement is taken prior to or at the Meeting, will be
entitled, if the Merger is consummated, to have a Georgia court determine the
statutory fair value of his shares of FCB Common Stock and to receive payment
of that amount in cash in lieu of receiving shares of NCBC Common Stock in the
Merger. See "The Merger--Dissenters' Rights" and Appendix III.
MARKET PRICES OF NCBC AND FCB COMMON STOCK
NCBC. The NCBC Common Stock is traded over-the-counter on the Nasdaq National
Market tier and is quoted under the trade symbol "NCBC." On April 23, 1997,
NCBC announced a 2-for-1 stock split, effective as of May 16, 1997, for shares
held of record on May 5, 1997. On April 22, 1998, NCBC's Board of Directors
3
<PAGE>
declared a second two-for-one stock split, effective as of July 1, 1998, for
shareholders of record as of June 5, 1998. The stock prices set forth in the
table below have been adjusted to reflect such stock splits. The stock prices
listed in the table were obtained from Nasdaq and represent the high and low
closing sales prices.
MARKET PRICE OF NCBC COMMON STOCK
<TABLE>
<CAPTION>
YEAR/QUARTER HIGH LOW
------------ ------- -------
<S> <C> <C>
1996
First Quarter.............................................. $7.750 $6.375
Second Quarter............................................. 7.938 7.438
Third Quarter.............................................. 8.375 7.750
Fourth Quarter............................................. 9.595 8.313
1997
First Quarter.............................................. $11.500 $8.936
Second Quarter............................................. 11.813 9.625
Third Quarter.............................................. 13.813 11.438
Fourth Quarter............................................. 17.875 13.594
1998
First Quarter.............................................. $21.313 $15.125
Second Quarter............................................. 23.375 19.688
Third Quarter (through August 6, 1998)..................... 27.375 20.938
</TABLE>
FCB. The FCB Common Stock is not traded publicly and no specific market sales
prices can be quoted. FCB has maintained partial records of share prices based
upon actual transactions disclosed. However, these records are incomplete since
they do not reflect prices for all transactions in FCB Common Stock. To the
extent such information has been disclosed to FCB, the share prices of FCB
Common Stock are as follows:
KNOWN TRADING PRICES OF FCB COMMON STOCK
<TABLE>
<CAPTION>
YEAR/QUARTER HIGH LOW
------------ ------ ------
<S> <C> <C>
1996
First Quarter................................................ $15.30 $15.30
Second Quarter............................................... 15.51 15.51
Third Quarter................................................ 16.17 16.17
Fourth Quarter............................................... 20.00 17.11
1997
First Quarter................................................ $20.00 $20.00
Second Quarter............................................... 25.25 25.25
Third Quarter................................................ * *
Fourth Quarter............................................... 25.25 25.25
1998
First Quarter................................................ $33.70 $25.25
Second Quarter............................................... 49.02 49.02
Third Quarter (through August 6, 1998)....................... * *
</TABLE>
- --------
* FCB is not aware of the occurrence of any trades of FCB Common Stock during
this quarter
4
<PAGE>
On April 17, 1998, the last trading day before the public announcement of the
Merger, the high and low sales prices per share reported on the Nasdaq National
Market tier for NCBC Common Stock were $20.688 and $20.500, respectively (after
giving effect to a two-for-one stock split effective on July 1, 1998) ($67.615
and $67.02, respectively, on an equivalent share basis for each share of FCB
Common Stock based on the Exchange Ratio). On the date of this Proxy
Statement/Prospectus, the high and low sales prices per share reported on the
Nasdaq National Market tier for NCBC Common Stock were $[22.375] and $[22.500],
respectively ($[73.130] and $[73.540], respectively, on an equivalent share
basis for each share of FCB Common Stock based on the Exchange Ratio). FCB
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT QUOTATIONS FOR THE MARKET PRICES OF
NCBC COMMON STOCK.
NCBC AND FCB SELECTED HISTORICAL FINANCIAL DATA
NCBC. The selected consolidated financial data of NCBC for, and as of the end
of, each of the periods indicated in the five-year period ended December 31,
1997, have been derived from the audited consolidated financial statements of
NCBC. The selected consolidated financial data for each of the six-month
periods ended June 30, 1997 and 1998, and as of June 30, 1998, have been
derived from the unaudited consolidated financial statements of NCBC, which
reflect, in the opinion of management of NCBC, all adjustments (which include
only normal recurring adjustments) necessary for the fair presentation of the
financial data for such periods. The results for such interim periods are not
necessarily indicative of the results for the full year. The selected financial
data should be read in conjunction with the consolidated financial statements
of NCBC and the notes thereto which have been incorporated by reference herein.
All common share data have been restated to reflect a two-for-one stock split,
effective as of May 16, 1997, and a subsequent two-for-one stock split
effective on July 1, 1998. Pro forma data reflecting the Merger and certain
other acquisitions are not presented because such acquisitions individually and
combined do not have a significant effect on the data as presented. On January
29, 1998, NCBC acquired First Citizens Bancshares Company, a one bank holding
company located in Marion, Arkansas. In connection therewith NCBC issued
557,582 shares of NCBC Common Stock (after giving effect to a two-for-one stock
split effective on July 1, 1998). On March 31, 1998, NCBC acquired Bancshares
of West Memphis, a one bank holding company located in West Memphis, Arkansas.
In connection therewith, NCBC issued 1,699,920 shares of NCBC Common Stock
(after giving effect to a two-for-one stock split effective on July 1, 1998).
On August 1, 1998, NCBC acquired CBC Bancshares, Inc., a one bank holding
company located in Collierville, Tennessee. In connection therewith, NCBC
issued 534,531 shares of NCBC Common Stock. Acquisitions accounted for under
the pooling of interests accounting method are included for all periods
presented, while acquisitions accounted for under the purchase accounting
method are included from the date of acquisition.
5
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FOR THE YEAR ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------ ---------------------
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income.. $ 162,690 $ 195,120 $ 246,465 $ 286,567 $ 336,993 $ 162,856 $ 182,814
Total interest ex-
pense................. 62,297 85,099 126,440 151,101 174,172 85,090 90,890
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income.... 100,393 110,021 120,025 135,466 162,821 77,766 91,924
Provision for loan
losses................ 8,392 7,077 9,750 14,134 17,013 7,005 3,497
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net interest income af-
ter provision for loan
losses................ 92,001 102,944 110,275 121,332 145,808 70,761 88,427
Total other income..... 52,289 49,940 53,868 69,635 82,405 36,445 41,953
Total other expenses... 86,082 87,574 91,830 103,875 123,460 59,468 68,989
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income
taxes................. 58,208 65,310 72,313 87,092 104,753 47,738 61,391
Income taxes........... 18,802 20,968 23,278 29,579 34,973 16,514 20,897
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income............. $ 39,406 $ 44,342 $ 49,035 $ 57,513 $ 69,780 $ 31,224 $ 40,494
========== ========== ========== ========== ========== ========== ==========
PER COMMON SHARE DATA:
Earnings per share--ba-
sic................... $ 0.41 $ 0.46 $ 0.50 $ 0.59 $ 0.71 $ 0.32 $ 0.40
Earnings per share--di-
luted................. $ 0.40 $ 0.45 $ 0.49 $ 0.58 $ 0.69 $ 0.31 $ 0.40
Cash dividends de-
clared................ $ 0.14 $ 0.16 $ 0.18 $ 0.20 $ 0.23 $ 0.11 $ 0.15
<CAPTION>
DECEMBER 31, JUNE 30,
------------------------------------------------------ ---------------------
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total cash and cash
equivalents........... $ 120,396 $ 166,433 $ 387,755 $ 195,902 $ 247,493 $ 190,003 $ 242,017
Available-for-sale
securities............ 954,788 872,379 516,623 700,775 408,083 733,615 687,151
Held-to-maturity
securities............ 17,408 283,906 762,023 817,124 1,210,071 882,584 1,131,719
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total securities...... 972,196 1,156,285 1,278,646 1,517,899 1,618,154 1,616,199 1,818,930
Trading account
securities............ 63,124 13,507 20,159 31,812 98,332 34,059 67,878
Loans, net of unearned
discounts............. 1,395,830 1,592,806 1,931,213 2,347,973 2,608,967 2,540,652 2,887,453
Less allowance for loan
losses................ 21,467 24,310 29,010 35,514 43,297 38,110 45,050
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net loans............. 1,374,363 1,568,496 1,902,203 2,312,459 2,565,670 2,502,542 2,842,403
Premises and equipment
net................... 15,388 17,729 18,382 21,799 27,404 24,039 32,120
Broker/dealer customer
receivables........... 23,645 1,130 13,444 11,699 7,695 20,928 55,615
Other assets........... 51,655 82,229 74,453 108,839 127,263 133,813 141,654
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total assets.......... $2,620,767 $3,005,809 $3,695,042 $4,200,409 $4,692,011 $4,521,583 $5,200,617
========== ========== ========== ========== ========== ========== ==========
Total deposits......... $1,919,641 $2,154,390 $2,574,770 $2,976,430 $3,251,242 $2,997,545 $3,415,788
Short-term borrowings
and other
liabilities........... 289,652 299,076 444,413 358,476 492,601 580,355 563,504
Federal Home Loan Bank
advances.............. 170,025 321,541 372,799 396,109 389,884 404,724 636,812
Long term debt......... 6,372 6,383 6,381 156,065 156,252 206,035 156,345
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total liabilities..... 2,385,690 2,781,390 3,398,363 3,887,080 4,289,979 4,188,659 4,772,449
Capital trust
passthrough
securities........... 49,884 49,877 49,890
Total shareholders' eq-
uity................... 235,077 224,419 296,679 313,329 352,148 98,051 378,278
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total liabilities and
shareholders'
equity............... $2,620,767 $3,005,809 $3,695,042 $4,200,409 $4,692,011 $4,521,583 $5,200,617
========== ========== ========== ========== ========== ========== ==========
</TABLE>
6
<PAGE>
FCB. The selected consolidated financial data of FCB for each of the periods
indicated in the five-year period ended December 31, 1997, have been derived
from the audited consolidated financial statements of FCB. The selected
consolidated financial data for each of the six-month periods ended June 30,
1997 and 1998 have been derived from the unaudited consolidated financial
statements of FCB, which reflect, in the opinion of management of FCB, all
adjustments (which include only normal recurring adjustments) necessary for the
fair presentation of the financial data for such periods. The results of such
interim periods are not necessarily indicative of the results for the full
year. The selected financial data should be read in conjunction with FCB's
consolidated financial statements, including the notes thereto, and
"Management's Discussion and Analysis of FCB's Financial Condition and Results
of Operations" incorporated by reference into this Proxy Statement/Prospectus.
FCB
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED JUNE 30,
---------------------------------------------------------- -----------------------
1993 1994 1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATING RE-
SULTS DATA:
Net Interest Income.... 1,964,705 2,443,445 3,421,947 4,145,188 4,809,928 2,306,460 2,513,999
Provision for Possible
Loan Losses........... 120,488 192,000 192,000 216,000 299,893 149,893 150,000
Net Income............. 787,044 587,270 993,365 1,237,538 1,449,366 648,085 673,675
PERIOD END BALANCE SHEET
DATA:
Total Assets........... 48,235,191 57,518,288 64,677,989 79,221,198 90,951,775 84,004,426 102,985,206
Total Deposits......... 42,005,622 50,735,379 55,654,136 65,373,546 77,676,041 70,700,368 89,017,441
Shareholders' Equity... 4,285,407 4,672,536 5,774,487 6,888,738 8,089,564 7,597,590 8,698,627
PER COMMON SHARE DATA:
Net Income (Basic
EPS).................. 1.86 1.38 2.34 2.98 3.43 1.52 1.58
Cash Dividends......... -- -- -- 0.30 * * --
Book Value............. 10.32 11.26 13.91 16.60 16.91 17.77 19.00
PERFORMANCE RATIOS:
Return on Assets....... 1.90% 1.09% 1.66% 1.72% 1.74% 1.59% 1.43%
Return on Equity....... 20.10% 13.11% 19.22% 20.11% 19.90% 17.90% 16.05%
</TABLE>
- --------
*A 2% stock dividend was declared for this period which resulted in the
issuance of 8,258 shares.
7
<PAGE>
NCBC AND FCB EQUIVALENT PER COMMON SHARE DATA(1)
The following unaudited table presents selected historical per common share
data for NCBC and FCB and FCB equivalent per common share data on the basis
described in Note (2). All common share data have been restated to reflect
stock splits and stock dividends during the periods presented. This data should
be read in conjunction with the historical financial statements of NCBC
(incorporated by reference into this Proxy Statement/Prospectus) and of FCB
(incorporated by reference into this Proxy Statement/Prospectus).
<TABLE>
<CAPTION>
PER SHARE OF COMMON STOCK
-------------------------------------------------------
NET INCOME NET INCOME CASH BOOK VALUE
(BASIC)(3) (DILUTED)(3) DIVIDENDS(4)(5) (END OF PERIOD)
---------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
NCBC--Historical
Year ended December
31, 1995............. $.50 $.49 $ .18 $2.99
Year ended December
31, 1996............. $.59 $.58 $ .20 $3.22
Year ended December
31, 1997............. $.71 $.69 $ .23 $3.61
Six Months ended June
30, 1998............. $.40 $.40 $ .15 $3.80
FCB--Historical
Year ended December
31, 1995............. $2.34 $13.91
Year ended December
31, 1996............. $2.98 $0.30 $16.60
Year ended December
31, 1997............. $3.43 $16.91
Six Months ended June
30, 1998............. $1.58 $19.00
FCB--Equivalent(2)
Year ended December
31, 1995............. $1.63 $1.60 $ .59 $ 9.77
Year ended December
31, 1996............. $1.93 $1.90 $ .65 $10.52
Year ended December
31, 1997............. $2.32 $2.26 $ .75 $11.80
Six Months ended June
30, 1998............. $1.31 $1.31 $ .49 $12.42
</TABLE>
- --------
(1) Pro forma data reflecting the Merger and certain other acquisitions are not
presented because such acquisitions individually and combined do not have a
significant effect on the data as presented. On January 29, 1998, NCBC
acquired First Citizens Bancshares Company, a one bank holding company
located in Marion, Arkansas. In connection therewith, NCBC issued 557,582
shares of NCBC Common Stock (after giving effect to a two-for-one stock
split effective July 1, 1998). On March 31, 1998, NCBC acquired Bancshares
of West Memphis, a one bank holding company located in West Memphis,
Arkansas. In connection therewith, NCBC issued 1,699,920 shares of NCBC
Common Stock (after giving effect to a two-for-one stock split effective
July 1, 1998). On August 1, 1998, NCBC acquired CBC Bancshares, Inc., a one
bank holding company located in Collierville, Tennessee. In connection
therewith, NCBC issued 534,531 shares of NCBC Common Stock. Acquisitions
accounted for under the pooling of interests accounting method are included
for all periods presented, while acquisitions accounted for under the
purchase accounting method are included from the date of acquisition.
(2) Represents NCBC data equivalent to one share of FCB Common Stock computed
by multiplying NCBC historical data by the Exchange Ratio.
(3) Net income per common share (basic) is based on the average number of
common shares outstanding during the periods presented. Diluted net income
per common share incudes an adjustment for the assumed conversion of all
potentially dilutive securities.
(4) NCBC declared quarterly dividends per common share of $.06 beginning the
fourth quarter of 1996. In the fourth quarter of 1997, the dividend was
increased to $.07 per common share. On July 9, 1998 the NCBC Board of
Directors declared a quarterly dividend of $.08 per common share.
(5) FCB's management has for the past two years declared dividends. In 1997, a
2% stock dividend was declared, which resulted in the issuance of 8,258
shares. In 1996, a cash dividend of $139,531 in the aggregate ($.30 per
share of FCB Common Stock) was declared. The Merger Agreement restricts the
right of FCB to declare dividends. Thereunder, FCB is prohibited from
declaring or paying dividends or making any other distribution in respect
of FCB Common Stock, with the exception of a cash dividend, which the
parties have agreed will be $.49 per share of FCB Common Stock outstanding,
the declaration date of which shall be before 30 days prior to the
consummation of the Merger. The right of FCB to declare and pay such
dividend is subject to certain restrictions. See "The Merger--Covenants;
Conditions; Representations and Warranties; Amendment and Termination."
8
<PAGE>
RISK FACTORS
TRANSFER OF CONTROL TO NCBC
FCB Shareholders currently control FCB through their ability to elect the
Board of Directors of FCB and to vote on various matters affecting FCB. The
Merger will transfer control of FCB from the FCB Shareholders to NCBC. As of
the Effective Time, the FCB Shareholders will become shareholders of NCBC, a
multi-bank holding company. As a result of the Merger, the former FCB
Shareholders will no longer have the ability to control or influence the
management policies of FCB's operations, and as shareholders of NCBC their
ability to influence the management policies of NCBC will be limited due to
the fact that they will hold a relatively small percentage of the voting stock
of NCBC.
COMPETITION
NCBC's banking subsidiaries compete with other banking institutions on the
basis of service, convenience and, to some extent, price. Due in part to both
regulatory changes and consumer demands, banks have experienced increased
competition from other financial entities offering similar products.
Competition from both bank and non-bank organizations is expected to continue.
RISK FROM GENERAL ECONOMIC CONDITIONS
In addition, general economic conditions impact the banking industry. The
credit quality of NCBC's loan portfolio necessarily reflects, among other
matters, the general economic conditions in the areas in which it conducts its
business. The continued financial success of NCBC and its subsidiaries depends
somewhat on factors which are beyond NCBC's control, including national and
local economic conditions, the supply and demand for investable funds,
interest rates and federal, state and local laws affecting these matters. Any
substantial deterioration in any of the foregoing conditions could have a
material adverse effect on NCBC's financial condition and results of
operations, which, in all likelihood, would adversely affect the market price
of NCBC Common Stock. See "Summary--Market Prices of NCBC and FCB Common
Stock."
LESS ATTRACTIVE ACQUISITION TARGET
The NCBC Charter and Bylaws contain several provisions which may make NCBC a
less attractive target for acquisition by any entity that who does not have
the support of NCBC's Board of Directors. Such provisions include, among other
things, the requirement of a supermajority vote of shareholders or directors
to approve certain business combinations and other corporate actions, a
minimum price provision, several special procedural rules, a staggered Board
of Directors, and the limitation that shareholder actions without a meeting
may only be taken by unanimous written shareholder consent. FCB's Articles of
Incorporation and Bylaws contain similar restrictions, although under Georgia
law FCB's shareholders may take action without a meeting only by unanimous
written consent unless otherwise provided in the bylaws. See "Comparison of
Rights of FCB and NCBC Shareholders--Charter and Bylaw Provisions Affecting
NCBC Common Stock."
9
<PAGE>
INFORMATION CONCERNING THE MEETING
THE MEETING
The Meeting will be held at the main office of the Bank at 827 Joe Frank
Harris Parkway, S.E., Cartersville, Georgia 30120, on , 1998 at p.m.,
local time. The purpose of the Meeting is to consider and vote upon the
approval and adoption of the Merger Agreement. Only holders of FCB Common
Stock of record at the close of business on the Record Date will be entitled
to receive notice of and to vote at the Meeting. As of the Record Date, there
were [430,204] shares of FCB Common Stock outstanding and entitled to vote,
with each such share entitled to one vote.
VOTE REQUIRED
Under the GBCC, the affirmative vote of the holders of a majority of the
outstanding shares of FCB Common Stock entitled to vote is required to approve
and adopt the Merger Agreement. On the Record Date, there were approximately
816 holders of record of FCB Common Stock. On such date, the directors and
officers of FCB and their affiliates beneficially owned, and expressed their
intent to vote in favor of the Merger, a total of approximately [33.45%] of
the outstanding shares of FCB Common Stock. At the date of this Proxy
Statement/Prospectus, neither NCBC nor any of its affiliates owned any of the
outstanding shares of FCB Common Stock.
VOTING OF PROXIES
Shares of FCB Common Stock represented by properly executed proxies received
at or prior to the Meeting will be voted at the Meeting in the manner
specified by the holders of such shares. Properly executed proxies which do
not contain voting instructions will be voted FOR approval and adoption of the
Merger Agreement. Any stockholder present in person or by proxy (including
broker non-votes) at the Meeting who abstains from voting will be counted for
purposes of determining whether a quorum exists. With respect to all matters
considered at the Meeting, an abstention (or broker non-vote) has the same
effect as a vote AGAINST the proposal.
If any other matters are properly presented at the Meeting, the person or
persons named in the form of proxy enclosed with this Proxy
Statement/Prospectus and acting thereunder will have discretion to vote on
such matters in accordance with their best judgment, unless the proxy
indicates otherwise. FCB has no knowledge of any matters to be presented at
the Meeting, other than the matters described in this Proxy
Statement/Prospectus.
REVOCABILITY OF PROXIES
The grant of a proxy on the enclosed form of proxy does not preclude an FCB
Shareholder from voting in person or otherwise revoking a proxy. Attendance at
the meeting will not in and of itself constitute revocation of a proxy. An FCB
Shareholder may revoke a proxy at any time prior to its exercise by delivering
to Danny F. Dukes, Secretary of FCB, a duly executed revocation or proxy
bearing a later date or by voting in person at the Meeting.
SOLICITATION OF PROXIES
FCB will bear the cost of the solicitation of proxies in connection with the
Meeting, except that NCBC will bear a portion of the filing fees payable in
connection with the Registration Statement of which this Proxy
Statement/Prospectus is a part and this Proxy Statement/Prospectus and
printing costs incurred in connection with the printing of such Registration
Statement and this Proxy Statement/Prospectus based on the relative asset
sizes of the parties at December 31, 1997. In addition to solicitation by
mail, the directors, officers and employees of FCB may solicit proxies by
telephone or telegram or in person. Such persons will not be additionally
compensated, but will be reimbursed for reasonable out-of-pocket expenses
incurred in connection with such solicitation. Arrangements may also be made
with brokerage firms, nominees, fiduciaries and other custodians, for the
forwarding of solicitation materials to the beneficial owners of shares held
of record by such persons, and FCB will reimburse such persons for their
reasonable out-of-pocket expenses in connection therewith.
OTHER MATTERS TO BE CONSIDERED
It is not anticipated that any matter other than matters described above
will be brought before the Meeting.
10
<PAGE>
THE MERGER
The descriptions of the terms and conditions of the Merger, the Merger
Agreement, and any related documents in this Proxy Statement/Prospectus are
qualified in their entirety by reference to the copy of the Merger Agreement
attached as Appendix I to this Proxy Statement/Prospectus, to the Georgia
statute governing dissenters' rights, a copy of which is attached as Appendix
III to this Proxy Statement/Prospectus, to the Registration Statement of which
this Proxy Statement/Prospectus is a part and to the exhibits to the
Registration Statement.
GENERAL
Subject to the terms of the Merger Agreement, FCB will be merged with and
into NCBC in accordance with Georgia law. NCBC will be the surviving
corporation of the Merger and the separate existence of FCB will cease
following the Merger. The Bank will become a wholly owned subsidiary of NCBC
as a result of the Merger. If all conditions to consummation of the Merger are
satisfied or waived, unless the Merger Agreement is terminated in accordance
with its terms, Articles of Merger reflecting the Merger will be filed with
the Secretary of State of the State of Georgia, and the Merger will then
become effective at the Effective Time. It is presently contemplated that the
Effective Time will occur as soon as practicable after the Meeting and the
receipt of the approval of the FRB and the Georgia Department of Banking and
Finance and the expiration of the statutory Department of Justice 30-day
waiting period following FRB approval, subject to the conditions described
under "The Merger--Covenants; Conditions; Representations and Warranties;
Amendment and Termination."
At the Effective Time, each of the issued and outstanding shares of FCB
Common Stock (other than treasury shares and shares held by FCB Shareholders
who perfect their dissenters' rights) will be converted, without any action on
the part of the holders of those shares, into the right to receive 3.2684
shares of NCBC Common Stock. FCB Shareholders who properly exercise and
perfect their dissenters' rights under the GBCC will be paid the statutory
fair value of their shares in cash. In the event NCBC changes the number of
shares of NCBC Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend or similar recapitalization, and
the record date therefor is prior to the Effective Time, the ratio under which
shares of FCB Common Stock will be converted into shares of NCBC Common Stock
will be proportionally adjusted. Furthermore, at the Effective Time, all
rights with respect to FCB Common Stock pursuant to stock options ("FCB
Options") granted by FCB under its qualified stock options plans, its
employment agreement with J. Steven Walraven, the President of the Bank, and
incentive stock option plan (collectively, the "FCB Option Plans"), which are
outstanding at the Effective Time, whether or not exercisable, shall be
converted into and become rights with respect to NCBC Common Stock.
On the date of this Proxy Statement/Prospectus, the closing sale price of a
share of NCBC Common Stock on the Nasdaq National Market tier was $[22.000].
Based on such price, the equivalent value of a share of FCB Common Stock would
be $[71.900] based on the Exchange Ratio. The market price of NCBC Common
Stock is subject to fluctuations and could be more or less than its market
price on the date of this Proxy Statement/Prospectus. Any such change will
cause a corresponding change in the equivalent value of a share of FCB Common
Stock. FCB SHAREHOLDERS ARE URGED TO OBTAIN UPDATED MARKET INFORMATION
CONCERNING NCBC COMMON STOCK.
No fractional shares of NCBC Common Stock will be issued as a result of the
Merger. In lieu of the issuance of fractional shares, each FCB Shareholder who
otherwise would be entitled to a fractional share of NCBC Common Stock will
receive a cash payment (without interest) equal to the product of the Current
Market Price Per Share ($21.52) multiplied by the fractional share of NCBC
Common Stock otherwise issuable.
BACKGROUND OF THE MERGER
The managements of NCBC and FCB began considering a potential combination in
March 1998. A letter of intent was finalized and executed as of April 9, 1998.
The Merger Agreement was approved by the FCB Board of Directors on August 3,
1998, and by the NCBC Board of Directors on April 22, 1998. The Merger
Agreement was executed on August 5, 1998.
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REASONS FOR THE MERGER; BOARD OF DIRECTORS' RECOMMENDATION
Reasons for the Merger. The Board of Directors of FCB believes that the
Merger is in the best interests of FCB and the FCB Shareholders. The market
value of the NCBC Common Stock to be issued in the Merger represents a
substantial premium over the book value of FCB Common Stock. The dividends
currently paid on the 3.2684 shares of NCBC Common Stock into which each share
of FCB Common Stock would be converted are greater than those currently paid
on FCB Common Stock. Furthermore, for the first time, FCB Shareholders will
have substantial liquidity in their investment because, unlike FCB Common
Stock, NCBC Common Stock is listed and actively traded. The Merger also will
allow the FCB Shareholders to own shares in NCBC, which has significantly
greater financial resources and many more banking locations in more
diversified markets than FCB has at the present time and can expect to have in
the future. Additionally, after the Merger, the resources of NCBC should
enable the Bank to enhance its services to its customers and the northern
Georgia community in which it operates.
The Board of Directors of NCBC also believes that the Merger is in the best
interests of NCBC and the NCBC shareholders. The Merger will allow NCBC to
establish a "hub" for NCBC's network of in-store supermarket branches in
Georgia, and should enable NCBC to facilitate expansion in the fast-growing
market of northern Georgia. In addition, FCB has a strong commercial loan base
which should enable NCBC to augment its small business and commercial lending
services in the region.
FCB entered into the Merger Agreement after consideration of various factors
affecting the determination of the value for FCB Common Stock in the context
of a merger transaction, including among other factors the histories,
financial conditions, results of operations, and dividend records of FCB and
NCBC, and the business prospects of FCB, both separately and as a combined
entity with NCBC. In addition, the Board of Directors of FCB considered the
effect of the Merger on the employees, customers and suppliers of FCB and the
Bank and on the community where the Bank currently operates. The terms of the
Merger Agreement are the result of arms-length negotiations between FCB and
NCBC.
Board of Directors' Recommendation. The Board of Directors of FCB believes
that the proposed Merger is in the best interests of FCB and the FCB
Shareholders and recommends that FCB Shareholders vote for approval and
adoption of the Merger Agreement. The Board of Directors of FCB approved the
Merger Agreement at its meeting on August 3, 1998, which was attended by eight
of ten FCB directors.
OPINION OF FINANCIAL ADVISOR TO FCB
FCB retained Morgan Keegan & Company, Inc. ("Morgan Keegan") as its
financial advisor to render an opinion to the FCB Board of Directors
concerning the fairness, from a financial point of view, to FCB Shareholders
of the Exchange Ratio pursuant to the Agreement. Morgan Keegan was retained by
FCB on the basis of, among other things, its experience and expertise in the
bank and thrift industries. As part of its investment banking business, Morgan
Keegan is regularly engaged in the valuation of businesses and securities in
connection with mergers and acquisitions, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for various purposes.
On August 7, 1998 Morgan Keegan delivered its written opinion to the Board
of Directors of FCB to the effect that, as of August 7, 1998 and based upon
and subject to certain matters stated in such opinion, the Exchange Ratio is
fair, from a financial point of view, to FCB Shareholders.
The full text of the written opinion of Morgan Keegan, which sets forth the
assumptions made, matters considered and limitations on the review undertaken,
is attached hereto as Appendix II and is incorporated herein by reference. FCB
Shareholders are urged to read this opinion carefully in its entirety. Morgan
Keegan's opinion is directed only to the fairness to the FCB Shareholders,
from a financial point of view, of the Exchange Ratio and does not address any
other aspect of the Merger or related transactions and does not constitute a
recommendation to any stockholder as to how such stockholder should vote at
the Meeting. The summary of the opinion of Morgan Keegan set forth in this
Proxy Statement/Prospectus is qualified in its entirety by reference to the
full text of such opinion.
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In arriving at its opinion, Morgan Keegan reviewed the Merger Agreement and
held discussions with certain senior officers, directors and other
representatives and advisors of FCB and certain senior officers and other
representatives and advisors of NCBC concerning the businesses, operations and
prospects of FCB and NCBC. Morgan Keegan examined certain publicly available
business and financial information relating to FCB and NCBC as well as certain
financial forecasts and other data for FCB and NCBC which were provided to
Morgan Keegan by or otherwise discussed with the respective management teams
of FCB and NCBC, including information relating to certain strategic
implications and operational benefits anticipated from the Merger. Morgan
Keegan reviewed the financial terms of the Merger as set forth in the Merger
Agreement in relation to, among other things: current and historical market
prices and trading volumes of FCB and NCBC Common Stock; the historical and
projected earnings and operating data of FCB and NCBC; and the capitalization
and financial condition of FCB and NCBC. Morgan Keegan considered, to the
extent publicly available, the financial terms of certain other similar
transactions recently effected which Morgan Keegan considered relevant in
evaluating the Merger and analyzed certain financial, stock market and other
publicly available information relating to the businesses of other companies
whose businesses Morgan Keegan considered relevant in evaluating those of FCB
and NCBC. Morgan Keegan also considered the relative contributions of FCB and
NCBC to the combined company. In addition to the foregoing, Morgan Keegan
conducted such other analyses and examinations and considered such other
financial, economic and market criteria as Morgan Keegan deemed appropriate to
arrive at its opinion. Morgan Keegan noted that its opinion was necessarily
based upon information available, and financial, stock market and other
conditions and circumstances existing and disclosed, to Morgan Keegan as of
the date of its opinion.
In conducting its review and rendering its opinion, Morgan Keegan assumed
and relied, without independent verification, upon the accuracy and
completeness of all financial and other information publicly available or
furnished to or otherwise reviewed by or discussed with Morgan Keegan. With
respect to financial forecasts and other information provided to or otherwise
reviewed by or discussed with Morgan Keegan, the management teams of FCB and
NCBC advised Morgan Keegan that such forecasts and other information were
reasonably prepared on a basis reflecting the best currently available
estimates and judgements of the respective management teams of FCB and NCBC as
to the future financial performance of FCB and NCBC and the strategic
implications and operational benefits anticipated from the Merger. Morgan
Keegan assumed, with the consent of the Board of Directors of FCB, that the
Merger will be accounted for as a pooling of interests in accordance with
generally accepted accounting principles and as a tax-free reorganization for
federal income tax purposes. Morgan Keegan did not express any opinion as to
what the value of NCBC Common Stock actually will be when issued pursuant to
the Merger or the price at which NCBC Common Stock will trade subsequent to
the Merger. In addition, Morgan Keegan did not make or obtain an independent
evaluation or appraisal of the assets or liabilities (contingent or otherwise)
of FCB or NCBC nor did Morgan Keegan make any physical inspection of the
properties or assets of FCB or NCBC. Morgan Keegan was not asked to consider,
and its opinion does not address, the relative merits of the Merger as
compared to any alternative business strategies that might exist for FCB or
the effect of any other transaction in which FCB might engage. Although Morgan
Keegan evaluated the Exchange Ratio from a financial point of view, Morgan
Keegan was not asked to and did not recommend the specific consideration
payable in the Merger, which was determined by FCB and NCBC through arms-
length negotiations. No other limitations were imposed by FCB on Morgan Keegan
with respect to the investigations made or procedures followed by Morgan
Keegan in rendering its opinion.
The following is a summary of the principal analyses performed by Morgan
Keegan in connection with its opinion.
Summary Transaction Analysis. Morgan Keegan reviewed the terms of the
proposed transaction, including the Exchange Ratio and the aggregate
transaction value. Morgan Keegan reviewed the implied value of the
consideration offered based upon a market price per share of $43.038 which is
the average of the closing price per share of NCBC Common Stock on the Nasdaq
National Market (as reported by The Wall Street Journal) during the five (5)
trading day period from April 3, 1998, through April 9, 1998. Such market
price of $43.038 was then further adjusted to reflect the NCBC two-for-one (2
for 1) common stock split effective on July 1, 1998 to render a split-adjusted
market price per share of $21.519. This indicates an implied value of $70.3327
per
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share of FCB Common Stock (assuming 492,183 fully diluted outstanding shares
based on an exchange ratio of 3.2684 NCBC Common Stock shares for one share of
FCB Common Stock which includes any Common Stock Equivalents). The implied
aggregate transaction value is $34.62 million. Morgan Keegan calculated that
as of April 9, 1998, the aggregate transaction value represented 35.43% of the
total assets of FCB at March 31, 1998, 4.15x FCB's stated book value at March
31, 1998, and 22.94x FCB's earnings for the trailing twelve months ending
March 31, 1998.
Contribution Analysis. Morgan Keegan reviewed certain historical financial
and operating information for FCB, NCBC and the pro forma combined entity
resulting from the Merger based on financial data reported by FCB and NCBC.
Morgan Keegan analyzed the relative balance sheet contribution of FCB and NCBC
for certain data to the combined company on a pro forma basis as of March 31,
1998. This analysis indicated that FCB would have contributed 1.9% to combined
total assets, 2.4% to combined loans (net of allowances for losses), 2.3% to
deposits and 2.2% to tangible equity. Morgan Keegan also analyzed the relative
income statement contribution of FCB and NCBC for certain data to the combined
company on a pro forma basis. This analysis indicated that FCB would have
contributed 2.9% to combined net interest income for the latest twelve months
("LTM") ended March 31, 1998, 2.0% to combined pretax income and 2.0% to
combined net income. At the Exchange Ratio of one share of FCB Common Stock
for 3.2684 shares of NCBC Common Stock, the holders of outstanding FCB Common
Stock would own approximately 1.5% of NCBC on a fully diluted basis.
Comparable Company Analysis for FCB. Morgan Keegan reviewed and compared
certain financial information relating to FCB to corresponding financial
information, public market multiples and ratios for eight publicly traded
Georgia companies that it deemed to be comparable to FCB. The companies which
Morgan Keegan used for the purposes of this analysis were First Sterling Banks
Inc., Golden Isle Financial Holdings, Inc., Habersham Bancorp, Merit Holding
Corporation, PAB Bankshares, Inc., Savannah Bancorp, Inc., Southwest Georgia
Financial Corporation, and Summit Bank Corporation (collectively, the
"Comparable Companies"). Morgan Keegan calculated a range of market multiples
for the Comparable Companies by dividing market value as of August 4, 1998 by
each such company's LTM earnings per share ended March 31, 1998 and tangible
book value reported March 31, 1998. This analysis indicated that the price per
share/earnings multiples ("P/E") for LTM EPS ranged from 12.70x to 27.95x,
with a mean of 20.42x and a median of 19.83x. Using balance sheet data as of
March 31,1998, Morgan Keegan's analysis of the Comparable Companies indicated
market value multiples of tangible book value that ranged from 1.43x to 4.20x,
with a mean of 2.50x and a median of 2.50x. Given that FCB Common Stock is
thinly traded, Morgan Keegan did not calculate market value multiples for FCB.
For the LTM results ending March 31, 1998, Morgan Keegan also compared certain
ratios (including, among other things, return on latest assets; return on
latest equity; loan loss reserve to total loans; total equity capital to total
assets; and total loans to total deposits) of the Comparable Companies to FCB.
For the Comparable Companies, the analysis indicated a return on latest assets
range of 0.57% to 1.64%, with a mean of 1.24% and a median of 1.31%, compared
with a 1.54% for FCB; a return on latest equity range of 7.34% to 15.02%, with
a mean of 12.30% and a median of 12.77% for the Comparable Companies, compared
to 18.10% for FCB; and a loan loss reserve to total loans range of 1.13% to
1.69%, with a mean of 1.47% and a median of 1.54% for the Comparable
Companies, compared to a 1.82% for FCB. Additionally, the analysis indicated a
total equity capital to total assets range of 7.73% to 12.30%, with a mean of
9.97% and a median of 9.47% for the Comparable Companies, compared to 8.53%
for FCB; and a total loans to total deposits range of 64.79% to 95.63%, with a
mean of 75.79% and a median of 73.24% for the Comparable Companies, compared
to a 78.89% for FCB.
Comparable Company Analysis for NCBC. Morgan Keegan reviewed and compared
certain financial information relating to NCBC to corresponding financial
information, public market multiples and ratios for eight publicly traded
Southeastern banking companies that it deemed to be comparable to NCBC. The
companies which Morgan Keegan used for purposes of this analysis were
BancorpSouth, Inc., CCB Financial Corporation, Centura Banks, Inc.,
Cullen/Frost Bankers, Inc., International Bancshares Corporation, One Valley
Bancorp, Inc. Trustmark Corporation, and Whitney Holding Corporation
(collectively, the "NCBC Comparable Companies"). Morgan Keegan calculated a
range of market multiples for the NCBC Comparable Companies by dividing
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market value as of August 4, 1998 by each such company's EPS for the latest
twelve months ending March 31, 1998 and tangible book value as of March 31,
1998. This analysis indicated that the price per share/earnings multiples
("P/E") for LTM EPS ranged from 16.40x to 22.16x, with a mean of 18.77x and a
median of 17.95x, compared to a 30.16x for NCBC. Using balance sheet data
reported March 31, 1998, Morgan Keegan's analysis of the NCBC Comparable
Companies indicated market value multiples of tangible book value that ranged
from 2.07x to 3.74x, with a mean of 2.82x and a median of 2.45x, compared to
6.09x for NCBC. For the LTM results ending March 31, 1998, Morgan Keegan also
compared certain ratios (including, among other things, return on latest
assets; return on latest equity; loan loss reserve to total loans; total
equity capital to total assets; and total loans to total deposits) of the NCBC
Comparable Companies to NCBC. For the NCBC Comparable Companies, the analysis
indicated a return on latest assets range of 1.07% to 1.36%, with a mean of
1.19% and a median of 1.16%, compared to 1.50% for NCBC; a return on latest
equity range of 11.85% to 21.20% with a mean of 14.75% and a median of 13.47%
for the NCBC Comparable Companies, compared to 20.18% for NCBC; and a loan
loss reserve to total loans range of 1.34% to 2.08%, with a mean of 1.56% and
a median of 1.48% for the NCBC Comparable Companies, compared to a 1.64% for
NCBC. Additionally, the analysis indicated a total equity capital to total
assets range of 5.44% to 10.89%, with a mean of 8.39% and a median of 8.61%
for the NCBC Comparable Companies, compared to 7.41% for NCBC; and a total
loans to total deposits range of 43.72% to 86.72%, with a mean of 73.03% and a
median of 77.09% for the NCBC Comparable Companies, compared to 77.49% for
NCBC.
Stock Trading Analysis. Morgan Keegan reviewed and analyzed the price
performance and the historical trading volume for NCBC's Common Stock.
Morgan Keegan's analysis indicated that for the five-year period ending
December 31, 1997, the compounded annual growth rate for NCBC was 29.98%
compared to 31.34% for the Nasdaq Banking Stocks, 18.33% for the Nasdaq
Composite, 17.37% for the S&P 500, and 22.76% for the S&P Bank Composite.
Additionally, Morgan Keegan compared recent trading volume in NCBC's Common
Stock to that of its NCBC Comparable Companies. During the four quarters
ending March 31, 1998, the quarterly trading volume as a percentage of average
outstanding diluted shares for the NCBC Comparable Companies ranged from 0.87%
to 20.73%, with a mean of 6.74% and a median of 6.12%. During the same period,
the quarterly trading volume as a percentage of average outstanding diluted
shares for NCBC ranged from 16.07% to 24.93%, with a mean of 20.83% and a
median of 21.16%. Morgan Keegan considers NCBC to be liquid and marketable.
Morgan Keegan also examined recent transactions involving FCB's stock, which
is privately and relatively thinly traded. Morgan Keegan placed little weight
on the market price of FCB's stock in its analysis.
Analysis of Selected Comparable Mergers and Acquisitions. In order to assess
market pricing for comparable mergers, Morgan Keegan reviewed overall merger
transactions in the banking industry. Morgan Keegan selected 32 transactions
occurring between July 1, 1997, and July 22, 1998, involving selling banks
located within the state of Georgia with total assets between $32 million and
$540 million. No transaction was considered identical to the Merger;
therefore, the medians of the overall transaction multiples were considered
more relevant than the multiples for any specific transaction. Morgan Keegan
calculated market value multiples of LTM net income ranging from 12.59x to
34.35x, with a mean of 21.24x and a median of 21.35x, latest reported book
value ranging from 1.14x to 5.59x, with a mean of 2.88x and a median of 2.72x
and latest reported total assets ranging from 11.6% to 60.6%, with a mean of
27.5% and a median of 25.4%. FCB's transaction multiples are 22.94x latest
twelve months earnings for the period ending March 31, 1998, 4.15x stated book
value as of March 31, 1998, and 35.4% of total assets as of March 31, 1998.
No company or transaction used in the comparable companies and comparable
transactions analyses for comparative purposes is identical to FCB or the
Merger. Accordingly, an analysis of the results of the foregoing necessarily
involves complex considerations concerning differences in financial and
operating characteristics of the companies and other factors. Mathematical
analysis (such as determining the average or median) is not, in itself, a
meaningful method of using comparable company or transaction data.
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Discounted Cash Flow Analysis. Morgan Keegan performed a discounted cash
flow analysis of the projected cash flow available for dividends of FCB for
fiscal years 1998 through 2002, based on projections provided by FCB
management. Using this information, Morgan Keegan calculated a range of equity
values for FCB based on the sum of (a.) the present value of the cash flow
available for dividends to FCB and (b.) the present value of the estimated
terminal value for FCB assuming that it was sold at the end of fiscal year
2002. In performing its discounted cash flow analysis, Morgan Keegan assumed,
among other things, discount rates of 11.0% to 13.0% and terminal multiples of
net income of 14.0x to 16.0x. Those discount rates and terminal multiples
reflect Morgan Keegan's qualitative judgements concerning the specific risk
associated with such an investment and the historical and projected operating
performance of FCB. This analysis resulted in a range of equity values for FCB
of $26.95 million to $27.74 million, or $54.75 to $56.36 per share.
The summary of the Morgan Keegan opinion set forth above does not purport to
be a complete description of the analyses performed by Morgan Keegan. The
preparation of a fairness opinion is not necessarily susceptible to partial
analysis or summary description. Morgan Keegan believes that its analyses and
the summary set forth above must be considered as a whole and that selecting
portions of its analyses, without considering all analyses, or of the above
summary, without considering all factors and analyses, would create an
incomplete view of the process underlying the analyses set forth in the
opinion. In addition, Morgan Keegan may have deemed various assumptions more
or less probable than other assumptions, so that the ranges of valuations
resulting from any particular analysis described above should not be taken to
represent the actual value of FCB or the combined company.
In performing its analyses, Morgan Keegan made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of FCB or NCBC. The
analyses performed by Morgan Keegan 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 Morgan Keegan's analysis of the fairness, from a financial point of
view, of the consideration to be paid by NCBC. 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.
FCB has agreed to pay Morgan Keegan a retainer fee of $20,000 and,
contingent upon the closing of the Merger, a success fee of 0.5% of the
aggregate Merger consideration pursuant to an engagement letter. FCB has also
agreed to reimburse Morgan Keegan for its reasonable out-of-pocket expenses
and to indemnify Morgan Keegan against certain liabilities, including
liabilities under the federal securities laws.
EXCHANGE OF CERTIFICATES REPRESENTING FCB COMMON STOCK
Promptly after the Effective Time, NCBC shall cause Bank of New York, the
exchange agent for NCBC Common Stock (the "Exchange Agent"), to mail to each
holder of record of any of the issued and outstanding shares of FCB Common
Stock immediately prior to the Effective Time materials that will contain
instructions with respect to the surrender of certificates representing shares
of FCB Common Stock and the distribution of certificates representing shares
of NCBC Common Stock. Shares of FCB Common Stock will be surrendered to the
Exchange Agent.
Upon surrender to the Exchange Agent of one or more certificates for shares
of FCB Common Stock for cancellation, together with properly completed
transmittal materials, the Exchange Agent will distribute to each FCB
Shareholder a certificate representing the shares of NCBC Common Stock into
which the holder's shares of FCB Common Stock have been converted, together
with all undelivered dividends or distributions in respect of such shares
(without interest thereon). Cash will be paid in lieu of the issuance of
fractional shares of NCBC Common Stock. FCB Shareholders will not be entitled
to receive interest on any such cash to be received in the Merger. See "--
General."
Until they have surrendered their FCB Common Stock certificates for
exchange, FCB Shareholders will not be entitled to receive any dividends or
other distributions that may be declared and payable to holders of record of
NCBC Common Stock. Upon the surrender of FCB Common Stock certificates,
however, NCBC Common
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Stock certificates (together with all such withheld dividends or other
distributions with respect to the certificates, without interest) and any
withheld cash payment for a fractional share interest will be delivered and
paid (without interest). Neither NCBC nor the Exchange Agent will be liable to
a FCB Shareholder for any NCBC Common Stock or dividends thereon delivered in
good faith to a public official in accordance with any state's abandoned
property, escheat, or other similar law. After the Effective Time,
certificates representing shares of FCB Common Stock converted in the Merger
into NCBC Common Stock will be deemed for all other corporate purposes to
evidence ownership of the shares of NCBC Common Stock into which they were
converted.
COVENANTS; CONDITIONS; REPRESENTATIONS AND WARRANTIES; AMENDMENT AND
TERMINATION
FCB Covenants. Pursuant to the Merger Agreement, during the period from the
date of the Merger Agreement and continuing until the Effective Time, FCB has
agreed to operate its business only in the usual, regular and ordinary course
and has agreed not to take certain actions (unless expressly contemplated in
the Merger Agreement) without the prior written consent of NCBC, including,
among other things: (i) amending its Articles of Incorporation, Bylaws or
other governing instruments; (ii) incurring any additional debt obligation or
other obligation for borrowed money in excess of an aggregate of $100,000,
except in the ordinary course of business consistent with past practices, or
imposing, or suffering the imposition, on any asset of any lien or permitting
any such lien to exist on any of its assets; (iii) directly or indirectly
redeeming, repurchasing, or otherwise acquiring any of its capital stock; (iv)
declaring or paying any dividend, or making any other distribution in respect
of FCB's capital stock, with the exception of a cash dividend, which the
parties have agreed will be $.49 per share of FCB Common Stock, the
declaration date of which shall be on or before 30 days prior to the Effective
Time; provided, however, that the declaration and payment of such dividend
shall not (x) prevent the Merger from qualifying for pooling of interests
accounting treatment or (y) result in a total consolidated stockholder's
equity of FCB of less than $8,330,000; (v) issuing, selling, pledging,
encumbering, authorizing the issuance of, entering into any contract to issue,
sell, pledge, encumber or authorize the issuance of or otherwise permitting to
become outstanding any additional shares of FCB Common Stock or any other
capital stock of FCB except pursuant to its employee or non-employee director
stock option plans; (vi) adjusting, splitting, combining or reclassifying any
capital stock or issuing or authorizing the issuance of any other securities
in respect of or in substitution for shares of FCB Common Stock or selling,
leasing, mortgaging or otherwise disposing of or otherwise encumbering any
shares of capital stock of any subsidiary or any asset having a book value in
excess of $25,000, other than in the ordinary course of business for
reasonable and adequate consideration; (vii) except for purchases of certain
marketable securities, purchasing any securities or making any material
investment in any person other than a wholly owned subsidiary or otherwise
acquiring direct or indirect control over any other persons, except in the
ordinary course of business; (viii) making any significant change in any tax
or accounting methods or systems of internal accounting controls, except as
may be appropriate to conform to changes in tax laws or regulatory accounting
requirements or generally accepted accounting principles; or (ix) entering
into, modifying, amending or terminating any material contract or waiving,
releasing, compromising or assigning any material rights or claims, except in
accordance with past practice. FCB also has agreed not to take certain
enumerated actions relating to the conduct of its business or pertaining to
its employees and employee benefit arrangements.
In the Merger Agreement, FCB has agreed to cooperate in the preparation and
filing of the Registration Statement and the distribution of this Proxy
Statement/Prospectus. The Board of Directors of FCB is required to recommend
(subject to compliance with their fiduciary duties as advised by counsel) to
the FCB Shareholders approval of the matters submitted for approval in
connection with the Merger. The Board of Directors and the officers are
obligated (subject to compliance with their fiduciary duties as advised by
counsel) to use their reasonable efforts to obtain the approval of the FCB
Shareholders of the Merger Agreement, and to take all appropriate actions to
cause the Merger to be consummated.
Conditions to Consummation of the Merger. The obligations of FCB and NCBC to
consummate the Merger are conditioned upon the following: (i) approval of the
Merger Agreement by FCB Shareholders owning a majority of the outstanding
shares of FCB Common Stock under applicable law; (ii) approval of the Merger
by the FRB, and the absence of any objection by the United States Justice
Department and approval of the Merger
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by the Georgia Department of Banking and Finance; (iii) each party shall have
obtained all consents required for the consummation of the Merger or for
preventing any default under any contract or permit, which if such consent is
not obtained or made would be reasonably likely to have a material adverse
effect; (iv) no court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any law or order that
prohibits, restricts or makes illegal consummation of the Merger; (v) no stop
orders suspending the effectiveness of the Registration Statement of which
this Proxy Statement/Prospectus is a part shall have been issued, no action,
suit, proceeding or investigations by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities laws or the Securities Act or the Exchange
Act relating to the issuance of trading of the shares of NCBC Common Stock
pursuant to the Merger shall have been received; and (vi) the shares of NCBC
Common Stock to be issued pursuant to the Merger shall have been approved for
listing on the Nasdaq National Market tier, subject to official notice of
issuance. Consummation of the Merger by the parties is subject to the further
conditions, including among others, that: (i) the representations and
warranties of FCB and NCBC contained in the Merger Agreement must be true and
correct in all material respects as of the Closing Date, and the various
covenants of FCB and NCBC must have been duly performed and complied with
pursuant to the Merger Agreement and (ii) NCBC and FCB must have received
certain legal opinions dated the Closing Date. In addition to the conditions
described in the preceding sentence, the obligation of NCBC to consummate the
Merger is subject the following conditions: (i) exclusive of gains or losses
on transactions in securities, total consolidated stockholders equity of FCB
at the Closing Date shall not be less than $8,330,000; (ii) FCB shall own,
free and clear of any liens, not less than 100.0% of the outstanding capital
stock of the Bank; (iii) from and after December 31, 1997, neither FCB nor the
Bank shall have consummated any extraordinary sale of assets nor any material
investment portfolio restructuring; and (iv) certain FCB officers shall have
entered into non-compete agreements with NCBC and the Bank.
It is anticipated that the foregoing conditions will be complied with but
FCB and NCBC may waive any condition to their obligations to consummate the
transaction, except requisite approvals of shareholders and regulatory
authorities. The Merger Agreement may be terminated by any of the parties if
all of the conditions to closing have not been satisfied or waived on or
before November 30, 1998.
Representations and Warranties. The Merger Agreement contains a number of
representations and warranties by NCBC and FCB. The material accuracy of all
those representations and warranties as of the Closing Date is a condition to
the obligation of each company to consummate the Merger. The representations
and warranties relate to matters such as the organization of each company, the
authority of each company to transact its business, to enter into the Merger
Agreement and to consummate the transactions contemplated by the Merger
Agreement, the capitalization of each company, the filing of certain reports
by each company with regulatory authorities and the presentation of
information contained in those reports, the absence of certain changes in
FCB's financial condition or business since December 31, 1997, the payment of
taxes and filing of tax returns, FCB's allowance for possible loan losses, the
absence of material litigation, the compliance with laws by each company, the
information provided by each company for use in the Registration Statement,
FCB's employee benefit plans and the employment contracts of FCB.
Amendment and Termination. The Merger Agreement may be amended by agreement
between FCB and NCBC, except that no amendment reducing the consideration
received by FCB Shareholders may be made unless approved by the FCB
Shareholders. The Merger Agreement may be terminated by either FCB or NCBC
upon the failure of conditions to be met on or before November 30, 1998. In
such event, the Merger Agreement will be of no further force or effect, and
neither party will have any further liability to the other.
RESALE OF NCBC COMMON STOCK BY AFFILIATES
NCBC Common Stock to be issued to FCB Shareholders in connection with the
Merger has been registered under the Securities Act and, upon consummation of
the Merger, will be freely transferable under the Securities Act, except for
shares issued to any person who may be deemed an "Affiliate" (as defined
below) of FCB within the meaning of Rule 145 under the Securities Act.
"Affiliates" are generally defined as persons who control, are controlled by,
or are under common control with FCB at the time of the Meeting (generally,
directors and certain
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executive officers of FCB and major shareholders of FCB). Generally, all
shares of NCBC Common Stock received by such Affiliates may not be sold by
them until NCBC publishes at least one full calendar month of the combined
results of operations of NCBC and FCB.
In addition, Affiliates of FCB may not sell their shares of NCBC Common
Stock acquired in connection with the Merger except pursuant to an effective
registration statement under the Securities Act covering such shares or in
compliance with Rule 145 or another applicable exemption from the registration
requirements of the Securities Act. In general, under Rule 145, for one year
following the Effective Time (the "Restricted Period"), an Affiliate (together
with certain related persons) is entitled to sell shares of NCBC Common Stock
acquired in connection with the Merger only through unsolicited "broker
transactions" or in transactions directly with a "market maker," as such terms
are defined in Rule 144 under the Securities Act. Additionally, the number of
shares that may be sold by an Affiliate (together with certain related persons
and certain persons acting in concert) within any three-month period during
the Restricted Period for purposes of Rule 145 may not exceed the greater of
(i) one percent of the outstanding shares of NCBC Common Stock or (ii) the
average weekly trading volume of such stock during the four calendar weeks
preceding such sale. Rule 145 is available to Affiliates only if NCBC remains
current with its information filings with the SEC under the Exchange Act.
Following the Restricted Period, an Affiliate may sell such NCBC Common Stock
free of such manner of sale or volume limitations, provided that NCBC was
current with its Exchange Act information filings and such Affiliate was not
then an Affiliate of NCBC. Two years after the Effective Time, an Affiliate
may sell shares of NCBC Common Stock without any restrictions so long as such
Affiliate was not and had not been for at least three months prior thereto, an
Affiliate of NCBC.
REGULATORY AND OTHER LEGAL CONSIDERATIONS
The Merger is subject to approval by the FRB under the Bank Holding Company
Act of 1956, as amended (the "BHC Act"). The BHC Act provides that the FRB
will not approve a transaction (a) which would result in a monopoly, or which
would be in furtherance of any combination or conspiracy to monopolize or to
attempt to monopolize the business of banking in any part of the United States
or (b) the effect of which in any section of the country may be substantially
to lessen competition, or to tend to create a monopoly, or which in any other
manner would be in restraint of trade, unless the FRB finds that the
anticompetitive effects of the proposed transaction are clearly outweighed in
the public interest by the probable effect of the transaction in meeting the
convenience and needs of the community to be served. In conducting its review
of any application for approval, the FRB is required to consider the financial
and managerial resources and future prospects of the company or companies and
the banks concerned, and the convenience and needs of the community to be
served. The BHC Act also requires the FRB to notify the Attorney General of
the United States of the approval of any transaction. Any action brought under
the antitrust laws by the Attorney General (acting through the Department of
Justice) arising out of any transaction must be commenced by the Department of
Justice prior to the earliest date the transaction could be consummated,
which, with certain limited exceptions, is 30 days after the FRB approval. The
BHC Act further requires that consummation of approved acquisitions or mergers
be delayed for a period of not less than 30 days following the date of FRB
approval during which time complaining parties may obtain a review of the
FRB's order by filing a petition requesting that the order be set aside in the
United States Court of Appeals for the District of Columbia Circuit, or in the
United States Court of Appeals for the circuit in which the complaining party
has its principal place of business. If no action based on the antitrust laws
is commenced before the termination of the 30-day period, the acquisition or
merger may not be attacked thereafter in any judicial proceeding on the ground
that it alone and of itself constituted a violation of any antitrust laws
other than Section 2 of the Sherman Antitrust Act.
The Merger is also subject to approval by the State of Georgia Department of
Banking and Finance (the "Department"). The procedure in Georgia is the same
to obtain permission to merge with a bank holding company and to acquire
control of a banking subsidiary. The Department will respond within 60 days
after receipt of a completed application. A completed application consists of
the following five items: (1) a copy of any form or documents regarding the
Merger filed with the FRB; (2) a letter from legal counsel to the applicant as
to whether any securities to be issued in the Merger are subject to
registration under either state or federal securities laws and that the
applicant is taking the necessary action to comply with any such applicable
laws;
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(3) a draft copy of any proposed proxy statements or offering circulars or
letters prepared in connection with the Merger; (4) a copy of the most recent
independent audit, if any and if not already on file with the Department, of
the applicant's books and records, performed by independent public
accountants; and (5) proof of publication of a notice containing a brief
description of the Merger and notice of a 30 day opportunity for comment,
required by the Department not more than 30 days prior to filing the
application. The Department, in approving an application, will consider
factors deemed relevant by the FRB, including, but not limited to,
capitalization, competence of management, the convenience and needs of the
applicable community, resulting market share of the surviving entity and
competitive factors.
The BHC Act discussed above provides for the publication of notices and the
administrative hearings relating to the federal or state filings noted above
and permits interested parties to intervene in the proceedings. If interested
parties intervene, administrative and judicial proceedings relating to both
federal and state filings could substantially delay the regulatory approvals
required for consummation of the Merger.
The management of NCBC does not believe that the consummation of the Merger
will violate any antitrust or applicable state laws, but there can be no
assurance that the FRB, the Department of Justice or other regulatory
authorities will concur in this assessment.
ACCOUNTING TREATMENT
NCBC will account for the Merger as a pooling of interests. Under the
pooling of interests method of accounting, the historical basis of the assets
and liabilities of NCBC and FCB will be combined at the Effective Time and
carried forward at their previously recorded amounts, the stockholders' equity
accounts of NCBC and FCB will be combined on the consolidated balance sheet of
NCBC and no goodwill or other intangible assets will be created. Consolidated
financial statements of NCBC issued after the Merger will be restated
retroactively to reflect the consolidated operations of NCBC and FCB as if the
Merger had taken place prior to the periods covered by such consolidated
financial statements.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain federal income tax consequences of the
Merger and the exchange by the holders of FCB Common Stock of such shares for
shares of NCBC Common Stock. This discussion does not address all aspects of
taxation that may be relevant to particular FCB Shareholders in light of their
personal investment or tax circumstances, or to certain types of FCB
Shareholders (including insurance companies, financial institutions, broker-
dealers, foreign corporations, persons who receive stock through the exercise
of stock options or otherwise as compensation for services rendered and
persons who are not citizens or residents of the United States) subject to
special treatment under the federal income tax laws, nor does it discuss any
state, local or foreign tax considerations. Accordingly, each FCB Shareholder
is urged to consult his or her own tax advisor as to the specific tax
consequences of the Merger, including the applicable federal, state, local and
foreign tax consequences of the Merger.
Neither NCBC nor FCB has requested or will receive an advance ruling from
the Internal Revenue Service (the "Service") as to the federal income tax
consequences of the Merger. Instead, King & Spalding, counsel to NCBC, will
deliver an opinion to FCB and NCBC relating to certain federal income tax
consequences of the Merger. Such opinion will be based upon certain
representations of fact provided by NCBC and FCB. Such representations of fact
will not be independently verified by King & Spalding. Such opinion will be
also based upon the Code, regulations thereunder, administrative rulings and
practice by the Service, and judicial authority, in each case existing at the
time such opinion is delivered. Any change in applicable law or pertinent
facts could affect the continuing validity of such opinion and this
discussion. In addition, a tax opinion is not binding upon the Service, and
there can be no complete assurance, and none is hereby given, that the Service
will not take a position which is contrary to one or more positions reflected
in the tax opinion, or that such opinion will be upheld by the courts if
challenged by the Service. However, NCBC and FCB have agreed in the Merger
Agreement not to take any action which would disqualify the Merger as a
reorganization which is tax-free to the FCB Shareholders pursuant to Section
368(a) of the Code. Based on the foregoing, it is anticipated that the tax
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opinion will state, among other matters, that: (i) the Merger will constitute
a reorganization within the meaning of Section 368(a) of the Code, and NCBC
and FCB will each be a party to the reorganization within the meaning of
Section 368(b) of the Code; (ii) no gain or loss will be recognized by NCBC or
FCB as a result of the Merger; (iii) no gain or loss will be recognized by the
FCB Shareholders upon the exchange of FCB Common Stock for NCBC Common Stock
pursuant to the Merger (except with respect to cash received in lieu of
fractional shares of NCBC Common Stock), or by the holders of FCB Options upon
the conversion of such options into rights with respect to NCBC Common Stock;
(iv) the receipt of cash in lieu of fractional shares of NCBC Common Stock
will be treated as if fractional shares were distributed as part of the
exchange and then were redeemed by NCBC; (v) a FCB Shareholder who perfects
his appraisal rights under Georgia law and who receives payment in cash for
the "fair value" of his shares of FCB Common Stock will be treated as having
exchanged such shares for cash in a redemption subject to Section 302 of the
Code, and the FCB Shareholder generally will recognize capital gain or loss in
such exchange equal to the difference between the cash received and the tax
basis of such shares; (vi) the aggregate tax basis of the shares of NCBC
Common Stock received by a FCB Shareholder pursuant to the Merger will be the
same as the aggregate tax basis of the shares of FCB Common Stock surrendered
in exchange therefor, excluding any basis allocable to a fractional share of
NCBC Common Stock for which cash is received; and (vii) the holding period of
the shares of NCBC Common Stock received by a FCB Shareholder will include the
holding period or periods of the shares of FCB Common Stock exchanged
therefor, provided that the shares of FCB Common Stock are held as a capital
asset within the meaning of Section 1221 of the Code at the Effective Time.
EACH HOLDER OF SHARES OF FCB COMMON STOCK IS URGED TO CONSULT SUCH HOLDER'S
PERSONAL TAX AND FINANCIAL ADVISORS AS TO THE SPECIFIC FEDERAL INCOME TAX
CONSEQUENCES TO SUCH HOLDER, BASED ON SUCH HOLDER'S OWN PARTICULAR STATUS AND
CIRCUMSTANCES, AND ALSO AS TO ANY STATE, LOCAL, FOREIGN OR OTHER TAX
CONSEQUENCES ARISING OUT OF THE MERGER.
THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN
TAX ASPECTS OF THE MERGER. THE DISCUSSION IS BASED ON CURRENTLY EXISTING
PROVISIONS OF THE CODE, EXISTING AND PROPOSED TREASURY REGULATIONS THEREUNDER
AND CURRENT ADMINISTRATIVE RULINGS AND COURT DECISIONS. ALL OF THE FOREGOING
ARE SUBJECT TO CHANGE AND ANY SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY
OF THIS DISCUSSION. EACH FCB SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX
ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO HIM OR
HER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN TAX
LAWS.
EXPENSES
All expenses incurred by or on behalf of the parties in connection with the
Merger Agreement and the transactions contemplated by the Merger Agreement are
to be borne by the party incurring the expense, except that NCBC and FCB shall
bear and pay the filing fees payable in connection with the Registration
Statement of which this Proxy Statement/Prospectus is a part and this Proxy
Statement/Prospectus and the printing costs incurred in connection with the
printing of such Registration Statement and this Proxy Statement/Prospectus
based on the relative asset sizes of the parties at December 31, 1997.
STOCK EXCHANGE LISTING
NCBC Common Stock is listed on the Nasdaq National Market tier. NCBC will
use its best efforts to cause the shares of NCBC Common Stock to be issued
under the Merger Agreement to be approved for listing on the Nasdaq National
Market tier, subject to official notice of issuance, prior to the Effective
Time.
NO SOLICITATION OF TRANSACTIONS; BREAK-UP FEE
Pursuant to the Merger Agreement, neither FCB nor any affiliate of FCB nor
any representatives thereof may directly or indirectly solicit or knowingly
encourage any exchange offer or any proposal for a merger,
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consolidation, acquisition of all or substantially all, but in no event less
than 90%, of the outstanding FCB Common Stock and, concurrently, not less than
100% of the outstanding common stock of the Bank by any person. Furthermore,
except to the extent necessary to comply with the fiduciary duties of FCB's
Board of Directors, neither FCB nor any affiliate or representative of FCB
may, pursuant to the Merger Agreement, furnish any non-public information that
it is not legally obligated to furnish, negotiate with respect to, or enter
into, or agree to enter into any contract with respect to any Acquisition
Proposal, but FCB may communicate information about such an Acquisition
Proposal to its shareholders if and to the extent that it is required to do so
in order to comply with its legal obligations as advised by counsel. FCB has
agreed pursuant to the Merger Agreement to promptly notify NCBC in the event
that it receives any inquiry or proposal relating to any such transaction.
Pursuant to the Merger Agreement, FCB has further agreed to pay or cause to be
paid to NCBC the sum of $500,000 prior to entering into a letter of intent,
agreement in principle, or definitive agreement (whether or not considered
binding, nonbinding, conditional or unconditional) with any third party with
respect to an Acquisition Proposal, or supporting or indicating an intent to
support an Acquisition Proposal.
DISSENTERS' RIGHTS
If the Merger and the transactions contemplated thereby are consummated, any
FCB Shareholder who properly perfects his statutory dissenters' rights of
appraisal in accordance with Article 13 of the GBCC ("Article 13") has the
right to receive in cash the fair value of such FCB Shareholder's shares of
FCB Common Stock determined immediately prior to the Merger, excluding any
appreciation or depreciation in value in anticipation of the Merger. The
following is a summary of Article 13 and the procedures for FCB Shareholders
dissenting from the Merger and perfecting such dissenters' rights of
appraisal. This summary is qualified in its entirety by reference to Article
13, which is reprinted in full as Appendix III to this Proxy
Statement/Prospectus. Appendix III should be reviewed carefully by any FCB
Shareholder who wishes to perfect such statutory dissenters' rights. FAILURE
TO STRICTLY COMPLY WITH THE PROCEDURES SET FORTH IN ARTICLE 13 WILL RESULT IN
THE LOSS OF DISSENTERS' RIGHTS.
To exercise appraisal rights under Article 13, a holder of FCB Common Stock
must (i) deliver to NCBC before the taking of the vote of FCB Shareholders on
the Merger Agreement written notice of his intent to demand payment for his
shares if the Merger is effected, and (ii) not vote his shares in favor of the
Merger Agreement. A FCB Shareholder who does not satisfy these two
requirements is not entitled to payment for his shares under Article 13. In
addition, any FCB Shareholder who returns a signed proxy but fails to provide
instructions as to the manner in which such shares are to be voted will be
deemed to have voted in favor of the Merger Agreement and will not be entitled
to assert dissenters' rights of appraisal.
A FCB Shareholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one beneficial FCB Shareholder and he notifies NCBC
in writing of the name and address of each person on whose behalf he asserts
dissenters' rights. The rights of such a partial dissenter are determined as
if the shares as to which he dissents and his other shares are registered in
the names of different FCB Shareholders.
If the Merger Agreement is approved at the Meeting, NCBC must deliver a
written dissenters' notice (the "Dissenters' Notice) to all Shareholders who
satisfied the notice requirements of Article 13. The Dissenters' Notice must
be sent within 10 days after the Effective Time and must (i) state where the
demand for payment must be sent and where and when certificates for shares
must be deposited, (ii) inform holders of uncertificated shares to what extent
transfer of those shares will be restricted after the demand for payment is
received, (iii) set a date by which NCBC must receive the demand for payment
(which date may not be fewer than 30 nor more than 60 days after the
Dissenters' Notice is delivered), and (iv) be accompanied by a copy of Article
13.
A record FCB Shareholder who receives the Dissenters' Notice must demand
payment and deposit his certificates in accordance with the Dissenters'
Notice. Such FCB Shareholder will retain all other rights of a FCB Shareholder
until those rights are canceled or modified by the consummation of the Merger.
A record FCB
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Shareholder who does not demand payment or deposit his share certificates
where required, each by the date set in the Dissenters' Notice, is not
entitled to payment for his shares under Article 13.
Within 10 days of the later of the Effective Time or receipt of a payment
demand, NCBC must offer to pay each dissenting FCB Shareholder who complied
with Article 13 the amount NCBC estimates to be the fair value of his shares,
plus accrued interest from the Effective Time. Such offer of payment must be
accompanied by (i) certain recent NCBC financial statements, (ii) NCBC's
estimate of the fair value of the shares and interest due, (iii) an
explanation of how the interest was calculated, (iv) a statement of the
dissenter's right to demand payment under Article 13, and (v) a copy of
Article 13. If the FCB Shareholder accepts NCBC's offer by written notice to
NCBC within 30 days after NCBC's offer, NCBC must make payment within 60 days
after the later of the making of the offer or the Effective Time.
If the Merger is not consummated within 60 days after the date set for
demanding payment and depositing share certificates, NCBC must return the
deposited certificates. If, after such return, the Merger is consummated, NCBC
must send a new Dissenters' Notice and repeat the payment procedure described
above.
A dissenting FCB Shareholder may notify NCBC in writing of his own estimate
of the fair value of his shares and the interest due, and may demand payment
of his estimate, if (i) he believes that the amount offered by NCBC is less
than the fair value of his shares or that the interest due has been calculated
incorrectly or (ii) NCBC, having failed to consummate the Merger, does not
return the deposited certificates within 60 days after the date set for
demanding payment. A dissenting FCB Shareholder waives his right to demand
payment unless he notifies NCBC of his demand in writing within 30 days after
NCBC makes or offers payment for his shares. If NCBC does not offer payment
within 10 days of the later of the Effective Time or receipt of a payment
demand, then (i) the FCB Shareholder may demand the financial statements and
other information of NCBC, and NCBC must provide such information within 10
days after receipt of the written demand, and (ii) the FCB Shareholder may
notify NCBC of his own estimate of the fair value of his shares and the amount
of interest due, and may demand payment of that estimate.
If a demand for payment by a FCB Shareholder remains unsettled, NCBC must
commence a nonjury equity valuation proceeding in the appropriate court, as
specified in Article 13, within 60 days after receiving the payment demand and
must petition the court to determine the fair value of the shares and accrued
interest. If NCBC does not commence the proceeding within 60 days, NCBC is
required to pay each dissenting FCB Shareholder whose demand remains
unsettled, the amount demanded. NCBC is required to make all dissenting FCB
Shareholders whose demands remain unsettled parties to the proceeding and to
serve a copy of the petition upon each dissenting FCB Shareholder. The court
may appoint appraisers to receive evidence and to recommend a decision on fair
value. Each dissenting FCB Shareholder made a party to the proceeding is
entitled to judgment for the fair value of his shares plus interest to the
date of judgment.
In an appraisal proceeding commenced under Article 13, the court must
determine the costs of the proceeding, excluding fees and expenses of
attorneys and experts for the respective parties, and must assess those costs
against NCBC, except that the court may assess the costs against all or some
of the dissenting FCB Shareholders to the extent the court finds they acted
arbitrarily, vexatiously, or not in good faith in demanding payment under
Article 13. The court also may assess the fees and expenses of attorneys and
experts for the respective parties against NCBC if the court finds NCBC did
not substantially comply with the requirements of Article 13, or against
either NCBC or a dissenting FCB Shareholder if the court finds that such party
acted arbitrarily, vexatiously, or not in good faith with respect to the
rights provided by Article 13.
If the court finds that the services of the attorneys for any dissenting FCB
Shareholder were of substantial benefit to other dissenting FCB Shareholders
similarly situated, and that the fees for those services should not be
assessed against NCBC, the court may award those attorneys reasonable fees out
of the amounts awarded the dissenting FCB Shareholders who were benefited. No
action by any dissenting FCB Shareholder to enforce dissenters' rights may be
brought more than three years after the Effective Time, regardless of whether
notice of the Merger and of the right to dissent was given by NCBC in
compliance with the provisions of Article 13.
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COMPARISON OF RIGHTS OF FCB AND NCBC SHAREHOLDERS
FCB is incorporated under the laws of the State of Georgia, and NCBC is
incorporated under the laws of the State of Tennessee. FCB Shareholders, whose
rights as shareholders are currently governed by Georgia law and the FCB
Articles of Incorporation and Bylaws, will become, upon consummation of the
Merger, shareholders of NCBC. Their rights as shareholders of NCBC will be
governed by Tennessee law and the NCBC Charter and Bylaws. Certain differences
between the rights of FCB Shareholders and NCBC Shareholders are summarized
below. The summary does not purport to be a complete statement of the rights
of FCB Shareholders as compared with the rights of NCBC Shareholders. The
identification of specific differences is not meant to indicate that other
equally or more significant differences do not exist. The summary is qualified
in its entirety by reference to the Tennessee General Corporation Act, the
Tennessee Business Corporation Act (effective October 1, 1987), the Georgia
Business Corporation Code (the "GBCC"), and the respective Articles of
Incorporation or Charter and Bylaws of the two corporations.
Changes in Control. Certain provisions of the NCBC Charter and Bylaws may
have the effect of preventing, discouraging or delaying any change of control
of NCBC. These provisions include the authority to issue preferred stock with
such rights and privileges as the Board of Directors may deem appropriate from
time to time, provisions for the classification of the NCBC Board of
Directors, and provisions relating to certain business combinations. The
authority of the Board of Directors to issue preferred stock with such rights
and privileges, including voting rights, dividend, redemption and conversion
rights, may enable the Board of Directors to prevent a change in control
despite a shift in ownership of NCBC Common Stock. The classification of the
NCBC Board of Directors, pursuant to which one-third of the directors of NCBC
are elected each year for a three-year term, and the special Board of
Directors voting provisions in connection with transactions with Interested
Shareholders (as described below), may delay the ability of dissatisfied NCBC
Shareholders or anyone who obtains a controlling interest in NCBC Common Stock
to elect a new Board of Directors and to exercise control of NCBC. The
provision of the NCBC Charter relating to certain business combinations (the
"Fair Price Provisions") may have the effect of deterring or making more
difficult a change in control or acquisition of NCBC.
The Fair Price Provisions contained in the NCBC Charter are summarized
below. The Fair Price Provisions require that certain business combinations
involving an Interested Shareholder (as defined in the NCBC Charter to include
a person who beneficially owns (as defined in the NCBC Charter) 5% or more of
NCBC Common Stock) be approved by the holders of at least two-thirds of the
outstanding shares of NCBC Common Stock, unless two-thirds of the entire NCBC
Board of Directors approves the transaction and certain minimum price criteria
and procedural safeguards are satisfied. These transactions include any merger
or consolidation of NCBC into an Interested Shareholder or any affiliates
thereof, any sale of more than $5 million in assets of NCBC to an Interested
Shareholder or any affiliates thereof, any recapitalization or
reclassification of NCBC securities or similar transaction increasing the
percentage ownership by an Interested Shareholder or any proposal for the
liquidation of NCBC.
The Fair Price Provisions require that a business combination involving any
Interested Shareholder which does not receive the required shareholder vote
must meet certain fair price criteria. Those criteria require, among other
things, that the aggregate amount of the cash and fair market value of the
consideration other than cash to be received for each share of NCBC be at
least equal to the highest of the following computations:
(i) the highest per share price (including brokerage commissions,
transfer taxes and soliciting dealers' fees) paid or agreed to be paid by
the Interested Shareholder for any shares of NCBC Common Stock acquired by
it (1) within the four-year period immediately prior to the first public
announcement of the proposed business combination (the "Announcement Date")
or (2) in the transaction in which it became an Interested Shareholder,
whichever is higher, or
(ii) the fair market value per share of NCBC Common Stock on the
Announcement Date or on the date on which the Interested Shareholder became
an Interested Shareholder.
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In addition, the consideration paid for NCBC Common Stock in a business
combination must be either cash or the same form of consideration paid by the
Interested Shareholder to acquire the largest number of shares of NCBC Common
Stock previously acquired by it.
The Fair Price Provisions are designed to discourage attempts to take over
NCBC by utilizing two-tier pricing tactics or by acquiring less than all of
NCBC's outstanding shares. In recent years there have been increasing numbers
of non-negotiated attempts to take over publicly owned corporations. These
attempts typically involve the accumulation of a substantial block of the
target corporation, followed by a merger or other reorganization of the
acquired company on terms determined entirely by the purchaser. The terms of
these attempts may include two-tier pricing, which is the practice of paying
cash to acquire a controlling interest in a company and acquiring the
remaining equity interest by paying the remaining shareholders a price that is
lower than the price paid to acquire the controlling interest or by utilizing
a different form of consideration for payment to the remaining shareholders
than was used to purchase the controlling interest.
While the terms of such a non-negotiated takeover could be fair to NCBC
Shareholders, negotiated transactions may result in more favorable terms to
NCBC Shareholders because of factors such as the timing of the transaction,
the tax effects on the shareholders and the fact that the nature and amount of
the consideration paid to all shareholders will be negotiated by the parties
at arms-length rather than dictated by the purchaser.
Although the federal securities laws and regulations applicable to certain
of the business combinations covered by the Fair Price Provisions require that
disclosure be made to shareholders of the terms of such a transaction, these
laws do not assure shareholders that the financial terms of the business
combination will be fair to them or that they can effectively prevent its
consummation. The Fair Price Provisions are intended to address some of the
effects of these gaps in federal and state laws and prevent some of the
potential inequities of certain acquisitions that involve two or more steps.
The Fair Price Provisions require that, in order to complete a business
combination that is not approved by a two-thirds vote of the holders of at
least 75% of the outstanding NCBC Common Stock, an Interested Shareholder must
obtain the affirmative vote of two-thirds of NCBC Board of Directors, or meet
the minimum price and procedural requirements of the Fair Price Provisions.
Due to the difficulties of complying with the requirements of the Fair Price
Provisions, the Fair Price Provisions generally may discourage attempts to
acquire control of NCBC. As a result, holders of NCBC Common Stock may be
deprived of an opportunity to sell their shares at a premium above the market
price. In addition, the Fair Price Provisions would give veto power to the
holders of a minority of NCBC Common Stock with respect to certain business
combinations that are opposed by more than one-third of the NCBC Board of
Directors and which do not meet the Fair Price Provisions, but which a
majority of shareholders may believe to be desirable and beneficial. Moreover,
in any such business combination not receiving the requisite approval of NCBC
Shareholders or of directors, the minimum price provisions of the Fair Price
Provisions, while providing objective pricing criteria, could be arbitrary and
not indicative of value.
The FCB Articles of Incorporation and Bylaws also contain certain provisions
which may have the effect of preventing, discouraging or delaying a change in
control of FCB. Like NCBC, the Board of Directors of FCB is staggered. The
Board is divided into three classes, with each class as nearly equal in number
as possible. One-third of the directors of FCB are elected each year for a
three-year term.
The FCB Articles of Incorporation also contain a provision requiring the
affirmative vote of the holders of at least two-thirds of the outstanding
shares of the corporation entitled to vote thereon to approve any merger or
consolidation of the corporation with or into any other corporation and any
sale, lease, exchange or disposition of all or substantially all of the assets
of the corporation to any other corporation, person, or entity if such other
corporation, person, or entity which is a party to such transaction is the
beneficial owner, directly or indirectly, of 5% or more of the issued and
outstanding shares of the corporation entitled to vote in an election of
directors.
The FCB Board of Directors, when evaluating an offer of another party (a) to
make a tender offer or exchange offer for any equity security of the
corporation, (b) to merge or consolidate any other corporation with
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the corporation, or (c) to purchase or otherwise acquire all or substantially
all of the assets of the corporation, shall, in determining what is in the
best interest of the corporation and its shareholders, consider all relevant
factors, including (i) the short-term and long-term social and economic
effects on the employees, customers, shareholders and other constituents of
the corporation and its subsidiaries, and on the communities within which the
corporation and its subsidiaries operate; and (ii) the consideration being
offered by the other party in relation to the then-current value of the
corporation in a freely negotiated transaction and in relation to the Board of
Directors' then-estimate of the future value of the corporation as an
independent entity.
Amendment of Charter or Articles of Incorporation. Tennessee law requires a
majority vote of the outstanding shares of the corporation entitled to vote to
amend its charter. The NCBC Charter, however, requires an affirmative vote by
at least two-thirds of the shares entitled to vote (other than shares held by
an Interested Shareholder) to alter or amend any provisions of the Charter
unless the Board of Directors, by a two-thirds majority, submits the proposed
amendment to a vote of shareholders in which circumstance a majority vote of
shareholders is needed.
The GBCC also requires a majority vote of the outstanding shares of the
corporation entitled to vote to amend its articles of incorporation. The FCB
Articles of Incorporation state that a different voting requirement is
necessary to amend or rescind some of the articles. The FCB Articles of
Incorporation provide that unless two-thirds of the directors in office shall
approve the proposed change, the affirmative vote of the holders of at least
two-thirds of the outstanding stock of the corporation that are entitled to
vote in an election of directors is required to amend or rescind the articles
which authorize (i) a staggered board of directors, (ii) limitation of the
liability of directors, (iii) approval of a merger or consolidation with
certain shareholders, and (iv) the factors the board must use when evaluating
an offer by another party to make a tender offer or exchange offer, or to
merge or consolidate another corporation with FCB. Additionally, a vote of 80%
of the outstanding shares is required to amend the article authorizing removal
of a director.
Certain Voting Rights. Tennessee law requires approval of any merger,
consolidation or sale of substantially all the assets of a corporation (except
for a surviving corporation in certain exempted mergers) by a vote of a
majority of the outstanding shares of the corporation entitled to vote, unless
the corporation's charter requires approval by a greater percentage. Georgia
law requires shareholders eligible to vote to approve the merger or share
exchange by a majority of the votes entitled to be cast.
As described more fully above, the NCBC Charter and the FCB Articles of
Incorporation require a special shareholder vote to approve certain business
combinations, including mergers, consolidations and sales of assets, involving
certain shareholders.
Dividends. A Tennessee corporation may pay dividends, if authorized by the
Board of Directors, unless, after giving effect to the dividend, (i) the
corporation would not be able to pay its debts as they become due in the usual
course of business or (ii) the corporation's total assets would be less than
the sum of its total liabilities plus (unless the charter permits otherwise)
the amount necessary to satisfy, upon dissolution, the rights of shareholders
whose preferential rights are superior to those receiving the distribution if
the corporation were dissolved at the time of the distribution. The NCBC
Charter authorizes distributions in accordance with Section 48-16-401 of the
Tennessee Business Corporation Act.
The GBCC is similar in all material respects to Tennessee law. The FCB
Articles of Incorporation authorize the FCB Board of Directors to declare
dividends out of capital surplus.
Boards of Directors. As permitted by Tennessee law, the NCBC Bylaws divide
the NCBC Board of Directors into three classes serving staggered three-year
terms, with the terms of one class of directors to expire each year. The
classification of the NCBC Board of Directors means that approximately one-
third of the NCBC Board of Directors is elected each year, with the result
that it would take two annual meetings of NCBC Shareholders to change the
majority of the members constituting the NCBC Board of Directors. The
classification of directors has the effect of making it more difficult to
change the composition of the board of
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directors. A classified board of directors can help promote the continuity and
stability of management and policies because a majority of the directors at
any given time will have prior experience as directors.
In addition, the NCBC Bylaws provide that any or all of the NCBC directors
may be removed from office at any time with or without cause, but only by the
affirmative vote of at least two-thirds of the shares entitled to vote.
Under the GBCC, the articles of incorporation may allow for staggering the
terms of directors by dividing the total number of directors into two or three
groups, with each group containing one-half or one-third of the total. In
addition, the GBCC provides that, except in certain circumstances, any or all
of the board of directors of a Georgia corporation may be removed with or
without cause by the holders of a majority of the shares then entitled to vote
at an election of directors at a meeting called expressly for that purpose.
The FCB Articles of Incorporation and Bylaws provide for a staggered Board of
Directors. The Board is divided into three classes, with each class as nearly
equal in number as possible. One-third of the directors of FCB are elected
each year for a three-year term. The FCB Articles of Incorporation and Bylaws
provide that any director may be removed from office, at a meeting with
respect to which notice of such purpose is given, (a) without cause, only upon
the affirmative vote of 80% of the issued and outstanding shares of the
corporation, and (b) with cause, only upon the affirmative vote of the holders
of a majority of the issued and outstanding shares of the corporation.
Special Meetings of Shareholders. Tennessee law provides that the Board of
Directors, any person authorized by the charter or bylaws, or unless the
charter provides otherwise, the holder of at least 10% of the votes entitled
to be cast may call a special meeting of shareholders. NCBC Bylaws provide
that a special meeting of NCBC Shareholders may be called by the Chairman of
the Board, the Board of Directors, or upon the written request of the holders
of not less than 10% of the votes entitled to be cast of NCBC Common Stock.
The GBCC permits the board of directors, persons authorized by the articles
of incorporation or bylaws and holders of 25%, or such greater or lesser
percentages as may be provided in the articles of incorporation or bylaws, of
a all votes entitled to be cast on the proposed corporate action to call a
special meeting. The FCB Bylaws provide that a special meeting may be called
by any one or more shareholders holding an aggregate of 25% of the outstanding
capital stock of FCB.
Dissenters' Rights. Under Tennessee law, the shareholders of a corporation
that is being merged into or is selling all or substantially all its assets to
another corporation have the right to dissent from the action and have a
Tennessee court determine the statutory fair value of their shares. Under the
GBCC, the shareholders of a corporation that is party to a merger have the
right to dissent from the action and have a Georgia court determine the fair
value of their shares. See "The Merger--Dissenters' Rights."
Preemptive Rights. Unless the charter of a Tennessee corporation provides
otherwise, Tennessee law states that shareholders of a Tennessee corporation
do not have preemptive rights to acquire proportional amounts of the
corporation's unissued shares upon decision of the board of directors to issue
them. The NCBC Charter provides that no holder of any class of NCBC common
stock will have preemptive rights.
The GBCC is substantially similar to Tennessee law. The FCB Articles of
Incorporation provide that no holder of shares of FCB common stock shall have
preemptive rights.
Indemnification/Limitation on Liability. Under both Tennessee and Georgia
law, a corporation may indemnify an individual who is a party to a proceeding
because he or she is or was a director or officer against liability incurred
in the proceeding if such individual conducted himself or herself in good
faith and such individual reasonably believed (i) in the case of conduct in
his or her official capacity, that such conduct was in the best interests of
the corporation, (ii) in all other cases, that such conduct was at least not
opposed to the best interests of the corporation and (iii) in the case of any
criminal proceeding, that the individual had no reasonable cause to believe
such conduct was unlawful. A corporation may not indemnify a director or
officer (i) in connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred in
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connection with the proceeding if it is determined that the director or
officer has met the relevant standard of conduct under Tennessee and Georgia
law or (ii) in connection with any proceeding with respect to conduct for
which he or she was adjudged liable on the basis that personal benefit was
improperly received by him or her, whether or not involving action in his or
her official capacity. A corporation must indemnify a director or officer who
was wholly successful, on the merits or otherwise, in the defense of any
proceeding to which he or she was a party because he or she was a director or
officer of the corporation against reasonable expenses incurred by the
director or officer in connection with the proceeding.
The NCBC Bylaws provide for indemnification in accordance with Tennessee law
for officers and directors of NCBC and their testators and intestators. The
FCB Bylaws provide for indemnification in accordance with Georgia Law for
directors, officers, employees or agents of FCB and their testators and
intestators.
The NCBC Charter, pursuant to Tennessee law, provides that the directors of
NCBC will not be liable to the corporation or its shareholders for monetary
damages for breach of fiduciary duty as director except for (i) any breach of
the director's duty of loyalty to the corporation or its shareholders, (ii)
acts or omissions not in good faith which involve intentional misconduct or a
knowing violation of the law, or (iii) liability with regard to unlawful
distributions.
The FCB Articles of Incorporation provide that a director of FCB will not be
liable to the corporation or its shareholders for monetary damages, for breach
of any duty as a director, except liability for (i) any wrongful appropriation
of any business opportunity of the corporation, (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) the types of liability set forth in the GBCC dealing with illegal
or unauthorized (a) distributions of corporate assets, (b) repurchases of
stock or (c) commencement of business or (iv) any transaction from which the
director derived an improper material tangible personal benefit.
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DESCRIPTION OF NCBC CAPITAL STOCK
NCBC is authorized by its Charter to issue up to 175,000,000 shares of NCBC
Common Stock, par value $2.00 per share, of which 99,672,702 shares were
issued and outstanding at July 28, 1998, and up to 5,000,000 shares of
Preferred Stock, no par value, of which no shares are issued and outstanding.
The holders of NCBC Common Stock are entitled to one vote per share on all
matters submitted for action by the shareholders. Any corporate action
requiring shareholder approval other than the election of directors may be
authorized by the affirmative vote of a majority of the shares represented at
a meeting at which a quorum is present or represented. Directors are elected
by a plurality of the votes cast in an election. There is no provision for
cumulative voting with respect to the election of directors. The Board of
Directors is divided into three classes with staggered three-year terms. The
affirmative vote of at least two-thirds of the outstanding shares of each
class of capital voting stock is required to amend, alter, change or repeal
Article Seven of the Charter providing for classification of the Board of
Directors, to approve certain business combinations, including mergers and
consolidations involving NCBC, sale of substantially all of the assets of
NCBC, liquidation of NCBC, reclassification of NCBC's securities and
recapitalizations of NCBC involving amendments to the Charter, unless certain
price and procedural requirements are met. Special meetings of shareholders
may be called by the Chairman, President or Vice President, or by a majority
of the members of the Board of Directors, or by holders of not less than one-
tenth of all shares entitled to vote at such meeting upon request delivered to
the Chairman, President or Secretary of NCBC by such shareholders at least 90
days before the proposed date of the meeting.
All shares of NCBC Common Stock are entitled to share equally in such
dividends as the Board of Directors may declare from sources legally available
therefor. Upon liquidation or dissolution of NCBC, whether voluntary or
involuntary, all shares of NCBC Common Stock are entitled to share equally in
the assets available for distribution to shareholders after payment of all
prior obligations of NCBC. The holders of NCBC Common Stock have no preemptive
rights.
The transfer agent for NCBC Common Stock is The Bank of New York.
NCBC is a legal entity separate and distinct from its subsidiaries,
including its subsidiary banks. There are various legal and regulatory
limitations under federal and state law on the extent to which its
subsidiaries, including its bank and bank holding company subsidiaries, can
finance or otherwise supply funds to NCBC.
The principal source of NCBC's cash revenues is dividends from its
subsidiaries. There are certain limitations under federal and Tennessee law on
the payment of dividends by such subsidiaries. The prior approval of the
appropriate federal regulatory body is required if the total of all dividends
declared by any state member bank of the Federal Reserve System or any
national banking association in any calendar year exceeds the bank's net
profits (as defined) for that year combined with its retained net profits for
the preceding two calendar years, less any required transfers to surplus or a
fund for the retirement of any preferred stock. Such regulatory bodies also
have authority to prohibit a state member bank or bank holding company, such
as NCBC, or a national banking association from engaging in what, in the
opinion of such regulatory body, constitutes an unsafe or unsound practice in
conducting its business. The payment of dividends could, depending upon the
financial condition of the subsidiary, be deemed to constitute such an unsafe
or unsound practice.
Retained earnings of NCBC's banking subsidiaries available for payment of
cash dividends under all applicable regulations would have been approximately
$32.293 million as of December 31, 1997. See Note N to the Financial
Statements of NCBC, incorporated by reference in this Proxy
Statement/Prospectus, with respect to certain contractual limits on dividend
payments by NCBC.
NCBC's subsidiaries, subsidiary banks and their respective subsidiaries are
subject to limitations under Section 23A of the Federal Reserve Act with
respect to extensions of credit to, investments in, and certain other
transactions with, NCBC and its other subsidiaries. Furthermore, loans and
extensions of credit are also subject to various collateral requirements.
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Certain provisions of the Charter and Bylaws of NCBC may restrict changes of
control of NCBC. These provisions include the authority to issue preferred
stock with such rights and privileges as the Board of Directors may deem
appropriate from time to time, provisions for the classification of the NCBC
Board of Directors and provisions relating to certain business combinations
with certain shareholders. See "Comparison of Rights of FCB and NCBC
Shareholders--Changes in Control" and "--Boards of Directors."
LEGAL OPINIONS
The validity of the shares of NCBC Common Stock to be issued upon
consummation of the Merger has been passed upon for NCBC by King & Spalding,
Atlanta, Georgia. As of August 5, 1998, attorneys in the firm of King &
Spalding who participated in the preparation of the Registration Statement of
which this Proxy Statement/Prospectus is a part owned approximately 11,988
shares of NCBC Common Stock.
EXPERTS
The consolidated financial statements of NCBC, incorporated by reference in
NCBC's Annual Report on Form 10-K for the year ended December 31, 1997, 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 authority of such firm as experts in
accounting and auditing.
The consolidated financial statements of FCB at December 31, 1996 and 1997
and for the years then ended incorporated by reference herein from FCB's
Annual Report on Form 10-KSB for the year ended December 31, 1997 have been
examined by Mauldin & Jenkins, LLC., independent public accountants, whose
report thereon included therein are incorporated herein in reliance upon their
report given upon their authority as experts in accounting and auditing.
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APPENDIX I
AGREEMENT AND PLAN OF MERGER
DATED AS OF AUGUST 5, 1998
BY AND BETWEEN
NATIONAL COMMERCE BANCORPORATION
AND FIRST COMMUNITY BANCORP, INC.
CARTERSVILLE, GEORGIA
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
R E C I T A L S.......................................................... I-5
ARTICLE 1
TERMS OF THE MERGER
1.1 Merger............................................................. I-5
1.2 Time and Place of Closing.......................................... I-6
1.3 Effective Time..................................................... I-6
1.4 Charter............................................................ I-6
1.5 Bylaws............................................................. I-6
1.6 Name............................................................... I-6
1.7 Directors and Officers............................................. I-6
ARTICLE 2
MANNER OF CONVERTING SHARES AND OPTIONS; EXCHANGE RATIO
2.1 Conversion; Cancellation and Exchange of Shares; Exchange Ratio.... I-6
2.2 Conversion of Stock Options........................................ I-8
2.3 Anti-Dilution Provisions........................................... I-9
ARTICLE 3
EXCHANGE OF SHARES
3.1 Exchange Procedures................................................ I-9
3.2 Rights of Former FCB Record Holders................................ I-9
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF FCB
4.1 Organization, Standing and Power................................... I-10
4.2 Authority; No Breach of Agreement.................................. I-10
4.3 Capital Stock...................................................... I-11
4.4 FCB Subsidiaries................................................... I-11
4.5 SEC Filings; FCB Financial Statements.............................. I-12
4.6 Absence of Undisclosed Liabilities................................. I-13
4.7 Absence of Certain Changes or Events............................... I-13
4.8 Tax Matters........................................................ I-13
4.9 Allowance for Possible Loan Losses................................. I-14
4.10 Assets............................................................. I-15
4.11 Intellectual Property.............................................. I-15
4.12 Environmental Matters.............................................. I-15
4.13 Compliance with Laws............................................... I-16
4.14 Labor Relations.................................................... I-16
4.15 Employee Benefit Plans............................................. I-16
4.16 Material Contracts................................................. I-18
4.17 Legal Proceedings.................................................. I-18
4.18 Reports............................................................ I-18
4.19 Statements True and Correct........................................ I-19
4.20 Accounting, Tax and Regulatory Matters............................. I-19
4.21 State Takeover Laws................................................ I-19
4.22 Articles of Incorporation Provisions............................... I-19
4.23 Charter Documents.................................................. I-20
</TABLE>
I-2
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NCBC
<TABLE>
<S> <C> <C>
5.1 Organization, Standing and Power................................ I-20
5.2 Authority; No Breach by Agreement............................... I-20
5.3 Capital Stock................................................... I-21
5.4 SEC Filings; Financial Statements............................... I-21
5.5 Absence of Undisclosed Liabilities.............................. I-21
5.6 Absence of Certain Changes or Events............................ I-22
5.7 Compliance with Laws............................................ I-22
5.8 Legal Proceedings............................................... I-22
5.9 Reports......................................................... I-22
5.10 Statements True and Correct..................................... I-22
5.11 Accounting, Tax and Regulatory Matters.......................... I-23
ARTICLE 6
CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 Affirmative Covenants of FCB.................................... I-23
6.2 Negative Covenants of FCB....................................... I-23
6.3 Covenants of NCBC............................................... I-25
6.4 Adverse Changes in Condition.................................... I-25
6.5 Reports......................................................... I-25
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 Registration Statement; Proxy Statement; Shareholder Approvals.. I-26
7.2 Exchange Listing................................................ I-26
7.3 Applications.................................................... I-26
7.4 NCBC Filings with State Offices................................. I-26
7.5 Agreement as to Efforts to Consummate........................... I-26
7.6 Investigation and Confidentiality............................... I-27
7.7 Press Release................................................... I-27
7.8 Certain Actions................................................. I-27
7.9 Accounting and Tax Treatment.................................... I-28
7.10 State Takeover Laws............................................. I-28
7.11 Articles of Incorporation Provisions............................ I-28
7.12 Agreement of Affiliates......................................... I-29
7.13 Employee Benefits and Contracts................................. I-29
7.14 D&O Coverage.................................................... I-31
7.15 Indemnification................................................. I-31
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 Conditions to Obligations of Each Party......................... I-31
8.2 Conditions to Obligations of NCBC............................... I-33
8.3 Conditions to Obligations of FCB................................ I-34
</TABLE>
I-3
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<TABLE>
ARTICLE 9
TERMINATION
<C> <S> <C>
9.1 Termination....................................................... I-35
9.2 Effect of Termination............................................. I-36
9.3 Non-Survival of Representations and Covenants..................... I-37
ARTICLE 10
GENERAL PROVISIONS
10.1 Definitions....................................................... I-37
10.2 Expenses.......................................................... I-43
10.3 Brokers and Finders............................................... I-43
10.4 Entire Agreement.................................................. I-43
10.5 Amendments........................................................ I-43
10.6 Waivers........................................................... I-44
10.7 Assignment........................................................ I-44
10.8 Notices........................................................... I-44
10.9 Governing Law..................................................... I-45
10.10 Counterparts...................................................... I-45
10.11 Captions.......................................................... I-45
10.12 Interpretation.................................................... I-45
10.13 Enforcement of Agreement.......................................... I-45
10.14 Attorneys' Fees................................................... I-45
10.15 Severability...................................................... I-45
10.16 Remedies Cumulative............................................... I-45
</TABLE>
I-4
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") dated as of this 5th day
of August, 1998, by and between NATIONAL COMMERCE BANCORPORATION ("NCBC" or
"Surviving Corporation," as the context may require), a corporation chartered
and existing under the laws of the State of Tennessee which is registered both
as a bank holding company and as a savings and loan holding company and whose
principal offices are located at One Commerce Square, Memphis, Shelby County,
Tennessee 38150; and FIRST COMMUNITY BANCORP, INC. ("FCB"), a corporation
chartered and existing under the laws of the state of Georgia which is
registered as a bank holding company and whose principal offices are located
827 Joe Frank Harris Parkway, SE, Cartersville, Georgia 30120.
Certain other capitalized terms used in this Agreement and in the Plan of
Merger are defined below in Section 10.1.
R E C I T A L S
A. FCB is the beneficial owner and holder of record of one hundred percent
(100%) of the issued and outstanding shares of capital stock of First
Community Bank & Trust (the "FCB Bank Subsidiary"). FCB desires to have all of
its assets, including the capital stock it owns of FCB Bank Subsidiary,
acquired by NCBC on the terms and subject to the conditions set forth in this
Agreement and the Plan of Merger annexed hereto as Exhibit 1.
B. NCBC desires to acquire FCB's assets, including the capital stock of FCB
Bank Subsidiary, on the terms and subject to the conditions set forth in this
Agreement and the Plan of Merger.
C. The Board of Directors of FCB deems it desirable and in the best
interests of FCB, FCB Bank Subsidiary and the shareholders of FCB that FCB be
merged with and into NCBC (which would survive the merger as the Surviving
Corporation, as defined herein) on the terms and subject to the conditions set
forth in this Agreement and in the manner provided in this Agreement and the
Plan of Merger (the "Merger") and has directed that this Agreement and the
Plan of Merger be submitted to the shareholders of FCB with the recommendation
that they be approved by them.
D. The Board of Directors of NCBC deems it desirable and in the best
interests of NCBC and the shareholders of NCBC that FCB be merged with and
into NCBC on the terms and subject to the conditions set forth in this
Agreement and in the manner provided in this Agreement and the Plan of Merger.
E. The respective Boards of Directors of NCBC and FCB have each adopted (or
will each adopt) resolutions setting forth and adopting this Agreement and the
Plan of Merger, and have directed that this Agreement and the annexed Plan of
Merger and all resolutions adopted by said Boards of Directors and by the FCB
Shareholders related to this Agreement, be submitted with appropriate
applications to, and filed with all applicable Regulatory Authority as may be
necessary in order to obtain all Consents required to consummate the proposed
Merger and the transactions contemplated in this Agreement in accordance with
this Agreement, the Plan of Merger and applicable law.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
representations, warranties, covenants and agreements herein contained and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
TERMS OF THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time FCB shall be merged with and into NCBC in accordance with the
provisions of Section 14-2-1101, et seq. of the Georgia Code
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and Section 48-21-101, et seq. of the Tennessee Code, and with the effect
provided in Section 48-21-108 of the Tennessee Code (the "Merger"). NCBC shall
be the Surviving Corporation resulting from the Merger and shall continue to
be governed by the laws of the State of Tennessee. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved
and adopted by the respective Boards of Directors of FCB and NCBC, and the
Plan of Merger, in substantially the form of Exhibit 1 which has been approved
and adopted by the Boards of Directors of FCB and NCBC.
1.2 Time and Place of Closing. The Closing will take place at 9:00 a.m. on
the date that the Effective Time occurs (or the immediately preceding day if
the Effective Time is earlier than 9:00 a.m.) or at such other time as the
Parties, acting through their chief executive officers or chief financial
officers, may mutually agree. The Closing shall be held at the NCBC Board
Room, NCBC Executive Offices (Fourth Floor), One Commerce Square, Memphis,
Shelby County, Tennessee 38150, or at such other place as the Parties, acting
through their chief executive officers or chief financial officers, may
mutually agree.
1.3 Effective Time. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time the Articles of
Merger reflecting the Merger shall become effective with the Secretary of
State of the state of Tennessee (the "Effective Time").
1.4 Charter. The Charter of NCBC in effect immediately prior to the
Effective Time shall be the Charter of the Surviving Corporation until
otherwise amended or repealed.
1.5 Bylaws. The Bylaws of NCBC in effect immediately prior to the Effective
Time shall be the Bylaws of the Surviving Corporation until otherwise amended
or repealed.
1.6 Name. The name of NCBC shall remain unchanged after the Effective Time,
unless and until otherwise renamed.
1.7 Directors and Officers. The directors and officers of NCBC in office
immediately prior to the Effective Time, together with such additional persons
as may thereafter be elected or appointed, shall serve as the directors and
officers of the Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation, unless and until
their successors shall have been elected or appointed and shall have qualified
or until they shall have been removed in the manner provided herein.
ARTICLE 2
MANNER OF CONVERTING SHARES AND OPTIONS; EXCHANGE RATIO
2.1 Conversion; Cancellation and Exchange of Shares; Exchange Ratio. At the
Effective Time, by virtue of the Merger becoming effective and without any
action on the part of NCBC, FCB, or the shareholders of either of the
foregoing, the shares of the constituent corporations shall be converted as
follows:
(a) NCBC Capital Stock. Each share of NCBC Capital Stock issued and
outstanding immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) FCB Common Stock. Each share of FCB Common Stock issued and
outstanding at the Effective Time shall cease to represent any interest
(equity, shareholder or otherwise) in FCB and shall, except for those
shares (the "Dissenting Shares") held by any FCB Record Holders who shall
have properly perfected such Holders' dissenters' rights and shall have
maintained the perfected status of such dissenters' rights through the
Effective Time ("FCB Dissenting Shareholders"), whose rights shall be
governed by the provisions of Sections 14-2-1301 through 14-2-1332 of the
Georgia Code, automatically be converted exclusively into, and constitute
only the right of each FCB Record Holder to receive in exchange for such
Holder's shares of FCB Common Stock, the Consideration to which the FCB
Record Holder is entitled as provided in this Section 2.1(b).
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<PAGE>
(i) The Exchange Ratio Calculation. Subject to any adjustments which
may be required by an event described in Subsection 2.1(b)(iii) below,
at and as of the Effective Time:
(A) Each one (1) share of FCB Common Stock (other than Dissenting
Shares) outstanding at and as of the Effective Time shall be
converted into the right to receive that number of shares of NCBC
Common Stock equal to the quotient of:
(I) The quotient of (x) the sum of the Net Purchase Price
(defined below) and the Cost of Unexercised FCB Options (defined
below), (y) divided by the NCBC "Market Price Per Share"
(defined below),
divided by
(II) The sum of number of shares of FCB Common Stock
outstanding at and as of the Effective Time and the number of
options to purchase FCB Common Stock outstanding at and as of
the Effective Time.
(B) Each share of FCB Common Stock held of record by a FCB
Dissenting Shareholder shall be converted into the right to receive
payment from the Surviving Corporation with respect thereto in
accordance with the provision of the Georgia Code.
(C) "Net Purchase Price" shall be equal to $33,034,041. "Cost of
Unexercised FCB Options" shall be equal to $1,583,344.
In the event total consolidated stockholders' equity of FCB,
exclusive of any securities gains or losses in accordance with FAS
115, is less than $8,330,000 as of the day immediately preceding the
Effective Time, NCBC reserves the unilateral right to either
renegotiate the Net Purchase Price or terminate this Agreement.
No share of FCB Common Stock shall be deemed to be outstanding or
have any rights other than those set forth in this Section 2.1(b)
after the Effective Time. No fractional shares of NCBC Common Stock
shall be issued in the Merger and, if after aggregating all of the
whole and fractional shares of NCBC Common Stock to which a FCB
Record Holder shall be entitled based upon this Exchange Ratio
Calculation, there should be a fractional share of NCBC Common Stock
remaining, such fractional share shall be settled by a cash payment
therefor pursuant to Article 3 of this Agreement, which cash
settlement shall be based upon the Current Market Price Per Share
(as defined below) of one (1) full share of NCBC Common Stock.
(ii) Definition of "Market Price Per Share". The "Market Price Per
Share" is $21.519, which is the average of the closing price per share
of NCBC Common Stock on the NASDAQ (as reported by The Wall Street
Journal) on the five (5) trading day period from April 3, 1998, through
April 9, 1998 ($43.038), as adjusted for the two-for-one stock split
with respect to the NCBC Common Stock that occurred on July 1, 1998:
<TABLE>
<S> <C> <C>
Friday April 3 $43 1/16
Monday April 6 $43
Tuesday April 7 $42 5/6
Wednesday April 8 $42 7/8
Thursday April 9 $43 5/8
--------
$ 43.038
</TABLE>
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<PAGE>
Therefore, assuming FCB owns 100% of the authorized and outstanding
common stock of FCB Bank Subsidiary and has consolidated stockholders'
equity not less than $8,330,000, then:
<TABLE>
<S> <C>
Net Purchase Price...................... $33,034,041
+ Cost of Unexercised FCB Options....... 1,583,344
-----------
$34,617,385
divided by
NCBC Market Price Per Share............. $ 21.519
equals
Number of NCBC Shares (adjusted for the
two-for-one stock split)............... 1,608,688
divided by
FCB Shares Outstanding.................. 430,204
+ FCB Options........................... 61,979
-----------
492,183
equals
NCBC Shares for Each 1 Share of FCB..... 1.6342
-----------
</TABLE>
(iii) Effect of Stock Splits, Reverse Stock Splits, Stock Dividends
and Similar Changes in the Capital of FCB. Should FCB effect any stock
splits, reverse stock splits, stock dividends or similar changes in its
respective capital accounts subsequent to the date of this Agreement
but prior to the Effective Time, the Exchange Ratio may, in NCBC's sole
discretion if such change in the capital accounts constitutes a breach
of any of FCB's representations, warranties or covenants, be adjusted
in such a manner as the Board of Directors of NCBC shall deem in good
faith to be fair and reasonable in order to give effect to such
changes. Notwithstanding the foregoing, nothing in this subparagraph
(iii) shall be deemed to be a waiver of the inaccuracy of any
representation or warranty or breach of any covenant by FCB set forth
herein.
(c) Shares Held by FCB or NCBC. Each of the shares of FCB Common Stock
held by any FCB Company or by any NCBC Company, in each case other than (x)
in a fiduciary capacity, (y) under the FCB Employee Stock Ownership Plan
with 401(k) features, or (z) as a result of debts previously contracted,
shall be canceled and retired at the Effective Time and no Consideration
shall be issued in exchange therefor.
(d) Dissenters' Rights of FCB Shareholders. Any FCB Dissenting
Shareholder who shall comply strictly with the provisions of Sections 14-2-
1301, et seq. of the Georgia Code shall be entitled to dissent from the
Merger and to seek those appraisal remedies afforded by the Georgia Code.
2.2 Conversion of Stock Options.
(a) At the Effective Time, all rights with respect to FCB Common Stock
pursuant to stock options ("FCB Options") granted by FCB under the FCB
Stock Plans, which are outstanding at the Effective Time, whether or not
exercisable, shall be converted into and become rights with respect to NCBC
Common Stock, and NCBC shall assume each FCB Option, in accordance with the
terms of the FCB Stock Plan and stock option agreement by which it is
evidenced. From and after the Effective Time, (i) each FCB Option assumed
by NCBC may be exercised solely for shares of NCBC Common Stock, (ii) the
number of shares of NCBC Common Stock subject to such FCB Option shall be
equal to the number of shares of FCB Common Stock subject to such FCB
Option immediately prior to the Effective Time multiplied by the Exchange
Ratio, (iii) the per share exercise price under each such FCB Option shall
be adjusted by dividing the per share exercise price under each such FCB
Option by the Exchange Ratio and rounding down to the nearest cent, (iv) in
order to conform the treatment of the holders of such options in the case
of termination of employment to the treatment that is accorded holders of
options granted under the NCBC Option Plan, FCB Options that are assumed by
NCBC and that are exercisable at the effective date of termination of such
option holder's employment with an NCBC Company (other than for cause or by
reason of death, disability or retirement of option holder) shall be
exercisable by such holder within the period beginning on
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<PAGE>
the effective date of termination of employment and ending 90 days
thereafter, and (v) each FCB Option held by a FCB director assumed by NCBC
which provides for an exercise date within 90 days after termination of
such holder's status as a FCB director shall be modified to remove such
provision and substitute in lieu thereof that such exercise must occur
within ninety (90) days after termination of such holder's status as a
director of FCB or First Community Bank & Trust, whichever is later. FCB
shall take all necessary steps to effectuate the foregoing provisions of
this Section 2.2.
(b) All restrictions or limitations on transfer with respect to FCB
Common Stock awarded under the FCB Stock Plans or any other plan, program,
or arrangement of either FCB Company, to the extent that such restrictions
or limitations shall not have already lapsed, and except as otherwise
expressly provided in such plan, program or arrangement, shall remain in
full force and effect with respect to shares of NCBC Common Stock into
which such restricted stock is converted pursuant to this Agreement.
2.3 Anti-Dilution Provisions. In the event NCBC changes the number of shares
of NCBC Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, or recapitalization with respect to
such stock and the record date therefor (in the case of a stock dividend) or
the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.
ARTICLE 3
EXCHANGE OF SHARES
3.1 Exchange Procedures. Promptly after the Effective Time, NCBC and FCB
shall cause the Exchange Agent to mail to the FCB Record Holders appropriate
transmittal materials (which shall specify that delivery shall be effected,
and risk of loss and title to the certificates theretofore representing shares
of FCB Common Stock shall pass, only upon proper delivery of such certificates
to the Exchange Agent). The Exchange Agent may establish reasonable and
customary rules and procedures in connection with its duties. After the
Effective Time, each FCB Record Holder of FCB Common Stock (other than shares
to be canceled pursuant to Section 2.1(c) of this Agreement) issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and shall promptly
upon surrender thereof receive in exchange therefor the Consideration provided
in Section 2.1(b) of this Agreement, together with all undelivered dividends
or distributions in respect of such shares (without interest thereon) pursuant
to Section 3.2 of this Agreement. To the extent required by Section 2.1(b) of
this Agreement, each FCB Record Holder also shall receive, upon surrender of
the certificate or certificates representing his or her shares of FCB Common
Stock outstanding immediately prior to the Effective Time, cash in lieu of any
fractional share of NCBC Common Stock to which such holder may be otherwise
entitled (without interest). NCBC shall not be obligated to deliver the
Consideration to which any FCB Record Holder is entitled as a result of the
Merger until such FCB Record Holder surrenders such holder's certificate or
certificates representing the shares of FCB Common Stock for exchange as
provided in this Section 3.1. The certificate or certificates of FCB Common
Stock so surrendered shall be duly endorsed as the Exchange Agent may
reasonably require. Any other provision of this Agreement notwithstanding,
neither NCBC nor the Exchange Agent shall be liable to a FCB Record Holder for
any amounts paid or properly delivered in good faith to a public official
pursuant to any applicable abandoned property Law. Adoption of this Agreement
by the shareholders of FCB shall constitute ratification of the appointment of
the Exchange Agent.
3.2 Rights of Former FCB Record Holders. At the Effective Time, the stock
transfer books of FCB shall be closed as to holders of FCB Common Stock
outstanding immediately prior to the Effective Time, and no transfer of FCB
Common Stock by any FCB Record Holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the provisions of Section
3.1 of this Agreement, each certificate theretofore representing shares of FCB
Common Stock (other than shares to be cancelled pursuant to Section 2.1(c) of
this Agreement) shall from and after the Effective Time represent for all
purposes only the right to receive the Consideration provided in Section
2.1(b) of this Agreement in exchange therefor, subject, however,
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<PAGE>
to the Surviving Corporation's obligation to pay any dividends or make any
other distributions with a record date prior to the Effective Time which have
been declared or made by FCB in respect of such shares of FCB Common Stock in
accordance with the terms of this Agreement and which remain unpaid at the
Effective Time. Whenever a dividend or other distribution is declared by NCBC
on the NCBC Common Stock, the record date for which is at or after the
Effective Time, the declaration shall include dividends or other distributions
on all shares of NCBC Common Stock issuable pursuant to this Agreement, but
beginning thirty (30) days after the Effective Time no dividend or other
distribution payable to the holders of record of NCBC Common Stock as of any
time subsequent to the Effective Time shall be delivered to a FCB Record
Holder until such FCB Record Holder surrenders his or her certificate or
certificates evidencing FCB Common Stock for exchange as provided in Section
3.1 of this Agreement. However, upon surrender of such FCB Common Stock
certificate, both the NCBC Common Stock certificate and any undelivered
dividends and cash payments payable hereunder (without interest) shall be
delivered and paid with respect to each share represented by such certificate.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF FCB
Except as disclosed in the FCB Disclosure Memorandum, FCB hereby represents
and warrants to NCBC as follows:
4.1 Organization, Standing and Power. FCB is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Georgia
and has the corporate power and authority to carry on its business as now
conducted and to own, lease and operate its Assets. FCB is duly qualified or
licensed to transact business as a foreign corporation in good standing in the
states of the United States and foreign jurisdictions where the character of
its Assets or the conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FCB.
4.2 Authority; No Breach of Agreement.
(a) FCB has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and the Plan of
Merger and to consummate the transactions contemplated hereby and thereby.
The execution, delivery and performance of this Agreement and the Plan of
Merger, as appropriate, and the consummation of the transactions
contemplated herein and therein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on
the part of FCB, subject to the approval of this Agreement and the Plan of
Merger by the holders of a majority (or such greater percentage as may be
required by the Articles of Incorporation of FCB or other applicable law)
of the outstanding shares of FCB Common Stock, which is the only
shareholder vote required for approval of this Agreement and the Plan of
Merger and consummation of the Merger by FCB. Subject to the receipt of
such requisite shareholder approval, this Agreement and the Plan of Merger
represent legal, valid and binding obligations of FCB, enforceable against
FCB in accordance with their respective terms (except in all cases as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, moratorium or similar 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 or the Plan of
Merger, as appropriate, by FCB, nor the consummation by FCB of the
transactions contemplated hereby or thereby, nor compliance by FCB with any
of the provisions hereof or thereof will (i) conflict with or result in a
breach of any provision of FCB's Articles of Incorporation or Bylaws, or
(ii) except as disclosed in Section 4.2(b) of the FCB Disclosure
Memorandum, constitute or result in a Default under, or require any Consent
(other than shareholder approval) pursuant to, or result in the creation of
any Lien on any material Asset of any FCB Company under, any Contract or
Permit of any FCB Company, or (iii) subject to receipt of the requisite
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<PAGE>
Consents referred to in Section 7.3 of this Agreement, violate any Law or
Order applicable to either FCB Company or any of their respective Material
Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate Laws, and other than Consents
required from Regulatory Authorities, and other than notices to or filings
with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation with respect to any FCB Employee Plans or under the HSR Act,
and other than Consents, filings or notifications which, if not obtained or
made, are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on FCB, no notice to, filing with, or Consent of,
any public body or authority is necessary for the consummation by FCB of
the Merger and the other transactions contemplated in this Agreement and
the Plan of Merger.
(d) Neither FCB Company is a party to, or subject to, or bound by, any
agreement or judgment, order, letter of understanding, writ, prohibition,
injunction or decree of any court or other governmental body of competent
jurisdiction, or any law which would prevent the execution and delivery of
this Agreement and the Plan of Merger by FCB, or the consummation of the
transactions contemplated hereby and thereby, and no action or proceeding
is pending against either FCB Company in which the validity of this
Agreement, the transactions contemplated hereby or any action which has
been taken by any of such Parties in connection herewith or in connection
with the transaction contemplated hereby is at issue.
4.3 Capital Stock.
(a) The authorized capital stock of FCB consists of 10,000,000 shares of
FCB Common Stock, $1.00 par value per share, of which 430,204 shares are
issued and outstanding as of the date of this Agreement. All of the issued
and outstanding shares of capital stock of FCB are duly and validly issued
and outstanding and are fully paid and nonassessable under the Georgia Code
and FCB's Articles of Incorporation. None of the outstanding shares of
capital stock of FCB has been issued in violation of any preemptive rights
of the current or past shareholders of FCB.
(b) Except as set forth in Section 4.3(a) of this Agreement or pursuant
to the FCB Option Plans, there are no shares of capital stock or other
equity securities of FCB outstanding and no outstanding Rights relating to
the capital stock of FCB.
4.4 FCB Subsidiaries. FCB has no Subsidiaries other than FCB Bank
Subsidiary. FCB owns all of the issued and outstanding shares of capital stock
(or other equity interests) of FCB Bank Subsidiary. No capital stock (or other
equity interest) of FCB Bank Subsidiary is or may become required to be issued
(other than to FCB) by reason of any Rights, and there are no Contracts by
which FCB Bank Subsidiary is bound to issue (other than to FCB) additional
shares of its capital stock (or other equity interests) or Rights or by which
FCB is or may be bound to transfer any shares of the capital stock (or other
equity interest) of FCB Bank Subsidiary (other than to another FCB). There are
no Contracts relating to the rights of FCB to vote or to dispose of any shares
of the capital stock (or other equity interests) of FCB Bank Subsidiary. All
of the shares of capital stock (or other equity interests) of FCB Bank
Subsidiary held by FCB are fully paid and nonassessable under the applicable
corporation or similar Law of the jurisdiction in which FCB Bank Subsidiary is
incorporated or organized and are owned by FCB free and clear of any Lien. FCB
Bank Subsidiary is duly organized, validly existing, and in good standing
under the laws of the jurisdiction in which it is incorporated or organized,
and has the corporate power and authority necessary for it to own, lease and
operate its Assets and to carry on its business as now conducted. FCB Bank
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation in good standing in the states of the United States and foreign
jurisdictions where the character of its Assets or the nature or conduct of
its business requires it to be so qualified or licensed, except for such
jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FCB. FCB Bank Subsidiary is an "insured institution" as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder, and the Deposits in which are insured by the Bank Insurance Fund,
to the extent provided by law. The minute book and other organizational
documents and Records for FCB Bank Subsidiary have been made available to NCBC
for its review, and are true and complete as in
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<PAGE>
effect as of the date of this Agreement and accurately reflect all amendments
thereto and all proceedings of the Board of Directors and shareholders
thereof.
4.5 SEC Filings; FCB Financial Statements.
(a) FCB has filed and made available to NCBC all SEC Documents required
to be filed by FCB since December 31, 1995. The FCB SEC Documents (i) at
the time filed, complied in all material respects with the applicable
requirements of the Securities Laws and (ii) did not, at the time they were
filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated in
such FCB SEC Documents or necessary in order to make the statements in such
FCB SEC Documents, in light of the circumstances under which they were
made, not misleading. FCB Bank Subsidiary is not required to file any SEC
Documents as a separate entity.
(b) Each of the FCB Financial Statements (including, in each case, any
related notes) contained in the FCB SEC Reports, including any FCB SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all material respects the
consolidated financial position of FCB and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
(c) FCB has delivered to NCBC (or will deliver when available, with
respect to periods ended after the date of this Agreement to the Effective
Time) true, correct and complete copies of all Call Reports and Federal
Reserve Y-6 Reports, including any amendments thereto, filed with any
Regulatory Authorities by FCB and FCB Bank Subsidiary, respectively, for
the years ended December 31, 1996, and 1997, and thereafter, together with
any correspondence with any Regulatory Authorities concerning any of the
aforesaid financial statements and Reports (the "FCB Regulatory Financial
Statements"). Such FCB Regulatory Financial Statements (i) were (or will
be) prepared from the Records of FCB and/or each FCB Bank Subsidiary; (ii)
were (or will be) prepared in accordance with regulatory accounting
principles consistently applied; (iii) present (or, when prepared, will
present) FCB and FCB Bank Subsidiary's financial condition and the results
of its operations, changes in stockholders' equity and cash flows at the
relevant dates thereof and for the periods covered thereby; and (iv)
contain or reflect (or, when prepared, will contain and reflect) all
necessary adjustments and accruals for an accurate presentation of FCB's
and FCB Bank Subsidiary's financial condition and the results of FCB's and
FCB Bank Subsidiary's operations and cash flows for the periods covered by
such financial statements (subject to any exceptions as to consistency
specified therein or as may be indicated in the notes thereto or, in the
case of interim financial statements, to normal recurring year-end
adjustments that are not material.
(d) FCB has delivered to NCBC (or will deliver when available, with
respect to periods ended after the date of this Agreement but prior to the
Effective Time) true, correct and complete copies of FCB Bank Subsidiary's
consolidated balance sheets as of December 31, 1997, 1996, and 1995
(audited); and consolidated statements of income and changes in
stockholders' equity and consolidated statements of cash flows for the
years ended December 31, 1997, 1996, and 1995 (audited) (the "FCB Bank
Subsidiary Financial Statements"). Each of the FCB Bank Subsidiary
Financial Statements (including the related notes) fairly presents the
consolidated results of operations of FCB Bank Subsidiary for the
respective periods covered thereby and the consolidated financial condition
of FCB Bank Subsidiary as of the respective dates thereof, in each case in
accordance with generally accepted accounting principles consistently
applied during the periods involved, except as may be noted therein.
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<PAGE>
4.6 Absence of Undisclosed Liabilities. No FCB Company has any Liabilities
that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FCB, except Liabilities which are accrued or
reserved against in the FCB Regulatory Financial Statements as of December 31,
1997, and March 31, 1998, and the FCB Bank Subsidiary Financial Statements as
of December 31, 1997, and March 31, 1998, or reflected in the notes or
schedules, if any, thereto, and delivered with the FCB Disclosure Memorandum
prior to the date of this Agreement. Neither FCB Company has incurred or paid
any Liability since the Balance Sheet Date, except for such Liabilities
incurred or paid in the ordinary course of business consistent with past
business practice and which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on FCB or in connection with the
transactions contemplated by this Agreement.
4.7 Absence of Certain Changes or Events. Except as described in Section 4.7
of the FCB Disclosure Memorandum, since the Balance Sheet Date there has not
been:
(a) Any material transaction by either FCB Company which was not
undertaken in the ordinary course of business and in conformity with past
practice.
(b) Any loss of a key employee or any damage, destruction or loss,
whether or not covered by insurance, which has had or which may be
reasonably expected to have a Material Adverse Effect on either FCB
Company.
(c) Any acquisition or disposition by either FCB Company of any Asset
having a fair market value, singularly or in the aggregate for each FCB
Company, in an amount greater than Fifty Thousand Dollars ($50,000.00),
except in the ordinary course of business and in conformity with past
practice.
(d) Any mortgage, pledge or subjection to Lien, of any kind or any of the
Assets of either FCB Company, except to secure extensions of credit in the
ordinary course of business and in conformity with past practice.
(e) Any amendment, modification or termination of any Contract relating
to either FCB Company or to which either FCB Company is a party which would
or may be reasonably expected to have a Material Adverse Effect on FCB.
(f) Any increase in, or commitment to increase, the compensation payable
or to become payable to any officer, director, employee or agent of either
FCB Company, or any bonus payment or similar arrangement made to or with
any of such officers, directors, employees or agents, other than routine
increases made in the ordinary course of business not exceeding the greater
of ten percent (10%) per annum or Five Thousand Dollars ($5,000.00) for any
of them individually, except for increases given to J. Steven Walraven and
Rodney L. Grizzle pursuant to their respective employment agreements
described in Section 4.7 of the FCB Disclosure Memorandum or pursuant to
FCB Company's bonus plans as set forth in Section 4.7 of the FCB Disclosure
Memorandum.
(g) Any incurring of, assumption of, or taking of, by either FCB Company,
any Asset subject to any Liability, except for Liabilities incurred or
assumed or Assets taken subsequent to the Balance Sheet Date in the
ordinary course of business and in conformity with past practice.
(h) Any material alteration in the manner of keeping the books, accounts
or Records of either FCB Company, or in the accounting policies or
practices therein reflected.
(i) Any release or discharge (or partial release or discharge) of any
obligation or Liability of any Person related to or arising out of any loan
made by either FCB Company, except in the ordinary course of business and
in conformity with past practice.
4.8 Tax Matters.
(a) Except as set forth in Section 4.8(a) of the FCB Disclosure
Memorandum, all Tax Returns required to be filed by or on behalf of any of
the FCB Companies have been timely filed or requests for extensions have
been timely filed, granted and have not expired for periods ended on or
before December 31, 1997,
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<PAGE>
and on or before the date of the most recent fiscal year end immediately
preceding the Effective Time, and all Tax Returns filed are complete and
accurate. All Taxes shown on filed Tax Returns have been paid. There is no
audit examination, deficiency, or refund litigation with respect to any
Taxes, except as fully reserved against in the FCB Financial Statements
made available prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled examinations or
concluded Litigation have been paid. There are no Liens with respect to
Taxes upon any of the Assets of the FCB Companies.
(b) Neither of the FCB Companies has executed an extension or waiver of
any statute of limitations on the assessment or collection of any Tax due
(excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities)
that is currently in effect.
(c) Adequate provision for any Taxes due or to become due for any of the
FCB Companies for the period or periods through and including the date of
the respective FCB Financial Statements has been made and is reflected on
such FCB Financial Statements.
(d) Reserved.
(e) Each of the FCB Companies is in compliance with, and its Records
contain all information and documents (including properly completed IRS
Forms W-9) necessary to comply with, all applicable information reporting
and Tax withholding requirements under federal, state and local tax Laws,
and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the IRC, except for such instances of
non-compliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FCB.
(f) Except as set forth in Section 4.8(f) of the FCB Disclosure
Memorandum, neither of the FCB Companies has made any payments, is
obligated to make any payments, or is a party to any Contract that could
obligate it to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the IRC.
(g) There has not been an ownership change, as defined in the IRC Section
382(g), of either of the FCB Companies that occurred during or after any
Taxable Period in which the Companies incurred a net operating loss that
carries over to any Taxable Period ending after December 31, 1997.
(h) Except as set forth in Section 4.8(h) of the FCB Disclosure
Memorandum, neither of the FCB Companies is a party to any tax allocation
or sharing agreement and neither of the FCB Companies has been a member of
an affiliated group filing a consolidated federal income tax return (other
than a group the common parent of which was FCB) or has any Liability for
taxes of any Person (other than FCB and its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state, local or
foreign Law) as a transferee or successor or by contract or otherwise.
4.9 Allowance for Possible Loan Losses. The allowance for possible loan or
credit losses, including any allowances or reserves for losses on ORE and
other collateral taken in satisfaction, or partial satisfaction of a debt
previously contracted shown on the consolidated balance sheets of FCB included
in the most recent FCB Regulatory Financial Statements dated prior to the date
of this Agreement was, and the Allowance shown on the consolidated balance
sheets of FCB included in the FCB Regulatory Financial Statements as of dates
subsequent to the execution of this Agreement and as of the Closing Date will
be, as of the dates thereof, in the reasonable opinion of management of FCB
adequate (within the meaning of GAAP and applicable regulatory requirements or
guidelines) to provide for all known and reasonably anticipated losses
relating to or inherent in the loan and lease portfolios (including accrued
interest receivables and ORE reserves) of the FCB Companies and other
extensions of credit (including letters of credit and commitments to make
loans or extend credit) by the FCB Companies as of the dates thereof. Except
as described in Section 4.9 of the FCB Disclosure Memorandum (by loan type,
loan number, classification and outstanding balance), neither FCB Company has
any Loan or other extension of credit which has been (or should have been in
management's reasonable opinion) classified as "Other Assets Especially
Mentioned," "Substandard," "Doubtful" or "Loss," or similar classifications,
that were not classified in either FCB Company's most recent report of
examination. Section 4.9 of the FCB
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Disclosure Memorandum also lists all Loans or extensions of credit which are
included on any FCB Company's "watch list." The net book value of either FCB
Company's assets acquired through foreclosure in satisfaction of problem loans
("ORE") is carried on the balance sheet of the FCB Financial Statements at
fair value at the time of acquisition less estimated selling costs which
approximate the net realizable value of the ORE in accordance with the
American Institute of Certified Public Accountants' Statement of Position 92-
3.
4.10 Assets. Except as disclosed or reserved against in the FCB Regulatory
Financial Statements made available prior to the date of this Agreement, the
FCB Companies have good and marketable title, free and clear of all Liens, to
all of their respective Assets. All tangible Assets used in the businesses of
the FCB Companies are in good condition, reasonable wear and tear excepted,
and are usable in the ordinary course of business consistent with FCB's past
practices. All Assets which are material to FCB's business on a consolidated
basis, held under leases or subleases by either of the FCB Companies, are held
under valid Contracts 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), and each
such Contract is in full force and effect. To the best of management's
Knowledge, the FCB Companies currently maintain insurance similar in amounts,
scope, and coverage to that maintained by other peer banking organizations.
Neither of the FCB Companies has received notice from any insurance carrier
that (i) such insurance would be canceled or that coverage thereunder will be
reduced or eliminated, or (ii) premium costs with respect to such policies of
insurance will be substantially increased. Except as set forth in Section 4.10
of the FCB Disclosure Memorandum, there are presently no claims pending under
any such policies of insurance and no notices have been given by either FCB
Company under such policies.
4.11 Intellectual Property. All of the Intellectual Property rights of the
FCB Companies are in full force and effect and constitute legal, valid and
binding obligations of the respective parties thereto, and there have not
been, and, to the Knowledge of FCB, there currently are not, any defaults
thereunder by either FCB Company. An FCB Company owns or is the valid licensee
of all such Intellectual Property rights free and clear of all liens or claims
of infringement. Neither of the FCB Companies or, to the Knowledge of FCB,
their respective predecessors, has misused the Intellectual Property rights of
others and none of the Intellectual Property rights as used in the business
conducted by either such FCB Company infringes upon or otherwise violates the
rights of any Person, nor has any Person asserted a claim of such
infringement. Except as disclosed in Section 4.11 of the FCB Disclosure
Memorandum, neither FCB Company is obligated to pay any royalties to any
Person with respect to any such Intellectual Property. Each FCB Company owns
or has the valid right to use all of the Intellectual Property rights which it
is presently using, or in connection with performance of any material Contract
to which it is a party. No officer, director, or employee of either FCB
Company is party to any Contract which requires such officer, director or
employee to assign any interest in any Intellectual Property or keep
confidential any trade secrets, proprietary data, customer information, or
other business information except as disclosed in Section 4.11 of the FCB
Disclosure Memorandum, which restricts or prohibits such officer, director or
employee from engaging in activities competitive with any person, including
either FCB Company.
4.12 Environmental Matters. Except as set forth in Section 4.12 of the FCB
Disclosure Memorandum:
(a) To the Knowledge of FCB, each FCB Company, its Participation
Facilities, and its Operating Properties are, and have been, in compliance
with all environmental laws, except for violations which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on FCB.
(b) There is no litigation pending or, to the Knowledge of FCB,
threatened before any court, governmental agency or authority or other
forum in which either FCB Company or any of its Operating Properties or
Participation Facilities (or FCB in respect of such Operating Property or
Participation Facility) has been or, with respect to threatened litigation,
may be named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any environmental law or (ii) relating to the release
into the environment of any hazardous material, whether or not occurring
at, on, under, adjacent to, or
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affecting (or potentially affecting) a site owned, leased, or operated by
either FCB Company or any of its Operating Properties or Participation
Facilities, except for such litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FCB, nor, to the knowledge of FCB, is there any
reasonable basis for any litigation of a type described in this sentence.
(c) To the Knowledge of FCB, during the period of (i) either FCB
Company's ownership or operation of any of their respective current
properties, (ii) either FCB Company's participation in the management of
any Participation Facility, or (iii) either FCB Company's holding of a
security interest in an Operating Property, there have been no releases of
hazardous material in, on, under, adjacent to, or affecting (or potentially
affecting) such properties, except such as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on FCB.
To the Knowledge of FCB, prior to the period of (i) either FCB Company's
ownership or operation of any of their respective current properties, (ii)
either FCB Company's participation in the management of any Participation
Facility, or (iii) either FCB Company's holding of a security interest in
an Operating Property, to the Knowledge of FCB, there were no releases of
Hazardous Material in, on, under, or affecting such property, Participation
Facility or Operating Property, except such as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on FCB.
4.13 Compliance with Laws. FCB is duly registered as a bank holding company
under the BHC Act. Each FCB Company has in effect all (i) Permits required by
any applicable state or federal bank regulatory authority ("Regulatory
Permits") and (ii) all other Permits necessary for it to own, lease or operate
its material Assets and to carry on its business as now conducted, except for
those Permits the absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FCB, and there
has occurred (i) no default under any such Regulatory Permit and (ii) no
Default under any such other Permit other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FCB. Except as set forth in Section 4.13 of the FCB
Disclosure Memorandum, neither of the FCB Companies:
(a) Is in violation of any (i) Laws, Orders or Permits applicable to
banks or bank holding companies; or (ii) any other Laws, Orders or Permits
applicable to its business or employees conducting its business except for
violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FCB; and
(b) Has received any notification or communication from any agency or
department of federal, state or local government or any Regulatory
Authority or the staff thereof (i) asserting that either FCB Company is not
in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, (ii) threatening to revoke any
Permits, or (iii) requiring either FCB Company to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive, or
memorandum of understanding, or to adopt any board resolution or similar
undertaking, which restricts materially the conduct of its business, or in
any manner relates to its capital adequacy, its credit or reserve policies,
its management or the payment of dividends.
4.14 Labor Relations. Neither FCB Company is the subject of any Litigation
asserting that it or the other FCB Company has committed an unfair labor
practice (within the meaning of the National Labor Relations Act or comparable
state Law) or seeking to compel it or any other FCB Company to bargain with
any labor organization as to wages or conditions of employment, nor is there
any strike or other labor dispute involving either FCB Company, pending or
threatened, or to the Knowledge of FCB, is there any activity involving FCB
Company's employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
4.15 Employee Benefit Plans.
(a) FCB has disclosed in Section 4.15(a) of the FCB Disclosure
Memorandum, and has delivered or made available to NCBC prior to the date
of this Agreement copies in each case of, all pension, retirement, profit
sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation,
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bonus or other incentive plan, all other written employee programs,
arrangement or agreements, all medical, vision, dental or other health
plans, all life insurance plans and all other employee benefit plans or
fringe benefit plans, including "employee benefit plans" as that term is
defined in Section 3(3) of ERISA, currently adopted, maintained by,
sponsored in whole or in part by, or contributed to by any FCB Company or
ERISA Affiliate thereof for the benefit of employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and
under which employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to participate
(collectively the "FCB Benefit Plans"). Any of the FCB 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 "FCB ERISA Plan." Each FCB ERISA
Plan which is also a "defined benefit plan" (as defined in IRC Section
414(j) is referred to herein as a "FCB Pension Plan." No FCB Pension Plan
is or has been a multi-employer plan within the meaning of Section 3(37) of
ERISA.
(b) All FCB Benefit Plans are in compliance with the applicable terms of
ERISA, the IRC and any other applicable laws the breach or violation of
which are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FCB. Each FCB ERISA Plan which is intended to be
qualified under IRC Section 401(a) has received a favorable determination
letter from the Internal Revenue Service, and FCB is not aware of any
circumstances likely to result in revocation of any such favorable
determination letter. No FCB Company has engaged in a transaction with
respect to any FCB Benefit Plan that, assuming the taxable period of such
plan expired as of the date hereof, would subject any FCB Company to a tax
imposed by either IRC Section 4975 or Section 502(i) of ERISA.
(c) No FCB Pension Plan (other than the EPP (as defined in Section
7.13(c)) has any "unfunded current liability," as that term is defined in
Section 302(d)(8)(A) of ERISA, and the fair market value of the assets of
any 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 in accordance with all
applicable legal requirements. Since the date of the most recent actuarial
evaluation, there has been (i) no material change in the financial position
of any FCB Pension Plan, (ii) no change in the actuarial assumptions with
respect to any FCB Pension Plan, and (iii) no increase in benefits under
any FCB Pension Plan as a result of plan amendments or changes in
applicable law which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FCB or materially adversely affect
the funding status of any such plan. Neither any FCB Pension Plan nor any
"single-employer plan," within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any FCB Company, or the single-employer
plan of any entity which is considered one employer with FCB under Section
4001 of ERISA or IRC Section 414 or Section 302 of ERISA (whether or not
waived) (an "ERISA Affiliate") has an "accumulated funding deficiency"
within the meaning of Section 412 of the Internal Revenue Code or Section
302 of ERISA. Neither FCB Company has provided, or is required to provide,
security to a FCB Pension Plan or to any single-employer plan of an ERISA
Affiliate pursuant to IRC Section 401(a)(29).
(d) Within the six-year period preceding the Effective Time, no liability
under Subtitle C or D of Title IV of ERISA has been or is expected to be
incurred by any FCB Company with respect to any ongoing, frozen or
terminated single-employer plan or the single-employer plan of any ERISA
Affiliate. Neither FCB Company has incurred any withdrawal liability with
respect to a multi-employer plan under Subtitle B of Title IV of ERISA
(regardless of whether based on contributions of an ERISA Affiliate). No
notice of a "reportable event," within the meaning of Section 4043 of ERISA
for which the 30-day reporting requirement has not been waived, has been
required to be filed for any FCB Pension Plan or by any ERISA Affiliate
within the 12-month period ending on the date hereof.
(e) Except as disclosed in Section 4.15(e) of the FCB Disclosure
Memorandum, neither FCB Company has any liability for retiree health and
life benefits under any of the FCB Benefit Plans to former employees and
there are no restrictions on the rights of such FCB Company to amend or
terminate any such retiree health or benefit plan without incurring
liability thereunder.
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(f) Except as disclosed in Section 4.15(f) of the FCB Disclosure
Memorandum, neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
or otherwise) becoming due to any director or any employee of any FCB
Company from either FCB Company under any FCB Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any FCB Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any
such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement or employment agreement) of employees and former
employees of either FCB Company and their respective beneficiaries, other
than entitlements accrued pursuant to funded retirement plans subject to
the provisions of IRC Section 412 or Section 302 of ERISA, have been fully
reflected on the FCB Financial Statements to the extent required by and in
accordance with GAAP.
(h) Prior to consummation of the Merger, FCB's KSOP with 401(k) feature
will be terminated.
4.16 Material Contracts. Except as disclosed in Section 4.16 of the FCB
Disclosure Memorandum and in Section 10.3 of this Agreement, neither of the
FCB Companies, nor any of their respective assets, businesses or operations,
is a party to or, or is bound or affected by, or receives benefits under (i)
any employment, severance, termination, consulting or retirement contract or
contracts providing for aggregate payments (x) to any person in any calendar
year in excess of $10,000, or (y) to any one or more Persons in the aggregate
in excess of $50,000, (ii) any contract relating to the borrowing of money by
either FCB Company or the guarantee by either FCB Company of any such
obligation (other than contracts evidencing deposit liabilities, purchases of
federal funds, fully secured repurchase agreements and Federal Home Loan Bank
advances of depository institution subsidiaries, trade payables, and contracts
relating to borrowings or guarantees made in the ordinary course of business),
(iii) any contracts which prohibit or restrict either FCB Company from
engaging in any business activities in any geographic area, line of business
or otherwise in competition with any other person, (iv) any contracts between
FCB Companies, (v) any exchange-traded or over-the-counter swap, forward,
future, option, cap, floor or collar financial contract, or any other interest
rate or foreign currency protection contract (not disclosed in the FCB
Financial Statements delivered prior to the date of this Agreement) which is a
financial derivative contract (including various combinations thereof), and
(vi) any other material contract or amendment thereto that would be required
to be filed as an exhibit to a FCB SEC Report (whether or not FCB is subject
to the filing requirements of the SEC) filed (or which would have been filed
if FCB were subject to the SEC reporting requirements) by FCB with the SEC
prior to the date of this Agreement (together with all contracts referred to
in Sections 4.10 and 4.15(a) of this Agreement (the "FCB Contracts")). With
respect to each FCB Contract: (i) to the Knowledge of FCB, the Contract is in
full force and effect; (ii) neither FCB Company is in Default thereunder,
(iii) neither FCB Company has repudiated or waived any material provision of
any such contract; and (iv) no other party to any such contract is, to the
Knowledge of FCB, in Default in any respect or has repudiated or waived any
material provision thereunder. Except as set forth in Section 4.16 of the FCB
Disclosure Memorandum, all of the indebtedness of either FCB Company for money
borrowed is prepayable at any time by such FCB Company without penalty or
premium.
4.17 Legal Proceedings. There is no Litigation pending or, to the Knowledge
of FCB, threatened (or unasserted but considered probable of assertion and
which if asserted would have at least a reasonable probability of an
unfavorable outcome) against either FCB Company, or against any Asset,
interest, or right of any of them that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FCB, nor are
there any orders of any Regulatory Authorities, other governmental
authorities, or arbitrators outstanding against either FCB Company. Section
4.17 of the FCB Disclosure Memorandum includes a report of all material
litigation as of the date of this Agreement to which either FCB Company is a
party and which names a FCB Company as a defendant or cross-defendant.
4.18 Reports. Since January 1, 1995, each FCB Company has timely 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
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SEC, if applicable, including Forms 10-K, Forms 10-Q, Forms 8-K and proxy
statements, (ii) all other Regulatory Authorities, and (iii) any applicable
state securities or banking authorities (except failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on FCB). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable laws. As of its
respective date, each such report and document did not, in all material
respects, contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
4.19 Statements True and Correct. No statement, certificate, instrument or
other writing furnished or to be furnished by either FCB Company to NCBC
pursuant to this Agreement or any other document, agreement, or instrument
referred to herein contains, or will contain, any untrue statement of material
fact or will omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied by either FCB
Company or any Affiliate thereof for inclusion in the Registration Statement
to be filed by NCBC with the SEC will, when the Registration Statement becomes
effective, be false or misleading with respect to any material fact, or omit
to state any material fact necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by either FCB
Company or any Affiliate thereof for inclusion in the Proxy Statement to be
mailed to FCB's shareholders in connection with the shareholders' meeting, and
any other documents to be filed by a FCB Company or any Affiliate thereof with
the SEC or any other Regulatory Authority in connection with the transactions
contemplated thereby, will, at the respective time such documents are filed,
and with respect to the Proxy Statement, when first mailed to the shareholders
of FCB, 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, or, in the case
of the Proxy Statement or any amendment thereof or supplement thereto, at the
time of the shareholders' meeting, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to any material fact, or
omit to state any material fact necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the
shareholders' meeting. All documents that either FCB Company or any Affiliate
thereof is responsible for filing with any regulatory authority in connection
with the transactions contemplated hereby will comply as to form in all
material respects with the provisions of applicable Law.
4.20 Accounting, Tax and Regulatory Matters. Neither FCB Company or any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance relating to FCB that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the IRC, or (ii) materially impede or delay
receipt of any Consents of Regulatory Authorities referred to in Section
8.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such section.
4.21 State Takeover Laws. Neither FCB Company has taken any action which
would require the transactions contemplated by this Agreement and the Plan of
Merger to comply with any applicable "moratorium," "fair price," "business
combination," "control share," or other anti-takeover laws (collectively
"Takeover Laws"), including Sections 14-2-1110, et seq. of the Georgia Code.
4.22 Articles of Incorporation Provisions. Each FCB Company has taken all
action so that the entering into of this Agreement and the Plan of Merger and
the consummation of the Merger and the other transactions contemplated by this
Agreement and the Plan of Merger do not and will not result in the grant of
any rights to any Person under the Articles of Incorporation, Bylaws or other
governing instruments of either FCB Company (other than voting, dissenters'
appraisal or other similar rights) or restrict or impair the ability of NCBC
or any of its Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of either FCB Company that may be directly
or indirectly acquired or controlled by it.
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4.23 Charter Documents. FCB has previously provided NCBC true and correct
copies of the Articles of Incorporation and Bylaws of FCB and the Articles of
Incorporation and Bylaws of FCB Bank Subsidiary, as amended to date, and each
are in full force and effect.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF NCBC
Except as disclosed in the NCBC Disclosure Memorandum, NCBC hereby
represents and warrants to FCB that:
5.1 Organization, Standing and Power. NCBC is a corporation duly organized,
validly existing and in good standing under the laws of the state of Tennessee
and has the corporate power and authority to carry on its business as now
conducted and to own, lease and operate its material assets. NCBC is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the states of the United States and foreign jurisdictions where
the character of its assets or the nature or conduct of its business requires
it to be so qualified or licensed, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on NCBC.
5.2 Authority; No Breach by Agreement.
(a) NCBC has the corporate power and authority necessary to execute,
deliver and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the Plan of Merger and the consummation
of the transactions contemplated herein, including the Merger, have been
duly and validly authorized by all necessary corporate action in respect
thereof on the part of NCBC. This Agreement represents a legal, valid and
binding obligation of NCBC, enforceable against NCBC in accordance with its
terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar
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 by NCBC, nor the
consummation by NCBC of the transactions contemplated hereby, nor
compliance by NCBC with any of the provisions hereof will (i) conflict with
or result in a breach of any provision of any NCBC Company's Charter (or
similar governing instrument) or Bylaws, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any assets of any NCBC Company under any Contract
or Permit of any NCBC Company, or (iii) subject to receipt of the requisite
approvals referred to in Section 8.1(b) of this Agreement, violate any Law
or Order applicable to any NCBC Company or any of their respective material
Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate law and the rules of the
NASDAQ, and other than Consents required from Regulatory Authorities, and
other than notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee benefit
plans, or under the HSR Act, and other than Consents, filings or
notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on NCBC,
no notice to, filing with, or Consent of, any public body or authority is
necessary for the consummation by NCBC of the Merger and the other
transactions contemplated in this Agreement and the Plan of Merger.
(d) NCBC is not a party to, or subject to, or bound by, any agreement or
judgment, order, letter of understanding, writ, prohibition, injunction or
decree of any court or other governmental body of competent jurisdiction,
or any law which would prevent the execution and delivery of this Agreement
and the Plan of Merger by NCBC, or the consummation of the transactions
contemplated hereby and thereby, and no action or proceeding is pending
against NCBC in which the validity of this Agreement, the transactions
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contemplated hereby or any action which has been taken by any of such
Parties in connection herewith or in connection with the transaction
contemplated hereby is at issue.
5.3 Capital Stock. The currently authorized capital stock of NCBC consists
of (i) 75,000,000 shares of NCBC Common Stock, of which 49,137,390 shares are
issued and outstanding as of March 6, 1998, and (ii) 5,000,000 shares of NCBC
Preferred Stock, of which no shares are issued and outstanding. All of the
issued and outstanding shares of NCBC Capital Stock are, and all of the shares
of NCBC Common Stock to be issued in exchange for shares of FCB Common Stock
upon consummation of the Merger, when issued in accordance with the terms of
this Agreement, will be, duly and validly issued and outstanding and fully
paid and nonassessable under the Tennessee Code and the NCBC Charter. None of
the outstanding shares of NCBC Capital Stock has been, and none of the shares
of NCBC Common Stock to be issued in exchange for shares of FCB Common Stock
upon consummation of the Merger will be, issued in violation of any preemptive
rights of the current or past shareholders of NCBC. NCBC has reserved for
issuance a sufficient number of shares of NCBC Common Stock for the purpose of
issuing shares of NCBC Common Stock in accordance with the provisions of
Section 2.1(b) and 2.2 of this Agreement.
On April 22, 1998, NCBC's shareholders approved a proposal to amend the NCBC
Charter to increase the number of authorized shares from 75,000,000 to
175,000,000, and subsequently, the NCBC Board of Directors declared a two-for-
one stock split payable on July 1, 1998, for shareholders of record on June 5,
1998. Pursuant to the provisions of Section 2.3 of this Agreement, the
Exchange Ratio shall be proportionately adjusted to reflect such stock split.
5.4 SEC Filings; Financial Statements.
(a) NCBC has filed and made available to FCB all SEC Documents required
to be filed by NCBC since December 31, 1994. The NCBC SEC Documents (i) at
the time filed, complied in all material respects with the applicable
requirements of the Securities Laws and (ii) did not, at the time they were
filed (or, if amended or superseded by a filing prior to the date of this
Agreement, then on the date of such filing) contain any untrue statement of
a material fact or omit to state a material fact required to be stated in
such NCBC SEC Documents or necessary in order to make the statements in
such NCBC SEC Documents, in light of the circumstances under which they
were made, not misleading. Except for NCBC Subsidiaries that are registered
as a broker, dealer or investment advisor, no NCBC Subsidiary is required
to file any SEC Documents.
(b) Each of the NCBC Financial Statements (including, in each case, any
related notes) contained in the NCBC SEC Reports, including any NCBC SEC
Reports filed after the date of this Agreement until the Effective Time,
complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited interim statements, as permitted by
Form 10-Q of the SEC), and fairly presented in all material respects the
consolidated financial position of NCBC and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount or effect.
5.5 Absence of Undisclosed Liabilities. No NCBC Company has any liabilities
that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on NCBC, except liabilities which are accrued or
reserved against in the consolidated balance sheets of NCBC as of December 31,
1997, included in the NCBC Financial Statements made available prior to the
date of this Agreement or reflected in the notes thereto. No NCBC Company has
incurred or paid any liability since December 31, 1997, except for such
liabilities incurred or paid (i) in the ordinary course of business consistent
with past business practice and which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on NCBC or (ii) in
connection with the transactions contemplated by this Agreement.
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5.6 Absence of Certain Changes or Events. Since December 31, 1997, except as
disclosed in the NCBC Financial Statements delivered prior to the date of this
Agreement or contemplated by pending federal legislation applicable to
financial institutions generally, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on NCBC, and (ii) the NCBC
Companies have not taken any action, or failed to take any action, prior to
the date of this Agreement, which action or failure, if taken after the date
of this Agreement, would represent or result in a material breach or violation
of any of the covenants and agreements of NCBC provided in Article 6 of this
Agreement.
5.7 Compliance with Laws. NCBC is duly registered as a bank holding company
under the BHC Act and as a savings and loan holding company under the HOLA.
Each NCBC Company has in effect all Permits necessary for it to own, lease or
operate its material assets and to carry on its business as now conducted, and
there has occurred no default under any such permit. No NCBC Company:
(a) Is in violation of any Laws, Orders or Permits applicable to its
business or employees conducting its business; and
(b) Has received any notification or communication from any agency or
department of federal, state or local government or any Regulatory
Authority or the staff thereof (i) asserting that any NCBC Company is not
in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, (ii) threatening to revoke any
Permits, or (iii) requiring any NCBC Company to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment or memorandum or understanding, or to adopt any board resolution
or similar undertaking, which restricts materially the conduct of its
business, or in any manner relates to its capital adequacy, its credit or
reserve policies, its management, or the payment of dividends.
5.8 Legal Proceedings. There is no Litigation pending, or, to the Knowledge
of NCBC, threatened (or unasserted but considered probable of assertion and
which if asserted would have at least a reasonable probability of an
unfavorable outcome) against any NCBC Company, or against any Asset, interest
or right of any of them, and there are no orders of any regulatory
authorities, other than governmental authorities, or arbitrators against any
NCBC Company, in each case that is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on NCBC.
5.9 Reports. Since January 1, 1995, NCBC 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) other
Regulatory Authorities, and (iii) any applicable state securities or banking
authorities (except, in the case of state securities authorities, failures to
file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on NCBC). As of their respective dates,
each of such reports and documents, including the financial statements,
exhibits and schedules thereto, complied in all material respects with all
applicable Laws. As of its respective date, each such report and document did
not, in all material respects, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which
they were made, not misleading.
5.10 Statements True and Correct. No statement, certificate, instrument or
other writing furnished or to be furnished by any NCBC Company or any
Affiliate thereof to FCB pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any untrue
statement of material fact or will omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the information supplied or to be supplied
by any NCBC Company or any Affiliate thereof for inclusion in the Registration
Statement to be filed by NCBC with the SEC, will, when the Registration
Statement becomes effective, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any NCBC Company or any Affiliate thereof for inclusion in the
Proxy Statement to be mailed to FCB Shareholders in connection with the
shareholders' meetings, and any other
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documents to be filed by any NCBC Company or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed,
and with respect to the Proxy Statement, when first mailed to the shareholders
of FCB, 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, or, in the case
of the 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 correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the shareholders' meetings. All documents that any NCBC Company or
any Affiliate thereof is responsible for filing with any Regulatory Authority
in connection with the transactions contemplated hereby will comply as to form
in all material respects with the provisions of applicable law.
5.11 Accounting, Tax and Regulatory Matters. No NCBC Company or any
Affiliate thereof has taken any action or has any knowledge of any fact or
circumstance relating to NCBC that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of IRC Section 368(a), or (ii) materially impede or delay receipt of
any Consents of Regulatory Authorities referred to in Section 8.1(b) of this
Agreement or result in the imposition of a condition or restriction of the
type referred to in the last sentence of such Section.
ARTICLE 6
CONDUCT OF BUSINESS PENDING CONSUMMATION
6.1 Affirmative Covenants of FCB. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, unless the
prior written consent of NCBC shall have been obtained, and except as
otherwise expressly contemplated herein, FCB shall, and shall cause each of
its Subsidiaries to: (i) operate its business only in the usual, regular and
ordinary course (which shall include matters of the type set forth in Section
6.1 of the FCB Disclosure Memorandum), (ii) preserve intact its business
organization and assets and maintain its rights and franchises, and (iii) take
no action which would (a) materially adversely affect the ability of any party
to obtain any Consents required for the transactions contemplated hereby
without imposition of a condition or restriction of the type referred to in
the last sentence of Section 8.1(b) of this Agreement or prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or as a reorganization within the
meaning of Section 368(a) of the IRC or (b) adversely affect in any material
respect the ability of any Party to perform its covenants and agreements under
this Agreement.
6.2 Negative Covenants of FCB. Except as specifically permitted by this
Agreement, from the date of this Agreement until the earlier of the Effective
Time or the termination of this Agreement, FCB covenants and agrees that it
will not do or agree to commit to do, or permit any of its Subsidiaries to do
or agree or commit to do, any of the following without the prior written
consent of the chief executive officer, president or chief financial officer
of NCBC, which consent shall not be unreasonably withheld:
(a) Amend the Articles of Incorporation, Bylaws or other governing
instruments of any FCB Company; or
(b) Incur any additional debt obligation or other obligation for borrowed
money (other than indebtedness of a FCB Company to another FCB Company) in
excess of an aggregate of $100,000 (for the FCB Companies on a consolidated
basis) except in the ordinary course of the business of FCB Bank Subsidiary
consistent with past practices (which shall include creation of deposit
liabilities, purchases of federal funds, advances from the Federal Reserve
Bank or Federal Home Loan Bank, and entry into repurchase agreements fully
secured by U.S. government or agency securities), or impose, or suffer the
imposition on any Asset of either FCB Company of any lien or permit any
such lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts
established in the ordinary course of business, the satisfaction of legal
requirements in the exercise of trust
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powers, and Liens in effect as of the date hereof that are disclosed in the
FCB Disclosure Memorandum); or
(c) Repurchase, redeem or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans or under the
FCB Option Plans), directly or indirectly, any shares, or any securities
convertible into any shares, of the capital stock of any FCB Company, or
declare or pay any dividend or make any other distribution in respect of
FCB capital stock, with the exception of a cash dividend not to exceed Two
Hundred Fifty Thousand Dollars ($250,000.00) the declaration date of which
shall be before 30 days prior to the Effective Time; provided, however,
that the declaration and payment of such dividend shall not (i) prevent the
Merger from qualifying for pooling-of-interests accounting treatment or
(ii) result in a total consolidated stockholder's equity of FCB of less
than $8,330,000; or
(d) Except pursuant to this Agreement or under the FCB Options Plans,
issue, sell, pledge, encumber, authorize the issuance of, enter into any
contract to issue, sell, pledge, encumber, or authorize the issuance of or
otherwise permit to become outstanding, any additional shares of FCB Common
Stock or any other capital stock of either FCB Company, 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 or
any stock equivalent type rights; or
(e) Except under the FCB Option Plans or sales of repossessed property,
adjust, split, combine or reclassify any capital stock of either FCB
Company or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of FCB Common Stock, or sell,
lease, mortgage or otherwise dispose of or otherwise encumber any shares of
capital stock of FCB Bank Subsidiary (unless any such shares of stock are
sold or otherwise transferred to another FCB Company) or any Asset having a
book value in excess of $25,000, other than in the ordinary course of
business for reasonable and adequate consideration; or
(f) Except for purchases of U.S. Treasury securities or U.S. government
agency securities, which in either case have maturities of three (3) years
or less, purchase any securities or make any material investment, either by
purchase of stock or securities, contributions to capital, asset transfers,
or purchase of any assets, in any Person other than FCB Bank Subsidiary, or
otherwise acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, (ii)
acquisitions of control by a depository institution Subsidiary in its
fiduciary capacity, or (iii) the creation of new wholly owned Subsidiaries
organized to conduct or continue activities otherwise permitted by this
Agreement; or
(g) Grant any increase in compensation or benefits to the employees or
officers of either FCB Company, except in accordance with past practice
disclosed in Section 6.2(g) of the FCB Disclosure Memorandum or as required
by law; pay any severance or termination pay or any bonus other than
pursuant to written policies or written contracts in effect on the date of
this Agreement and disclosed in Section 6.2(g) of the FCB Disclosure
Memorandum; and enter into or amend any severance agreements with officers
of either FCB Company; grant any material increase in fees or other
increases in compensation or other benefits to directors of either FCB
Company except in accordance with past practice disclosed in Section 6.2(g)
of the FCB Disclosure Memorandum; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee benefits
(other than the acceleration of vesting which occurs under a benefit plan
upon a change of control of FCB); or
(h) Enter into or amend any employment contract between either FCB
Company and any Person (unless such amendment is required by law) that the
FCB Company 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) Adopt any new employee benefit plan of either FCB Company or
terminate or withdraw from, or make any material change in or to, any
existing employee benefit plans of either FCB Company other than any such
change that is required by law or that, in the opinion of counsel is
necessary or advisable to
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maintain the tax-qualified status of any such plan, or make any
distributions from such employee benefit plans, except as required by law,
the terms of such plans or consistent with past practice; or
(j) Make any significant change in any tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in tax laws or regulatory accounting requirements or
GAAP; or
(k) Commence any litigation other than in accordance with past practice,
settle any litigation involving any liability of either FCB Company for
material money damages or restrictions upon the operations of either FCB
Company; or
(l) Except in the ordinary course of business, enter into, modify, amend
or terminate any material Contract (excluding any loan contract) or waive,
release, compromise or assign any material rights or claims.
6.3 Covenants of NCBC. From the date of this Agreement until the earlier of
the Effective Time or the termination of this Agreement, NCBC covenants and
agrees that it shall (i) continue to conduct its business and the business of
its Subsidiaries in a manner designed in its reasonable judgment to enhance
the long-term value of the NCBC Common Stock and the business prospects of the
NCBC Companies, and (ii) take no action which would (a) materially adversely
affect the ability of any Party to obtain any Consents required for the
transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 8.1(b) of
this Agreement or prevent the transactions contemplated hereby, including the
Merger, from qualifying for pooling-of-interests accounting treatment or as a
reorganization within the meaning of IRC Section 368(a), or (b) materially
adversely affect the ability of any Party to perform its covenants and
agreements under this agreement, provided, that the foregoing shall not
prevent any NCBC Company from acquiring any other assets or businesses or from
discontinuing or disposing of any of its assets or business if such action is,
in the judgment of NCBC, desirable in the conduct of the business of NCBC and
its Subsidiaries and would not, in the judgment of NCBC, likely delay the
Effective time to a date subsequent to the date set forth in Section 9.1(e) of
this Agreement.
6.4 Adverse Changes in Condition. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
6.5 Reports. Each Party and its Subsidiaries shall file all reports required
to be filed by it with Regulatory Authorities 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. If financial statements
are contained in any such reports filed with any Regulatory Authority pursuant
to the Securities Laws, such financial statements will fairly present the
consolidated financial position of the entity filing such statements as of the
dates indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows for the periods then ended in accordance
with GAAP or regulatory accounting (subject in the case of interim financial
statements to normal recurring year-end adjustments that are not material). As
of their respective dates, such reports filed with any Regulatory Authorities
pursuant to the Securities Laws will comply in all material respects with the
Securities Laws and will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Any financial statements contained in
any other reports to another Regulatory Authority shall be prepared in
accordance with laws applicable to such reports.
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ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 Registration Statement; Proxy Statement; Shareholder Approvals. NCBC
shall file the Registration Statement with the SEC, and shall use its
reasonable effort to cause the Registration Statement to become effective
under the 1933 Act and take any action required to be taken under the
applicable state Blue Sky or Securities Laws in connection with the issuance
of the shares of NCBC Common Stock upon consummation of the Merger. FCB shall
furnish all information concerning it and the holders of its capital stock as
NCBC may reasonably request in connection with such action. FCB shall call a
shareholders' meeting, to be held as soon as reasonably practicable after the
Registration Statement is declared effective by the SEC, for the purpose of
voting upon approval of this Agreement and the Plan of Merger and such other
related matters as its deems appropriate. In connection with the shareholders'
meeting, (i) NCBC and FCB shall prepare a Proxy Statement (which shall be
included in the Registration Statement with the SEC) and mail such Proxy
Statement to the shareholders of FCB, (ii) the Parties shall furnish to each
other all information concerning them that they may reasonably request in
connection with such Proxy Statement, (iii) the Board of Directors of FCB
shall recommend (subject to compliance with their fiduciary duties as advised
by counsel) to their shareholders the approval of the matters submitted for
approval, and (iv) the Board of Directors and officers of FCB shall (subject
to compliance with their fiduciary duties as advised by counsel) use their
reasonable efforts to obtain such shareholders' approvals.
7.2 Exchange Listing. NCBC shall use its reasonable efforts to list, prior
to the Effective Time, on the NASDAQ, subject to official notice of issuance,
the shares of NCBC Common Stock to be issued to the holders of FCB Common
Stock or FCB Stock Options pursuant to the Merger, and NCBC shall give all
notices and make all filings with the NASDAQ required in connection with the
transactions contemplated herein.
7.3 Applications. NCBC shall prepare and file, and FCB shall cooperate in
the preparation and, where applicable, filing of applications with all
Regulatory Authorities having jurisdiction over the transactions contemplated
by this Agreement seeking the requisite Consents necessary to consummate the
transactions contemplated by this Agreement. At least two business days prior
to filing, NCBC shall provide FCB and its counsel with copies of such
applications to review and approve with respect to information relating to
FCB. The Parties shall deliver to each other copies of all filings,
correspondence and orders to and from, all Regulatory Authorities in
connection with the transactions contemplated hereby as soon as practicable
upon their becoming available.
7.4 NCBC Filings with State Offices. Upon the terms and subject to the
conditions of this Agreement, NCBC and FCB shall execute and file the Articles
of Merger with the Secretary of State of the states of Georgia and Tennessee
in connection with the Closing.
7.5 Agreement as to Efforts to Consummate. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable 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 to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 8 of this Agreement; provided, however, that nothing herein shall
preclude either Party from exercising its rights under this Agreement. Each
Party shall use, and shall cause each of its Subsidiaries to use, its
reasonable efforts to obtain all Consents necessary or desirable for the
consummation of the transactions contemplated by this Agreement; provided,
however, that nothing in this Section 7.5 shall be construed to obligate NCBC
to take any action to meet any condition required for it to obtain any Consent
if NCBC shall, in its sole discretion, deem such condition to be unreasonable
or to constitute a significant impediment upon NCBC's ability to carry on its
business or acquisition programs or to require NCBC to increase its capital
ratios to amounts in excess of the Federal Reserve's minimum capital ratio
guidelines which may from time to time be in effect.
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7.6 Investigation and Confidentiality.
(a) Prior to the Effective Time, each Party shall keep the other Party
advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and properties of it
and its Subsidiaries and of their respective financial and legal conditions
as the other Party reasonably requests, provided that such investigation
shall be reasonably related to the transactions contemplated hereby and
shall not interfere unnecessarily with normal operations. No investigation
by a Party shall affect the representations and warranties of the other
Party.
(b) Each Party shall, and shall cause its advisers and agents to,
maintain the confidentiality of all confidential information furnished to
it by the other Party concerning its and its Subsidiaries' businesses,
operations and financial positions and shall not use such information for
any purpose except in furtherance of the transactions contemplated by this
Agreement. If this Agreement is terminated prior to the Effective Time,
each Party shall promptly return or certify the destruction of all
documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) FCB shall use its reasonable efforts to exercise its rights under
confidentiality agreements entered into with persons which are considering
an Acquisition Proposal with FCB to preserve the confidentiality of the
information relating to FCB provided to such persons and their Affiliates
and representatives.
(d) Each Party shall give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the
other Party which it has discovered through the course of its investigation
and which represents either a material breach of any representation,
warranty, covenant or agreement of the other Party or which has had or is
reasonably likely to have a Material Adverse Effect on the other Party.
7.7 Press Release. Prior to the Effective Time, FCB and NCBC shall consult
with 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, that nothing in this Section 7.7
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by law.
7.8 Certain Actions.
(a) Except with respect to this Agreement and the Plan of Merger and the
transactions contemplated hereby and thereby, after the date of this
Agreement, neither FCB Company nor any Affiliate thereof nor any
representatives thereof retained by either FCB Company shall directly or
indirectly solicit or knowingly encourage any Acquisition Proposal by any
Person. Except to the extent necessary to comply with the fiduciary duties
of FCB Board of Directors as advised by counsel, neither FCB Company and no
Affiliate or representative of FCB or either FCB Company shall furnish any
non-public information that it is not legally obligated to furnish,
negotiate with respect to, or enter into, or agree to enter into any
contract with respect to any Acquisition Proposal, but FCB may communicate
information about such an Acquisition Proposal to its shareholders if and
to the extent that it is required to do so in order to comply with its
legal obligations as advised by counsel. FCB shall promptly notify NCBC
orally and in writing in the event that it receives any inquiry or proposal
relating to any such transaction. FCB shall (i) immediately cease and cause
to be terminated any existing activities, discussions or negotiations with
any persons conducted heretofore with respect to any of the foregoing, and
(ii) direct and use its reasonable efforts to cause all of its
representatives not to engage in any of the foregoing.
(b) As a condition of and as an inducement to NCBC's entering this
Agreement, FCB covenants, acknowledges and agrees that it shall be a
specific, absolute and unconditionally binding condition precedent to FCB's
entering into a letter of intent, agreement in principle, or definitive
agreement (whether or not considered binding, nonbinding, conditional or
unconditional) with any third party with respect to an Acquisition
Proposal, or supporting or indicating an intent to support an Acquisition
Proposal, other than
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this Agreement and the transactions contemplated in this Agreement
regardless of whether FCB has otherwise complied with the provisions of
Section 7.8(a) hereof, that FCB or such third party which is a party of the
Acquisition Proposal shall have paid NCBC the sum of Five Hundred Thousand
Dollars ($500,000.00), which sum represents the (i) direct costs and
expenses (including, but not limited to, fees and expenses incurred by
NCBC's financial or other consultants, printing costs, investment bankers,
accountants, and counsel) incurred by or on behalf of NCBC in negotiating
and undertaking to carry out the transactions contemplated by this
Agreement; and (ii) indirect costs and expenses of NCBC in connection with
the transactions contemplated by this Agreement, including NCBC's
management time devoted to negotiation and preparation for the transactions
contemplated by this Agreement; and (iii) NCBC's loss as a result of the
transactions contemplated by this Agreement not being consummated.
Accordingly, FCB hereby stipulates and covenants that prior to FCB entering
into a letter of intent, agreement in principle, or definitive agreement
(whether binding, nonbinding, conditional or unconditional) with any third
party with respect to an Acquisition Proposal or supporting or indicating
an intent to support an Acquisition Proposal, either FCB or such third
party shall have paid to NCBC the amount set forth above in immediately
available funds to satisfy the specific absolute, and unconditionally
binding condition precedent imposed by this Section 7.8. Notwithstanding
anything to the contrary in this Section 7.8(b) in the event such
Acquisition Proposal should be the result of a hostile takeover of FCB, any
sums due NCBC hereunder shall be paid only at the closing of the
transactions set forth in such Acquisition Proposal. NCBC acknowledges that
under no circumstances shall any officer or director of FCB (unless such
officer or director shall have an interest in a potential acquiring party
in any Acquisition Proposal) be held personally liable to NCBC for any
amount of the foregoing payment. On the payment of such amount to NCBC,
NCBC shall have no cause of action or claim (either in law or in equity)
whatsoever against FCB, or any officer or director of FCB, with respect to
or in connection with such Acquisition Proposal, this Agreement or the Plan
of Merger, and upon payment of such amount this Agreement shall terminate.
(c) The requirements, conditions and obligations imposed by this Section
7.8 shall continue in full force and effect from the date of this Agreement
until December 31, 1998, unless and until the earlier of any of the events
specified in the second paragraph of this paragraph (c) shall occur, in
which event FCB shall not be obligated to pay the amount required by this
Section 7.8 as a condition precedent to such transaction.
This Agreement shall have been terminated (i) mutually by the Parties
pursuant to Section 9.1(a) of this Agreement; (ii) by FCB pursuant to
Section 9.1(b) of this Agreement; (iii) Reserved; (iv) by either Party
pursuant to Section 9.1(d)(i) of this Agreement; (v) by FCB pursuant to
Section 9.1(f) of this Agreement, other than due to the failure to satisfy
Section 8.1(a); or (vi) by FCB pursuant to Section 9.1(c) of this
Agreement, but in such event only on the basis of (a) material inaccuracy
(without waiver thereof) of representations and warranties of NCBC as
contemplated by the provisions of Section 8.3(a) of this Agreement; (b)
noncompliance by NCBC with its obligations as required by the provisions of
Section 8.3(b) of this Agreement; or (c) the failure of NCBC to deliver all
certificates as required by the provisions of Section 8.3(c) of this
Agreement, or (d) the failure of NCBC to satisfy the conditions set forth
in Section 8.3(d) of this Agreement.
7.9 Accounting and Tax Treatment. Each of the Parties undertakes and agrees
to use its reasonable efforts to cause the Merger, and to take no action which
would cause the Merger not, to qualify for pooling-of-interests accounting
treatment and treatment as a "reorganization" within the meaning of IRC
Section 368(a) for federal income tax purposes.
7.10 State Takeover Laws. Each FCB Company shall take all reasonable steps
to exempt the transactions contemplated by this Agreement from, or if
necessary challenge the validity or applicability, of any applicable Takeover
Law.
7.11 Articles of Incorporation Provisions. Each FCB Company shall take all
necessary action to ensure that the entering into of this Agreement and the
Plan of Merger and the consummation of the Merger and the
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other transactions contemplated hereby and thereby do not and will not result
in the grant of any rights to any Person under the Articles of Incorporation,
Bylaws, or other governing instruments of either FCB Company (other than
voting, dissenters' appraisal and other similar rights) or restrict or impair
the ability of NCBC or any of its Subsidiaries to vote, or to exercise the
rights of a shareholder with respect to, shares of any FCB Company that may be
directly or indirectly acquired or controlled by it.
7.12 Agreement of Affiliates. FCB has disclosed in Section 7.12 of the FCB
Disclosure Memorandum all persons whom it reasonably believes is an
"affiliate" of FCB for purposes of Rule 145 under the 1933 Act. FCB shall use
its reasonable efforts to cause each such Person to deliver to NCBC not later
than thirty (30) days prior to the Effective Time, a written agreement,
substantially in the form of Exhibit 3, providing that such Person will not
sell, pledge, transfer, or otherwise dispose of the shares of FCB Common Stock
held by such Person except as contemplated by such agreement or by this
Agreement and will not sell, pledge, transfer or otherwise dispose of the
shares of NCBC Common Stock to be received by such Person upon consummation of
the Merger except in compliance with applicable provisions of the 1933 Act and
the rules and regulations thereunder and until such time as financial results
covering at least thirty (30) days of combined operations of NCBC and FCB have
been published within the meaning of Section 201.01 of the SEC's Codification
of Financial Reporting Policies. If the Merger will qualify for pooling-of-
interests accounting treatment, shares of NCBC Common Stock issued to such
affiliates of FCB in exchange for shares of FCB Common Stock shall not be
transferable until such time as financial results covering at least thirty
(30) days of combined operations of NCBC and FCB have been published within
the meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 7.12 (and NCBC shall be entitled to
place restrictive legends upon certificates for shares of NCBC Common Stock
issued to affiliates of FCB pursuant to this Agreement and to enforce the
provisions of this Section 7.12). NCBC shall not be required to maintain the
effectiveness of the Registration Statement under the 1933 Act for the
purposes of resale of NCBC Common Stock by such affiliates.
7.13 Employee Benefits and Contracts.
(a) Following the Effective Time, NCBC shall provide to officers and
employees of the FCB Companies employee benefits under employee benefit and
welfare plans, on terms and conditions which when taken as a whole are
substantially similar to those currently provided by the NCBC Companies to
their similarly situated officers and employees. To the extent permitted by
FCB's KSOP with 401(k) feature and applicable law, as soon as reasonably
practical after consummation of the Merger, distributions will be made
under, and in accordance with, FCB's KSOP with 401(k) feature previously
terminated pursuant to Section 4.15(h) of this Agreement will be terminated
and distributions made in accordance therewith. For purposes of
participation, vesting and other benefit accrual, under any such NCBC
employee benefit plans, the service of the employees of the FCB Companies
prior to the Effective Time shall be treated as service with an NCBC
Company participating in such employee benefit plan. Nothing herein shall
be deemed to have reduced, contracted, enlarged, undertaken, authorized,
approved or otherwise to have affected whatever contractual rights the
officers and employees of FCB may have under existing documentation other
than as expressly stated herein, and nothing herein shall be deemed to be
an employment contract, agreement or understanding, or offer of employment
by NCBC or any of its direct or indirect Subsidiaries after the Effective
Time. With respect to calendar year 1998, NCBC hereby agrees to (i) honor
FCB's existing policy of paying hourly non-exempt personnel for accrued but
unused sick days, and (ii) pay a one-time annual year-end bonus to
employees and officers between Thanksgiving and Christmas, 1998, consistent
with FCB's practice in prior years. FCB hereby represents and covenants
that it has accrued and will continue to accrue pursuant to GAAP amounts
sufficient to enable it to make the foregoing payments. Following Closing,
NCBC agrees to allow the current directors of FCB to participate in its
health insurance plans generally available to employees of NCBC, subject to
eligibility and any other requirements of such plans.
(b) FCB shall use its best efforts to obtain prior to the Closing the
consent of each participant in the Director's Indexed Fee Continuation
Program described in Section 4.15(a) of the FCB Disclosure Memorandum,
including the Endorsement Split Dollar Plan (the "Benmark Plan") to the
termination of
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the Benmark Plan effective as of the Effective Time. Prior to the Closing,
FCB shall provide to NCBC a schedule setting forth the amount of
contributions made to the Benmark Plan by the participants from their own
funds. Promptly following the Effective Time, NCBC shall pay to each such
participant an amount equal to the contribution made by such participant,
together with interest thereon from the date(s) of the contribution to the
day prior to the payment at a per annum rate equal to the internal rate of
return earned by the Benmark Plan on the amount contributed.
(c) FCB shall use its best efforts to obtain prior to the Closing the
consent of each participant, other than J. Steven Walraven, in the
Executive Private Pension Plan described in Section 4.8(f) of the FCB
Disclosure Memorandum (the "EPP") to the modification of the EPP with
respect to all participants other than Mr. Walraven effective as of the
Effective Time, as described below. Following the Effective Time, NCBC
shall maintain the EPP for the benefit of Mr. Walraven and shall make all
contributions to the EPP required to provide Mr. Walraven with the benefits
to which he is entitled pursuant to the EPP as described in that certain
Executive Private Pension Agreement dated April 1, 1997, between Mr.
Walraven and the FCB Bank Subsidiary and in that certain Officer's Benefit
Statement dated as of February 17, 1998, between Mr. Walraven and the FCB
Bank Subsidiary. As modified, the EPP shall provide that each participant
in the EPP who consents to the modification shall be entitled to receive
the amounts set forth below at the times set forth below:
<TABLE>
<CAPTION>
PARTICIPANT AMOUNT PAYABLE AT NORMAL RETIREMENT AGE ($) AMOUNT PAYABLE UPON EARLY TERMINATION ($)
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
D.F. Dukes 14,875.00 944.00
-------------------------------------------------------------------------------------------------------
R.F. Grizzle 13,313.00 558.00
-------------------------------------------------------------------------------------------------------
V. Sutton 14,841.00 1,809.00
-------------------------------------------------------------------------------------------------------
D.P. Lochridge 9,212.00 392.00
-------------------------------------------------------------------------------------------------------
E.R. Lee 8,580.00 375.00
-------------------------------------------------------------------------------------------------------
B.J. Warren 17,921.00 3,613.00
-------------------------------------------------------------------------------------------------------
C.M. White 5,406.00 348.00
</TABLE>
Except as provided in the following sentence, the amount payable at Normal
Retirement Age (as defined in the Executive Private Pension Agreement
between the Bank and each participant) shall be payable in accordance with
the provisions of Articles III and IV of the Executive Private Pension
Agreement between the Bank and each participant (including, without
limitation, the provisions that contemplate the payment of such amount to
the participant as a "Disability Benefit" or a "Death Benefit").
Notwithstanding the previous sentence, if any participant leaves the employ
of the Bank prior to his or her normal retirement date (other than because
of death, disability or termination by the Bank for any reason other than
for "cause" (as defined herein)), such participant shall be paid, in a lump
sum, the amount shown in the table above as the "Amount Payable upon Early
Termination" as soon as practicable following his or her termination and
shall have no further rights pursuant to the EPP. If such participant
leaves the Bank prior to Normal Retirement Age due to death or disability
or due to dismissal by the Bank for any reason than for "cause", then the
Amount Payable at Normal Retirement Age shall be payable in accordance with
the provisions of Articles III and IV of the EPP; provided, however, that
any "Early Retirement Benefit" (as defined in the EPP) shall be paid
commencing on the Normal Retirement Date. "Cause" shall mean (i) conduct by
a participant that amounts to fraud, material dishonesty, gross negligence
or willful misconduct in the performance of participant's duties; (ii) the
conviction (from which no appeal may be, or is, timely taken) of the
participant of a felony; (iii) the initiation of suspension or removal
proceedings against the participant by federal or state regulatory
authorities under lawful authority pursuant to provision of federal or
state law or regulation; or (iv) the knowing violation of federal or state
banking laws or regulations. By consenting to the modification of the EPP
as described above, each participant will agree that (i) neither the Bank
nor any successor in interest to the Bank shall have any obligation to make
contributions to the EPP following the Effective Time; (ii) the participant
shall have only those rights with
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respect to the EPP described above; and (iii) the participant's rights to
receive benefits from the EPP shall remain subject to the forfeiture
provisions of Section 3.5 of the applicable Executive Private Pension
Agreement. Following the Effective Time, NCBC shall maintain the EPP
(without making further financial contributions thereto) to the extent
required to provide the benefits to the participants as described above.
7.14 D&O Coverage. At the Effective Time, NCBC will provide, errors and
omissions insurance coverage for FCB's directors and officers, at its
election, either (i) by purchasing continuation coverage under FCB's current
policy for a period not less than six (6) years after the Effective Time, or
(ii) obtain coverage under NCBC's current policy to provide coverage for FCB's
directors and officers on a prior acts basis for a period not less than six
(6) years prior to the Effective Time.
7.15. Indemnification.
(a) With respect to all claims brought during the period of three (3)
years after the Effective Time, NCBC shall indemnify, defend and hold
harmless present and former directors, officers, employees and agents of
FCB and FCB Companies (the "FCB Entities") (each an "Indemnification
Party") against all Liabilities arising out of actions or omissions arising
out of the Indemnified Party's service or services as directors, officers,
employees or agents of an Investor Entity, or at the request of an Investor
Entity, of another corporation, partnership, joint venture, trust or other
enterprise occurring at or prior to the Effective Time (including
transactions contemplated by this Agreement) to the fullest extent
permitted under Georgia Law and the Articles of Incorporation and Bylaws of
FCB as in effect on the date hereof, including provisions relating to
advances of expenses incurred in the defense of any Litigation and whether
or not any FCB Company or NCBC is insured against any such matter. Without
limiting the foregoing, in any case in which approval by the Surviving
Corporation is required to effectuate any indemnification, the Surviving
Corporation shall direct, at the election of the Indemnified Party, that
the determination of any such approval shall be made by independent counsel
mutually agreed upon between NCBC and the Indemnified Party.
(b) Any Indemnified Party wishing to claim indemnification under
paragraph (a) of this Section 7.15, upon learning of any such Liability of
Litigation, shall promptly notify NCBC thereof. In the event of any such
Litigation (whether arising before or after the Effective Time), (i) the
Surviving Corporation shall have the right to assume the defense thereof
and the Surviving Corporation shall not be liable to such Indemnified
Parties for any legal expenses of other counsel or any other expenses
subsequently incurred by such Indemnified Parties in connection with the
defense thereof, except that if the Surviving Corporation elects not to
assume such defense or counsel for the Indemnified Parties advised that
there are substantive issues which raise conflicts of interest between the
Surviving Corporation and the Indemnified Parties, the Indemnified Parties
may retain counsel satisfactory to them, and the Surviving Corporation
shall be obligated pursuant to this paragraph (b) to pay for only one firm
of counsel for all Indemnified Parties in any jurisdiction, (ii) the
Indemnified Parties will cooperate in the defense of any such Litigation,
and (iii) the Surviving Corporation shall not be liable for any settlement
effected without its prior written consent; and provided further that the
Surviving Corporation shall not have any obligation thereunder to any
Indemnified Party when and if a court of competent jurisdiction shall
determine, and such determination shall have become final, that the
indemnification of such Indemnified Party in the manner contemplated hereby
is prohibited by applicable law.
ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
8.1 Conditions to Obligations of Each Party. The respective obligations of
each Party to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 10.6
of this Agreement:
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<PAGE>
(a) Shareholder Approval. The shareholders of FCB shall have approved
this Agreement and the Plan of Merger and the consummation of the
transactions contemplated hereby and thereby, including the Merger, as and
to the extent required by law, by the provisions of any governing
instruments.
(b) Regulatory Approvals. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by law shall have
expired. No Consent obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner, which in the reasonable judgment of
the Board of Directors of either party would so materially adversely impact
the financial or economic benefits of the transactions contemplated by this
Agreement that, had such condition or requirement been known, either party
would not, in its reasonable judgment, have entered into this Agreement.
(c) Consents. Each Party shall have obtained any and all Consents
required for consummation of the Merger (other than those referred to in
Sections 8.1(b) and 8.1(c) of this Agreement) or for the preventing of any
default under any contract or permit of such Party which, if not obtained
or made, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party.
(d) Legal Proceedings. No court or government or regulatory authority of
competent jurisdiction shall have enacted, issued, promulgated, enforced or
entered any law or order (whether temporary, preliminary or permanent) or
taken any other action which prohibits, restricts or makes illegal
consummation of the transactions contemplated by this Agreement and the
Plan of Merger.
(e) Registration Statement. The Registration Statement shall be effective
under the 1933 Act, no stop orders suspending the effectiveness of the
Registration Statement shall have been issued, no action, suit, proceeding
or investigation by the SEC to suspend the effectiveness thereof shall have
been initiated and be continuing, and all necessary approval under state
securities laws or the 1933 Act, or 1934 Act relating to the issuance or
trading of the shares of NCBC Common Stock pursuant to the Merger shall
have been received.
(f) Exchange Listing. The shares of NCBC Common Stock issuable pursuant
to the Merger shall have been approved for listing on the NASDAQ, subject
to official notice of issuance.
(g) Tax Matters. Each of the Parties shall have received an opinion from
King & Spalding in form and substance reasonably satisfactory to such
Party, dated the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion
which are consistent with the state of facts existing at the Effective
Time, for federal income tax purposes:
(i) The Merger will be treated as a reorganization within the meaning
of Section 368(a) of the IRC;
(ii) No gain or loss will be recognized by NCBC or FCB as a result of
the Merger;
(iii) No gain or loss will be recognized by the shareholders of FCB
upon the exchange of FCB Common Stock for NCBC Common Stock pursuant to
the Merger (except with respect to cash received in lieu of a
fractional share interest in NCBC Common Stock) or by the holders of
FCB Options upon the conversion of such options into rights with
respect to NCBC Common Stock; and
(iv) The aggregate tax basis of NCBC Common Stock received by a FCB
shareholder pursuant to the Merger will be the same as the aggregate
tax basis of the FCB Common Stock surrendered in exchange therefor
(excluding any basis allocable to a fractional share of NCBC Common
Stock for which cash is received).
In rendering such opinion, King & Spalding may require and rely upon
representations and covenants, including those contained in
certificates of officers of NCBC, FCB, and others, reasonably
satisfactory in form and substance to such counsel.
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<PAGE>
(i) Employment Agreements. NCBC and each of J. Steven Walraven and Rodney
L. Grizzle shall have entered into an Employment Agreement for a term of
three (3) years providing for compensation and job descriptions not less
favorable than their respective compensation and job responsibilities as of
March 31, 1998.
8.2 Conditions to Obligations of NCBC. The obligations of NCBC to perform
this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by NCBC pursuant to Section 10.6(a) of this
Agreement:
(a) Representations and Warranties. For purposes of this Section 8.2(a),
the accuracy of the representations and warranties of FCB set forth in this
Agreement shall be assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such representations and
warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties of FCB set
forth in Section 4.3 of this Agreement shall be true and correct (except
for inaccuracies which are de minimis in amount). The representations and
warranties of FCB set forth in Sections 4.20, 4.21 and 4.22 of this
Agreement shall be true and correct in all material respects. There shall
not exist inaccuracies in the representations and warranties of FCB set
forth in this Agreement (including the representations and warranties set
forth in Sections 4.3, 4.20, 4.21 and 4.22), such that the aggregate effect
of such inaccuracies has, or is reasonably likely to have, a Material
Adverse Effect on FCB.
(b) No Material Adverse Effect. There shall have been no Material Adverse
Effect on FCB's or FCB Bank Subsidiary's financial condition since March
31, 1998.
(c) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of FCB to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all
material respects.
(d) Certificates. FCB shall have delivered to NCBC (i) a certificate,
dated as of the Effective Time and signed on its behalf by its president
and the chief financial officer of the FCB Bank Subsidiary, to the effect
that the conditions of its obligations set forth in Sections 8.2(a) and
8.2(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by FCB's Board of Directors and shareholders
evidencing the taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement and the Plan of
Merger, and the consummation of the transactions contemplated hereby and
thereby, all in such reasonable detail as NCBC and its counsel shall
reasonably request.
(e) Affiliates Agreements. NCBC shall have received from each affiliate
of FCB the affiliates letter referred to in Section 7.12 of this Agreement,
to the extent necessary to assure in the reasonable judgment of NCBC that
the transactions contemplated hereby will qualify for pooling-of-interests
accounting treatment.
(f) Legal Opinion. FCB shall have delivered to NCBC an opinion of
Troutman Sanders LLP, counsel to FCB, dated as of the Closing Date,
addressed to and in form and substance satisfactory to NCBC, to the effect
that:
(i) FCB is a bank holding company duly organized, validly existing
and in good standing under the laws of the State of Georgia with
corporate power and authority to conduct its business and to own and
use its Assets.
(ii) FCB Bank Subsidiary is a financial institution duly organized,
validly existing, and in good standing under the laws of the State of
Georgia with corporate power and authority to conduct its business and
own and use its Assets.
(iii) The execution, delivery and performance of this Agreement and
the Plan of Merger, as appropriate, and the consummation of the
transactions contemplated herein and therein, including the
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<PAGE>
Merger, have been duly and validly authorized by all necessary
corporate and shareholder action in respect thereof on the part of FCB.
(iv) The execution and delivery by FCB of the Agreement do not, and
if FCB were now to perform its obligations under the Agreement such
performance would not, violate or contravene any provision of the
Articles of Incorporation or Bylaws of FCB or, to our Knowledge but
without any independent investigation, result in any breach of, or
default or acceleration under any mortgage, agreement, lease,
indenture, or other instrument, order, judgment or decree to which FCB
is a party or by which it is bound.
(v) The Agreement has been duly and validly executed and delivered by
FCB, and assuming valid authorization, execution and delivery by NCBC
constitutes a valid and binding agreement of FCB enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and subject to the application of
equitable principles and judicial discretion; provided, however, that
we express no opinion as to the availability of the equitable remedy of
specific performance.
(g) Maintenance of Certain Covenants, Etc. At the time of Closing,
(i) Exclusive of any securities gains or losses pursuant to FAS 115,
total consolidated stockholders' equity of FCB shall not be less than
$8,330,000;
(ii) FCB shall own, free and clear of any liens, not less than 100%
of the outstanding capital stock of FCB Bank Subsidiary; and
(iii) From and after the Balance Sheet Date, there shall have been no
extraordinary sale of assets, nor any material investment portfolio
restructuring by either FCB Company.
The financial criteria and calculations set forth above shall be
determined in accordance with GAAP assuming that FCB and FCB Bank
Subsidiary shall have been operated consistently in the normal course
of their respective businesses; provided, however, that the effects of
any balance sheet expansion through abnormal, unusual, nonrecurring or
out-of-the-ordinary borrowings or by the realization of extraordinary
or nonrecurring gains otherwise than in the ordinary course of business
or other income from the disposition of assets or liabilities or
through similar transactions shall be eliminated from the calculations.
(h) Non-Compete Agreements. Each of H. Boyd Pettit, III, J. Steven
Walraven and Rodney L. Grizzle shall have entered into, and FCB shall have
used its best efforts to cause each other director of FCB and each chairman
of the board and each president or chief executive officer of FCB Bank
Subsidiary to enter into, a non-compete agreement with NCBC and FCB Bank
Subsidiary substantially in the form of the non-compete agreement which is
annexed hereto as Exhibit 2.
(i) Consents. FCB shall have obtained and shall have furnished to NCBC
the consent of each participant in the Benmark Plan on the Closing Date,
other than Mr. Michael L. McPherson, to the termination of the Benmark Plan
in accordance with the provisions of Section 7.13(b) of this Agreement.
Such consents shall be in form and substance reasonably satisfactory to
NCBC and shall remain in full force and effect on the Closing Date.
8.3 Conditions to Obligations of FCB. The obligations of FCB to perform this
Agreement and the Plan of Merger and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by FCB pursuant to Section 10.6(b) of this
Agreement.
(a) Representations and Warranties. For purposes of this Section 8.3(a),
the accuracy of the representations and warranties of NCBC set forth in
this Agreement shall be assessed as of the date of this Agreement and as of
the Effective Time with the same effect as though all such representations
and warranties had been made on and as of the Effective Time (provided that
representations and warranties which are confined to a specified date shall
speak only as of such date). The representations and warranties
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<PAGE>
of NCBC set forth in Section 5.3 of this Agreement shall be true and
correct (except for inaccuracies which are de minimis in amount). The
representations and warranties of NCBC set forth in Section 5.11 of this
Agreement shall be true and correct in all material respects. There shall
not exist inaccuracies in the representations and warranties of NCBC set
forth in this Agreement (including the representations and warranties set
forth in Sections 5.3 and 5.11) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have, a Material Adverse
Effect on NCBC.
(b) Performance of Agreements and Covenants. Each and all of the
agreements and covenants of NCBC to be performed and complied with pursuant
to this Agreement and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied with in all
material respects.
(c) Certificates. NCBC shall have delivered to FCB (i) a certificate,
dated as of the Effective Time 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 Sections 8.3(a) and 8.3(b) of
this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by NCBC's Board of Directors evidencing the taking
of all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as FCB and its counsel
shall reasonably request.
(d) Legal Opinion. NCBC shall have delivered to FCB an opinion of
counsel, which may be in-house counsel of NCBC, dated as of the Closing
Date, addressed to and in form and substance satisfactory to FCB, to the
effect that:
(i) NCBC is a Tennessee corporation, duly organized, validly existing
and in good standing under the laws of the state of Tennessee with
corporate power and authority to conduct its business and to own and
use its assets;
(ii) This Agreement and the Plan of Merger have been duly and validly
authorized, executed and delivered on behalf of NCBC by duly authorized
officers or representatives thereof, and (assuming this Agreement is a
binding obligation of FCB) constitutes a valid and binding obligation
of NCBC enforceable in accordance with its terms, subject as to
enforceability to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and subject to the application of equitable principles
and judicial discretion;
(iii) The execution, delivery and performance of this Agreement and
the Plan of Merger, as appropriate, and the consummation of the
transactions contemplated herein and therein, including the Merger,
have been duly and validly authorized by all necessary corporate and
shareholder action in respect thereof on the part of NCBC.
(e) Fairness Opinion. FCB shall have received a "fairness opinion" from
its independent financial adviser dated as of the date of the Proxy
Statement to the effect that, in the opinion of such adviser, the
consideration to be received by the FCB Record Holders pursuant to the
terms and conditions of this Agreement is fair to the shareholders of FCB
from a financial point of view, and such fairness opinion shall not have
been withdrawn prior to the Closing Date.
ARTICLE 9
TERMINATION
9.1 Termination. Notwithstanding any other provision of this Agreement, and
notwithstanding the approval of this Agreement by the shareholders of NCBC or
FCB, this Agreement and the Plan of Merger may be terminated and the Merger
abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of NCBC and the Board of
Directors of FCB; or
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(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 8.2(a) of this Agreement in the case of FCB and Section 8.3(a) in
the case of NCBC or in material breach of any covenant or other agreement
contained in this Agreement) in the event of an inaccuracy of any
representation or warranty of the other Party contained in this Agreement
which cannot be or has not been cured within thirty (30) days after the
giving of written notice to breaching Party of such inaccuracy and which
inaccuracy would provide the terminating Party the ability to terminate the
Merger under the applicable standard set forth in Section 8.2(a) of this
Agreement in the case of FCB and Section 8.3(a) of this Agreement in the
case of NCBC; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 8.2(a) of this Agreement in the case of FCB and Section 8.3(a) in
the case of NCBC or in material breach of any covenant or other agreement
contained in this Agreement) in the event of a material breach by the other
Party of any covenant or agreement contained in this Agreement which cannot
be or has not been cured within thirty (30) days after the giving of
written notice to the breaching Party of such breach; or
(d) By the Board of Directors of either Party in the event (i) any
consent of any Regulatory Authority required for consummation of the Merger
shall have been denied by final nonappealable action of such Regulatory
Authority or if any action taken by such Regulatory Authority is not
appealed within the time limit for appeal or (ii) the shareholders of FCB
fail to vote their approval of this Agreement and the transactions
contemplated hereby as required by the Georgia Code and FCB's Charter and
Bylaws; or
(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by November 30, 1998, if the failure
to consummate the transactions contemplated hereby on or before such date
is not caused by any willful breach of this Agreement by the Party electing
to terminate pursuant to this Section 9.1(e) and further, if NCBC shall
have filed all applications necessary to obtain the necessary Consents of
banking Regulatory Authorities within sixty (60) days of the date hereof,
and if the Closing shall not have occurred because of a delay caused by a
bank Regulatory Authority in its review of the application before it, or by
the SEC in its review of the Registration Statement to be filed by NCBC,
then FCB shall, upon NCBC's written request, extend the November 30, 1998,
date for a reasonable time, in no event less than thirty (30) days, in
order for NCBC to obtain all Consents of bank Regulatory Authorities
required and/or all Consents of the SEC and any other securities Regulatory
Authorities, and for the expiration of any stipulated waiting periods; or
(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 8.2(a) of this Agreement in the case of FCB and Section 8.3(a) in
the case of NCBC or in material breach of any covenant or other agreement
contained in this Agreement) in the event that any of the conditions
precedent to the obligations of such Party to consummate the Merger cannot
be satisfied or fulfilled by the date specified in Section 9.1(e) of this
Agreement as the same may be extended pursuant to Section 9.1(e).
9.2 Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 9.1 of this Agreement, this Agreement
and the Plan of Merger shall become void and have no effect, except that (i)
the provisions of this Section 9.2 and Article 10 and Sections 7.6(b) and 7.8
of this Agreement shall survive any such termination and abandonment; (ii) a
termination pursuant to Sections 9.1(b), 9.1(c) or 9.1(f) of this Agreement
shall not relieve the breaching Party from liability for an uncured willful
breach of a representation, warranty, covenant or agreement giving rise to
such termination; and (iii) Section 7.8 of this Agreement shall be governed by
its own terms.
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9.3 Non-Survival of Representations and Covenants. The respective
representations, warranties, obligations, covenants and agreements of the
Parties shall not survive the Effective Time except this Section 9.3 and
Articles 1, 2, 3 and 10 and Sections 7.1(b), 7.8, 7.12, and 7.13 of this
Agreement.
ARTICLE 10
GENERAL PROVISIONS
10.1 Definitions.
(a) Except as otherwise provided herein, the capitalized terms set forth
below shall have the following meanings:
"Acquisition Proposal" shall mean any exchange offer or any proposal
for a merger, consolidation, acquisition of all or substantially all,
but in no event less than 90%, of the outstanding common stock of FCB
and concurrently, not less than 100% of the outstanding common stock of
FCB Bank Subsidiary.
"Affiliate" of a Party means any Person, partnership, corporation,
association, limited liability company, business trust, or other legal
entity directly or indirectly controlling, controlled by or under
common Control, with that Party.
"Agreement" shall mean this Agreement, the Plan of Merger and the
Exhibits delivered pursuant hereto and incorporated herein by
reference.
"Allowances" shall mean the allowances for loan, lease and other
credit losses, including losses in connection with ORE, of any Person.
"Articles of Merger" shall mean the Articles of Merger to be executed
by NCBC and FCB and filed with the Secretary of State of the state of
Tennessee pursuant to Section 48-21-107 of the Tennessee Code, and with
the Secretary of State of the state of Georgia pursuant to Section 14-
2-1105 of the Georgia Code, relating to the merger of FCB with and into
NCBC as contemplated by this Agreement and the Plan of Merger.
"Assets" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued or contingent, or otherwise relating to or utilized
in such Person's business, directly or indirectly, in whole or in part,
whether or not carried on the books and records of such Person, and
whether or not owned in the name of such Person or any Affiliate of
such Person and wherever located.
"Balance Sheet Date" shall mean March 31, 1998.
"BHC Act" shall mean the Bank Holding Company Act of 1956, as
amended.
"Business Day" shall mean any Monday, Tuesday, Wednesday, Thursday or
Friday that it not a federal or state holiday generally recognized or
observed by banks in the state of Tennessee or Georgia.
"Closing" shall mean the consummation of the Merger.
"Closing Date" shall mean the date on which the Closing occurs.
"Consent" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or affirmation by any Person pursuant to any
Contract, Law, Order or Permit.
"Consideration" shall mean the shares of NCBC Common Stock and the
cash settlement of any remaining fractional share of NCBC Common Stock
deliverable to the FCB Record Holders pursuant to Section 2.1(b) of
this Agreement.
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"Contract" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking
of any kind or character, or other document to which any Person is a
party or that is binding on any Person or its capital stock, Assets, or
business.
"Control" shall have the meaning assigned to such term in Section
2(a)(2) of the Bank Holding Company Act of 1956, as amended.
"Default" shall mean (i) any breach or violation of or default under
any Contract, Order or Permit, (ii) any occurrence of any event that
with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract,
Order, or Permit, or (iii) any occurrence or any event that with or
without the passage of time or the giving of notice would give rise to
a right to terminate or revoke, change the current terms of or
renegotiate, or to accelerate, increase or impose any Liability under,
any Contract, Order or Permit.
"Deposits" shall mean all deposits (including, but not limited to,
certificates of deposit, savings accounts, NOW accounts and checking
accounts) of the FCB Bank Subsidiary and other deposit-taking
Affiliates.
"Effective Date" shall mean that date on which the Effective Time of
the Merger shall have occurred.
"Effective Time" shall mean the date and time that the Articles of
Merger shall become effective with the Secretary of State of Georgia.
"Environmental Laws" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface or subsurface strata) and
which are administered, interpreted or enforced by the United States
Environmental Protection Agency and any state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42
USC (S)9601, et seq. ("CERCLA"), the Resource Conservation and Recovery
Act, as amended, 42 USC (S)6901, et seq. ("RCRA"), and other Laws
relating to emissions, discharges, releases or threatened releases of
any Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Agent" shall mean Bank of New York.
"Exchange Ratio" shall mean the number of shares of NCBC Common
Stock, and fractions thereof, to be exchanged for each share of FCB
Common Stock pursuant to Section 2.1(b) of this Agreement, subject to
such adjustments as may be provided in this Agreement and the Plan of
Merger.
"Exhibits" 1 through 3, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may
be referred to in this Agreement and any other related instrument or
document without being attached hereto or thereto.
"FCB" shall mean First Community Bancorp, Inc., a Georgia
corporation.
"FCB Bank Subsidiary" shall mean First Community Bank & Trust,
Cartersville, Georgia.
"FCB Common Stock" shall mean the common stock of First Community
Bancorp, Inc., $1.00 par value per share.
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<PAGE>
"FCB Company(ies)" shall mean FCB and all of its Subsidiaries,
whether direct or indirect.
"FCB Disclosure Memorandum" shall mean the written information
entitled "First Community Bancorp, Inc. Company Disclosure Memorandum"
delivered prior to the date of this Agreement to NCBC describing in
reasonable detail the matters contained therein and, with respect to
each disclosure made therein, specifically referencing each Section of
this Agreement under which such disclosure is being made. Information
disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically referenced
with respect thereto.
"FCB Employee Plans" shall mean any pension plans, profit sharing
plans, deferred compensation plans, stock option plans, cafeteria
plans, and any other such or related benefit plans or arrangements
offered or funded by FCB or any FCB Bank Subsidiary, to or for the
benefit of the officers, directors, employees, independent contractors
or consultants of FCB or any FCB Bank Subsidiary.
"FCB Option Plans" means those options to acquire FCB Common Stock
under (i) FCB's qualified stock option plans; (ii) FCB's employment
agreement with its president; and (iii) FCB's incentive stock option
plan.
"FCB Record Holders" means those Persons who shall be the holders of
record of any of the issued and outstanding shares of FCB Common Stock
immediately prior to the Effective Time.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"Federal Reserve" shall mean the Board of Governors of the Federal
Reserve System and shall include the Federal Reserve Bank of St. Louis
when acting under delegated authority.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time, consistently applied.
"Georgia Code" shall mean the Georgia Code Annotated, as amended.
"Hazardous Material" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).
"HSR Act" shall mean Section 7A of the Clayton Act, as added by Title
III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"Intellectual Property" shall mean copyrights, patents, trademarks,
service marks, service names, trade names, applications therefor,
technology rights and licenses, computer software (including any source
or object codes therefor or documentation relating thereto), trade
secrets, franchises, know-how, inventions and other intellectual
property rights.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person (including references to
such Person being aware of a particular matter) shall mean those facts
that are known by the Chairman, Chief Executive Officer, President,
Chief Administrative Officer, Chief Financial Officer, Chief Accounting
Officer, Chief Credit Officer or General Counsel of such Person, or
such other officer of such Person, regardless of
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<PAGE>
title, charged with or responsible for the oversight of a particular
area, department or function to which the subject matter relates.
"Law" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule or statute applicable to a Person or its
Assets, Liabilities or business, including those promulgated,
interpreted or enforced by any Regulatory Authority.
"Liability" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than
endorsements of notes, bills, checks, and drafts presented for
collection or deposit in the ordinary course of business) of any type,
whether accrued, absolute or contingent, liquidated or unliquidated,
matured or unmatured, or otherwise.
"Lien" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or
interest, charge, or claim of any nature whatsoever of, on, or with
respect to any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable, and (ii) for depository
institution Subsidiaries of a Party, pledges to secure deposits and
other Liens incurred in the ordinary course of the banking business.
"Litigation" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information relating to or affecting
a Party, its business, its Assets (including Contracts related to it),
or the transactions contemplated by this Agreement, but shall not
include regular, periodic routine examinations of depository
institutions and their Affiliates by Regulatory Authorities.
"Material Adverse Effect" on a Party shall mean an event, change or
occurrence which, individually or together with any other event, change
or occurrence, has a material adverse impact on (i) the financial
position, business or results of operations of such Party and its
Subsidiaries, taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate the
Merger or the other transactions contemplated by this Agreement.
"Merger" shall mean the merger of FCB with and into NCBC, as
described in Section 1.1 of this Agreement.
"NASDAQ" shall mean the NASDAQ Stock Market or NASDAQ National
Market, or its successor, upon which shares of NCBC Common Stock are
listed for trading.
"NCBC" shall mean National Commerce Bancorporation, a corporation
chartered and existing under the laws of the State of Tennessee which
is registered both as a bank holding company and as a savings and loan
holding company and whose principal offices are located at One Commerce
Square, Memphis, Shelby County, Tennessee 38150.
"NCBC Capital Stock" shall mean, collectively, the NCBC Common Stock,
the NCBC Preferred Stock and any other class or series of capital stock
of NCBC.
"NCBC Common Stock" shall mean the $2.00 par value common stock of
NCBC.
"NCBC Companies" shall mean, collectively, NCBC and all NCBC
Subsidiaries.
"NCBC Disclosure Memorandum" shall mean the written information
entitled "National Commerce Bancorporation Disclosure Memorandum"
delivered prior to the date of this Agreement to
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FCB describing in reasonable detail the matters contained therein and,
with respect to each disclosure made therein, specifically referencing
each Section of this Agreement under which such disclosure is being
made. Information disclosed with respect to one Section shall be deemed
to be disclosed for purposes of any other Section not specifically
referenced with respect thereto.
"NCBC Financial Statements" shall mean (i) the consolidated balance
sheets (including related notes and schedules, if any) of NCBC as of
March 31, 1998, and as of March 31, 1997, and March 31, 1996, the
related statements of earnings, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for the
three (3) months ended March 31, 1998, and for each of the three years
ended December 31, 1997, 1996, and 1995, as filed by NCBC in SEC
Documents and (ii) the consolidated balance sheet of NCBC (including
related notes and schedules, if any) and related statements of
earnings, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to March 31, 1998.
"NCBC Option Plan" shall mean the NCBC's 1994 Stock Option Plan.
"NCBC Preferred Stock" shall mean the no par value preferred stock of
NCBC authorized but none of which is currently outstanding.
"NCBC Subsidiaries" shall mean the Subsidiaries of NCBC.
"1933 Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Operating Property" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or
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.
"Order" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling,
or writ of any federal, state, local or foreign or other court,
arbitrator, mediator, tribunal, administrative agency, or Regulatory
Authority.
"ORE" shall mean real estate and other property acquired through
foreclosure, deed in lieu of foreclosure, or similar procedures.
"Participation Facility" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the
owner or operator of such facility or property, but only with respect
to such facility or property.
"Party" shall mean either NCBC, on the one hand, or FCB on the other
hand, and "Parties" shall mean NCBC and FCB.
"Pension Plan" shall mean any employee pension benefit plan as such
term is defined in Section 3(2) of ERISA which is maintained by the
referenced Party.
"Permit" shall mean any federal, state, local and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person or its securities, Assets or business.
"Person" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability
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company, trust, business association, group acting in concert, or any
person acting in a representative capacity.
"Plan of Merger" shall mean the plan of merger providing for the
Merger, in substantially the form of Exhibit 1.
"Proxy Statement" shall mean the proxy statement to be used by FCB to
solicit proxies with a view to securing the approval of the FCB
shareholders of this Agreement and the Plan of Merger.
"Records" means all available records, minutes of meetings of the
Board of Directors, committees and shareholders of a Party; original
instruments and other documentation, pertaining to a Party or any of
its Subsidiaries or assets (including plans and specifications relating
to any realty), Liabilities, Deposits, Contracts, capital stock, and
loans; and all other business and financial records which are necessary
or customary for use in the conduct of such Person or any of such
Person's Subsidiary businesses on or after the Effective Time as it was
conducted prior to the Effective Time.
"Registration Statement" shall mean the Registration Statement on
Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
NCBC under the 1933 Act with respect to the resale of the shares of
NCBC Common Stock to be issued to the shareholders of FCB in connection
with the transactions contemplated by this Agreement.
"Regulatory Authorities" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Federal
Reserve, the Office of Thrift Supervision (including its predecessor,
the Federal Home Loan Bank Board), the Office of the Comptroller of the
Currency, the FDIC, all state regulatory agencies having jurisdiction
over the Parties and their respective Subsidiaries, the NASDAQ, the
National Association of Securities Dealers and the SEC, or any
respective successor thereto.
"Representative" shall mean any investment banker, financial advisor,
attorney, accountant, consultant, or other representative of a Person.
"Rights" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for shares of the
capital stock of a Person, or which derive their value in whole or in
part from shares of the capital stock of a Person, including stock
appreciation rights and phantom stock, or by which a Person is or may
be bound to issue additional shares of its capital stock or other
Rights.
"SEC" shall mean the United States Securities and Exchange
Commission, or any successor thereto.
"SEC Documents" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required
to be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"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 thereunder, as well as
any similar state securities laws and any similar rules and regulations
promulgated by the applicable federal or state bank Regulatory
Authorities.
"Shareholders' Meeting" shall mean the Special Meeting of the
shareholders of FCB to be held pursuant to Section 7.1 of this
Agreement, including any adjournment or adjournments thereof.
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"Subsidiaries" shall mean all of those Persons of which the entity in
question owns or controls 5% or more of the outstanding voting equity
securities or equity interest, either directly or through an unbroken
chain of entities as to each of which 5% or more of the outstanding
equity securities or equity interest is owned directly or indirectly by
its parent; provided, however, that there shall not be included any
Person acquired through foreclosure or in satisfaction of a debt
previously contracted in good faith, any such entity that owns or
operates an automatic teller machine interchange network, or any such
Person the equity securities or equity interest of which are owned or
controlled in a fiduciary capacity or through a small business
development corporation.
"Surviving Corporation" shall mean NCBC, as the corporation resulting
from and surviving the consummation of the Merger as set forth in
Section 1.1 of this Agreement.
"Tax" or "Taxes" shall mean any federal, state, county, local or
foreign income, profits, franchise, gross receipts, payroll, sales,
employment, use, property, withholding, excise, occupancy and other
taxes, assessments, charges, fares or impositions, including interest,
penalties, and additions imposed thereon or with respect thereto.
"Tennessee Code" shall mean the Tennessee Code Annotated, as amended.
(b) Any singular term in this Agreement shall be deemed to include the
plural and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation."
10.2 Expenses.
(a) Except as otherwise provided in Section 7.8 and this Section 10.2,
each of the Parties shall bear and pay all direct costs and expenses
incurred by it or on its behalf in connection with the costs contemplated
hereunder, including, filing, registration and application fees, printing
fees, and fees and expenses of its own financial or other consultants,
investment bankers, accountants, and counsel, except that each of the
Parties shall bear and pay the filing fees payable in connection with the
Registration Statement and the Proxy Statement and printing costs incurred
in connection with the printing of the Registration Statement and the Proxy
Statement based on the relative Asset sizes of the Parties at December 31,
1997.
(b) Nothing contained in this Section 10.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party
of the terms of this Agreement or otherwise limit the rights of the non-
breaching Party.
10.3 Brokers and Finders. Other than the engagement of Morgan Keegan &
Company, Inc. by FCB, the fees of which solely shall be the responsibility of
FCB, each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investments
bankers fees, brokerage fees, commissions, or finders fees in connection with
this Agreement or the ones contemplated hereby. In the event of a claim by any
broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by FCB or NCBC, each of FCB and NCBC,
as the case may be agrees to indemnify and hold the other Party harmless of
and from any Liability in respect of any such claim.
10.4 Entire Agreement. Except as otherwise expressly provided herein, this
Agreement (including the other documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. Nothing in this
Agreement, expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement.
10.5 Amendments. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether
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before or after shareholder approval of this Agreement and the Plan of Merger
has been obtained; provided, that after any such approval by the holders of
FCB Common stock, there shall be made no amendment that modifies in any
material respect the Consideration to be received by the FCB Record Holders.
10.6 Waivers.
(a) Prior to or at the Effective Time, NCBC, acting through its Board of
Directors, chief executive officer, or other authorized officer, shall have
the right to waive any Default in the performance of any term of this
Agreement by FCB, to waive or extend the time for the compliance or
fulfillment by FCB of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
NCBC under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of NCBC.
(b) Prior to or at the Effective Time, FCB, acting through its Board of
Directors, chief executive officer, or other authorized officer, shall have
the right to waive any Default in the performance of any term of this
Agreement by NCBC, to waive or extend the time for the compliance or
fulfillment by NCBC of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
FCB under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of FCB.
(c) The failure of any Party at any time or times to require performance
of any provision hereof shall in no manner affect the right of such Party
at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances shall be deemed to be
or construed as a further or continuing waiver of such condition or breach
or a waiver of any other condition or of the breach of any other term of
this Agreement.
10.7 Assignment. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party; provided, however, NCBC
may assign all of its rights hereunder to any other wholly owned Subsidiary
whether now existing or hereafter acquired or organized. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit
of and be enforceable by the Parties and their respective successors and
assigns.
10.8 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, by registered or certified mail, postage prepaid,
or by courier or overnight carrier, 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:
<TABLE>
<C> <S>
National Commerce
If to NCBC: Bancorporation
One Commerce Square
Memphis, TN 38150
Fax: (901) 523-3170
Telephone: (901) 523-3320
Attention: Lewis E. Holland
Vice Chairman and CFO
and Charles A. Neale
Vice President and General
Counsel
Fax: (901) 523-3303
Telephone: (901) 523-3371
</TABLE>
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<TABLE>
<S> <C>
If to FCB: First Community Bancorp, Inc.
827 Joe Frank Harris Parkway, SE
(P. O. Box 280/30120-0280)
Cartersville, GA 30120
Fax: (770) 606-2262
Telephone: (770) 606-2262
Attention: J. Steven Walraven
President and Chief Executive Officer
With a copy to: Thomas O. Powell
Troutman Sanders LLP
600 Peachtree Street, Suite 5200
NationsBank Plaza
Atlanta, GA 30308-2216
Fax: (404) 885-3995
Telephone: (404) 885-3294
</TABLE>
10.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Tennessee, without regard to any
applicable conflicts of Laws.
10.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same document.
10.11 Captions. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
10.12 Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether
under any rule of construction or otherwise. No Party to this Agreement shall
be considered the draftsman. The Parties acknowledge and agree that this
Agreement has been reviewed, negotiated and accepted by all Parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and
intentions of all Parties hereto.
10.13 Enforcement of Agreement. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or was otherwise
breached. It is accordingly agreed that the Parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy
to which they are entitled at law or in equity.
10.14 Attorneys' Fees. If any Party hereto shall bring any action at law or
in equity to enforce its rights under this Agreement (including an action
based upon a misrepresentation or the breach of any warranty, covenant,
agreement or obligation contained herein), the prevailing Party in such action
shall be entitled to recover from the other Party its reasonable costs and
expenses necessarily incurred in connection with such action (including fees,
disbursements and expenses of attorneys and costs of investigation).
10.15 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
10.16 Remedies Cumulative. All remedies provided in this Agreement, by Law
or otherwise, shall be cumulative and not alternative.
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IN WITNESS WHEREOF, each of the Parties hereto has duly executed and
delivered this Agreement or has caused this Agreement to be executed and
delivered in its name and on behalf by its representatives thereunto duly
authorized, all as of the date first written above.
FIRST COMMUNITY BANCORP, INC.
/s/ J. Steven Walraven
By: ________________________________
J. Steven Walraven
President and Chief Executive
Officer
ATTEST:
/s/ Danny F. Dukes
- -------------------------------
Danny F. Dukes, Secretary
(Corporate Seal)
NATIONAL COMMERCE BANCORPORATION
/s/ Lewis E. Holland
By: ________________________________
Lewis E. Holland, Vice Chairman,
Treasurer
and CEO
ATTEST:
/s/ Gus B. Denton
- -------------------------------
Gus B. Denton, Secretary
(This corporation has no seal)
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APPENDIX II
August 7, 1998
Board of Directors
First Community Bancorp, Inc.
827 Joe Frank Harris Parkway, S.E.
Cartersville, Georgia 30120
Gentlemen:
You have requested our opinion as to the fairness, from a financial point of
view, to the shareholders of First Community Bancorp, Inc. (the "Company") of
the Exchange Ratio in connection with its proposed merger with National
Commerce Bancorporation ("NCBC") (the "Transaction") pursuant to and in
accordance with the terms of that certain Agreement and Plan of Merger (the
"Agreement") entered into by and between NCBC and the Company. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
to them in the Agreement.
You have advised us that, pursuant to the Agreement, NCBC and the Company
will merge (the "Merger") with and into NCBC and that the Company's banking
subsidiary will become a wholly owned bank subsidiary of NCBC. Each share of
the Company's Common Stock (excluding shares held by (i.) Company shareholders
who perfect their dissenter' rights or by (ii.) the Company or any of its
subsidiaries or by NCBC or any of its subsidiaries, in each case other than in
a fiduciary capacity or as a result of debts previously contracted) issued and
outstanding at the Effective Time shall be converted into 3.2684 shares of
NCBC Common Stock, subject to adjustment as set forth in the Agreement.
Morgan Keegan & Company, Inc. ("Morgan Keegan"), as part of its investment
banking business, is regularly engaged in the valuation of businesses and
securities in connection with mergers and acquisitions, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for various purposes. We have been retained by the Board of
Directors of the Company for the purpose of and will receive a fee for,
rendering this opinion. We have not advised any party in connection with the
Transaction other than the Company and we make no recommendation to the
shareholders of the Company.
In connection with our opinion, we have (1) reviewed the Agreement; (2) held
discussions with various members of management and representatives of the
Company and NCBC concerning each company's historical and current operations,
financial condition and prospects; (3) reviewed historical consolidated
financial and operating data that was publicly available or furnished to us by
the Company and NCBC; (4) reviewed internal financial analyses, financial and
operating forecasts, reports and other information prepared by officers and
representatives of the Company; (5) reviewed certain publicly available
information with respect to certain other companies that we believe to be
comparable to the Company and NCBC and the trading markets for such other
companies' securities; (6) reviewed certain publicly available information
concerning the terms of certain other transactions that we deemed relevant to
our inquiry; (7) considered the relative contributions of the Company and NCBC
to the combined company; and (8) conducted such other financial studies,
analyses and investigations as we deemed appropriate for the purpose of this
opinion.
In our review and analysis and in arriving at our opinion, we have assumed
and relied upon the accuracy and completeness of all of the financial and
other information provided us or publicly available and have assumed and
relied upon the representations and warranties of the Company and NCBC
contained in the Agreement. We have not been engaged to, and have not
independently attempted to, verify any of such information. We have also
relied upon the managements of the Company and NCBC as to the reasonableness
and achievability of the financial and operating projections and the
assumptions and bases therefor provided to us and, with your consent, we have
assumed that such projections reflect the best currently available estimates
and judgments of such
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respective managements of the Company and NCBC and that such projections and
forecasts will be realized in the amounts and time periods currently estimated
by the managements of the Company and NCBC. We have not been engaged to assess
the achievability of such projections or the assumptions on which they were
based and express no view as to such projections or assumptions. In addition,
we have not conducted a physical inspection or appraisal of any of the assets,
properties or facilities of either the Company or NCBC nor have we been
furnished with any such evaluation or appraisal. We have also assumed that the
conditions to the Transaction would be consummated on a timely basis in the
manner contemplated in the Agreement. Our opinion is based upon analyses of
the foregoing factors in light of our assessment of general economic,
financial and market conditions as they exist and can be evaluated by us as of
the date hereof. We express no opinion as to the price or trading range at
which shares of NCBC Common Stock will trade following the date hereof, or the
price or trading range at which NCBC Common Stock will trade upon completion
of the Transaction.
Morgan Keegan has previously provided investment banking and fixed income
services to the Company. In the ordinary course of our business, we serve as a
market maker for the NCBC Common Stock and trade shares for our own account
and the accounts of our customers. Accordingly, we may at any time hold long
or short positions in NCBC Common Stock.
It is understood that this opinion is not to be quoted or referred to, in
whole or in part (including excerpts or summaries), in any filing, report,
document, release or other communication used in connection with the
Transaction (unless required to be quoted or referred to by applicable
regulatory requirements), nor shall this opinion be used for any other
purposes, without our prior written consent, which consent shall not be
unreasonably withheld. Furthermore, our opinion is directed to the Board of
Directors of the Company and does not constitute a recommendation to any
shareholder of the Company as to how such shareholder should vote at the
shareholders' meeting to be held in connection with the Transaction.
Based upon and subject to the foregoing and based upon such other matters as
we consider relevant, it is our opinion that, as of the date hereof, the
Exchange Ratio is fair, from a financial point of view, to the Company's
shareholders.
Yours very truly,
/s/ Morgan Keegan & Company, Inc.
_____________________________________
MORGAN KEEGAN & COMPANY, INC.
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APPENDIX III
DISSENTERS' RIGHTS OF APPRAISAL
TITLE 14. CHAPTER 2
BUSINESS CORPORATIONS
STATE OF GEORGIA
ARTICLE 13
DISSENTERS' RIGHTS
PART 1
Right to Dissent and Obtain Payment for Shares
14-2-1301. DEFINITIONS.
As used in this article, the term:
I. "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
II. "Corporate action" means the transaction or other action by the
corporation that creates dissenters' rights under Code Section 14-2-1302.
III. "Corporation" means the issuer of shares held by a dissenter before the
corporate action, or the surviving or acquiring corporation by merger or share
exchange of that issuer.
IV. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under Code Section 14-2-1302 and who exercises that right
when and in the manner required by Code Sections 14-2-1320 through 14-2-1327.
V. "Fair value," with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action.
VI. "Interest" means interest from the effective date of the corporate
action until the date of payment, at a rate that is fair and equitable under
all the circumstances.
VII. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with a
corporation.
VIII. "Shareholder" means the record shareholder or the beneficial
shareholder.
14-2-1302. RIGHT TO DISSENT.
A. A record shareholder of the corporation is entitled to dissent from, and
obtain payment of the fair value of his shares in the event of, any of the
following corporate actions:
(1) Consummation of a plan of merger to which the corporation is a party:
(A) If approval of the shareholders of the corporation is required
for the merger by Code Section 14-2-1103 or the articles of
incorporation and the shareholder is entitled to vote on the merger; or
(B) If the corporation is a subsidiary that is merged with its parent
under Code Section 14-2-1104;
(2) Consummation of a plan of share exchange to which the corporation is
a party as the corporation whose shares will be acquired, if the
shareholder is entitled to vote on the plan;
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(3) Consummation of a sale or exchange of all or substantially all of the
property of the corporation if a shareholder vote is required on the sale
or exchange pursuant to Code Section 14-2-1202, but not including a sale
pursuant to court order or a sale for cash pursuant to a plan by which all
or substantially all of the net proceeds of the sale will be distributed to
the shareholders within one year after the date of sale;
(4) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(A) Alters or abolishes a preferential right of the shares;
(B) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
(C) Alters or abolishes a preemptive right of the holder of the
shares to acquire shares or other securities;
(D) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights;
(E) Reduces the number of shares owned by the shareholder to a
fraction of a share if the fractional share so created is to be
acquired for cash under Code Section 14-2-604; or
(F) Cancels, redeems, or repurchases all or part of the shares of the
class; or
(5) Any corporate action taken pursuant to a shareholder vote to the
extent that Article 9 of this chapter, the articles of incorporation,
bylaws, or a resolution of the board of directors provides that voting or
nonvoting shareholders are entitled to dissent and obtain payment for their
shares.
B. A shareholder entitled to dissent and obtain payment for his shares under
this article may not challenge the corporate action creating his entitlement
unless the corporate action fails to comply with procedural requirements of
this chapter or the articles of incorporation or bylaws of the corporation or
the vote required to obtain approval of the corporate action was obtained by
fraudulent and deceptive means, regardless of whether the shareholder has
exercised dissenter's right.
C. Notwithstanding any other provision of this article, there shall be no
right of dissent in favor of the holder of shares of any class or series
which, at the record date fixed to determine the shareholders entitled to
receive notice of and to vote at a meeting at which a plan of merger or share
exchange or a sale or exchange of property or an amendment of the articles of
incorporation is to be acted on, were either listed on a national securities
exchange or held of record by more than 2,000 shareholders, unless:
(1) In the case of a plan of merger or share exchange, the holders of
shares of the class or series are required under the plan of merger or
share exchange to accept for their shares anything except shares of the
surviving corporation or another publicly held corporation which at the
effective date of the merger or share exchange are either listed on a
national securities exchange or held of record by more than 2,000
shareholders, except for scrip or cash payments in lieu of fractional
shares; or
(2) The articles of incorporation or a resolution of the board of
directors approving the transaction provides otherwise.
14-2-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.
A record shareholder may assert dissenters' rights as to fewer than all the
shares registered in his name only if he dissents with respect to all shares
beneficially owned by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each person on whose behalf
he asserts dissenters' rights. The rights of a partial dissenter under this
Code section are determined as if the shares as to which he dissents and his
other shares were registered in the names of different shareholders.
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PART 2
Procedure for Exercise of Dissenters' Rights
14-2-1320. NOTICE OF DISSENTERS' RIGHTS.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the
meeting notice must state that shareholders are or may be entitled to assert
dissenters' rights under this article and be accompanied by a copy of this
article.
(b) If corporate action creating dissenters' rights under Code Section 14-2-
1302 is taken without a vote of shareholders, the corporation shall notify in
writing all shareholders entitled to assert dissenters' rights that the action
was taken and send them the dissenters' notice described in Code Section 14-2-
1322 no later than ten days after the corporate action was taken.
14-2-1321. NOTICE OF INTENT TO DEMAND PAYMENT.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a record
shareholder who wishes to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed
action is effectuated; and
(2) Must not vote his shares in favor of the proposed action.
(b) A record shareholder who does not satisfy the requirements of subsection
(a) of this Code section is not entitled to payment for his shares under this
article.
14-2-1322. DISSENTERS' NOTICE.
(a) If proposed corporate action creating dissenters' rights under Code
Section 14-2-1302 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied
the requirements of Code Section 14-2-1321.
(b) The dissenters' notice must be sent no later than ten days after the
corporate action was taken and must:
(1) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(2) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(3) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than 30 nor more than 60 days after the date
the notice required in subsection (a) of this Code section is delivered;
and
(4) Be accompanied by a copy of this article.
14-2-1323. DUTY TO DEMAND PAYMENT.
(a) A record shareholder sent a dissenters' notice described in Code Section
14-2-1322 must demand payment and deposit his certificates in accordance with
the terms of the notice.
(b) A record shareholder who demands payment and deposits his shares under
subsection (a) of this Code section retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the proposed
corporate action.
(c) A record shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice,
is not entitled to payment for his shares under this article.
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14-2-1324. SHARE RESTRICTIONS.
(a) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under Code Section 14-2-1326.
(b) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
canceled or modified by the taking of the proposed corporate action.
14-2-1325. OFFER OF PAYMENT.
(a) Except as provided in Code Section 14-2-1327, within ten days of the
later of the date the proposed corporate action is taken or receipt of a
payment demand, the corporation shall by notice to each dissenter who complied
with Code Section 14-2-1323 offer to pay to such dissenter the amount the
corporation estimates to be the fair value of his or her shares, plus accrued
interest.
(b) The offer of payment must be accompanied by:
(1) The corporation's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income statement for
that year, a statement of changes in shareholders' equity for that year,
and the latest available interim financial statements, if any;
(2) A statement of the corporation's estimate of the fair value of the
shares;
(3) An explanation of how the interest was calculated;
(4) A statement of the dissenter's right to demand payment under Code
Section 14-2-1327; and
(5) A copy of this article.
(c) If the shareholder accepts the corporation's offer by written notice to
the corporation within 30 days after the corporation's offer or is deemed to
have accepted such offer by failure to respond within said 30 days, payment
for his or her shares shall be made within 60 days after the making of the
offer or the taking of the proposed corporate action, whichever is later.
14-2-1326. FAILURE TO TAKE ACTION.
(a) If the corporation does not take the proposed action within 60 days
after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the
transfer restrictions imposed on uncertificated shares.
(b) If, after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under Code Section 14-2-1322 and repeat the payment demand
procedure.
14-2-1327. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(a) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
his estimate of the fair value of his shares and interest due, if:
(1) The dissenter believes that the amount offered under Code Section 14-
2-1325 is less than the fair value of his shares or that the interest due
is incorrectly calculated; or
(2) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.
(b) A dissenter waives his or her right to demand payment under this Code
section and is deemed to have accepted the corporation's offer unless he or
she notifies the corporation of his or her demand in writing under
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subsection (a) of this Code section within 30 days after the corporation
offered payment for his or her shares, as provided in Code Section 14-2-1325.
(c) If the corporation does not offer payment within the time set forth in
subsection (a) of Code Section 14-2-1325:
(1) The shareholder may demand the information required under subsection
(b) of Code Section 14-2-1325, and the corporation shall provide the
information to the shareholder within ten days after receipt of a written
demand for the information; and
(2) The shareholder may at any time, subject to the limitations period of
Code Section 14-2-1332, notify the corporation of his own estimate of the
fair value of his shares and the amount of interest due and demand payment
of his estimate of the fair value of his shares and interest due.
PART 3
Judicial Appraisal of Shares
14-2-1330. COURT ACTION.
(a) If a demand for payment under Code Section 14-2-1327 remains unsettled,
the corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the
shares and accrued interest. If the corporation does not commence the
proceeding within the 60 day period, it shall pay each dissenter whose demand
remains unsettled the amount demanded.
(b) The corporation shall commence the proceeding, which shall be a nonjury
equitable valuation proceeding, in the superior court of the county where a
corporation's registered office is located. If the surviving corporation is a
foreign corporation without a registered office in this state, it shall
commence the proceeding in the county in this state where the registered
office of the domestic corporation merged with or whose shares were acquired
by the foreign corporation was located.
(c) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, which
shall have the effect of an action quasi in rem against their shares. The
corporation shall serve a copy of the petition in the proceeding upon each
dissenting shareholder who is a resident of this state in the manner provided
by law for the service of a summons and complaint, and upon each nonresident
dissenting shareholder either by registered or certified mail or by
publication, or in any other manner permitted by law.
(d) The jurisdiction of the court in which the proceeding is commenced under
subsection (b) of this Code section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers
described in the order appointing them or in any amendment to it. Except as
otherwise provided in this chapter, Chapter 11 of Title 9, known as the
"Georgia Civil Practice Act," applies to any proceeding with respect to
dissenters' rights under this chapter.
(e) Each dissenter made a party to the proceeding is entitled to judgment
for the amount which the court finds to be the fair value of his shares, plus
interest to the date of judgment.
14-2-1331. COURT COSTS AND COUNSEL FEES.
(a) The court in an appraisal proceeding commenced under Code Section 14-2-
1330 shall determine all costs of the proceeding, including the reasonable
compensation and expenses of appraisers appointed by the court, but not
including fees and expenses of attorneys and experts for the respective
parties. The court shall assess the costs against the corporation, except that
the court may assess the costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the court finds the
dissenters acted arbitrarily, vexatiously, or not in good faith in demanding
payment under Code Section 14-2-1327.
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(b) The court may also assess the fees and expenses of attorneys and experts
for the respective parties, in amounts the court finds equitable:
(1) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of Code Sections 14-2-1320 through 14-2-1327; or
(2) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this article.
(c) If the court finds that the services of attorneys for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these attorneys reasonable fees to be paid out of the
amounts awarded the dissenters who were benefited.
14-2-1332. LIMITATION OF ACTIONS.
No action by any dissenter to enforce dissenters' rights shall be brought
more than three years after the corporate action was taken, regardless of
whether notice of the corporate action and of the right to dissent was given
by the corporation in compliance with the provisions of Code Section 14-2-1320
and Code Section 14-2-1322.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20: INDEMNIFICATION OF DIRECTORS AND OFFICERS
The following summary is qualified in its entirety by reference to the
complete text of the statute, Charter, Bylaws and agreements referred to
below.
The Registrant's Bylaws provide that the Registrant will indemnify any
person, who is made a party to a suit by or in the right of the Registrant by
reason of the fact that he is or was an officer or director of the Registrant,
against amounts paid in settlement and reasonable expenses incurred as a
result of such suit or proceeding or any appeal therein to the extent
permitted by, and in the manner provided by, Tennessee law. The Registrant
will indemnify any person made, or threatened to be made, a party to a suit
other than by or in the right of any corporation, by reason of the fact that
he was an officer or director of the Registrant or served such other
corporation in any capacity, against judgments, fines, amounts paid in
settlement and reasonable expenses incurred as a result of such suit or
proceeding or any appeal therein, if such director or officer acted in good
faith for a purpose he reasonably believed to be in the best interest of the
Registrant and, in criminal actions or proceedings, in addition, had no
reasonable cause to believe that his conduct was unlawful, and to the extent
permitted by, and in the manner provided by, Tennessee law.
The Registrant's Charter provides that no director of the Registrant shall
be personally liable to the Registrant or its shareholders for monetary
damages for breach of fiduciary duty as a director, except (i) for any breach
of the director's duty of loyalty to the Registrant or its shareholders, (ii)
for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, or (iii) for unlawful distributions
under the laws of Tennessee. Under Part 5 of Article 18 of the Tennessee
Securities Act, a corporation may indemnify a director, officer, employee or
agent of the corporation who is made a party to a proceeding against liability
incurred in the proceeding if (1) he conducted himself in good faith and (2)
he reasonably believed (a) that his conduct was in the best interest of the
corporation in the case of conduct in his official capacity, (b) that his
conduct was at least not opposed to the corporation's best interest in all
other cases, and (c) he had no reasonable cause to believe his conduct was
unlawful, in the case of a criminal proceeding. A corporation may not
indemnify a director in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation or in
connection with any other proceeding charging improper personal benefit to
him, in which he was adjudged liable on the basis that personal benefit was
improperly received by him.
The Registrant maintains a directors and officers liability insurance
policy. Such policy has a deductible of $150,000 and an annual per occurrence
and aggregate cap on coverage of $20 million. In addition, the Registrant
maintains a general liability insurance policy with an annual per occurrence
and aggregate cap of $20 million.
ITEM 21: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
An index to Exhibits appears at pages II-5 through II-6 hereof.
ITEM 22: UNDERTAKINGS
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 foregoing provisions, or otherwise, 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 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
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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.
The undersigned Registrant hereby undertakes that, for purposes 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 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement 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.
The undersigned Registrant hereby undertakes as follows: 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 issuer 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.
The Registrant undertakes that every prospectus (i) that is filed pursuant
to the immediately preceding paragraph 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 of 1933, 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.
The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Proxy
Statement/Prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form,
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.
The undersigned Registrant hereby undertakes 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.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF MEMPHIS, STATE OF
TENNESSEE, ON AUGUST 6, 1998.
National Commerce Bancorporation
/s/ Thomas M. Garrott
By: _________________________________
Thomas M. Garrott
Chairman of the Board, President
and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Lewis E. Holland and Charles A. Neale and each
of them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
/s/ Thomas M. Garrott Chairman of the August 6, 1998
- ------------------------------------- Board, President
THOMAS M. GARROTT and Chief Executive
Officer (Principal
Executive Officer)
and Director
/s/ Lewis E. Holland Vice Chairman, August 6, 1998
- ------------------------------------- Treasurer and Chief
LEWIS E. HOLLAND Financial Officer
(Principal
Financial Officer
and Principal
Accounting Officer)
and Director
/s/ Frank G. Barton, Jr. Director August 6, 1998
- -------------------------------------
FRANK G. BARTON, JR.
/s/ R. Grattan Brown, Jr. Director August 6, 1998
- -------------------------------------
R. GRATTAN BROWN, JR.
/s/ Bruce E. Campbell, Jr. Director August 6, 1998
- -------------------------------------
BRUCE E. CAMPBELL, JR.
II-3
<PAGE>
SIGNATURE TITLE DATE
/s/ John D. Canale, III Director August 6, 1998
- -------------------------------------
JOHN D. CANALE, III
/s/ Thomas C. Farnsworth, Jr. Director July 9, 1998
- -------------------------------------
THOMAS C. FARNSWORTH, JR.
Director , 1998
- -------------------------------------
R. LEE JENKINS
/s/ W. Neely Mallory, Jr. Director July 9, 1998
- -------------------------------------
W. NEELY MALLORY, JR.
/s/ James E. McGehee, Jr. Director July 9, 1998
- -------------------------------------
JAMES E. MCGEHEE, JR.
/s/ Harry J. Phillips, Sr. Director August 6, 1998
- -------------------------------------
HARRY J. PHILLIPS, SR.
/s/ William R. Reed, Jr. Director August 6, 1998
- -------------------------------------
WILLIAM R. REED, JR.
Director , 1998
- -------------------------------------
SIDNEY A. STEWART, JR.
/s/ G. Mark Thompson Director August 6, 1998
- -------------------------------------
G. MARK THOMPSON
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<C> <S>
2.1 Agreement and Plan of Merger among National Commerce Bancorporation
and First Community Bancorp, Inc. dated August 5, 1998 (included as
Appendix I to the Proxy Statement/Prospectus in Part I of this
Registration Statement).
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 King & Spalding, counsel to the Registrant, as to the
legality of the shares of the Registrant's Common Stock being
registered.
8.1 Opinion of King & Spalding, counsel to the Registrant, as to certain
federal income tax consequences of the Merger.
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 dated 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).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<C> <S>
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).
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).
10.18 Employment Agreement dated as of August 19, 1996, by and between
National Commerce Bancorporation and Jacques Driscoll (filed as
Exhibit 10.18 to the Registrant's Form 10-K for the year ended
December 31, 1997 (File No. 0-6094) and incorporated herein by
reference).
21.1 Subsidiaries of the Registrant.
23.1 Consent of Ernst & Young, Independent Auditors.
23.2 Consent of Mauldin & Jenkins, Independent Auditors.
23.3 Consent of Morgan Keegan & Company, Inc.
23.4 Consent of King & Spalding (included in the opinions filed as Exhibits
5.1 and 8.1).
24.1 Powers of Attorney (see signature pages).
99.1 Form of FCB Proxy.
</TABLE>
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF KING & SPALDING]
August 7, 1998
National Commerce Bancorporation
One Commerce Square
Memphis, TN 38150
Re: Form S-4 Registration Statement Relating to
1,608,688 Shares of Common Stock, Par Value
$2.00 per Share, of National Commerce Bancorporation
----------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel for National Commerce Bancorporation, a Tennessee
corporation ("NCBC"), in connection with the preparation and filing of the
Registration Statement on Form S-4 (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to 1,608,688 shares of NCBC common stock, par value $2.00 per share, to
be issued in connection with the Agreement and Plan of Merger, dated as of
August 5, 1998 (the "Merger Agreement"), by and between NCBC and First Community
Bancorp, Inc.
In our capacity as such counsel, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate records
of NCBC, such agreements and instruments, such certificates of public officials,
officers of NCBC and other persons, and such other documents as we have deemed
necessary or appropriate as a basis for the opinions hereinafter expressed. In
such examinations, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity and completeness of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed, photostatic or facsimile
copies, and the authenticity of the originals of such copies, and we have
assumed all certificates of public officials to have been properly given and to
be accurate.
As to factual matters relevant to this opinion letter, we have relied upon
the representations and warranties as to factual matters contained in
certificates and statements of officers of NCBC and certain public officials.
Except to the extent expressly set forth herein, we have made no independent
investigations with regard thereto, and, accordingly, we do not express any
opinion as to matters that might have been disclosed by independent
verification.
On the basis of the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the shares of Common Stock of NCBC, par value
$2.00 per share, issuable in connection
<PAGE>
National Commerce Bancorporation
August 7, 1998
Page 2
with the Merger Agreement have been duly authorized and, when issued in
accordance with the terms of the Merger Agreement as described in the
Registration Statement, will be validly issued, fully paid and nonassessable by
the Company.
We consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to any related registration statement subsequently
filed by NCBC pursuant to Rule 462(b) of the Act and to the use of our name
under the heading "Legal Opinions" in the Prospectus constituting a part
thereof. In giving such consent, we do not thereby admit that we are within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission thereunder.
This opinion letter is being furnished by us to NCBC and the Commission
solely for the benefit of NCBC and the Commission in connection with the
Registration Statement and is not to be used, circulated, quoted or otherwise
relied upon by any other person, or by NCBC or the Commission for any other
purposes, without our express written consent. The only opinion rendered by us
consists of those matters set forth in the fourth paragraph hereof, and no
opinion may be implied or inferred beyond those expressly stated. This opinion
letter is rendered as of the date hereof, and we have no obligation to update
this opinion letter.
Sincerely,
KING & SPALDING
/s/ King & Spalding
<PAGE>
EXHIBIT 8.1
[LETTERHEAD OF KING & SPALDING APPEARS HERE]
August 7, 1998
National Commerce Bancorporation
One Commerce Square
Memphis, Tennessee 38150
First Community Bancorp, Inc.
827 Joe Frank Harris Parkway, SE
Cartersville, Georgia 30120
Re: Federal Income Tax Consequences of Merger of First Community Bancorp,
Inc. with and into National Commerce Bancorporation
Ladies and Gentlemen:
We have acted as counsel to National Commerce Bancorporation ("NCBC") in
connection with the Merger (the "Merger") of First Community Bancorp, Inc.
("FCB") with and into NCBC, pursuant to the Agreement and Plan of Merger dated
as of August 5, 1998 (the "Agreement") by and between NCBC and FCB. You have
requested our opinion, in our capacity as counsel to NCBC, regarding certain
federal income tax consequences of the Merger.
We understand that our opinion will be referred to in the Proxy
Statement/Prospectus that forms part of the Registration Statement on Form S-4
filed with the Securities and Exchange Commission in connection with the Merger.
We hereby consent to such use of our opinion.
All capitalized terms used herein without definition have the respective
meanings specified in the Agreement. All references herein to the Code are to
the United States Internal Revenue Code of 1986, as amended.
INFORMATION RELIED ON
---------------------
In rendering the opinion expressed herein, we have examined such documents
as we have deemed appropriate, including the Agreement. In our examination of
such documents, we have assumed, with your consent, that all documents submitted
to us as photocopies or telecopies faithfully reproduce the originals thereof,
that such originals are authentic, that all such documents have been or will be
duly executed to the extent required, and that all statements set forth in such
documents are accurate. We also have obtained such additional information and
representations as we have deemed relevant and necessary. However, we have not
yet obtained written certificates from NCBC and FCB to verify certain facts that
we have assumed in rendering this opinion.
<PAGE>
National Commerce Bancorporation
First Community Bancorp, Inc.
August 7, 1998
Page 2
Before rendering our opinion in connection with the closing, we intend to obtain
appropriate written certificates to confirm certain material facts that we have
assumed herein.
In view of the foregoing, we have assumed that the following statements are
true on the date hereof and will be true at the time of the Merger:
(1) The Merger will be consummated in compliance with the material terms of
the Agreement and none of the material terms and conditions therein have been
waived or modified and neither NCBC nor FCB has a plan or intention to waive or
modify any such material term or condition.
(2) The fair market value of the NCBC Common Stock and other consideration
received by each FCB shareholder will be approximately equal to the fair market
value of the FCB Common Stock surrendered by such shareholder in the Merger.
(3) Neither FCB nor any person related to FCB has acquired or will acquire,
in connection with the Merger, any FCB Common Stock from the FCB shareholders
prior to the Effective Time. For purposes of this assumption, a person is
related to FCB if it is (i) a corporation as to which FCB owns, actually or
constructively, fifty percent or more of the total voting power or total value
of the shares of all classes of stock outstanding, or (ii) a corporation which
owns, actually or constructively, fifty percent or more of the total voting
power or total value of all shares of all classes of stock of FCB. A person will
be deemed related to FCB for this purpose if such relationship exists either
immediately before or immediately after such acquisition, and a person that is a
partner in a partnership will be deemed to own or have acquired any stock that
such partnership acquired in accordance with the partner's interest in the
partnership.
(4) Neither NCBC nor any person related to NCBC has acquired or will
acquire, in connection with the Merger, any FCB Common Stock from the FCB
shareholders prior to the Effective Time. For purposes of this assumption, a
person is related to NCBC if it is (i) a member of its affiliated group within
the meaning of Section 1504 of the Code, (ii) a corporation as to which NCBC
owns, actually or constructively, fifty percent or more of the total voting
power or total value of the shares of all classes of stock outstanding, or (iii)
a corporation which owns, actually or constructively, fifty percent or more of
the total voting power or total value of all shares of all classes of stock of
NCBC. A person will be deemed related to NCBC for this purpose if such
relationship exists either immediately before or immediately after such
acquisition or arises in connection with the Merger, and a person that is a
partner in a partnership will be deemed to own or have acquired any stock that
such partnership acquired in accordance with the partner's interest in the
partnership.
(5) Neither NCBC nor any person related to NCBC has any plan or intention
to reacquire any of the shares of NCBC Common Stock issued in the Merger. For
purposes of this assumption, a person is related to NCBC if it is (i) a member
of its affiliated group within the meaning of Section 1504 of the Code, (ii) a
corporation as to which NCBC owns, actually or constructively, fifty percent or
more of the total voting power or total value of the shares of all classes of
stock outstanding, or (iii) a corporation which owns, actually or
constructively, fifty percent or more of the total voting power or total value
of all shares of all classes of stock of
<PAGE>
National Commerce Bancorporation
First Community Bancorp, Inc.
August 7, 1998
Page 3
NCBC. A person will be deemed related to NCBC for this purpose if such
relationship exists either immediately before or immediately after such
acquisition or arises in connection with the Merger, and a person that is a
partner in a partnership will be deemed to own or have acquired any stock that
such partnership acquired in accordance with the partner's interest in the
partnership.
(6) The liabilities of FCB to be assumed by NCBC and the liabilities to
which the transferred assets of FCB are subject were incurred by FCB in the
ordinary course of its business.
(7) NCBC, FCB and the shareholders of FCB will pay their respective
expenses, if any, incurred in connection with the Merger.
(8) There is no intercorporate indebtedness existing between FCB and NCBC
that was or will be issued, acquired, or settled at a discount.
(9) Neither FCB nor NCBC is a regulated investment company, a real estate
investment trust, or a corporation 50 percent or more of the value of whose
total assets (excluding cash, cash items, receivables and U.S. government
securities) are stock or securities and 80 percent or more of the value of whose
total assets are assets held for investment. For purposes of the 50 percent and
80 percent determinations under the preceding sentence, stock and securities in
any subsidiary shall be disregarded, and the parent corporation shall be deemed
to own its ratable share of the subsidiary's assets. A corporation shall be
considered a subsidiary for purposes of this paragraph if the parent owns 50
percent or more of the combined voting power of all classes of such
corporation's stock entitled to vote, or 50 percent or more of the total value
of shares of all classes of such corporation's stock outstanding.
(10) FCB is not under the jurisdiction of a court in a case under Title 11
of the United States Code or a receivership, foreclosure, or similar proceeding
in a federal or state court.
(11) The fair market value of the assets of FCB transferred to NCBC will
equal or exceed the sum of the liabilities assumed by NCBC plus the amount of
liabilities, if any, to which the transferred assets are subject.
(12) NCBC has no plan or intention to sell or otherwise dispose of any of
the assets acquired from FCB, except for dispositions made in the ordinary
course of business.
(13) Following the Merger, NCBC will continue the historic business of FCB
or use a significant portion of FCB's historic business assets in a business.
(14) None of the compensation received by any shareholder-employees of FCB
in contemplation of or as a result of the Merger will be separate consideration
for, or allocable to, any of their shares of FCB Common Stock; none of the
shares of NCBC Common Stock received by any shareholder-employees of FCB in
exchange for FCB Common Stock in the Merger will be separate consideration for,
or allocable to, any employment agreement; and the compensation paid to any
shareholder-employees pursuant to the Merger will be for services actually
rendered and
<PAGE>
National Commerce Bancorporation
First Community Bancorp, Inc.
August 7, 1998
Page 4
will be commensurate with amounts paid to third parties bargaining at arm's
length for similar services.
(15) The outstanding FCB Options have been granted by FCB as compensation
in connection with the provision of services to FCB and First Community Bank &
Trust by the FCB Option holders.
(16) 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 Merger to
the FCB 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 Merger to the FCB shareholders in exchange for their shares of FCB Common
Stock. The fractional share interest of each FCB shareholder will be aggregated
and no FCB shareholder will receive cash in an amount equal to or greater than
the value of one full share of NCBC Common Stock.
(17) At the Effective Time, the aggregate fair market value of the NCBC
Common Stock issued to the FCB shareholders in the Merger will represent at
least fifty percent (50%) of the total value of the aggregate consideration
payable in the Merger to the FCB shareholders (including cash paid to FCB
shareholders who perfect their dissenters rights and cash paid in lieu of
fractional shares of NCBC Common Stock).
(18) FCB will not, prior to the Effective Time, make any distributions with
respect to its stock which are of an extraordinary nature.
OPINION
-------
Based upon the foregoing, it is our opinion that:
(1) The Merger will be treated as a "reorganization" within the meaning of
Section 368(a)(1)(A) of the Code;
(2) No gain or loss will be recognized by NCBC or FCB as a result of the
Merger;
(3) No gain or loss will be recognized by the shareholders of FCB upon the
exchange of FCB Common Stock for NCBC Common Stock pursuant to the Merger
(except with respect to cash received in lieu of fractional share interests in
NCBC Common Stock) or by the holders of FCB Options upon the conversion of such
options into rights with respect to NCBC Common Stock;
(4) The aggregate tax basis of the NCBC Common Stock received by a FCB
shareholder pursuant to the Merger will be the same as the aggregate tax basis
of the FCB
<PAGE>
National Commerce Bancorporation
First Community Bancorp, Inc.
August 7, 1998
Page 5
Common Stock surrendered in exchange therefor (excluding any basis allocable to
a fractional share of NCBC Common Stock for which cash is received);
(5) The holding period of the shares of NCBC Common Stock received by a
FCB Shareholder will include the holding period or periods of the shares of FCB
Common Stock exchanged therefor, provided that the shares of FCB Common Stock
are held as a capital asset within the meaning of Section 1221 of the Code at
the Effective Time;
(6) The receipt of cash in lieu of fractional shares of NCBC Common Stock
will be treated as if fractional shares were distributed as part of the exchange
and then were redeemed by NCBC; and
(7) A FCB Shareholder who perfects his appraisal rights under Georgia law
and who receives payment in cash for the "fair value" of his shares of FCB
Common Stock will be treated as having exchanged such shares for cash in a
redemption subject to Section 302 of the Code, and the FCB Shareholder generally
will recognize capital gain or loss in such exchange equal to the difference
between the cash received and the tax basis of such shares.
The opinion expressed herein is based upon existing statutory, regulatory,
and judicial authority, any of which may be changed at any time with retroactive
effect. In addition, our opinion is based solely on the documents that we have
examined, the additional information that we have obtained, and the statements
set out herein that we have assumed to be true on the day hereof and at the time
of the Merger. Our opinion cannot be relied upon if any of the material facts
contained in such documents or any such additional information is, or later
becomes, inaccurate or if any of the material statements set out herein is, or
later becomes, inaccurate. Finally, our opinion is limited to the tax matters
specifically covered thereby, and we have not been asked to address herein, nor
have we addressed herein, any other tax consequences of the Merger.
Very truly yours,
/s/ King & Spalding
KING & SPALDING
<PAGE>
EXHIBIT 21.1
Parent and Subsidiaries
National Commerce Bancorporation and Subsidiaries
-------------------------------------------------
The following table shows the subsidiaries of NCBC, their jurisdiction of
organization, and the percentage of voting securities owned by each subsidiary's
parent as of June 30, 1998.
%
of Voting
Jurisdiction Securities
of Owned by
Name of Subsidiary Organization Parent Parent
- ------------------ ------------ ------ -----------
- --------------------------------------------------------------------------------
National Bank of Commerce United States NCBC 100.00%
Commerce General Corporation Tennessee NBC 100.00
NBC Capital Markets Group, Inc. Tennessee NBC 100.00
Nashville Bank of Commerce Tennessee NCBC 100.00
NBC Bank, FSB (Knoxville) United States NCBC 100.00
Commerce Capital Management, Inc. Tennessee NCBC 100.00
Monroe Properties, Inc. Tennessee NCBC 100.00
Commerce Corporate Advisors, Inc. Tennessee Nashville 100.00
National Commerce Bank Services, Inc. Tennessee Nashville 100.00
Commerce Finance Company Tennessee NCBC 100.00
Commerce Acquisition Corp. Tennessee NCBC 100.00
NBC Bank, FSB (Memphis) United States CAC 100.00
Brooks, Montague & Associates, Inc. Tennessee NCBC 100.00
TransPlatinum Service Corp. Tennessee NCBC 100.00
Kenesaw Leasing, Inc. Tennessee Knoxville 100.00
First Market Bank United States NCBC 49.00
USI Alliance Tennessee NCBC 100.00
National Commerce Real Estate Holding Tennessee NBC 100.00
Company
J&S Leasing, Inc. Tennessee Knox 100.00
NBC Insurance Services Tennessee NCBC 100.00
Commerce Real Estate Holding Company Delaware NCREHC 100.00
Commerce Real Estate Company Delaware CREHC 100.00
All of the above subsidiaries are included in the consolidated financial
statements contained in the report.
<PAGE>
EXHIBIT 23.1
Consent of Independent Auditors
-------------------------------
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4, No. 333-0000) and related Prospectus of
National Commerce Bancorporation for the registration of 1,608,688 shares of its
common stock and to the incorporation by reference therein of our report dated
February 13, 1998, with respect to the consolidated financial statements of
National Commerce Bancorporation incorporated by reference in its Annual Report
(Form 10-K) for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Memphis, Tennessee
August 3, 1998
<PAGE>
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4), and related Prospectus of National Commerce
Bancorporation for the registration of 1,608,688 shares of its common stock and
to the incorporation by reference therein of our report dated January 30, 1998,
with respect to the consolidated financial statements of First Community
Bancorp, Inc., incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 31, 1997, filed with the Securities and Exchange
Commission.
Mauldin & Jenkins, LLC
/s/ Mauldin & Jenkins, LLC
Atlanta, Georgia
August 7, 1998
<PAGE>
EXHIBIT 23.3
[LETTERHEAD OF MORGAN KEEGAN & COMPANY, INC. APPEARS HERE]
August 7, 1998
Board of Directors
First Community Bancorp, Inc.
827 Joe Frank Harris Parkway, S.E.
Cartersville, GA 30120
Ladies and Gentlemen:
Pursuant to the penultimate paragraph of our August 7, 1998 letter, we hereby
consent to the use of our opinion in the Registration Statement on Form S-4 of
National Commerce Bancorporation of our letter to the Board of Directors of
First Community Bancorp, Inc. and to the references to such letter and to our
firm in the Proxy Statement/Prospectus.
Yours very truly,
/s/ MORGAN KEEGAN & COMPANY, INC.
-------------------------------------
Morgan Keegan & Company, Inc.
<PAGE>
EXHIBIT 99.1
FIRST COMMUNITY BANCORP, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON [ ]
The undersigned hereby revokes all previous proxies, acknowledges receipt of
the notice of special stockholders meeting to be held on [ ] and
appoints Danny F. Dukes and J. Steven Walraven as proxies, each with the power
to appoint his substitute, and hereby authorizes either of them to act and
vote at the special meeting of stockholders of First Community Bancorp, Inc.
("FCB") to be held on [ ], and at any adjournments or postponements thereof,
as indicated upon all matters referred to on this proxy card and described in
the Joint Proxy Statement/Prospectus for the meeting, and, in their
discretion, upon any other matters which may properly come before the meeting.
Approval and adoption of the Agreement and Plan of Merger
dated as of August 5, 1998 (the "Agreement and Plan of Merger")
between National Commerce Bancorporation, a Tennessee
corporation "NCBC"), and FCB, providing for the merger (the
"Merger") of FCB with and into NCBC, with NCBC continuing as
the surviving corporation, and the transactions contemplated
thereby.
FOR [_] AGAINST [_] ABSTAIN [_]
(Continued on reverse side)
<PAGE>
The Board of Directors recommends a vote FOR the proposal. This proxy, when
properly executed, will be voted as specified above, and in the discretion of
the proxy holders as to any other matter that may properly come before the
meeting. IN THE ABSENCE OF SPECIFIC INSTRUCTIONS, PROXIES WILL BE VOTED FOR
THE PROPOSAL.
Dated: 1998
(SEAL)
--------------------------
(SIGNATURE)
(SEAL)
--------------------------
(SIGNATURE)
NOTE: Please sign above exactly as name appears on Stock Certificate. If stock
is held in the name of two or more persons, all must sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE RETURN YOUR EXECUTED PROXY TO THE COMPANY IN THE ENCLOSED ENVELOPE.
