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FILED PURSUANT TO
RULE 424(b)(3)
REGISTRATION NO. 33-56053
[THE TAMPA BANKING COMPANY LETTERHEAD]
December 9, 1994
To The Shareholders of
The Tampa Banking Company
Dear Shareholders:
You are cordially invited to attend the Special Meeting of Shareholders of
The Tampa Banking Company ("Tampa"), which will be held on January 17, 1995, at
4:30 p.m., local time, at 4400 N. Armenia Avenue, Tampa, Florida 33603.
At this meeting, you will be asked to consider and vote upon a proposal to
approve an Agreement and Plan of Merger (the "Merger Agreement"), by and
between Tampa and AmSouth Bancorporation ("AmSouth"), pursuant to which Tampa
would merge with and into AmSouth (the "Merger"), and each share of your Tampa
Common Stock would be converted into the right to receive 1.5592 shares of
AmSouth Common Stock (subject to adjustment in certain circumstances described
in the enclosed Proxy Statement-Prospectus), with cash being paid in lieu of
any fractional share interests.
The proposed Merger has been approved by the Board of Directors of Tampa.
Your Board of Directors has determined that the Merger is fair to, and in the
best interests of, Tampa and its shareholders and unanimously recommends that
you vote FOR approval of the Merger Agreement.
Consummation of the Merger is subject to certain conditions, including the
approval of the Merger Agreement by Tampa's shareholders. The enclosed Notice
of Special Meeting of Shareholders and Proxy Statement-Prospectus describe the
Merger and provide specific information concerning the Special Meeting as well
as other information about AmSouth and Tampa. In view of the significance of
these matters, you are urged to read this Proxy Statement-Prospectus, as well
as the appendices thereto.
It is very important that your shares be represented at the Special Meeting,
regardless of whether you plan to attend in person. The affirmative vote of
two-thirds of all of the outstanding shares of Tampa Common Stock is required
to approve the Merger Agreement. Consequently, a failure to vote will have the
same effect as a vote against the proposal. Therefore, I urge you to execute,
date and return the enclosed proxy card in the enclosed postage-paid envelope
as soon as possible to ensure that your shares will be voted at the Special
Meeting. You should not forward any of your stock certificates at this time.
On behalf of the Board of Directors, I urge you to vote FOR approval of the
Merger Agreement.
Sincerely,
/s/ G. Robert Blanchard
G. Robert Blanchard
Chairman of the Board
<PAGE>
THE TAMPA BANKING COMPANY
POST OFFICE BOX ONE
TAMPA, FLORIDA 33601-0001
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 17, 1995
Notice Is Hereby Given that, pursuant to a call of its Directors, a Special
Meeting of Shareholders of The Tampa Banking Company ("Tampa") will be held at
4400 N. Armenia Avenue, Tampa, Florida 33603, on January 17, 1995, at 4:30 p.m.
local time, for the purpose of considering and voting upon the following
matter.
Merger With AmSouth Bancorporation. Considering and voting upon a proposal to
approve an Agreement and Plan of Merger, dated as of the 9th day of March, 1994
(the "Merger Agreement"), attached as Appendix A to, and described in, the
accompanying Proxy Statement-Prospectus, providing for the merger of Tampa with
and into AmSouth Bancorporation.
Only those shareholders of record at the close of business on November 21,
1994 shall be entitled to notice of and to vote at the Special Meeting of
Shareholders or any adjournments or postponements thereof. If the Merger
Agreement is approved, shareholders of Tampa who dissent therefrom in
accordance with the procedures set forth in the accompanying Proxy Statement-
Prospectus shall be entitled to be paid the fair value of their shares of the
common stock of Tampa.
By Order of the Board of Directors
[ART]
Secretary
Tampa, Florida
December 9, 1994
THE BOARD OF DIRECTORS OF TAMPA UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF
TAMPA COMMON STOCK VOTE TO APPROVE THE PROPOSAL.
SINCE THE AFFIRMATIVE VOTE OF AT LEAST TWO-THIRDS OF THE OUTSTANDING SHARES
OF TAMPA COMMON STOCK IS REQUIRED TO APPROVE THE MERGER AGREEMENT, WE URGE YOU
TO SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE, WHETHER OR NOT
YOU PLAN TO ATTEND THE MEETING IN PERSON. THE PROXY MAY BE REVOKED AT ANY TIME
PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT-
PROSPECTUS. ANY SHAREHOLDER PRESENT AT THE SPECIAL MEETING, INCLUDING ANY
ADJOURNMENTS OR POSTPONEMENTS THEREOF, MAY REVOKE HIS OR HER PROXY AND VOTE
PERSONALLY ON EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING.
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PROXY STATEMENT PROSPECTUS
THE TAMPA BANKING COMPANY AMSOUTH BANCORPORATION
SPECIAL MEETING OF SHAREHOLDERS COMMON STOCK
TO BE HELD ON JANUARY 17, 1995 (PAR VALUE $1.00 PER SHARE)
----------------
This Proxy Statement-Prospectus is being furnished to the holders of common
stock, par value $.10 per share ("Tampa Common Stock"), of The Tampa Banking
Company, a Florida corporation ("Tampa"), in connection with the solicitation
of proxies by the Tampa Board of Directors for use at a Special Meeting of
Tampa shareholders to be held at 4:30 p.m., local time, on January 17, 1995,
at 4400 N. Armenia Avenue, Tampa, Florida 33603, and at any adjournments or
postponements thereof (the "Meeting").
At the Meeting, the shareholders of record of Tampa Common Stock as of the
close of business on November 21, 1994, will consider and vote upon a proposal
to approve the Agreement and Plan of Merger, dated as of the 9th day of March,
1994 (the "Merger Agreement"), between AmSouth Bancorporation, a Delaware
corporation ("AmSouth"), and Tampa, pursuant to which Tampa will merge with
and into AmSouth (the "Merger"). Upon consummation of the Merger, each
outstanding share of Tampa Common Stock (except for shares held by Tampa or
its subsidiaries, other than in a fiduciary capacity or in satisfaction of a
debt previously contracted, and shares held as treasury stock by Tampa) will
be converted into the right to receive 1.5592 shares of common stock of
AmSouth, par value $1.00 per share ("AmSouth Common Stock"), with cash being
paid in lieu of fractional shares. For a description of the Merger Agreement,
which is included in its entirety as Appendix A to this Proxy Statement-
Prospectus, see "THE MERGER."
This Proxy Statement-Prospectus also constitutes a prospectus of AmSouth in
respect of up to 1,160,000 shares of AmSouth Common Stock expected to be
issued pursuant to the Merger Agreement, subject to adjustment in the
circumstances described under "THE MERGER--Price-Based Termination" (the
"Merger Shares"). The number of Merger Shares (excluding such adjustment) is
based upon the conversion of each outstanding share of Tampa Common Stock
(except as described above) into 1.5592 shares of AmSouth Common Stock, and
the possible exercise of outstanding Tampa stock options. The actual number of
Merger Shares may be greater or less. See "THE MERGER--Effect of the Merger."
The outstanding shares of AmSouth Common Stock are listed on the New York
Stock Exchange, Inc. (the "NYSE"). The reported last sale price of AmSouth
Common Stock on the NYSE Composite Transactions Reporting System on December
6, 1994 was $26.75 per share.
This Proxy Statement-Prospectus and the accompanying proxy card are first
being mailed to shareholders of Tampa on or about December 13, 1994.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF AMSOUTH COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS,
DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR SAVINGS ASSOCIATION AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.
----------------
THE DATE OF THIS PROXY STATEMENT-PROSPECTUS IS DECEMBER 9, 1994.
<PAGE>
AVAILABLE INFORMATION
AmSouth is subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "SEC"). Copies of such reports, proxy statements and
other information can be obtained, upon payment of prescribed fees, from the
SEC at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
such reports, proxy statements and other information can be inspected at the
SEC's facilities referred to above and at the SEC's Regional Offices at Seven
World Trade Center (13th Floor), New York, New York 10048 and Citicorp Center,
500 West Madison, Suite 1400, Chicago, Illinois 60661. The AmSouth Common Stock
is listed on the NYSE under the symbol ASO. Reports, proxy statements and other
information concerning AmSouth should be available for inspection and copying
at the offices of the NYSE, 20 Broad Street, New York, New York 10005. AmSouth
has filed with the SEC a Registration Statement on Form S-4 (together with any
amendments thereto, the "Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Merger Shares.
This Proxy Statement-Prospectus does not contain all the information set forth
in the Registration Statement. Such additional information may be obtained from
the SEC's principal office in Washington, D.C.
Statements contained in this Proxy Statement-Prospectus or in any document
incorporated by reference in this Proxy Statement-Prospectus as to the contents
of any contract or other document referred to herein or therein are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or such other document, each such statement being qualified in all
respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC are incorporated in this Proxy
Statement-Prospectus by reference:
(a) AmSouth's Annual Report on Form 10-K for the fiscal year ended
December 31, 1993 (provided that the information referred to in Item
402(a)(8) of Regulation S-K shall not be deemed to be specifically
incorporated herein);
(b) AmSouth's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1994, June 30, 1994, and September 30, 1994;
(c) AmSouth's Current Reports on Form 8-K filed on (i) December 21, 1993,
as amended by a Form 8-K/A filed on February 16, 1994; (ii) January 26,
1994; (iii) March 22, 1994 (as amended by Forms 8- K/A filed on April 4,
1994 and April 11, 1994); (iv) April 11, 1994; (v) April 15, 1994; (vi)
April 22, 1994; (vii) May 11, 1994; (viii) May 19, 1994; (ix) May 20, 1994;
(x) June 10, 1994; (xi) July 8, 1994, as amended by a Form 8-K/A filed on
August 17, 1994; (xii) October 14, 1994; and (xiii) November 18, 1994;
(d) AmSouth's Registration Statement on Form 10, filed on March 12, 1973,
with respect to the description of AmSouth Common Stock contained therein
(and any amendment or report filed for the purpose of updating such
description);
(e) AmSouth's Registration Statement on Form 8-A, filed on July 10, 1989,
with respect to the AmSouth Stockholder Protection Rights Agreement (and
any amendment or report filed for the purpose of updating such
description); and
(f) All documents filed by AmSouth pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Proxy Statement-
Prospectus and prior to the Meeting.
Any statement contained in a document incorporated or deemed incorporated
herein by reference will be deemed to be modified or superseded for the purpose
of this Proxy Statement-Prospectus to the extent that a statement contained
herein or in the other subsequently filed document which also is, or is deemed
to be, incorporated herein by reference modifies or supersedes such statement.
Any such statement so modified
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or superseded will not be deemed, except as so modified or superseded, to
constitute a part of this Proxy Statement-Prospectus.
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS RELATING TO AMSOUTH,
OTHER THAN CERTAIN EXHIBITS TO SUCH DOCUMENTS, ARE AVAILABLE WITHOUT CHARGE
UPON REQUEST MADE TO AMSOUTH BANCORPORATION, POST OFFICE BOX 11007, BIRMINGHAM,
ALABAMA 35288 (TELEPHONE (205) 583-4439), ATTENTION: INVESTOR RELATIONS
DEPARTMENT. IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST
SHOULD BE MADE BY JANUARY 9, 1995.
Tampa is not subject to periodic reporting requirements under the Exchange
Act, and, accordingly, no information or documents relating to Tampa are
incorporated herein by reference. All information contained herein relating to
Tampa and its business was provided by Tampa specifically for inclusion herein
and has been included in reliance on Tampa's representations as to the truth
and accuracy thereof.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN AS CONTAINED HEREIN IN CONNECTION WITH THE
SOLICITATION OF PROXIES OR THE OFFERING OF SECURITIES MADE HEREBY 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 JURISDICTION 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 SECURITIES MADE HEREUNDER SHALL
UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF AMSOUTH OR TAMPA SINCE THE DATE HEREOF OR THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
3
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TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C>
PROXY STATEMENT........................................................... 1
AVAILABLE INFORMATION..................................................... 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... 2
SUMMARY................................................................... 7
Parties to the Merger................................................... 7
Effect of the Merger.................................................... 9
Consideration for Tampa Common Stock.................................... 9
Time, Date, Place and Purpose of Meeting of Tampa Shareholders.......... 9
Vote Required; Record Date.............................................. 9
Reasons for the Merger; Recommendation of the Tampa Board............... 10
Opinion of Financial Adviser............................................ 10
Effective Date.......................................................... 10
Bank Merger............................................................. 11
Conditions; Regulatory Approvals........................................ 11
Termination of the Merger Agreement..................................... 11
Management After the Merger............................................. 11
Interests of Certain Persons in the Merger.............................. 12
Certain Federal Income Tax Considerations............................... 12
Accounting Treatment.................................................... 12
Certain Differences in Shareholders' Rights............................. 12
Dissenters' Rights...................................................... 13
STOCK PRICE AND DIVIDEND INFORMATION...................................... 14
COMPARATIVE PER SHARE INFORMATION......................................... 16
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION...................... 17
INTRODUCTION.............................................................. 22
General................................................................. 22
Parties to the Merger................................................... 22
THE MEETING............................................................... 24
General................................................................. 24
Purpose of the Meeting.................................................. 24
Proxies................................................................. 24
Vote Required........................................................... 25
Recommendation of the Tampa Board....................................... 26
THE MERGER................................................................ 26
Effect of the Merger.................................................... 26
Background of and Reasons for the Merger................................ 26
Opinion of Financial Adviser............................................ 28
Effective Date.......................................................... 30
Surrender of Certificates............................................... 31
Conditions to Consummation of the Merger................................ 31
Price-Based Termination................................................. 33
Bank Merger............................................................. 34
Regulatory Approvals.................................................... 34
Conduct of Business Pending the Merger.................................. 34
No Solicitation......................................................... 35
Waiver and Amendment; Termination....................................... 35
</TABLE>
4
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<TABLE>
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PAGE
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<S> <C>
Management After the Merger............................................ 35
Interests of Certain Persons in the Merger............................. 36
Effect on Tampa Employee Benefit Plans................................. 37
Certain Federal Income Tax Considerations.............................. 37
Accounting Treatment................................................... 38
NYSE Listing........................................................... 38
Expenses............................................................... 38
CERTAIN RELATED TRANSACTIONS............................................. 39
Resales of AmSouth Common Stock........................................ 39
Voting Agreements...................................................... 39
CERTAIN REGULATORY CONSIDERATIONS........................................ 39
General................................................................ 39
Payment of Dividends................................................... 40
Transactions with Affiliates........................................... 41
Capital Adequacy....................................................... 41
Support of Subsidiary Banks............................................ 42
FDICIA................................................................. 42
Brokered Deposits...................................................... 43
FDIC Insurance Assessments............................................. 43
Depositor Preference................................................... 44
CERTAIN INFORMATION REGARDING TAMPA...................................... 45
Tampa Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 45
Ownership of Tampa Common Stock........................................ 63
DESCRIPTION OF AMSOUTH CAPITAL STOCK..................................... 65
General................................................................ 65
Common Stock........................................................... 65
Preferred Stock........................................................ 65
AmSouth Rights Agreement............................................... 66
Changes in Control..................................................... 66
COMPARISON OF RIGHTS OF SHAREHOLDERS..................................... 68
Removal of Directors................................................... 68
Vacancies on the Board of Directors.................................... 69
Amendment to the Certificate or Articles of Incorporation and Bylaws... 69
Authorized Capital Stock............................................... 69
Changes in Control..................................................... 70
Shareholder Rights Plan................................................ 71
Cumulative Voting...................................................... 71
Preemptive Rights...................................................... 71
Proxy Requirements..................................................... 71
Derivative Actions..................................................... 71
Affiliated Transactions................................................ 72
Directors' Liability................................................... 72
Indemnification........................................................ 72
Special Meetings of Shareholders; Action Without a Meeting............. 74
Rights of Dissenting Shareholders...................................... 74
Dividends.............................................................. 75
</TABLE>
5
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<TABLE>
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PAGE
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<S> <C>
DISSENTERS' RIGHTS....................................................... 75
VALIDITY OF AMSOUTH COMMON STOCK......................................... 77
EXPERTS.................................................................. 77
SHAREHOLDER PROPOSALS.................................................... 77
CONSOLIDATED FINANCIAL STATEMENTS OF THE TAMPA BANKING COMPANY AND SUB-
SIDIARY................................................................. F-1
APPENDICES
APPENDIX A: Agreement and Plan of Merger (omitting certain schedules)
APPENDIX B: Opinion of Financial Adviser dated March 9, 1994
APPENDIX C: Florida Business Corporation Act (S)(S) 1301, 1302, 1320
</TABLE>
6
<PAGE>
SUMMARY
The following summary is not intended to be a complete description of all
material facts regarding AmSouth, Tampa or the matters to be considered at the
Meeting and is qualified in all respects by the more detailed information
appearing elsewhere or incorporated by reference in this Proxy Statement-
Prospectus, the Appendices hereto and the documents referred to herein.
All historical financial and share-price related information of AmSouth
contained herein has been adjusted to give effect to the three-for-two split on
AmSouth Common Stock paid on January 15, 1992 to AmSouth shareholders of record
on December 13, 1991 (the "Stock Split").
PARTIES TO THE MERGER
AmSouth. AmSouth is a regional bank holding company headquartered in
Birmingham, Alabama, with 309 banking offices located in Alabama, Florida,
Tennessee and Georgia at September 30, 1994. At September 30, 1994, AmSouth had
total consolidated assets of approximately $16.9 billion, total consolidated
deposits of approximately $12.6 billion and total consolidated shareholders'
equity of approximately $1.3 billion. AmSouth is the largest bank holding
company headquartered in Alabama in terms of equity capital and the second
largest in terms of assets, based on September 30, 1994 information. Through
its subsidiaries, AmSouth offers a broad range of banking and bank-related
services.
AmSouth's largest subsidiary is AmSouth Bank of Alabama ("AmSouth Alabama").
At September 30, 1994, AmSouth Alabama had total consolidated assets of
approximately $9.2 billion, total consolidated deposits of approximately $6.7
billion and total consolidated shareholders' equity of approximately $772.7
million. AmSouth Alabama operated 145 offices in Alabama at September 30, 1994.
AmSouth Alabama is the second largest bank in Alabama, based upon total assets
at September 30, 1994. AmSouth's other major banking subsidiaries are AmSouth
Bank of Florida, headquartered in Tampa, Florida ("AmSouth Florida"), and
AmSouth Bank of Tennessee, headquartered in Chattanooga, Tennessee ("AmSouth
Tennessee").
At September 30, 1994, AmSouth Florida had total consolidated assets of
approximately $6.4 billion, total consolidated deposits of approximately $4.9
billion and total consolidated shareholders' equity of approximately $561.7
million. AmSouth Florida operated 137 offices in Florida at September 30, 1994.
At September 30, 1994, AmSouth Tennessee had total consolidated assets of
approximately $1.1 billion, total consolidated deposits of approximately $815.1
million and total consolidated shareholders' equity of approximately $113.0
million. AmSouth Tennessee operated 21 offices in Tennessee at September 30,
1994.
Since January 1, 1994, AmSouth has completed a number of business
combinations, the terms of which are summarized in the following table.
<TABLE>
<CAPTION>
APPROXIMATE CONSIDERATION/
HEADQUARTERS TOTAL ACCOUNTING COMPLETION
NAME OF ACQUIRED COMPANY LOCATION ASSETS(1) TREATMENT DATE
- ------------------------ --------------------- ------------ -------------------- -------------
<S> <C> <C> <C> <C>
Orange Banking Corpora-
tion ("Orange") Orlando, Florida $354 million common stock/ January 1994
pooling of interests
FloridaBank, a Federal
Savings Bank
("FloridaBank") Jacksonville, Florida 271 million common stock/ February 1994
pooling of interests
</TABLE>
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<TABLE>
<CAPTION>
APPROXIMATE CONSIDERATION/
HEADQUARTERS TOTAL ACCOUNTING COMPLETION
NAME OF ACQUIRED COMPANY LOCATION ASSETS(1) TREATMENT DATE
- ------------------------ ------------------- ------------ -------------------- ----------
<S> <C> <C> <C> <C>
Citizens National
Corporation
("Citizens") Naples, Florida $313 million common stock/ April 1994
pooling of interests
Parkway Bancorp, Inc.
("Parkway") Ft. Myers, Florida 130 million common stock/ April 1994
pooling of interests
First Federal Savings
Bank, Calhoun, Georgia
("Calhoun") Calhoun, Georgia 72 million common stock/ April 1994
pooling of interests
Fortune Bancorp, Inc.
("Fortune") Clearwater, Florida 2.7 billion cash and common June 1994
stock/purchase
</TABLE>
- --------
(1) The dollar amount indicated represents assets of the specified organization
as of the last reported period prior to the business combination.
As of the date of this Proxy Statement-Prospectus, AmSouth is a party to one
other pending business combination (other than the proposed merger with Tampa),
which is summarized in the table below.
<TABLE>
<CAPTION>
APPROXIMATE
HEADQUARTERS TOTAL CONSIDERATION/EXPECTED
NAME OF COMPANY TO BE ACQUIRED LOCATION ASSETS(1) ACCOUNTING TREATMENT
- ------------------------------ ------------------------ ------------ ----------------------
<S> <C> <C> <C>
Community Federal
Savings Bank
("Community") Fort Oglethorpe, Georgia $104 million cash/purchase
</TABLE>
- --------
(1) The dollar amount indicated represents assets of the organization as of
September 30, 1994.
Consummation of the Community transaction remains subject to fulfillment of a
number of conditions, including receipt of certain shareholder and regulatory
approvals. No assurances can be given that such conditions will be fulfilled or
that the transaction will be consummated.
AmSouth continually evaluates business combination opportunities and
frequently conducts due diligence activities in connection with possible
business combinations. As a result, business combination discussions and, in
some cases, negotiations frequently take place, and future business
combinations involving cash, debt or equity securities can be expected. Any
future business combination or series of business combinations that AmSouth
might undertake may be material, in terms of assets acquired or liabilities
assumed, to AmSouth's financial condition or results of operations. Recent
business combinations in the banking industry have typically involved the
payment of a premium over book and market values. This practice may result in
dilution of book value and net income per share for the acquiror.
AmSouth's other subsidiaries include AmSouth Mortgage Company, Inc., which
offers first mortgage loans through offices in nine states, AmSouth Leasing
Corporation, a specialized lender providing equipment leasing, and AmSouth
Investment Services, Inc., a registered broker-dealer that provides securities
brokerage services.
AmSouth was incorporated under the laws of the State of Delaware in 1970. Its
principal executive office is located at 1400 AmSouth-Sonat Tower, 1900 Fifth
Avenue North, Birmingham, Alabama 35203. Its telephone number is (205) 320-
7151.
Tampa. Tampa is a bank holding company incorporated under the laws of the
State of Florida. At September 30, 1994, Tampa had total consolidated assets of
approximately $213.4 million, total consolidated
8
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deposits of approximately $197.8 million and total consolidated shareholders'
equity of approximately $13.2 million.
Tampa's only subsidiary is The Bank of Tampa (the "Bank"), incorporated under
the laws of the State of Florida. The Bank is engaged principally in the
business of full-service banking. The Bank has a total of five office
locations, four of which are full-service offices and one of which is a limited
service office. See "INTRODUCTION--Parties to the Merger--Tampa."
Tampa was organized in 1987. Its principal offices are located at 601
Bayshore Boulevard, Tampa, Florida 36606, and its telephone number is (813)
872-1216.
EFFECT OF THE MERGER
Pursuant to the Merger Agreement, at the Effective Date (as defined below),
Tampa will merge with and into AmSouth. See "THE MERGER--Effect of the Merger."
For information on how Tampa shareholders will be able to exchange certificates
representing shares of Tampa Common Stock for new certificates representing the
shares of AmSouth Common Stock to be issued to them, see "THE MERGER--Surrender
of Certificates."
CONSIDERATION FOR TAMPA COMMON STOCK
Subject to certain adjustments, in the Merger each share of Tampa Common
Stock issued and outstanding at the Effective Date will be converted into the
right to receive 1.5592 shares (the "Conversion Number") of AmSouth Common
Stock, except that cash will be paid (i) in lieu of fractional shares of
AmSouth Common Stock and (ii) for shares, if any, with respect to which
dissenters' rights shall have been perfected in accordance with applicable
laws. However, shares of Tampa Common Stock held by Tampa or its subsidiary
(other than shares held in a fiduciary capacity or in satisfaction of a debt
previously contracted) and shares held as treasury stock by Tampa will be
canceled and retired and will cease to exist, and no payment will be made with
respect thereto. See "THE MERGER--Effect of the Merger." The shares of AmSouth
Common Stock to be received in exchange for each share of Tampa Common Stock
are sometimes referred to herein as the "Consideration." Each outstanding share
of AmSouth Common Stock will remain outstanding and unchanged as a result of
the Merger. For information regarding the treatment of outstanding options to
purchase Tampa Common Stock, see "THE MERGER--Interest of Certain Persons in
the Merger--Stock Options."
The amount and form of the Consideration were arrived at through arm's-length
negotiations between AmSouth and Tampa. See "THE MERGER--Background of and
Reasons for the Merger" and "--Opinion of Financial Adviser."
TIME, DATE, PLACE AND PURPOSE OF MEETING OF TAMPA SHAREHOLDERS
The Meeting will be held at 4:30 p.m., local time, on January 17, 1995 at
4400 N. Armenia Avenue, Tampa, Florida 33603. The purpose of the Meeting is to
consider and vote upon a proposal to approve the Merger Agreement. See "THE
MEETING."
VOTE REQUIRED; RECORD DATE
Only Tampa shareholders of record at the close of business on November 21,
1994 (the "Record Date"), will be entitled to vote at the Meeting. The
affirmative vote of the holders of two-thirds of the shares (each share being
entitled to one vote) outstanding on such date will be required to approve the
Merger Agreement. As of the Record Date, there were 637,827 shares of Tampa
Common Stock outstanding and entitled to be voted.
The directors and executive officers of Tampa and their affiliates
beneficially owned, as of the Record Date, 248,823 shares or approximately
37.04% of the outstanding shares of Tampa Common Stock. The
9
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directors and executive officers of AmSouth and their affiliates beneficially
owned, as of the Record Date, no shares of Tampa Common Stock. As of that date,
no subsidiary of either Tampa or AmSouth held of record or in the name of
nominees any shares of Tampa Common Stock in a fiduciary capacity. See "THE
MEETING--Vote Required" and "CERTAIN INFORMATION REGARDING TAMPA--Ownership of
Tampa Common Stock--Security Ownership of Directors and Certain Executive
Officers."
Pursuant to the Merger Agreement, members of the Tampa Board of Directors
(the "Tampa Board") (who in the aggregate have the power to vote 30.5% of the
outstanding shares of Tampa Common Stock as of the Record Date) have entered
into agreements with AmSouth providing that for twelve months from the date of
such agreement, each such director will vote his shares of Tampa Common Stock
in favor of the Merger. See "CERTAIN RELATED TRANSACTIONS--Voting Agreements."
REASONS FOR THE MERGER; RECOMMENDATION OF THE TAMPA BOARD
The Tampa Board has unanimously approved the Merger Agreement and has
determined that the Merger is fair to, and in the best interests of, Tampa and
its shareholders. The Tampa Board therefore unanimously recommends that Tampa's
shareholders vote FOR approval of the Merger Agreement. The Tampa Board
believes that the Merger will provide significant value to all Tampa
shareholders and also enable them to participate in the opportunities for
growth that the Tampa Board believes the Merger makes possible. See "THE
MEETING--Recommendation of the Tampa Board" and "THE MERGER--Background of and
Reasons for the Merger." For information on the interests of certain officers
and directors of Tampa in the Merger, see "THE MERGER--Interests of Certain
Persons in the Merger."
OPINION OF FINANCIAL ADVISER
The Tampa Board has received an opinion from The Robinson-Humphrey Company,
Inc., Tampa's financial adviser with respect to the Merger, that, from a
financial point of view, the terms of the Merger as set forth in the Merger
Agreement are fair to the holders of Tampa Common Stock. See "THE MERGER--
Opinion of Financial Adviser." Stockholders are urged to read the opinion in
its entirety, which is set forth in Appendix B.
EFFECTIVE DATE
The Merger will become effective at the time when appropriate documents (the
"Closing Documents") to consummate the Merger are executed in accordance with
all legal requirements and are filed as required by law, or on such later date
as the Closing Documents may specify (the "Effective Date"). The Closing
Documents will be filed on a date selected by AmSouth that is no later than the
15th day of the month following the end of the quarter in which the last of the
following occurs: (i) the last regulatory approval required for the Merger
(and, if AmSouth determines that the Bank Merger (as defined below) will occur
simultaneously with the Merger, the Bank Merger) is granted or (ii) the 30th
day following the expiration of the waiting period imposed by such regulatory
approval (or if such regulatory approval imposes no waiting period, the 60th
day following the receipt of such approval) or (iii) the 60th day following the
approval of the Merger by the shareholders of Tampa; provided that the closing
will not take place until the expiration of the periods contemplated by the
price-based termination provision described under "THE MERGER--Price-Based
Termination." After shareholder and regulatory approvals that would permit
consummation of the Merger have been obtained, the parties expect that the
Merger will occur on a date that will facilitate an orderly business
combination of Tampa and AmSouth, which date may be after the first possible
date on which the Merger could occur under the terms of the Merger Agreement.
The parties are unable at this time to predict when or if the Effective Date
will occur.
10
<PAGE>
BANK MERGER
AmSouth currently intends to merge the Bank into AmSouth Florida on or after
the Effective Date with AmSouth Florida being the survivor (the "Bank Merger").
The Bank Merger is subject to the prior receipt of certain regulatory
approvals, all of which have been received. See "THE MERGER--Bank Merger."
CONDITIONS; REGULATORY APPROVALS
Consummation of the Merger, and issuance of the Merger Shares, is subject to
various conditions, including receipt of the Tampa shareholder approval
solicited hereby, receipt of the necessary regulatory approvals (including
approvals for the Bank Merger if AmSouth determines that the Bank Merger will
occur simultaneously with the Merger), receipt of an opinion by Tampa and
AmSouth regarding certain tax aspects of the Merger and satisfaction of other
customary closing conditions.
The regulatory approvals and consents necessary to consummate the Merger and
the Bank Merger include the approval of the Board of Governors of the Federal
Reserve System, the Federal Deposit Insurance Corporation and the Florida
Department of Banking and Finance. As of the date of this Proxy Statement-
Prospectus all of these regulatory consents and approvals have been received.
See also "THE MERGER--Regulatory Approvals," and "--Bank Merger" and "CERTAIN
REGULATORY CONSIDERATIONS."
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated, and the Merger abandoned, prior to
the Effective Date, either before or after its approval by the shareholders of
Tampa, (i) by the mutual consent of AmSouth and Tampa or (ii) by either of them
individually under certain specified circumstances, including if the Merger has
not become effective by January 19, 1995. See "THE MERGER--Waiver and
Amendment; Termination."
In addition, the Merger Agreement contains a price-based termination
provision. Under this provision, the Merger Agreement may be terminated by
Tampa at any time during the ten-day period commencing on the twentieth day
prior to the Effective Date, but only if (i) the average closing price of
AmSouth Common Stock over a designated time period is less than $27.56 per
share, (ii) the decline in the price of AmSouth Common Stock exceeds by more
than 10% the decline over a specified time period in an index composed of
common stocks of other bank holding companies and (iii) AmSouth elects not to
increase the Consideration as specified in the Merger Agreement. Prior to
making any decision to terminate the Merger Agreement pursuant to this
provision, the Tampa Board would consult with its financial and other advisers
and would consider all financial and other information it deemed relevant to
its decision. The matter would not, however, be resubmitted to shareholders.
See "THE MERGER--Price-Based Termination."
MANAGEMENT AFTER THE MERGER
The directors and officers of AmSouth and AmSouth Florida immediately prior
to the Effective Date will continue as directors and officers of their
respective entities thereafter, together with such officers of Tampa or the
Bank who may be appointed as officers of AmSouth Florida. See "THE MERGER--
Management after the Merger."
11
<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of Tampa's management and the Tampa Board have interests in
the Merger in addition to their interests as shareholders of Tampa generally.
These include, among other things, provisions in the Merger Agreement relating
to eligibility for certain AmSouth employee benefits, eligibility for severance
benefits, indemnification for certain liabilities and ownership of stock
options. See "THE MERGER--Interests of Certain Persons in the Merger" and "--
Effect on Tampa Employee Benefit Plans."
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
It is intended that the Merger will be treated as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended, and,
accordingly, for federal income tax purposes, except for cash payments in lieu
of a fractional share interest, and for dissenters' shares, (i) no gain or loss
will be recognized by a Tampa shareholder upon the exchange of Tampa Common
Stock for AmSouth Common Stock; (ii) the basis of such AmSouth Common Stock
will be the same as the holder's basis in the Tampa Common Stock exchanged
therefor; and (iii) the holding period of such AmSouth Common Stock will
include the period during which such holder held the Tampa Common Stock
exchanged therefor, provided that the Tampa Common Stock was held as a capital
asset immediately prior to the consummation of the Merger. Consummation of the
Merger is conditioned upon receipt by Tampa of an opinion of Ernst & Young LLP,
or another tax adviser acceptable to Tampa, dated as of the Effective Date,
substantially to this effect. See "THE MERGER--Certain Federal Income Tax
Considerations."
Because certain tax consequences of the Merger may vary depending upon the
particular circumstances of each shareholder and other factors, each holder of
Tampa Common Stock is urged to consult such holder's own tax adviser to
determine the particular tax consequences to such holder of receipt of the
Merger Shares (including the application and effect of state and local income
and other tax laws).
ACCOUNTING TREATMENT
It is intended that the Merger will be accounted for as a "pooling of
interests" under generally accepted accounting principles ("GAAP").
Consummation of the Merger is conditioned upon the receipt by AmSouth of an
opinion from Ernst & Young LLP, AmSouth's independent auditors, stating that
the Merger may be accounted for in such manner. See "THE MERGER--Accounting
Treatment."
CERTAIN DIFFERENCES IN SHAREHOLDERS' RIGHTS
On the Effective Date, shareholders of Tampa will automatically become
shareholders of AmSouth, and their rights as shareholders of AmSouth will be
determined by the Delaware General Corporation Law and by AmSouth's Restated
Certificate of Incorporation and Bylaws. The rights of shareholders of AmSouth
differ from rights of the shareholders of Tampa with respect to certain
important matters, including their rights to remove directors; call special
meetings and take action without a meeting; the required shareholder votes as
to certain matters; statutory and other restrictions on certain business
combinations; and the existence of the AmSouth Stockholder Protection Rights
Agreement (the "AmSouth Rights Agreement") (Tampa having no similar agreement).
For a summary of these differences, see "COMPARISON OF RIGHTS OF SHAREHOLDERS."
Each share of AmSouth Common Stock has, and when issued each of the Merger
Shares will have, attached to it one right (an "AmSouth Right") issued pursuant
to the AmSouth Rights Agreement. Each AmSouth Right entitles its registered
holder to purchase (under certain circumstances) one one-hundredth of a share
of AmSouth Series A Preferred Stock, without par value, for $115.00, subject to
adjustment. The AmSouth Rights Agreement will not prevent a takeover of AmSouth
but may, however, have certain anti-
12
<PAGE>
takeover effects. The AmSouth Rights may cause substantial dilution to a person
or group that acquires 15% or more of the outstanding AmSouth Common Stock
unless the AmSouth Rights are first redeemed by AmSouth. See "DESCRIPTION OF
AMSOUTH CAPITAL STOCK--AmSouth Rights Agreement."
DISSENTERS' RIGHTS
Any holder of Tampa Common Stock who (i) gives notice in writing to Tampa
prior to the vote on the Merger of his or her intent to demand payment for his
or her shares if the Merger is effectuated, (ii) does not vote his or her
shares in favor of the Merger and (iii) files with Tampa, within 20 days after
Tampa gives notice to him or her of the Tampa shareholders' authorization of
the Merger (which notice shall be given to such dissenting Tampa shareholder by
Tampa within 10 days of such authorization), an election stating his or her
name and address, the number of shares as to which he or she dissents and a
demand for payment of the fair value of his or her shares and simultaneously
with the notice of election surrenders the certificates for the Tampa shares as
to which such dissenter dissents, shall be entitled to the fair value of his or
her Tampa Common Stock. Failure to follow the statutory provisions precisely
may result in loss of dissenters' rights. These statutory provisions are set
forth in full in Appendix C to this Proxy Statement-Prospectus and are
summarized under "DISSENTERS' RIGHTS."
13
<PAGE>
STOCK PRICE AND DIVIDEND INFORMATION
AMSOUTH
AmSouth Common Stock is listed and principally traded on the NYSE under the
symbol "ASO."
The following table sets forth for the periods indicated the high and low
sales prices and trading volumes (in thousands of shares) of AmSouth Common
Stock as reported on the NYSE Composite Transactions reporting system (as
published in The Wall Street Journal) with respect to each calendar quarter
since January 1, 1991. The following table also shows the cash dividends
declared per share of AmSouth Common Stock. (Per share amounts and shares
traded have been restated to give effect to a three-for-two stock split
effective December 13, 1991.)
AMSOUTH COMMON STOCK
<TABLE>
<CAPTION>
SHARES
HIGH LOW CASH TRADED
SALE SALE DIVIDEND (IN THOUSANDS)
------ ------ -------- --------------
<S> <C> <C> <C> <C>
1991
1st Quarter.............................. $17.25 $12.38 $.24 1,124
2nd Quarter.............................. 19.13 16.63 .24 1,325
3rd Quarter.............................. 22.13 18.75 .24 3,784
4th Quarter.............................. 22.13 19.13 .26 2,201
1992
1st Quarter.............................. 27.38 21.38 .26 3,347
2nd Quarter.............................. 31.13 26.13 .26 3,722
3rd Quarter.............................. 29.00 26.00 .26 3,332
4th Quarter.............................. 32.63 26.88 .29 1,962
1993
1st Quarter.............................. 34.13 29.63 .29 4,621
2nd Quarter.............................. 35.88 30.38 .29 4,267
3rd Quarter.............................. 33.63 29.25 .29 6,034
4th Quarter.............................. 31.50 27.38 .35 6,138
1994
1st Quarter.............................. 32.00 29.25 .35 4,128
2nd Quarter.............................. 33.13 29.63 .35 4,940
3rd Quarter.............................. 34.88 30.50 .35 5,430
4th Quarter*............................. 31.88 26.63 .38 4,745
</TABLE>
- --------
* Through December 6, 1994
The Letter of Intent related to the Merger Agreement was publicly announced on
February 15, 1994. The reported last sale price of AmSouth Common Stock on the
NYSE Composite Transactions reporting system (as reported in The Wall Street
Journal) on February 14, 1994 was $30.63. On June 16, 1994, AmSouth announced
its intention to repurchase over three years up to 1.5 million shares of
AmSouth Common Stock to be used in connection with AmSouth's employee benefit
plans. Also, on September 22, 1994, AmSouth announced that an additional
1,000,000 shares of AmSouth Common Stock would be repurchased by AmSouth in the
open market or in negotiated transactions prior to December 31, 1994 for the
sole purpose of replenishing shares issued by AmSouth in connection with its
purchase of Fortune. AmSouth does not anticipate purchasing any shares under
the first of these programs in the near future. As of September 30, 1994,
AmSouth had completed the repurchase of 1,000,000 shares under the second of
these programs.
14
<PAGE>
TAMPA
On November 30, 1994, Tampa had approximately 297 shareholders of record.
There is no established trading market for Tampa Common Stock and it has been
subject to only limited trading. The shares are not listed on any exchange or
quoted on any automated quotation system and no institution makes a market in
the stock. The following table sets forth sales prices for the shares, of which
Tampa is aware. The prices are based upon the best knowledge of Tampa
management and are not necessarily indicative of the fair market value of the
stock at the time of the trade and may not reflect all trades or the price of
those trades. To the best knowledge of Tampa management, there have been no
trades of Tampa Common Stock in 1994.
<TABLE>
<CAPTION>
PRICE RANGE
-----------
<S> <C>
1991............................. $ 20
1992............................. 20-22
1993............................. 22-24
</TABLE>
The execution of a Letter of Intent relating to the proposed Merger by the
parties was publicly announced on February 15, 1994. The most recent sale of
Tampa Common Stock prior to the announcement of the Letter of Intent, for which
the management of Tampa is aware of the sale price, was on June 30, 1993 at $23
per share for 1,500 shares.
Tampa did not declare any cash dividends for the first three calendar
quarters of 1994 or for the years ended December 31, 1993, 1992 and 1991.
15
<PAGE>
COMPARATIVE PER SHARE INFORMATION
The following table sets forth for the AmSouth Common Stock and the Tampa
Common Stock certain historical, pro forma combined and pro forma equivalent
per share financial information. The pro forma data do not purport to be
indicative of the results of future operations or the results that would have
occurred had the Merger been consummated as of the earliest date presented.
The information shown below should be read in conjunction with the historical
and unaudited pro forma financial statements of AmSouth, including the
respective notes thereto, incorporated by reference herein and with the
historical financial statements of Tampa appearing elsewhere in this Proxy
Statement-Prospectus, including the notes thereto. See "AVAILABLE INFORMATION,"
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE," "SUMMARY CONDENSED
CONSOLIDATED FINANCIAL INFORMATION" and "CERTAIN INFORMATION REGARDING TAMPA."
<TABLE>
<CAPTION>
AMSOUTH AND
AMSOUTH AND TAMPA TAMPA
HISTORICAL TAMPA TAMPA PRO FORMA PRO FORMA
----------------- PRO FORMA PRO FORMA COMBINED, EQUIVALENT,
PER COMMON SHARE AMSOUTH TAMPA COMBINED EQUIVALENT(a) AS ADJUSTED AS ADJUSTED(a)
---------------- ------- ------ ----------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
NET INCOME(b)
For the nine months
ended September 30,
1994.................. $ 2.25 $ 1.82 $ 2.23 $ 3.48 $ 1.88(c) $ 2.93
1993.................. 2.29 1.87 2.27 3.54 2.11(c) 3.29
For the year ended De-
cember 31,
1993.................. $ 3.10(d) $ 2.56 $ 3.05 $ 4.76 $ 2.58(e) $ 4.02
1992.................. 2.51(d) 2.00 2.48 3.87 2.50(f) 3.90
1991.................. 2.07(d) .97 2.04 3.18 2.13(f) 3.33
CASH DIVIDENDS(g)
For the nine months
ended September 30,
1994.................. $ 1.05 -- $ 1.05(g) $ 1.64 $ 1.05(g) $ 1.64
1993.................. .87 -- .87(g) 1.36 .87(g) 1.36
For the year ended De-
cember 31,
1993.................. $ 1.22 -- $ 1.22(g) $ 1.90 $ 1.22(g) $ 1.90
1992.................. 1.07 -- 1.07(g) 1.67 1.07(g) 1.67
1991.................. .98 -- .98(g) 1.53 .98(g) 1.53
BOOK VALUE(h)
As of September 30,
1994.................. $22.72 $20.64 $22.56 $35.18 $22.56 $35.18
As of December 31,
1993.................. 22.01 20.33 21.84 34.05 21.87(e) 34.10
</TABLE>
- --------
(a) Tampa pro forma equivalent amounts are computed by multiplying the pro
forma combined amounts by the assumed Conversion Number of 1.5592.
(b) Net income per common share is based on weighted average common shares
outstanding.
(c) Amounts are adjusted to include the pro forma effect of the June 23, 1994,
acquisition of Fortune and the pending acquisition of Community.
(d) Amounts are as reported in the 1993 Form 10-K.
(e) Amounts are adjusted to include the business combinations completed since
January 1, 1994, and the pending acquisition of Community.
(f) Amounts are adjusted to include the business combinations with Citizens,
FloridaBank and Orange.
(g) Pro forma cash dividends represent historical cash dividends of AmSouth.
(h) Book value per common share is based on total period-end shareholders'
equity.
16
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following tables present summary condensed consolidated financial data
for (i) AmSouth on an historical basis; (ii) Tampa on an historical basis; and
(iii) AmSouth and Tampa on an unaudited pro forma combined basis giving effect
to the Merger. The unaudited pro forma data in the tables assume that (i) each
of the 637,827 outstanding shares of Tampa Common Stock is converted in the
Merger into 1.5592 shares of AmSouth Common Stock, resulting in the issuance of
approximately 995,000 Merger Shares; (ii) that the outstanding options to
purchase Tampa Common Stock are not exercised prior to the Effective Date and
(iii) that the Merger is accounted for as a pooling of interests. See "THE
MERGER--Accounting Treatment." These tables should be read in conjunction with
the historical and unaudited pro forma financial statements of AmSouth,
including the notes thereto, incorporated by reference herein, and with the
historical financial statements of Tampa, including the notes thereto,
appearing elsewhere in this Proxy Statement-Prospectus. See "AVAILABLE
INFORMATION," "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "CERTAIN
INFORMATION REGARDING TAMPA." Interim unaudited historical data reflect, in the
respective opinions of management, all adjustments (consisting only of normal
recurring adjustments) necessary to a fair presentation of such data. The
unaudited pro forma combined condensed financial information is presented for
informational purposes only and is not necessarily indicative of the combined
financial position or results of operations which would have actually occurred
if the transactions had been consummated in the past or which may be obtained
in the future. The summary condensed consolidated financial data for the years
ended December 31, 1989 through December 31, 1993 have not been restated for
AmSouth's business combinations with Orange, FloridaBank, Citizens, Parkway and
Calhoun, which were accounted for as poolings of interests, and the effects of
which are not material to AmSouth's financial statements.
AMSOUTH--HISTORICAL
<TABLE>
<CAPTION>
AT OR FOR THE
NINE MONTHS
ENDED SEPTEMBER 30 AT OR FOR THE YEAR ENDED DECEMBER 31
------------------- --------------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
(In Thousands)
Gross Interest Margin.. $ 423,818 $ 373,643 $462,077 $393,437 $334,712 $297,525 $277,743
Provision for Loan
Losses................ 9,954 15,330 18,980 36,555 46,029 41,583 44,766
Noninterest Revenues... 151,588 147,736 194,361 164,249 162,502 130,243 124,857
Noninterest Expenses... 371,927 332,534 420,087 370,056 340,748 288,488 275,446
Applicable Income Tax-
es.................... 67,590 57,596 71,144 43,026 27,636 22,297 15,185
Net Income............. 125,935 115,919 146,227 108,049 82,801 75,400 67,203
PER COMMON SHARE DATA
Net Income............. $ 2.25 $ 2.29 $ 3.10 $ 2.51 $ 2.07 $ 1.97 $ 1.71
Cash Dividends De-
clared................ 1.05 0.87 1.22 1.07 0.98 0.94 0.89
Book Value............. 22.72 20.82 22.01 19.10 17.65 16.40 15.32
AVERAGE STATEMENT OF
CONDITION
(In Millions)
Total Securities(a).... $ 3,799 $ 3,328 $ 3,054 $ 2,648 $ 2,522 $ 2,191 $ 2,116
Loans, Net of Unearned
Income................ 9,510 7,485 7,043 5,757 5,631 5,734 5,597
Allowance for Loan
Losses................ 144 113 108 90 91 87 76
Total Earning Assets... 13,636 11,255 10,543 8,756 8,417 8,095 7,841
Total Assets........... 14,835 12,216 11,464 9,591 9,266 8,939 8,688
Deposits............... 11,112 9,416 8,745 7,608 7,441 7,093 6,811
Long-Term Debt......... 315 155 159 138 135 131 131
Shareholders' Equity... 1,242 1,010 979 791 682 607 588
</TABLE>
17
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION--CONTINUED
AMSOUTH--HISTORICAL
<TABLE>
<CAPTION>
AT OR FOR THE
NINE MONTHS
ENDED SEPTEMBER 30 AT OR FOR THE YEAR ENDED DECEMBER 31
------------------ ----------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- ------- ------- ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
END-OF-PERIOD STATEMENT
OF CONDITION
(In Millions)
Total Securities(a).... $ 4,019 $ 3,368 $ 3,002 $ 2,791 $2,806 $2,182 $2,155
Loans, Net of Unearned
Income................ 11,008 7,786 7,930 6,139 5,723 5,840 5,831
Allowance for Loan
Losses................ 165 115 118 93 89 88 93
Total Earning Assets... 15,322 11,983 11,402 9,297 9,009 8,145 8,135
Total Assets........... 16,869 12,987 12,548 10,209 9,925 9,148 8,993
Deposits............... 12,608 9,552 9,568 7,800 7,779 7,449 7,047
Long-Term Debt......... 424 170 163 136 139 129 131
Shareholders' Equity... 1,318 1,065 1,090 825 754 625 600
SELECTED FINANCIAL RA-
TIOS
Return on Average Total
Assets................ 1.13% 1.27% 1.28% 1.13% 0.89% 0.84% 0.77%
Return on Average Com-
mon Equity............ 13.56 15.35 14.93 13.66 12.14 12.43 11.43
Taxable Equivalent
Gross Interest Margin
to Average Earning
Assets................ 4.26 4.59 4.55 4.72 4.24 3.96 3.85
Operating Efficiency
Ratio(b).............. 63.41 62.22 62.34 64.07 65.56 63.96 64.59
Dividend Payout Ratio.. 46.67 37.99 39.35 42.63 47.34 47.72 52.05
Average Equity to Aver-
age Assets............ 8.37 8.27 8.54 8.25 7.36 6.79 6.77
Allowance at End of
Period to Loans, Net
of Unearned Income.... 1.50 1.47 1.49 1.51 1.56 1.50 1.60
Allowance at End of Pe-
riod to Nonperforming
Loans(c).............. 151.98 233.05 245.82 164.28 134.54 103.35 118.33
Nonperforming Assets to
Loans, Net of Unearned
Income, Foreclosed
Properties and
Repossessions(d)...... 1.28 1.05 0.92 1.59 2.74 2.85 2.18
</TABLE>
- --------
(a) Effective January 1, 1994, AmSouth adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." Amounts presented reflect AmSouth's total
securities portfolio, which includes trading securities, available-for-sale
securities and held-to-maturity securities. The September 30, 1994, amounts
include the market valuation allowance on available-for-sale securities of
$(8.0) million for the year-to-date average balance and $(21.4) million for
the end of period balance.
(b) The Operating Efficiency Ratio is defined as noninterest expenses divided
by the sum of the taxable-equivalent gross interest margin and noninterest
revenues.
(c) Nonperforming loans include nonaccrual loans and restructured loans.
(d) Nonperforming assets include nonaccrual loans, restructured loans,
foreclosed properties and repossessions.
18
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION--CONTINUED
TAMPA--HISTORICAL(a)
<TABLE>
<CAPTION>
AT OR FOR THE
NINE MONTHS
ENDED AT OR FOR THE
SEPTEMBER 30 YEAR ENDED DECEMBER 31
-------------- --------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
(In Thousands)
Gross Interest Margin.. $7,737 $7,170 $9,546 $8,780 $7,356 $6,321 $6,002
Provision for Loan
Losses................ 1,060 864 1,044 1,180 2,250 1,114 675
Noninterest Revenues... 1,275 1,470 1,917 1,284 2,397 1,106 973
Noninterest Expenses... 6,152 5,980 7,985 7,024 6,735 6,003 4,913
Applicable Income Tax-
es.................... 651 650 858 664 191 55 398
Net Income............. 1,149 1,146 1,576 1,196 577 255 989
PER COMMON SHARE DATA
Net Income............. $ 1.82 $ 1.87 $ 2.56 $ 2.00 $ .97 $ .43 $ 1.67
Cash Dividends De-
clared................ -- -- -- -- -- -- --
Book Value at End of
Period................ 20.64 19.65 20.33 17.60 15.13 14.18 14.09
AVERAGE STATEMENT OF
CONDITION
(In Millions)
Total Securities....... $ 62 $ 50 $ 50 $ 49 $ 44 $ 38 $ 33
Loans, Net of Unearned
Income................ 121 122 121 112 105 100 94
Allowance for Loan
Losses................ 2 2 2 2 2 1 1
Total Earning Assets... 194 177 179 166 153 142 132
Total Assets........... 213 196 198 183 169 158 151
Deposits............... 197 181 183 170 157 146 134
Shareholders' Equity... 13 12 12 10 9 8 8
END-OF-PERIOD STATEMENT
OF CONDITION
(In Millions)
Total Securities....... $ 63 $ 48 $ 56 $ 52 $ 57 $ 44 $ 32
Loans, Net of Unearned
Income................ 121 121 122 124 108 104 99
Allowance for Loan
Losses................ 3 2 2 2 2 2 1
Total Earning Assets... 195 177 189 182 180 155 138
Total Assets........... 213 197 211 203 188 175 154
Deposits............... 198 182 196 190 190 164 142
Shareholders' Equity... 13 12 13 11 9 8 8
SELECTED FINANCIAL RA-
TIOS
Return on Average Total
Assets................ 0.72% 0.78% 0.80% 0.65% 0.34% 0.16% 0.66%
Return on Average Com-
mon Equity............ 11.75 13.24 13.47 11.86 6.55 2.99 12.51
Taxable Equivalent
Gross Interest Margin
to Average Earning
Assets................ 5.31 5.40 5.34 5.28 4.86 4.63 4.81
Operating Efficiency
Ratio(b).............. 68.26 69.22 69.66 69.79 69.05 80.82 70.59
Dividend Payout Ratio.. -- -- -- -- -- -- --
Average Equity Ratio to
Average Assets........ 6.12 5.89 5.94 5.48 5.19 5.35 5.41
Allowance at End of
Period to Loans, Net
of Unearned Income.... 2.32 1.82 1.86 1.78 2.21 1.68 1.32
Allowance at End of Pe-
riod to Nonperforming
Loans(c).............. 190.07 81.29 98.90 90.43 158.50 218.80 100.90
Nonperforming Assets to
Loans, net of Unearned
Income, Foreclosed
Properties and
Repossessions(d)...... 1.54 3.60 3.13 3.20 3.30 2.49 2.48
</TABLE>
- --------
(a) Certain terminology used in presentation has been changed to conform with
terminology used in AmSouth's presentation.
(b) The Operating Efficiency Ratio is defined as noninterest expenses divided
by the sum of the taxable equivalent gross interest margin and noninterest
revenues.
(c) Nonperforming loans include nonaccrual loans.
(d) Nonperforming assets include nonaccrual loans, foreclosed properties and
repossessions.
19
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION--CONTINUED
AMSOUTH AND TAMPA
PRO FORMA COMBINED
(UNAUDITED)
<TABLE>
<CAPTION>
AS OF
SEPTEMBER 30, 1994
------------------
<S> <C>
STATEMENT OF CONDITION
(In Thousands, Except Per Share Amounts)
ASSETS
Cash and Due from Banks................................... $ 834,297
Federal Funds Sold and Securities Purchased Under Agree-
ments to Resell.......................................... 113,686
Trading Account Securities................................ 5,823
Available-for-Sale Securities............................. 663,876
Held-to-Maturity Securities............................... 3,412,202
Mortgage Loans Held for Sale.............................. 192,001
Loans, Net of Unearned Income............................. 11,129,028
Allowance for Loan Losses................................. (167,550)
-----------
Net Loans............................................. 10,961,478
Premises and Equipment, Net............................... 287,693
Other Real Estate Owned................................... 31,947
Intangible Assets......................................... 292,504
Mortgage Servicing Rights................................. 67,831
Other Assets.............................................. 219,277
-----------
$17,082,615
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits and Interest-Bearing Liabilities:
Deposits................................................ $12,806,048
Federal Funds Purchased and Securities Sold Under Agree-
ments to Repurchase.................................... 1,758,166
Other Borrowed Funds.................................... 635,717
Long-Term Debt.......................................... 423,648
-----------
Total Deposits and Interest-Bearing Liabilities....... 15,623,579
Other Liabilities......................................... 127,374
-----------
Total Liabilities..................................... 15,750,953
-----------
SHAREHOLDERS' EQUITY:
Common Stock.............................................. 60,521
Capital Surplus........................................... 584,615
Retained Earnings......................................... 729,830
Cost of Common Stock in Treasury.......................... (24,173)
Deferred Compensation on Restricted Stock................. (4,868)
Unrealized Losses on Available-for-Sale Securities........ (14,263)
-----------
Total Shareholders' Equity............................ 1,331,662
-----------
$17,082,615
===========
Book Value per Common Share............................... $ 22.56
===========
</TABLE>
20
<PAGE>
AMSOUTH AND TAMPA
PRO FORMA COMBINED, AS ADJUSTED
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED ENDED
SEPTEMBER 30, 1994(A) DECEMBER 31, 1993(A)(B)
--------------------- -----------------------
<S> <C> <C>
STATEMENT OF EARNINGS
(In Thousands, Except Per Share
Amounts)
Gross Interest Margin......... $468,171 $620,630
Provision for Loan Losses..... 24,927 49,748
Noninterest Revenues.......... 158,889 219,454
Noninterest Expenses.......... 424,399 562,696
Applicable Income Taxes....... 65,007 76,825
Net Income.................... $112,727 $150,815
Net Income per Share.......... $ 1.88 $ 2.58
Average Common Shares Out-
standing..................... 59,868 58,429
</TABLE>
- --------
(a) Adjusted to reflect the pro forma effect of the June 23, 1994 acquisition
of Fortune and the pending acquisition of Community as if such acquisitions
had occurred on January 1, 1993.
(b) Adjusted to include the business combinations completed since January 1,
1994, and the pending acquisition of Community.
For more detailed pro forma financial information, see "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE." For information on regulatory capital ratios
of AmSouth on both an historical and a pro forma combined basis, see "CERTAIN
REGULATORY CONSIDERATIONS--Capital Adequacy."
21
<PAGE>
INTRODUCTION
GENERAL
This Proxy Statement-Prospectus is being furnished to the holders of common
stock, par value $.10 per share, of Tampa ("Tampa Common Stock") in connection
with the solicitation of proxies by the Board of Directors of Tampa (the "Tampa
Board") for use at the Special Meeting of Tampa shareholders to be held at 4:30
p.m. local time on January 17, 1995, at 4400 N. Armenia Avenue, Tampa, Florida
33603 and at any adjournments or postponements thereof (the "Meeting").
At the Meeting, the shareholders of record of Tampa Common Stock as of the
close of business on November 21, 1994 (the "Record Date"), will consider and
vote upon a proposal to approve the Agreement and Plan of Merger, dated as of
the 9th day of March, 1994, as it may be amended (the "Merger Agreement"),
between Tampa and AmSouth Bancorporation, a Delaware corporation ("AmSouth"),
pursuant to which Tampa will merge with and into AmSouth (the "Merger"). Upon
consummation of the Merger, and subject to certain adjustments, each
outstanding share of Tampa Common Stock (except for shares held directly or
indirectly by Tampa, other than in a fiduciary capacity or in satisfaction of a
debt previously contracted, or shares held as treasury stock by Tampa) will be
converted into the right to receive 1.5592 shares of common stock, par value
$1.00 per share, of AmSouth ("AmSouth Common Stock"), except that cash will be
paid in lieu of fractional shares of AmSouth Common Stock. See "THE MEETING"
and "THE MERGER."
This Proxy Statement-Prospectus is also being furnished by AmSouth to Tampa
shareholders as a prospectus in connection with the issuance of shares of
AmSouth Common Stock as consideration in the Merger (the "Merger Shares").
All historical financial and share price-related information of AmSouth
contained herein has been adjusted to give effect to the three-for-two split on
AmSouth Common Stock paid on January 15, 1992 to AmSouth shareholders of record
on December 13, 1991 (the "Stock Split").
PARTIES TO THE MERGER
AmSouth. AmSouth is a regional bank holding company headquartered in
Birmingham, Alabama, with 309 banking offices located in Alabama, Florida,
Tennessee and Georgia at September 30, 1994. At September 30, 1994, AmSouth had
total consolidated assets of approximately $16.9 billion, total consolidated
deposits of approximately $12.6 billion and total consolidated shareholders'
equity of approximately $1.3 billion. AmSouth is the largest bank holding
company headquartered in Alabama in terms of equity capital and the second
largest in terms of assets, based on September 30, 1994 information. Through
its subsidiaries, AmSouth offers a broad range of banking and bank-related
services.
AmSouth's largest subsidiary is AmSouth Bank of Alabama ("AmSouth Alabama").
At September 30, 1994, AmSouth Alabama had total consolidated assets of
approximately $9.2 billion, total consolidated deposits of approximately $6.7
billion and total consolidated shareholders' equity of approximately $772.7
million. AmSouth Alabama operated 145 offices in Alabama at September 30, 1994.
AmSouth Alabama is the second largest bank in Alabama, based upon total assets
at September 30, 1994. AmSouth's other major banking subsidiaries are AmSouth
Bank of Florida, headquartered in Tampa, Florida ("AmSouth Florida"), and
AmSouth Bank of Tennessee, headquartered in Chattanooga, Tennessee ("AmSouth
Tennessee").
At September 30, 1994, AmSouth Florida had total consolidated assets of
approximately $6.4 billion, total consolidated deposits of approximately $4.9
billion and total consolidated shareholders' equity of approximately $561.7
million. AmSouth Florida operated 137 offices in Florida at September 30, 1994.
At September 30, 1994, AmSouth Tennessee had total consolidated assets of
approximately $1.1 billion, total consolidated deposits of approximately $815.1
million and total consolidated shareholders' equity of approximately $113.0
million. AmSouth Tennessee operated 21 offices in Tennessee at September 30,
1994.
22
<PAGE>
Since January 1, 1994, AmSouth has completed a number of business
combinations, the terms of which are summarized in the following table.
<TABLE>
<CAPTION>
APPROXIMATE CONSIDERATION/
HEADQUARTERS TOTAL ACCOUNTING COMPLETION
NAME OF ACQUIRED COMPANY LOCATION ASSETS(1) TREATMENT DATE
- ------------------------ --------------------- ------------ -------------------- -------------
<S> <C> <C> <C> <C>
Orange Banking Corpora-
tion Orlando, Florida $354 million common stock/ January 1994
pooling of interests
FloridaBank, a Federal
Savings Bank Jacksonville, Florida 271 million common stock/ February 1994
pooling of interests
Citizens National Corpo-
ration Naples, Florida 313 million common stock/ April 1994
pooling of interests
Parkway Bancorp, Inc. Ft. Myers, Florida 130 million common stock/ April 1994
pooling of interests
First Federal Savings
Bank, Calhoun, Georgia Calhoun, Georgia 72 million common stock/ April 1994
pooling of interests
Fortune Bancorp, Inc. Clearwater, Florida 2.7 billion cash and common June 1994
stock/purchase
</TABLE>
- --------
(1) The dollar amount indicated represents assets of the specified organization
as of the last reported period prior to the business combination.
As of the date of this Proxy Statement-Prospectus, AmSouth is a party to one
other pending business combination (other than the proposed merger with Tampa),
which is summarized in the table below.
<TABLE>
<CAPTION>
APPROXIMATE
HEADQUARTERS TOTAL CONSIDERATION/EXPECTED
NAME OF COMPANY TO BE ACQUIRED LOCATION ASSETS(1) ACCOUNTING TREATMENT
- ------------------------------ ------------------------ ------------ ----------------------
<S> <C> <C> <C>
Community Federal Savings Bank Fort Oglethorpe, Georgia $104 million cash/purchase
</TABLE>
- --------
(1) The dollar amount indicated represents assets of the organization as of
September 30, 1994.
Consummation of the Community Federal Savings Bank transaction remains
subject to fulfillment of a number of conditions, including receipt of certain
shareholder and regulatory approvals. No assurances can be given that such
conditions will be fulfilled or that the transaction will be consummated.
AmSouth continually evaluates business combination opportunities and
frequently conducts due diligence activities in connection with possible
business combinations. As a result, business combination discussions and, in
some cases, negotiations frequently take place, and future business
combinations involving cash, debt or equity securities can be expected. Any
future business combination or series of business combinations that AmSouth
might undertake may be material, in terms of assets acquired or liabilities
assumed, to AmSouth's financial condition or results of operation. Recent
business combinations in the banking industry have typically involved the
payment of a premium over book and market values. This practice may result in
dilution of book value and net income per share for the acquiror.
AmSouth's other subsidiaries include AmSouth Mortgage Company, Inc., which
offers first mortgage loans through offices in nine states, AmSouth Leasing
Corporation, a specialized lender providing equipment leasing, and AmSouth
Investment Services, Inc., a registered broker-dealer that provides securities
brokerage services.
AmSouth was incorporated under the laws of the State of Delaware in 1970. Its
principal executive office is located at 1400 AmSouth-Sonat Tower, 1900 Fifth
Avenue North, Birmingham, Alabama 35203. Its telephone number is (205) 320-
7151.
23
<PAGE>
Tampa. Tampa is a bank holding company incorporated under the laws of the
State of Florida. At September 30, 1994, Tampa had total consolidated assets of
approximately $213.4 million, total consolidated deposits of approximately
$197.8 million and total consolidated shareholders' equity of approximately
$13.2 million.
Tampa's only subsidiary is The Bank of Tampa (the "Bank"), incorporated under
the laws of the State of Florida. The Bank is engaged principally in the
business of full-service banking. The Bank has a total of five office
locations, four of which are full-service offices and one of which is a limited
service office, all of which are located in Hillsborough County, Florida.
At October 31, 1994, Tampa and the Bank had 96 employees, of which 89 were
full-time and 7 were part-time.
The Bank offers most of the customary banking services, including checking
accounts, savings accounts, certificates of deposit, money market accounts,
money orders, travelers' checks, safe deposit boxes, night depository,
automatic teller machine access, installment loans, commercial loans, mortgage
loans, mortgage collection and international banking services. The Bank does
not have trust powers.
The Bank's commercial loan department serves a variety of professionals and
local businesses, including many small, family-owned enterprises. The
department offers a full range of business credit services including lines of
credit, term loans, revolving loans, equipment financing and commercial
mortgages.
The Bank's consumer loan services include consumer credit common to most
full-service commercial banks. These services include automobile loans, boat
loans, home improvement loans, Visa credit lines, home equity lines of credit
and other personal loans.
The Bank established a full-service international department in the winter of
1986 to serve the international needs of the community. The department's
services include the issuance of letters of credit (commercial and standby),
international collections, foreign currency exchange, foreign travelers' checks
and export financing.
Tampa was organized in 1987. Its principal offices are located at 601
Bayshore Boulevard, Tampa, Florida, 33606 and its telephone number is (813)
872-1216.
THE MEETING
GENERAL
Each copy of this Proxy Statement-Prospectus mailed to holders of Tampa
Common Stock is accompanied by a proxy card furnished in connection with the
Tampa Board's solicitation of proxies for use at the Meeting. The Meeting is
scheduled to be held on January 17, 1995, at 4:30 p.m. local time, at 4400 N.
Armenia Avenue, Tampa, Florida 33603. Only holders of record of Tampa Common
Stock at the close of business on the Record Date are entitled to receive
notice of and to vote at the Meeting.
PURPOSE OF THE MEETING
At the Meeting, shareholders will consider and vote upon the following: (i) a
proposal to approve the Merger Agreement and (ii) such other matters as may
properly be brought before the Meeting. On each matter to be considered at the
Meeting, shareholders will have one vote for each share of Tampa Common Stock
held of record on the Record Date. This Proxy Statement-Prospectus is not a
proxy statement for use at any AmSouth meeting and no proxies are requested
from AmSouth shareholders.
PROXIES
HOLDERS OF TAMPA COMMON STOCK ARE REQUESTED TO SIGN, DATE AND RETURN PROMPTLY
THE ACCOMPANYING PROXY CARD TO TAMPA IN THE ENCLOSED POSTAGE-PAID, ADDRESSED
ENVELOPE. FAILURE TO RETURN YOUR PROPERLY EXECUTED PROXY CARD OR TO VOTE AT THE
MEETING WILL HAVE THE SAME EFFECT AS A VOTE AGAINST THE MERGER.
24
<PAGE>
Any holder of Tampa Common Stock who has delivered a proxy may revoke it any
time before it is voted by giving notice of revocation in writing or submitting
a signed proxy card bearing a later date to Tampa, provided that such notice or
proxy card is actually received by Tampa before the vote of shareholders, or in
open meeting prior to the taking of the shareholder vote at the Meeting. Any
notice of revocation should be sent to Tampa at P.O. Box One, Tampa, Florida
33601, Attention: Barbara A. Diamond, Secretary. A proxy will not be revoked by
the death or supervening incapacity of the shareholder executing the proxy
unless, before the vote, notice of such death or incapacity is filed with the
Secretary. The shares of Tampa Common Stock represented by properly executed
proxies received at or prior to the Meeting and not subsequently revoked will
be voted as directed in such proxies. If instructions are not given, shares
represented by proxies received will be voted FOR approval of the Merger
Agreement. IF ANY OTHER MATTERS ARE PROPERLY PRESENTED AT THE MEETING FOR
CONSIDERATION, THE PERSONS NAMED IN THE PROXY CARD ENCLOSED HEREWITH WILL HAVE
DISCRETIONARY AUTHORITY TO VOTE ON SUCH MATTERS IN ACCORDANCE WITH THEIR BEST
JUDGMENT; PROVIDED, HOWEVER, THAT SUCH DISCRETIONARY AUTHORITY WILL ONLY BE
EXERCISED TO THE EXTENT PERMISSIBLE UNDER APPLICABLE FEDERAL AND STATE
SECURITIES AND CORPORATION LAWS. IF NECESSARY, AND UNLESS CONTRARY INSTRUCTIONS
ARE GIVEN, THE PROXY HOLDER ALSO MAY VOTE IN FAVOR OF A PROPOSAL TO ADJOURN THE
MEETING TO PERMIT FURTHER SOLICITATION OF PROXIES IN ORDER TO OBTAIN SUFFICIENT
VOTES TO APPROVE THE MERGER AGREEMENT. As of the date of this Proxy Statement-
Prospectus, Tampa is unaware of any other matter to be presented at the
Meeting.
The cost of soliciting proxies from holders of Tampa Common Stock will be
borne by Tampa. Such solicitation will be made by mail but also may be made by
telephone or in person by the directors, officers and employees of Tampa (who
will receive no additional compensation for doing so). In addition, Tampa will
make arrangements with brokerage firms and other custodians, nominees and
fiduciaries to send proxy materials to their principals.
TAMPA SHAREHOLDERS SHOULD NOT FORWARD ANY STOCK CERTIFICATES WITH THEIR PROXY
CARDS.
VOTE REQUIRED
Only holders of record of shares of Tampa Common Stock on the Record Date
will be entitled to vote at the Meeting. The affirmative vote of the holders of
two-thirds of the shares of Tampa Common Stock outstanding on such date is
required in order to approve the Merger Agreement. Therefore, a failure to
return a properly executed proxy card or to vote in person at the Meeting will
have the same effect as a vote against the Merger Agreement. As of the Record
Date, there were 637,827 shares of Tampa Common Stock outstanding and entitled
to vote at the Meeting, with each share being entitled to one vote.
The directors and executive officers of Tampa and their affiliates
beneficially owned, as of the Record Date, 248,823 shares (or approximately
37.04% of the outstanding shares) of Tampa Common Stock. The directors and
executive officers of AmSouth and their affiliates beneficially owned, as of
the Record Date, no shares of Tampa Common Stock. As of that date, no
subsidiary of either Tampa or AmSouth held of record or in the name of nominees
any shares of Tampa Common Stock in a fiduciary capacity.
The presence, in person or by proxy, of a majority of the outstanding shares
of Tampa Common Stock is necessary to constitute a quorum of the shareholders
in order to take action at a meeting of shareholders. For these purposes,
shares of Tampa Common Stock which are present, or represented by proxy, at the
Meeting will be counted for quorum purposes regardless of whether the holder of
the shares or proxy fails to vote on the Merger Agreement or whether a broker
with discretionary authority fails to exercise its discretionary voting
authority with respect to the Merger Agreement. Once a quorum is established,
approval of the Merger Agreement requires the affirmative vote of the holders
of two-thirds of the outstanding shares of Tampa Common Stock. For voting
purposes therefore, abstentions and "broker non-votes" will have the same
effect as votes against the Merger Agreement.
Pursuant to the Merger Agreement, members of the Tampa Board, (who have the
power to vote in the aggregate 194,544 shares or 30.5% of the outstanding
shares of Tampa Common Stock as of the Record Date) have entered into an
agreement with AmSouth providing that for twelve months following the execution
of such agreement, each such director will vote his shares of Tampa Common
Stock in favor of the
25
<PAGE>
Merger and against any business combination or reorganization involving Tampa
or its subsidiaries with any entity other than AmSouth. See "CERTAIN RELATED
TRANSACTIONS--Voting Agreements."
RECOMMENDATION OF THE TAMPA BOARD
THE TAMPA BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND HAS
DETERMINED THAT THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, TAMPA AND
ITS SHAREHOLDERS. THE TAMPA BOARD THEREFORE UNANIMOUSLY RECOMMENDS THAT TAMPA'S
SHAREHOLDERS VOTE FOR APPROVAL OF THE MERGER AGREEMENT. For the reasons
described below, the Tampa Board believes that the Merger will provide
significant value to all Tampa shareholders and also enable them to participate
in opportunities for growth that the Tampa Board believes the Merger makes
possible. See "THE MERGER--Background of and Reasons for the Merger."
THE MERGER
The following information, insofar as it relates to matters contained in the
Merger Agreement, is qualified in its entirety by reference to the Merger
Agreement, which is incorporated herein by reference and attached hereto as
Appendix A. Tampa shareholders are urged to read carefully the Merger
Agreement.
EFFECT OF THE MERGER
At the Effective Date (as defined under the heading "Effective Date"), Tampa
will merge with and into AmSouth. The separate existence of Tampa will cease
and AmSouth will be the surviving corporation in the Merger. Subject to certain
adjustments, each share of Tampa Common Stock issued and outstanding at the
Effective Date will be converted in the Merger into the right to receive 1.5592
shares (the "Conversion Number") of AmSouth Common Stock. However, shares of
Tampa Common Stock held by Tampa or its subsidiaries (other than shares held in
a fiduciary capacity or in satisfaction of a debt previously contracted) and
shares held as treasury stock by Tampa will be canceled and retired and will
cease to exist, and no payment will be made with respect thereto. The shares of
AmSouth Common Stock to be received in exchange for each share of Tampa Common
Stock are sometimes referred to as the "Consideration." Each outstanding share
of AmSouth Common Stock outstanding immediately prior to the Effective Date
will remain outstanding and unchanged as a result of the Merger. For
information regarding the treatment of outstanding options to purchase Tampa
Common Stock, see "THE MERGER--Interests of Certain Persons in the Merger--
Stock Options."
No fractional shares of AmSouth Common Stock will be issued in connection
with the Merger. In lieu of fractional shares, AmSouth will make a cash payment
equal to the fractional interest which a Tampa shareholder would otherwise
receive multiplied by the closing price of AmSouth Common Stock on the New York
Stock Exchange (the "NYSE") on the Effective Date.
The amount and form of the Consideration were arrived at through arm's-length
negotiations between AmSouth and Tampa. See "Background of and Reasons for the
Merger." For information regarding certain rights attached to each share of
AmSouth Common Stock, including, when issued, to each of the Merger Shares, see
"DESCRIPTION OF AMSOUTH CAPITAL STOCK--AmSouth Rights Agreement."
BACKGROUND OF AND REASONS FOR THE MERGER
Background of the Merger.
In connection with the strategic planning for Tampa, the Tampa Board and its
management have periodically reviewed and analyzed different opportunities for
increased earnings growth and share value. In Spring 1993, the Tampa Board
retained The Robinson-Humphrey Company, Inc. ("Robinson-Humphrey") to assist
the Tampa Board in analyzing the value of Tampa and evaluating the various
business alternatives available to Tampa.
The Robinson-Humphrey analysis resulted in the Tampa Board considering three
alternatives for Tampa in the fall of 1993:
1. Exploring the sale of Tampa to another financial institution;
2. Attempting to affiliate with other community banks within the Tampa
Bay and the Central Florida area with whom Tampa could form a "holding
company" of community banks; or
3. Remaining a community bank and attempting to maximize shareholder
value through internal growth.
26
<PAGE>
In its 1993 report to the Tampa Board, Robinson-Humphrey indicated to the
Tampa Board that alternative number 3 presented the lowest potential for
increasing shareholder value. Alternative number 1 presented an immediate
potential for increased shareholder value, but alternative number 2, forming a
community bank holding company, presented ultimately the highest potential for
maximizing shareholder value, based on certain assumptions. After a review of
the factors involved, the Tampa Board decided in the fall of 1993 to further
investigate the potential for maximizing shareholder value pursuant to
alternative number 2.
Management and members of the Tampa Board then engaged in numerous
discussions with other community banks in order to ascertain whether
alternative number 2 would be feasible. After a number of these discussions, it
was determined by management and the Tampa Board that the contingencies
involved in the formation of a community bank holding company were simply too
risky to pursue. Additionally, the time period for formation and implementation
of the community bank holding company was, in the opinion of the Tampa Board,
too great. It thus became clear to the Tampa Board that the assumptions and
contingencies made by management and Robinson-Humphrey in analyzing alternative
number 2 could not be fulfilled with any certainty within a reasonable period
of time. In late 1993 and in early 1994, the Tampa Board then decided to pursue
alternative number 1, the sale of Tampa.
In early 1994, the Tampa Board again retained Robinson-Humphrey to prepare a
confidential offering memorandum to be presented to potential merger
candidates. Robinson-Humphrey, on behalf of Tampa, prepared the confidential
offering memorandum and approached various potential candidates requesting
proposals for a business combination. The proposal was made to approximately
eight different financial institutions.
Not all of the institutions approached responded with an offer. The offers
received were then analyzed by Robinson-Humphrey. The consideration offered by
AmSouth was the highest. Robinson-Humphrey then presented to the Tampa Board a
detailed analysis of the AmSouth offer, including an analysis of AmSouth's
financial condition and its prospects as an investment for the Tampa
shareholders. After consideration of the Robinson-Humphrey report and a review
of the transaction as proposed by AmSouth, the Tampa Board unanimously agreed
to pursue a definitive agreement with AmSouth. Representatives of the Tampa
Board and AmSouth then began discussions concerning the potential merger in
early 1994. These discussions culminated with the execution of the Merger
Agreement on March 9, 1994.
Tampa's Reason for the Merger
THE TAMPA BOARD BELIEVES THAT THE MERGER IS FAIR TO AND IN THE BEST INTERESTS
OF TAMPA AND ITS SHAREHOLDERS. THE TAMPA BOARD HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT AND HAS RECOMMENDED THAT TAMPA'S SHAREHOLDERS VOTE FOR THE
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT. IN REACHING ITS DETERMINATION
THAT THE MERGER IS FAIR TO AND IN THE BEST INTERESTS OF TAMPA'S SHAREHOLDERS,
THE TAMPA BOARD CONSIDERED A NUMBER OF FACTORS INCLUDING, WITHOUT LIMITATION,
THE FOLLOWING:
(a) The Tampa Board's familiarity with and review of Tampa's business,
operations, financial condition, earnings and prospects;
(b) The Tampa Board's review of the business operations, earnings and
financial condition of AmSouth on both an historical and a prospective
basis, the enhanced opportunities for growth that the Merger would make
possible, and the increased liquidity of equity ownership available to the
Tampa shareholders as a result of the Merger;
(c) The tax-free nature of the Merger;
(d) The Tampa Board's review of the possible alternatives to the Merger
(discussed above), the range of possible values to Tampa's shareholders
with respect to such alternatives and the timing and likelihood of actually
receiving and the risks and rewards associated with seeking to obtain those
values;
27
<PAGE>
(e) The Tampa Board's review of other offers received from potential
merger partners; and
(f) The terms of the Merger Agreement and other documents executed in
connection with the Merger.
In view of the wide variety of factors it considered in evaluating the
Merger, the Tampa Board did not attempt to assign relative weights to the
specific factors considered in reaching its determination.
Based upon all these matters, and such other matters as the Tampa Board
deemed relevant, the Tampa Board unanimously approved the Merger Agreement as
being in the best interests of Tampa and its shareholders.
TAMPA'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT TAMPA SHAREHOLDERS
VOTE FOR THE PROPOSAL TO APPROVE THE MERGER AGREEMENT.
AmSouth's Reasons for the Merger. The AmSouth Board of Directors (the
"AmSouth Board") has approved the Merger Agreement and determined that the
Merger and the issuance of the Merger Shares pursuant thereto are in the best
interests of AmSouth and its stockholders. In approving the Merger Agreement,
the AmSouth Board considered a number of factors. The material factors
considered by the AmSouth Board were the following:
(i) The AmSouth Board's review, based in part on a presentation by
AmSouth management, of (a) the business, operations, earnings and financial
condition, including the capital levels and asset quality, of Tampa on an
historical, prospective and pro forma basis, (b) the demographic, economic
and financial characteristics of the Tampa, Florida area and (c) the
results of AmSouth's due diligence review of Tampa; and
(ii) A variety of factors affecting and relating to the overall strategic
focus of AmSouth, including AmSouth's desire to expand to areas near
Alabama and to improve its presence in the Florida market, which AmSouth
believes has good prospects for growth and profitability.
The AmSouth Board did not assign any specific or relative weight to the
factors in its consideration.
OPINION OF FINANCIAL ADVISER
General
Tampa retained Robinson-Humphrey to act as its financial adviser in
connection with the Merger. Robinson-Humphrey has rendered an opinion dated
March 9, 1994 to the Tampa Board that, from a financial point of view, the
terms of the Merger set forth in the Merger Agreement were fair to holders of
Tampa Common Stock. The text of such opinion is set forth in Appendix B to this
Proxy Statement-Prospectus and should be read in its entirety by shareholders
of Tampa.
The consideration to be received by Tampa shareholders in the Merger was
determined by Tampa and AmSouth in their negotiations. No limitations were
imposed by the Tampa Board or management of Tampa upon Robinson-Humphrey with
respect to the investigations made or the procedures followed by Robinson-
Humphrey in rendering its opinion.
In connection with rendering its opinion to the Tampa Board, Robinson-
Humphrey performed a variety of financial analyses. However, the preparation of
a fairness opinion involves various determinations as to the most appropriate
and relevant methods of financial analyses and the application of those methods
to the particular circumstances, and, therefore, such an opinion is not readily
susceptible to summary description. Robinson-Humphrey, in conducting its
analysis and in arriving at its opinion, has not conducted a physical
inspection of any of the properties or assets of Tampa, and has not made or
obtained any independent valuation or appraisals of any properties, assets or
liabilities of Tampa. Robinson-Humphrey has assumed
28
<PAGE>
and relied upon the accuracy and completeness of the financial and other
information that was provided to it by Tampa or that was publicly available.
Its opinion is necessarily based on economic, market and other conditions as in
effect on, and the information made available to it as of the date of, its
analyses.
Valuation Methodologies
In connection with its opinion, and the presentation of that opinion to the
Tampa Board, Robinson-Humphrey performed three valuation analyses with respect
to Tampa: (i) a comparison with comparable publicly traded companies; (ii) an
analysis of comparable prices and terms of recent transactions involving the
acquisition of banks by other banking organizations; and (iii) a discounted
cash flow analysis. Each of these methodologies is discussed briefly below:
COMPARABLE COMPANY ANALYSIS. Robinson-Humphrey analyzed the market
trading of Tampa Common Stock relative to publicly traded banking companies
that had total assets comparable to Tampa and were located in the
Southeastern United States. The institutions included in the comparison
consisted of: American Bancorporation (AMBC), Bank of South Carolina
(BKSC), Carolina First Corporation (CAFC), Community Bancshares, Inc.
(CBOG), Chattahoochee Bancorp, Inc. (CHBC), City Holding Company (CHCO),
Central and Southern Holding (CSBC), Century South Banks, Inc. (CSBI),
Carolina Southern Bank (CSBK), First City Bancorp, Inc. (FCT), Founders
Financial Corporation (FFCP), Jefferson Bancorp, Inc. (JBNC), Metro
Financial Corporation (MFIN), Piedmont BankGroup, Inc. (PBGI), Suburban
Bankshares, Inc. (SBKSA), The Bank of Nashville (TBON), and Tennessee
Bancorp (TENB).
Among the market trading information compared was market price to book
value and tangible book value, of which the mean multiples for the
comparable companies was 126.96 percent and 147.24 percent, respectively,
compared to the multiple of approximately 233.0 percent of book value and
tangible book value represented by the consideration to be received by
Tampa shareholders in the Merger. Also examined was the ratio of market
price to the latest 12 months earnings per share, for which the average
multiple for the comparable banking companies was 18.04, compared to a
multiple of approximately 19.10 represented by the consideration to be
received in the Merger per share of Tampa Common Stock (based on a market
price per share of AmSouth Common Stock at $30.25 per share, which was the
closing price on March 7, 1994).
COMPARABLE TRANSACTION ANALYSIS. Robinson-Humphrey performed an analysis
of premiums paid in the acquisition of selected banking companies with
comparable characteristics to Tampa. Comparable transactions were
considered to be transactions since January 1, 1993 where the seller was
located in the Southeast and had assets less than $300 million at the time
of acquisition.
The analysis yielded a range of the ratio of price to book value of 74.80
percent to 257.80 percent, with a mean of 169.78 percent and a median of
170.52. These compare to a ratio of price to the Tampa book value as of
December 31, 1993 of approximately 233.0 percent in the Merger.
In addition, the analysis yielded a range of the ratio of price as a
percentage of tangible book value for the comparable transactions ranging
from 74.80 percent to 257.80 percent, with a mean of 172.55 percent and a
median of 175.58 percent. These compare to a ratio of price to tangible
book value at December 31, 1993 of approximately 233.0 percent for the
Merger.
Lastly, the analysis yielded a range of the ratio of price as a multiple
of trailing twelve month earnings per share. These ratios ranged from 5.76
times to 52.53 times, with a mean of 16.31 times and a median of 14.09
times. These compare to a ratio of price to the December 31, 1993 trailing
twelve months earnings per share of 19.10 times for the Merger.
No company or transaction used in the comparable company or comparable
transaction analysis is identical to Tampa. Accordingly, an analysis of the
foregoing necessarily involves complex
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considerations and judgments, as well as other factors that affect the
public trading value or the acquisition value of the company to which it is
being compared.
DISCOUNTED CASH FLOW ANALYSIS. Using discounted cash flow analysis,
Robinson-Humphrey estimated the present value of the future stream of
after-tax cash flows that Tampa could produce through 1998, under various
circumstances, assuming that Tampa performed in accordance with
earnings/return projections of management at the time that Tampa entered
into acquisition discussions in February, 1994. Robinson-Humphrey estimated
the terminal value for Tampa at the end of the period by applying multiples
of earnings ranging from 9.0 to 11.0 times and then discounting the cash
flow streams, dividends paid to shareholders and terminal value using
differing discount rates (ranging from 9.0 to 11.0 percent) choosing to
reflect different assumptions regarding the required rates of return of
Tampa and the inherent risk surrounding the underlying projections. This
discounted cash flow analysis indicated a reference range of $21.6 million
to $27.2 million, or $34.45 to $43.40 per share, for Tampa. Discounted cash
flow analysis relies on a number of assumptions, including earnings growth
rates, dividend payment rates, terminal values and discount rates. This
analysis is not necessarily indicative of actual values or actual future
results and does not purport to reflect the prices at which securities may
trade at the present or at any time in the future.
Compensation of Robinson-Humphrey
Pursuant to an engagement letter between Tampa and Robinson-Humphrey, Tampa
has paid Robinson-Humphrey a financial advisory fee of $75,000. In addition,
Tampa has agreed to pay Robinson-Humphrey a fee (conditioned upon consummation
of the Merger) equal to 1.5 percent of the total consideration received by
shareholders, against which the previously paid $75,000 will be credited. Tampa
has also agreed to indemnify Robinson-Humphrey and its officers and employees
against certain liabilities in connection with its services under the
engagement letter, except for liabilities resulting from the negligence of
Robinson-Humphrey.
As part of its investment banking business, Robinson-Humphrey is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, negotiated underwritings, secondary distributions of listed and
unlisted securities, private placements, and valuations for estate, corporate
and other purposes. The Tampa Board decided to retain Robinson-Humphrey based
on its experience as a financial adviser in mergers and acquisitions of
financial institutions, particularly transactions in the Southern region of the
United States, and its knowledge of financial institutions and Tampa in
particular, derived from its services as a financial adviser to the Tampa
Board, as described above. Robinson-Humphrey was one of the underwriters in
AmSouth's recent issuance of $150,000,000 of 7 3/4% Subordinated Notes due
2004.
EFFECTIVE DATE
The Merger will become effective at the time after all necessary regulatory
approvals have been obtained and when appropriate documents (the "Closing
Documents") to consummate the Merger are executed in accordance with all legal
requirements and are filed as required by law, or on such later date as the
Closing Documents may specify (the "Effective Date"). The Closing Documents
will be filed on a date selected by AmSouth that is no later than the 15th day
of the month following the end of the quarter in which the last of the
following occurs: (i) the last regulatory approval required for the Merger
(and, if AmSouth determines that the Bank Merger (as defined below) will occur
simultaneously with the Merger, the Bank Merger) is granted or (ii) the 30th
day following the expiration of the waiting period imposed by such regulatory
approval (or if such regulatory approval imposes no waiting period, the 60th
day following the receipt of such approval) or (iii) the 60th day following the
approval of the Merger by the shareholders of Tampa; provided that the closing
will not take place until the expiration of the periods contemplated by the
price-based termination provision described under "THE MERGER--Price-Based
Termination." After shareholder and regulatory approvals that would permit
consummation of the Merger have been obtained, the parties expect that the
Merger will occur on a date that will facilitate an orderly business
combination of Tampa and AmSouth, which date may be after the first possible
date on which the Merger could occur under the terms of the Merger Agreement.
The parties are unable at this time to predict when or if the Effective Date
will occur.
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SURRENDER OF CERTIFICATES
As promptly as practicable after the Effective Date, AmSouth will cause
AmSouth Alabama or such other bank or trust company selected by AmSouth, acting
in the capacity of exchange agent for AmSouth (the "Exchange Agent"), to mail
to each former holder of record of Tampa Common Stock (excluding holders, if
any, who have perfected dissenters' rights) a form of letter of transmittal,
together with instructions for the exchange of such holder's certificates
representing shares of Tampa Common Stock for the certificates representing
shares of AmSouth Common Stock.
HOLDERS OF TAMPA COMMON STOCK SHOULD NOT SEND IN ANY STOCK CERTIFICATES UNTIL
THEY RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS FROM THE EXCHANGE
AGENT.
Upon surrender to the Exchange Agent of one or more certificates for Tampa
Common Stock, together with a properly completed letter of transmittal, there
will be issued and mailed to the holder of Tampa Common Stock surrendering such
items a certificate or certificates representing the number of shares of
AmSouth Common Stock to which such holder is entitled, if any, and a check for
the amount, where applicable, to be paid in lieu of any fractional share
interest determined in the manner described above, without interest.
Former stockholders of record of Tampa shall be entitled to vote after the
Effective Date at any meeting of AmSouth stockholders the number of whole
shares of AmSouth Common Stock into which their shares of Tampa Common Stock
are converted, regardless of whether such holder exchanges his or her
certificates representing Tampa Common Stock for certificates representing
AmSouth Common Stock according to the provisions of the Merger Agreement. Until
surrendered or exchanged, each certificate theretofore representing shares of
Tampa Common Stock shall from and after the Effective Date represent for all
purposes only the right to receive shares of AmSouth Common Stock or cash in
lieu of fractional shares as set forth in the Merger Agreement (without any
interest thereon). No dividend or other distribution payable after the
Effective Date with respect to AmSouth Common Stock will be paid to the holder
of any unsurrendered Tampa certificate until the holder duly surrenders such
certificate. Pending delivery of such certificates of Tampa Common Stock,
dividends on the AmSouth Common Stock to be exchanged therefor which are
payable prior to the delivery date of such certificates will be held by AmSouth
and delivered to the persons entitled thereto upon proper delivery of such
certificates for exchange, together with fractional share checks, without any
interest thereon.
After the Effective Date, there will be no transfers on Tampa's stock
transfer books of shares of Tampa Common Stock. If certificates representing
shares of Tampa Common Stock are presented for transfer after the Effective
Date, they will be canceled and exchanged for the shares of AmSouth Common
Stock, if any, plus the amount due in lieu of fractional shares, if any,
deliverable in respect thereof.
None of AmSouth, the Exchange Agent or any other person will be liable to any
former holder of Tampa Common Stock for any amount properly delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
If a certificate for Tampa Common Stock has been lost, stolen or destroyed,
the Exchange Agent will issue the Consideration properly payable in accordance
with the Merger Agreement upon receipt of appropriate evidence as to such loss,
theft or destruction, appropriate evidence as to the ownership of such
certificate by the claimant and appropriate and customary indemnification.
CONDITIONS TO CONSUMMATION OF THE MERGER
Conditions to Each Party's Obligations. The respective obligations of AmSouth
and Tampa to effect the Merger are subject to the satisfaction of certain
conditions, including the following:
(i) Receipt of the approval of the holders of Tampa Common Stock
solicited hereby;
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(ii) Receipt of all consents and approvals required for the Merger and
the Bank Merger (if AmSouth determines that the Bank Merger will occur
simultaneously with the Merger), and the expiration of all applicable
statutory waiting periods; and satisfaction of all other requirements
prescribed by applicable laws, rules or regulations; provided, however,
that no approval or consent shall have imposed any conditions or
requirements which would (a) result in any material limitation on the
ability of AmSouth effectively to exercise full rights of ownership of all
the shares of Tampa Common Stock, (b) require a divestiture which would
constitute, if made solely by Tampa or the Bank, a material portion of
Tampa's business or properties or (c) in the good faith reasonable judgment
of the AmSouth Board, otherwise materially and adversely affect the
economic assumptions of the transactions contemplated pursuant to the
Merger Agreement so as to render inadvisable the consummation of the Merger
(all of the required regulatory approvals have been received, all statutory
waiting periods have expired and none of the approvals contained conditions
of the type described in (a), (b) or (c)); and
(iii) The absence of any unstayed or final injunction prohibiting the
consummation of the Merger and of any pending or threatened litigation or
proceeding by any governmental authority before any court or agency seeking
to restrain, prohibit or invalidate the Merger or any other transaction
provided for in the Merger Agreement.
For a discussion of the regulatory approvals required for consummation of the
Merger, see "Regulatory Approvals."
AmSouth Conditions. The obligation of AmSouth to effect the Merger is subject
to the satisfaction of certain additional conditions, including the following:
(i) The absence of a "material adverse condition" with respect to Tampa
or the Bank (each a "Tampa Material Condition"). As defined in the Merger
Agreement, a "Tampa Material Condition" is a condition which either alone
or when aggregated with other conditions has resulted or, in the reasonable
opinion of AmSouth, would result, in (a) a substantial loss or damage to
the properties or assets of Tampa, whether or not insured, that would
materially affect or impair the ability of Tampa to conduct its business as
presently conducted, or (b) a reduction of $625,000 or more on a pre-tax
basis in the consolidated total shareholders' equity of Tampa from the
amounts reflected on the financial statements of Tampa as of December 31,
1993; provided, however, that for purposes of these calculations,
consolidated total shareholders' equity of Tampa will not be reduced by (a)
merger-related charges and expenses taken by Tampa pursuant to the Merger
Agreement or (b) additions to the allowance for possible loan losses so as
to be consistent with AmSouth's policies regarding loan classification and
levels of reserves;
(ii) Receipt by AmSouth and its directors and officers who sign the
Registration Statement, of which this Proxy Statement-Prospectus is a part,
of an opinion from Ernst & Young LLP, AmSouth's independent auditors, (a)
that the transactions contemplated by the Merger Agreement will qualify for
"pooling of interests" accounting treatment under GAAP and (b) as to
certain tax effects of the Merger;
(iii) Delivery to AmSouth and its directors and officers who sign the
Registration Statement, of which this Proxy Statement-Prospectus is a part,
of an opinion of Hill, Ward & Henderson, or other counsel acceptable to
AmSouth, dated as of the Effective Date, containing such opinions as are
customary in a transaction of this kind;
(iv) The truth in all material respects of, or compliance in all material
respects with, each of the representations, warranties and covenants of
Tampa contained in the Merger Agreement, on the Effective Date as if made
on such date (or on the date when made in the case of any representation or
warranty which specifically relates to any earlier date) except, in the
case of such representations or warranties, where the failure to be true
would not have a material adverse effect on the business, financial
condition or results of operations of Tampa and the Bank taken as a whole;
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(v) The execution of an agreement between AmSouth and each affiliated
shareholder of Tampa relating to the disposition of any Merger Shares
received by such shareholder. See "CERTAIN RELATED TRANSACTIONS--Resales of
AmSouth Common Stock;" and
(vi) Receipt by AmSouth from Dwight Darby & Company, independent
accountants for Tampa, of letters with respect to certain financial
information regarding Tampa.
Tampa Conditions. The obligation of Tampa to effect the Merger is subject to
the satisfaction of certain additional conditions, including the following:
(i) The absence of a "material adverse condition" with respect to AmSouth
(each an "AmSouth Material Condition"). As defined in the Merger Agreement,
an "AmSouth Material Condition" is a condition which either alone or when
aggregated with other conditions has resulted or, in the reasonable opinion
of Tampa, would result, in (a) a substantial loss or damage to the
properties or assets of AmSouth, whether or not insured, that would
materially affect or impair the ability of AmSouth to conduct its business
as presently conducted, or (b) a reduction of $54,000,000 or more on a pre-
tax basis in the consolidated total shareholders' equity of AmSouth from
the amounts reflected on the financial statements of AmSouth as of December
31, 1993;
(ii) Delivery to Tampa and its directors of an opinion of counsel for
AmSouth acceptable to Tampa, dated the Effective Date, containing such
opinions as are customary in a transaction of this kind;
(iii) The truth in all material respects of, or compliance in all
material respects with, each of the representations, warranties and
covenants of AmSouth contained in the Merger Agreement, on the Effective
Date as if made on such date (or on the date when made in the case of any
representation or warranty which specifically relates to an earlier date)
except, in the case of such representations and warranties, where the
failure to be true would not have a material adverse effect on the
business, financial condition or results of operations of AmSouth and its
subsidiaries taken as a whole; and
(iv) Receipt by Tampa and its directors of an opinion of Ernst & Young
LLP, or another tax adviser acceptable to Tampa, dated the Effective Date,
in form and substance satisfactory to Tampa, to the effect described under
"Certain Federal Income Tax Considerations."
PRICE-BASED TERMINATION
The Merger Agreement may be terminated by Tampa, if the Tampa Board so
determines by a majority vote, at any time during the ten-day period commencing
on the twentieth day prior to the Effective Date if (i) the Average Closing
Price (as defined below) of shares of AmSouth Common Stock is less than $27.56,
and (ii) the decline in the price of AmSouth Common Stock exceeds by more than
10% the decline over a specified time period in an index composed of common
stocks of other bank holding companies; subject, however, to the following
three sentences. If Tampa elects to exercise its termination right pursuant to
the foregoing, it must give prompt written notice to AmSouth. During the seven-
day period commencing with its receipt of such notice, AmSouth will have the
option to increase the Consideration to be received by the holders of Tampa
Common Stock in the Merger by adjusting the Conversion Number up to the number
(calculated to the nearest one one-hundredth) obtained by dividing the product
of $27.56 and 1.5592 (i.e. $42.97) by the Average Closing Price. If AmSouth so
elects within such seven-day period, it must give prompt written notice to
Tampa of such election and the revised Conversion Number, whereupon no
termination will be deemed to have occurred, and the Merger Agreement will
remain in effect in accordance with its terms (except as the Conversion Number
shall have been so modified). An increase in the Conversion Number could result
in the number of Merger Shares to be issued exceeding the number indicated on
the cover page of this Proxy Statement-Prospectus.
For purposes of this provision of the Merger Agreement, "Average Closing
Price" means the average closing price per share of the AmSouth Common Stock as
reported on the NYSE Composite Transactions reporting system (as reported by
The Wall Street Journal) for the 10 consecutive NYSE trading days ending
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on the twentieth day prior to the Effective Date (or if such twentieth day is
not an NYSE trading day, the first NYSE trading day immediately preceding such
twentieth day).
Prior to making any decision to terminate the Merger Agreement pursuant to
this provision, the Tampa Board would consult with its financial and other
advisers and would consider all financial and other information it deemed
relevant to its decision. The matter would not, however, be resubmitted to
shareholders.
BANK MERGER
AmSouth currently anticipates that on or after the Effective Date, the Bank
will merge with AmSouth Florida (the "Bank Merger"). The Bank Merger will be
subject to the prior receipt of certain regulatory approvals, all of which have
been received. See "Regulatory Approvals."
REGULATORY APPROVALS
The regulatory approvals and consents necessary to consummate the Merger and
the Bank Merger include the approvals of the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), the Federal Deposit Insurance
Corporation (the "FDIC") and the Florida Department of Banking and Finance (the
"Florida Department").
AmSouth and Tampa are not aware of any material governmental approvals or
actions that are required for consummation of the Merger and the Bank Merger
(as currently structured), except as described above. A restructuring of the
Merger or the Bank Merger could result in different approvals being required.
Should any other approval or action be required, it is presently contemplated
that such approval or action would be sought. As of the date of this Proxy
Statement-Prospectus all of the required regulatory approvals and consents have
been received.
CONDUCT OF BUSINESS PENDING THE MERGER
Tampa. The Merger Agreement contains certain restrictions on the conduct of
Tampa's business pending consummation of the Merger. In particular, prior to
the Effective Date, the Merger Agreement prohibits Tampa (and its subsidiaries)
from taking any of the following actions without the prior written approval of
AmSouth: (i) declaring or paying any dividend; (ii) declaring or making any
distribution of, or combining, reclassifying, redeeming, purchasing or
otherwise acquiring any of its capital stock; (iii) except pursuant to plans or
agreements existing on the date of execution of the Merger Agreement, issuing
any additional shares of, or any options, calls or commitments for, or any
securities convertible into or exchangeable for, its capital stock or giving
any person any right to acquire from it shares of its capital stock; (iv)
incurring any long-term debt; (v) entering into any employment contracts with,
increasing the rate of compensation of, or paying any bonus to, any of its
directors, officers or employees, except in accordance with existing practices;
(vi) employing any new officer or employee at an annual salary that is in
excess of $50,000.00; (vii) except as may be required by applicable law,
entering into, terminating or modifying any employee benefit plan or
arrangement with respect to any of its directors, officers or other employees;
(viii) substantially modifying the manner in which it has heretofore conducted
its business or entering into any new line of business or employing any
consultant or advisor not under contract at the date of the Merger Agreement;
(ix) disposing of or discontinuing any major portion of its business or
property or merging or consolidating with, or acquiring all or any substantial
portion of, the business or property of any other entity; (x) disposing of any
material assets except in the ordinary course of business; (xi) knowingly
taking any action causing deterioration of its valuable customer deposit or
loan relationships; or (xii) agreeing to take any of the foregoing actions.
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AmSouth. The Merger Agreement prohibits AmSouth, prior to the Effective Date,
without the prior written consent of Tampa, from: (i) substantially modifying
the manner in which it has heretofore conducted its business; (ii) disposing of
to a non-affiliate or discontinuing a major portion of its business; or (iii)
agreeing to take any of the foregoing actions.
NO SOLICITATION
Tampa has agreed in the Merger Agreement that neither it nor any of its
subsidiaries will, and Tampa will instruct its employees, officers, directors,
agents, advisers and affiliates not to, solicit or encourage any inquiries or
proposals with respect to, furnish any information relating to, or subject to
the fiduciary duties of its Board, participate in any negotiation or discussion
concerning (i) any acquisition or purchase of a substantial portion of the
assets of, or a substantial equity interest in, or (ii) any business
combination with Tampa or its subsidiaries other than as contemplated in the
Merger Agreement.
WAIVER AND AMENDMENT; TERMINATION
Waiver and Amendment. Prior to the Effective Date, any provision of the
Merger Agreement may be (i) waived by the party benefited by the provision or
(ii) amended or modified (including the structure of the transaction) by an
agreement in writing between AmSouth and Tampa approved by their respective
Boards of Directors. After the vote by the shareholders of Tampa, however, the
Merger Agreement may not be amended to revise the method for determining the
number of shares of AmSouth Common Stock per share of Tampa Common Stock to be
received by shareholders of Tampa in the Merger, except as provided under the
heading "Price-Based Termination."
Termination. The Merger Agreement may be terminated prior to the Effective
Date, either before or after its approval by Tampa shareholders, under the
circumstances specified therein, including (i) by mutual consent of the Boards
of Directors of AmSouth and Tampa; (ii) by AmSouth or Tampa, if its Board of
Directors so determines by vote of a majority of the members of its entire
Board, in the event of a material breach by the other party of any
representation, warranty or agreement which is not cured within 45 days after
the date of written notice thereof; (iii) by AmSouth or Tampa, if its Board of
Directors so determines by vote of a majority of the members of its entire
Board, in the event the Merger is not consummated by January 19, 1995, unless
the failure to consummate is due to a breach of the Merger Agreement by the
party seeking to terminate; (iv) by AmSouth or Tampa, if the Merger is not
approved by the requisite vote of the Tampa shareholders; (v) by AmSouth or
Tampa after the denial of any required regulatory approval or if any required
regulatory approval which is obtained is conditioned or restricted as described
in "Conditions to Consummation of the Merger"; (vi) by AmSouth or Tampa, if any
condition to the consummation of the Merger is not met or waived by the party
to benefit from the unmet condition by 30 days after the Closing Date as
defined in the Merger Agreement; and (vii) by AmSouth if it discovers a Tampa
Material Condition or by Tampa if it discovers an AmSouth Material Condition.
See "Expenses" for information concerning certain fees payable by AmSouth in
the event of the termination of the Merger Agreement.
The Merger Agreement also contains a price-based termination provision, under
which the Merger Agreement may be terminated by Tampa in certain circumstances.
See "Price-Based Termination."
MANAGEMENT AFTER THE MERGER
The directors and officers of AmSouth and AmSouth Florida immediately prior
to the Effective Date will continue as directors and officers of their
respective entities thereafter as will those officers of Tampa and the Bank
retained by AmSouth Florida.
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INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of Tampa's management and the Tampa Board may be deemed to
have interests in the Merger in addition to their interests as shareholders of
Tampa generally. In each case, the Tampa Board either was aware of these
factors or, with respect to interests that arose subsequent to the Merger
Agreement, was aware of their potential, and considered them, among other
matters, in approving the Merger Agreement and the transactions contemplated
thereby.
Post-Merger Compensation and Benefits. The Merger Agreement provides that,
after the Effective Date, employees and officers of Tampa who become employees
of AmSouth or one of its subsidiaries will be entitled to participate in
AmSouth pension, benefit and similar plans on the same terms and conditions as
employees and officers of AmSouth, giving effect to years of service with Tampa
or any predecessors thereof as if such service were with AmSouth; provided,
however, that in the case of AmSouth's retirement plan, giving effect to years
of service will be for vesting purposes only and not for benefit accrual
purposes. The Merger Agreement also provides that employees and officers of
Tampa who become employees of AmSouth or one of its subsidiaries will, on or
after the Effective Date, receive compensation arrangements and fringe benefits
as are provided to AmSouth's and its subsidiaries' employees and officers of
equal status and position.
Bonus Payment. Tampa may pay a bonus of up to $150,000 to Mr. A. G. Divers,
President of Tampa, upon successful completion of the Merger, the exact amount
of which bonus will be determined by the Tampa Board with the concurrence of
AmSouth.
Stock Options. At October 31, 1994, the following executive officers of Tampa
and/or the Bank (one of whom is also a director of Tampa) held options to
purchase shares of Tampa Common Stock, in the amounts shown, pursuant to an
incentive stock option plan adopted by the Bank.
<TABLE>
<CAPTION>
SHARES SUBJECT
NAME TO OPTIONS
---- --------------
<S> <C>
A.C. Anderson.............................................. 1,400
A.G. Divers................................................ 26,670
M.R. Dougherty............................................. 1,000
R.V. Hernandez............................................. 600
D.A. Minotti............................................... 3,200
R.M. Ybor.................................................. 1,000
</TABLE>
If the options are exercised, the shares of Tampa Common Stock received by
the holder of the option will be exchanged in the Merger for AmSouth Common
Stock. Under the terms of the Merger Agreement, holders of these options may,
instead of exercising the options, convert the options into shares of AmSouth
Common Stock equal in value to the difference between (i) the exercise price of
the options and (ii) the value of the shares of AmSouth Common Stock that would
be received in the Merger in exchange for the number of shares of Tampa Common
Stock that would be received upon exercise of the options. If all of the
executive officers refrain from exercising their options, and, assuming an
AmSouth stock price of $29.00 per share, they would receive, in the aggregate,
approximately 31,165 shares of AmSouth Common Stock in exchange for
cancellation of their options. Options not exercised or so converted will
terminate on the earlier of the expiration date of the options or the Effective
Date.
As part of the Merger Agreement, Mr. A. G. Divers, President of Tampa, had
agreed to convert his options as described above. However, AmSouth has waived
this requirement, and it is expected that Mr. Divers will exercise his options
prior to the Effective Date.
Severance Benefits. Employees of Tampa and the Bank, including executive
officers, who are not retained after the Merger will be eligible for special
severance benefits. Such employees will receive one week's salary for every
completed calendar year of service with Tampa or the Bank, with a minimum
payment of one month's salary and a maximum payment of six month's salary.
Liability Insurance; Indemnification. AmSouth has agreed to use its
reasonable best efforts to purchase a five-year runoff "discovery period"
extension under Tampa's existing directors' and officers' liability insurance
policy, provided that AmSouth will not be obligated to pay more than $50,000
for such coverage. AmSouth has also agreed that for five years after the
Effective Date it will indemnify persons currently eligible for indemnification
by Tampa against liability for acts or omissions occurring prior to the
Effective Date, to
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the extent provided in Annex 5 to the Merger Agreement (which Annex 5 reflects
the current indemnification provisions of the bylaws of AmSouth Bank of
Florida.)
EFFECT ON TAMPA EMPLOYEE BENEFIT PLANS
AmSouth and Tampa have agreed that any employees and officers of Tampa and
its subsidiaries retained after consummation of the Merger will, at and after
the Effective Date, be entitled to participate in AmSouth pension, benefit and
similar plans on the same terms and conditions as employees and officers of
AmSouth, giving effect to years of service with Tampa and its subsidiaries or
any predecessors thereof as if such service were with AmSouth. However, in the
case of AmSouth's Retirement Plan, giving effect to years of service will be
for vesting purposes only and not for benefit accrual purposes. Retained
officers and employees will also receive compensation and benefits as are
provided to AmSouth's officers and employees of equal status and position.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the opinion of Ernst & Young LLP,
Certified Public Accountants, which opinion is a condition to consummation of
the Merger. The opinion sets forth certain federal income tax consequences of
the Merger to AmSouth, Tampa and to the holders of Tampa Common Stock (referred
to in this section as Tampa Shareholders) and has been filed as an exhibit to
the Registration Statement of which this Proxy Statement-Prospectus forms a
part. This discussion is not a complete description of all the tax consequences
of the Merger and, in particular, may not address federal income tax
considerations that may be relevant to certain shareholders entitled to special
treatment under the Internal Revenue Code of 1986, as amended (the "Code"),
(including, without limitation, insurance companies, dealers in securities,
certain retirement plans, financial institutions, tax exempt organizations and
foreign persons). Based upon certain customary representations made by the
managements of AmSouth and Tampa, Ernst & Young LLP has provided its opinion
concerning certain federal income tax consequences as follows:
(i) The Merger will qualify as a reorganization within the meaning of
Section 368(a) of the Code, Tampa and AmSouth will each be a party to the
reorganization and no gain or loss will be recognized by Tampa or AmSouth
as a result of the Merger;
(ii) No gain or loss will be recognized by a Tampa Shareholder upon the
receipt of AmSouth Common Stock in the Merger solely in exchange for such
shareholder's Tampa Common Stock (except with respect to cash received in
lieu of a fractional share interest in AmSouth Common Stock);
(iii) A Tampa Shareholder who dissents and receives only cash pursuant to
appraisal rights will recognize gain or loss. Such gain or loss will, in
general, be treated as capital gain or loss measured by the difference
between the amount of cash received and the tax basis of the Tampa Common
Stock converted;
(iv) The basis of the AmSouth Common Stock (including any fractional
share) received by a Tampa Shareholder in the Merger will be the same as
the basis of Tampa Common Stock surrendered in exchange therefor; and
(v) The holding period of the AmSouth Common Stock (including any
fractional share) received by a Tampa Shareholder in the Merger will
include the holding period of the Tampa Common Stock surrendered in
exchange therefor, provided such Tampa Common Stock was a capital asset in
the hands of a Tampa Shareholder on the day of the Merger.
No ruling has been or will be requested from the Internal Revenue Service
("IRS") as to any of the federal income tax effects to the Tampa Shareholders
of the Merger or the federal income tax effects to Tampa or AmSouth. The
opinion of Ernst & Young LLP is based entirely upon the Code, regulations in
effect thereunder, current administrative rulings and practice and judicial
authority, all of which are subject to change and any such change could affect
the validity of the opinion. Unlike a ruling from the IRS, the Ernst & Young
LLP opinion is not binding on the IRS and there can be no assurance, and none
is thereby
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<PAGE>
given, that the IRS will not take a position adverse to one or more positions
reflected herein or that the opinion will be upheld by the courts if challenged
by the IRS.
THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS THE FEDERAL INCOME TAX
CONSEQUENCES TO ALL SHAREHOLDERS OF TAMPA. IN ADDITION, THE DISCUSSION DOES NOT
ADDRESS THE STATE, LOCAL OR FOREIGN TAX ASPECTS OF THE MERGER. EACH TAMPA
SHAREHOLDER SHOULD CONSULT SUCH SHAREHOLDER'S OWN TAX ADVISER WITH RESPECT TO
THE SPECIFIC TAX CONSEQUENCES OF THE MERGER TO SUCH SHAREHOLDER, INCLUDING THE
APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS.
ACCOUNTING TREATMENT
Consummation of the Merger is conditioned upon the receipt by AmSouth and its
directors and officers who signed the Registration Statement, of which this
Proxy Statement-Prospectus is a part, of a letter from Ernst & Young LLP,
AmSouth's independent auditors, to the effect that the Merger qualifies for
pooling of interests accounting treatment if consummated in accordance with the
terms of the Merger Agreement.
All unaudited pro forma financial information incorporated by reference and
contained in this Proxy Statement-Prospectus has been prepared using the
pooling of interests method to account for the Merger. See "SUMMARY CONDENSED
CONSOLIDATED FINANCIAL INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
NYSE LISTING
The AmSouth Common Stock is listed on the NYSE. Accordingly, AmSouth has
agreed to use its best efforts to cause the Merger Shares to be listed on the
NYSE. Such listing is not, however, an express condition of consummation of the
Merger.
EXPENSES
The Merger Agreement provides, in general, that AmSouth and Tampa will each
pay its own expenses in connection with the Merger Agreement and the
transactions contemplated thereby, including fees and expenses of its own
financial or other consultants, investment bankers, accountants and counsel.
AmSouth and Tampa have agreed to divide equally the cost of printing this Proxy
Statement-Prospectus and the Registration Statement of which this Proxy
Statement-Prospectus is a part, the Securities and Exchange Commission (the
"SEC") registration fee and state "blue sky" fees as applicable, and fees and
expenses of experts providing market competition analysis and supporting
materials. However, if AmSouth terminates the Merger Agreement it will
reimburse Tampa for its share of the costs and expenses that otherwise would
have been shared.
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CERTAIN RELATED TRANSACTIONS
RESALES OF AMSOUTH COMMON STOCK
The shares of AmSouth Common Stock issued pursuant to the Merger Agreement
will be freely transferable under the Securities Act except for shares issued
to any shareholder who may be deemed to be an "affiliate" of Tampa for purposes
of Rule 145 under the Securities Act. Affiliates (i) may not sell their shares
of AmSouth Common Stock acquired in connection with the Merger except in
compliance with Rule 145 under the Securities Act after AmSouth has received an
opinion to that effect and (ii) may not sell or otherwise reduce their risk
relative to shares of Tampa Common Stock and AmSouth Common Stock acquired in
the Merger for 30 days prior to the Merger and until financial results covering
at least 30 days of post-merger combined operations have been published.
Persons who may be deemed to be affiliates of Tampa generally include
individuals or entities that control, are controlled by or are under common
control with Tampa and may include certain officers and directors of Tampa as
well as principal shareholders of Tampa. Tampa has agreed in the Merger
Agreement that it will obtain from each person who is an affiliate of Tampa
under Rule 145 an agreement with AmSouth providing that each such person will
not sell, dispose of or otherwise reduce such person's risk with respect to
AmSouth Common Stock except in compliance with the rules described in this
paragraph and that any such AmSouth Common Stock may bear a legend listing the
transfer restrictions to which it is subject.
VOTING AGREEMENTS
As a condition to AmSouth's obligations under the Merger Agreement, the
members of the Tampa Board entered into voting agreements with AmSouth (the
"Voting Agreements"). Pursuant to the Voting Agreements, each such Director
(who as a group had the power to vote, as of the Record Date, 30.5% of the
outstanding shares of Tampa Common Stock) has agreed to vote all shares of
Tampa Common Stock owned by him, or otherwise in his control, in favor of the
Merger and the other transactions contemplated by the Merger Agreement.
Furthermore, the Voting Agreements also require that each such person vote such
shares of Tampa Common Stock against any business combination or other
reorganization of any kind involving Tampa or its subsidiaries with any entity
other than AmSouth. Each Voting Agreement expires 12 months after its
execution.
CERTAIN REGULATORY CONSIDERATIONS
The following discussion sets forth certain of the material elements of the
regulatory framework applicable to banks and bank holding companies and
provides certain specific information relevant to AmSouth. Tampa is a bank
holding company subject to regulation by the Federal Reserve Board, and its
subsidiary, the Bank, is a Florida state bank, subject to regulation by the
Florida Department and the FDIC. Federal regulation of financial institutions
such as AmSouth and Tampa is intended primarily for the protection of
depositors rather than shareholders of those entities. See "AVAILABLE
INFORMATION," "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE" and "CERTAIN
INFORMATION REGARDING TAMPA."
GENERAL
As a bank holding company, AmSouth is subject to the regulation and
supervision of the Federal Reserve Board under the Bank Holding Company Act of
1956, as amended (the "BHCA"). Under the BHCA, bank holding companies may not
directly or indirectly acquire the ownership or control of more than 5% of the
voting shares or substantially all of the assets of any company, including a
bank, without the prior approval of the Federal Reserve Board. In addition,
bank holding companies are generally prohibited under the BHCA from engaging in
nonbanking activities, subject to certain exceptions.
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<PAGE>
AmSouth's subsidiary banks (the "Subsidiary Banks") are subject to
supervision and examination by applicable federal and state banking agencies.
AmSouth Alabama is subject to regulation and supervision by the Federal Reserve
Board and the State Banking Department of the State of Alabama (the "Alabama
Department"). All the other Subsidiary Banks are state-chartered banks that are
not members of the Federal Reserve System, and therefore are generally subject
to regulation and supervision by the FDIC and the applicable state banking
authority. The Subsidiary Banks are also subject to various requirements and
restrictions under federal and state law, including requirements to maintain
reserves against deposits, restrictions on the types and amounts of loans that
may be granted and the interest that may be charged thereon and limitations on
the types of investments that may be made and the types of services that may be
offered. Various consumer laws and regulations also affect the operations of
the Subsidiary Banks. In addition to the impact of regulation, commercial banks
are affected significantly by the actions of the Federal Reserve Board as it
attempts to control the money supply and credit availability in order to
influence the economy.
PAYMENT OF DIVIDENDS
AmSouth is a legal entity separate and distinct from its banking and other
subsidiaries. The principal source of cash flow of AmSouth, including cash flow
to pay dividends on AmSouth Common Stock, is dividends from the Subsidiary
Banks. There are statutory and regulatory limitations on the payment of
dividends by the Subsidiary Banks as well as by AmSouth to its shareholders.
Under Alabama law, a bank may not pay a dividend in excess of 90% of its net
earnings until the bank's surplus is equal to at least 20% of capital (which
AmSouth Alabama's surplus is). AmSouth Alabama is also required by Alabama law
to obtain the prior approval of the superintendent of the Alabama Department
for the payment of dividends if the total of all dividends declared by the bank
in any calendar year will exceed the total of (i) the bank's net earnings (as
defined by statute) for that year plus (ii) its retained net earnings for the
preceding two years, less any required transfers to surplus. Also, no dividends
may be paid from AmSouth Alabama's surplus without the prior written approval
of the superintendent.
As a bank that is a member of the Federal Reserve System, AmSouth Alabama is
required by federal law to obtain regulatory approval for the payment of
dividends if the total of all dividends declared by the Board of Directors of
such bank in any year will exceed the total of (1) the bank's net profits (as
defined and interpreted by regulation) for that year plus (2) the retained net
profits (as defined and interpreted by regulation) for the preceding two years,
less any required transfers to surplus. AmSouth Alabama also can pay dividends
only to the extent that retained net profits (including the portion transferred
to surplus) exceed bad debts.
All of the other Subsidiary Banks are also subject to varying restrictions on
the payment of dividends under applicable state laws. With respect to AmSouth
Florida, Florida law imposes dividend restrictions substantially similar to
those imposed under Alabama law on AmSouth Alabama. Under Tennessee law,
AmSouth Tennessee may declare dividends not more than once in each calendar
quarter from undivided profits if (a) the undivided profits account has been
maintained as required by law and (b) the required reserve against deposits is
not and will not thereby be impaired. Before any net profits are credited to
the undivided profit account, deductions for various expenses are required to
be made. No transfers may be made from the surplus account to the undivided
profits account without the consent of the Commissioner of Banking. In
addition, prior to determining that undivided profits are available for the
declaration of dividends, (a) any net loss must be deducted from the undivided
profits account and (b) transfers must be made from the undivided profits
account to the surplus account (i) in an amount required to raise the surplus
to 50% of the capital stock and (ii) in an amount not less than 10% of net
profits until the surplus equals the capital stock.
Furthermore, if, in the opinion of the applicable federal bank regulatory
authority, a bank under its jurisdiction is engaged in or is about to engage in
an unsafe or unsound practice (which, depending on the financial condition of
the bank, could include the payment of dividends), such authority may require,
after notice and hearing, that such bank cease and desist from such practice.
The Federal Reserve Board and the
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FDIC have indicated that paying dividends that deplete a bank's capital base to
an inadequate level would be an unsafe and unsound banking practice. Under the
Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), an
insured bank may not pay any dividend if it is undercapitalized or if payment
would cause it to become undercapitalized. See "FDICIA." Moreover, the Federal
Reserve Board and the FDIC have issued policy statements which provide that
bank holding companies and insured banks should generally only pay dividends
out of current operating earnings.
At September 30, 1994, under dividend restrictions imposed under federal and
state laws, the Subsidiary Banks, without obtaining governmental approvals,
could declare aggregate dividends of approximately $217 million.
The payment of dividends by AmSouth and the Subsidiary Banks may also be
affected or limited by other factors, such as the requirement to maintain
adequate capital above regulatory guidelines.
TRANSACTIONS WITH AFFILIATES
There are various legal restrictions on the extent to which AmSouth and its
nonbank subsidiaries can borrow or otherwise obtain credit from its Subsidiary
Banks. Each Subsidiary Bank (and its subsidiaries) is limited in engaging in
borrowing and other "covered transactions" with nonbank or nonsavings bank
affiliates to the following amounts: (i) in the case of any such affiliate, the
aggregate amount of covered transactions of the Subsidiary Bank and its
subsidiaries may not exceed 10% of the capital stock and surplus of such
Subsidiary Bank; and (ii) in the case of all affiliates, the aggregate amount
of covered transactions of the Subsidiary Bank and its subsidiaries may not
exceed 20% of the capital stock and surplus of such Subsidiary Bank. "Covered
transactions" are defined by statute to include a loan or extension of credit,
as well as a purchase of securities issued by an affiliate, a purchase of
assets (unless otherwise exempted by the Federal Reserve Board), the acceptance
of securities issued by the affiliate as collateral for a loan and the issuance
of a guarantee, acceptance or letter of credit on behalf of an affiliate.
Covered transactions are also subject to certain collateralization
requirements.
CAPITAL ADEQUACY
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies. The minimum guideline for the ratio of total capital ("Total
Capital") to risk-weighted assets (including certain off-balance-sheet items,
such as standby letters of credit) is 8%. At least half of Total Capital must
be composed of common stock, minority interests in the equity accounts of
consolidated subsidiaries, noncumulative perpetual preferred stock and a
limited amount of cumulative perpetual preferred stock, less goodwill and
certain other intangible assets ("Tier 1 Capital"). The remainder may consist
of subordinated debt, other preferred stock and a limited amount of loan loss
reserves. At September 30, 1994, AmSouth's consolidated Tier 1 Capital and
Total Capital ratios were 9.42% and 12.83%, respectively. At September 30,
1994, on a pro forma combined basis after giving effect to the Merger on a
pooling of interests accounting basis, AmSouth's consolidated Tier 1 Capital
and Total Capital ratios would have been approximately 9.43% and 12.81%,
respectively.
In addition, the Federal Reserve Board has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets (the "Leverage Ratio"), of 3% for bank holding companies that
meet certain specified criteria, including having the highest regulatory
rating. All other bank holding companies generally are required to maintain a
Leverage Ratio of at least 3% plus an additional cushion of 100 to 200 basis
points. AmSouth's Leverage Ratio at September 30, 1994 was 6.56%. At September
30, 1994, on a pro forma combined basis after giving effect to the Merger on a
pooling of interests accounting basis, AmSouth's Leverage Ratio would have been
approximately 6.56%. The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum supervisory
levels without significant reliance on
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intangible assets. Furthermore, the Federal Reserve Board has indicated that it
will consider a "tangible Tier 1 Capital leverage ratio" (deducting all
intangibles) and other indicia of capital strength in evaluating proposals for
expansion or new activities.
Each of the Subsidiary Banks is subject to risk-based and leverage capital
requirements adopted by the Federal Reserve Board or the FDIC, as the case may
be, similar to those described above. AmSouth believes that each of the
Subsidiary Banks was in compliance with applicable minimum capital requirements
as of September 30, 1994. Neither AmSouth nor any of the Subsidiary Banks has
been advised by any federal banking agency of any specific minimum Leverage
Ratio requirement applicable to it.
Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business, which are described below
under "FDICIA."
All of the federal banking agencies have proposed regulations that would add
an additional risk-based capital requirement based upon the amount of an
institution's exposure to interest rate risk. In addition, bank regulators
continue to indicate their desire to raise capital requirements applicable to
banking organizations beyond their current levels. However, the management of
AmSouth is unable to predict whether and when higher capital requirements would
be imposed and, if so, at what levels and on what schedule.
SUPPORT OF SUBSIDIARY BANKS
Under Federal Reserve Board policy, AmSouth is expected to act as a source of
financial strength to, and to commit resources to support, each of the
Subsidiary Banks. This support may be required at times when, absent such
Federal Reserve Board policy, AmSouth might not be inclined to provide it. In
addition, any capital loans by a bank holding company to any of its subsidiary
banks are subordinate in right of payment to deposits and to certain other
indebtedness of such subsidiary bank. In the event of a bank holding company's
bankruptcy, any commitment by the bank holding company to a federal bank
regulatory agency to maintain the capital of a subsidiary bank will be assumed
by the bankruptcy trustee and entitled to a priority of payment.
Under the Federal Deposit Insurance Act (the "FDIA"), an insured depository
institution, such as each of the Subsidiary Banks, can be held liable for any
loss incurred by, or reasonably expected to be incurred by, the FDIC after
August 9, 1989 in connection with (i) the default of a commonly controlled
FDIC-insured depository institution or (ii) any assistance provided by the FDIC
to any commonly controlled FDIC-insured depository institution "in danger of
default." "Default" is defined generally as the appointment of a conservator or
a receiver and "in danger of default" is defined generally as the existence of
certain conditions indicating that a default is likely to occur in the absence
of regulatory assistance.
FDICIA
On December 19, 1991, FDICIA was enacted. FDICIA substantially revised the
depository institution regulatory and funding provisions of the FDIA and makes
revisions to several other federal banking statutes. Among other things, FDICIA
requires the federal banking regulators to take prompt corrective action in
respect of depository institutions that do not meet minimum capital
requirements. FDICIA establishes five capital tiers: "well capitalized,"
"adequately capitalized," "undercapitalized," "significantly undercapitalized"
and "critically undercapitalized." Under applicable regulations, an FDIC-
insured depository institution is defined to be well capitalized if it
maintains a Leverage Ratio of at least 5%, a risk-adjusted Tier 1 Capital Ratio
of at least 6% and a Total Capital Ratio of at least 10% and is not otherwise
in a "troubled condition" as specified by its appropriate federal regulatory
agency. An FDIC-insured depository institution is defined to be adequately
capitalized if it maintains a Leverage Ratio of at least 4%, a risk-adjusted
Tier I Capital Ratio of at least 4% and a Total Capital ratio of at least 8%.
In addition, an FDIC-insured depository institution will be considered
undercapitalized if it fails to meet any minimum required
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measure, significantly undercapitalized if it is significantly below such
measure and critically undercapitalized if it fails to maintain a level of
tangible equity equal to not less than 2% of total assets. An FDIC-insured
depository institution may be deemed to be in a capitalization category that is
lower than is indicated by its actual capital position if it receives an
unsatisfactory examination rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of dividends) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions are subject to
restrictions on borrowing from the Federal Reserve System. In addition,
undercapitalized depository institutions are subject to growth limitations and
are required to submit capital restoration plans. A depository institution's
holding company must guarantee the capital plan, up to an amount equal to the
lesser of 5% of the depository institution's assets at the time it becomes
undercapitalized or the amount of the capital deficiency when the institution
fails to comply with the plan. The federal banking agencies may not accept a
capital plan without determining, among other things, that the plan is based on
realistic assumptions and is likely to succeed in restoring the depository
institution's capital. If a depository institution fails to submit an
acceptable plan, it is treated as if it is significantly undercapitalized.
The capital-based prompt corrective action provisions of FDICIA and their
implementing regulations apply to FDIC-insured depository institutions and are
not applicable to holding companies which control such institutions. However,
the Federal Reserve Board has indicated that, in regulating bank holding
companies, it will take appropriate action at the holding company level based
on an assessment of the effectiveness of supervisory actions imposed upon
subsidiary depository institutions pursuant to such provisions and regulations.
Although the capital categories defined under the prompt corrective action
regulations are not directly applicable to AmSouth under existing law and
regulations, if AmSouth were placed in a capital category it would qualify as
well capitalized as of September 30, 1994.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks.
Critically undercapitalized depository institutions are subject to appointment
of a receiver or conservator.
AmSouth believes that all of the Subsidiary Banks satisfied the "well
capitalized" definition at September 30, 1994.
Various other legislation, including proposals to revise the banking
regulatory system and to limit the investments that a depository institution
may make with insured funds, is from time to time introduced in Congress.
BROKERED DEPOSITS
The FDIC has adopted regulations under FDICIA governing the receipt of
brokered deposits. Under these regulations, a bank cannot accept, rollover or
renew brokered deposits unless (i) it is well capitalized or (ii) it is
adequately capitalized and receives a waiver from the FDIC. A bank that cannot
receive brokered deposits also cannot offer "pass-through" insurance on certain
employee benefit accounts. Whether or not it has obtained such a waiver, an
adequately capitalized bank may not pay an interest rate on any deposits in
excess of 75 basis points over certain prevailing market rates specified by
regulation. There are no such restrictions on a bank that is well capitalized.
Because AmSouth believes that all the Subsidiary Banks were well capitalized as
of September 30, 1994, AmSouth believes the brokered deposits regulation will
have no material effect on the funding or liquidity of any of the Subsidiary
Banks.
FDIC INSURANCE ASSESSMENTS
The Subsidiary Banks are subject to FDIC deposit insurance assessments. The
FDIC has adopted a risk-based premium schedule which has increased the
assessment rates for most FDIC-insured depository
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institutions. Under the schedule, the premiums currently range from $.23 to
$.31 for every $100 of deposits. Each financial institution is assigned to one
of three capital groups--well capitalized, adequately capitalized or
undercapitalized--and further assigned to one of three subgroups within a
capital group, on the basis of supervisory evaluations by the institution's
primary federal and, if applicable, state supervisors and other information
relevant to the institution's financial condition and the risk posed to the
applicable insurance fund. The actual assessment rate applicable to a
particular institution will, therefore, depend in part upon the risk assessment
classification assigned to the institution by the FDIC.
The FDIC is authorized to raise insurance premiums in certain circumstances.
Recently the FDIC proposed revising the basis upon which premiums are
calculated. Any increase in premiums, including an increase resulting from such
a revision of premium calculations, would have an adverse effect on AmSouth's
earnings.
Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC.
DEPOSITOR PREFERENCE
The Omnibus Budget Reconciliation Act of 1993 provides that deposits and
certain claims for administrative expenses and employee compensation against an
insured depository institution will be afforded a priority over other general
unsecured claims against such an institution, including federal funds and
letters of credit, in the "liquidation or other resolution" of such an
institution by a receiver.
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CERTAIN INFORMATION REGARDING TAMPA
TAMPA MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Set forth below is certain financial and other information concerning Tampa,
including Tampa management's discussion and analysis of financial condition and
results of operations. This information has been provided entirely by the
management of Tampa.
The discussion set forth below should be read in conjunction with the audited
consolidated financial statements of Tampa (including the notes thereto)
appearing elsewhere in this Proxy Statement-Prospectus.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
------------------------------------
PERCENT
INCREASE
1994 1993 (DECREASE)
---------- ---------- --------------
<S> <C> <C> <C>
Revenue from earning assets.................. $ 10,748 $ 9,927 8.27%
Interest expense............................. 3,011 2,757 9.21
Gross interest margin........................ 7,737 7,170 7.91
Provision for loan losses.................... 1,060 864 22.69
Net interest margin.......................... 6,677 6,306 5.88
Noninterest revenues......................... 1,275 1,470 (13.20)
Noninterest expenses......................... 6,152 5,980 2.91
Income before applicable income taxes........ 1,800 1,796 .17
Applicable income taxes ..................... 651 650 .15
Net income................................... 1,149 1,146 .17
Per common share
Net income................................. 1.82 1.87 (2.67)
Cash dividends declared.................... -- -- --
Average common shares outstanding............ 631,921 613,950 1.89
</TABLE>
<TABLE>
<CAPTION>
PERCENT
YEAR ENDED DECEMBER 31 INCREASE/DECREASE
--------------------------------------- --------------------
1993 1992 1991 1990 1989 1993/1992 1992/1991
------- ------- ------- ------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenue from earning as-
sets................... $13,223 $13,298 $14,609 $14,680 $13,919 (.56)% (8.97)
Interest expense........ 3,677 4,518 7,253 8,359 7,917 (18.60) (37.70)
Gross interest margin... 9,546 8,780 7,356 6,321 6,002 8.72 19.36
Provision for loan loss-
es..................... 1,044 1,180 2,250 1,114 675 (11.53) (47.56)
Net interest margin..... 8,502 7,600 5,106 5,207 5,327 11.86 48.85
Noninterest revenues.... 1,917 1,284 2,397 1,106 973 49.30 (46.42)
Noninterest expenses.... 7,985 7,024 6,735 6,003 4,913 13.68 4.30
Income before applicable
income taxes........... 2,434 1,860 768 310 1,387 30.84 142.05
Applicable income taxes. 858 664 191 55 398 29.20 246.65
Net income.............. 1,576 1,196 577 255 989 31.74 107.33
Per common share
Net income............ 2.56 2.00 .97 .43 1.67 28.00 106.19
Cash dividends de-
clared............... -- -- -- -- -- -- --
Average common shares
outstanding............ 613,950 597,952 593,018 592,202 592,768 2.68 .83
Total assets............ 211,163 203,302 187,888 175,332 154,430 3.87 8.20
</TABLE>
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For the year ended December 31, 1993, Tampa reported earnings per share of
the Tampa Common Stock of $2.56 versus $2.00 for 1992 and $.97 for 1991. Net
income was $1.6 million compared to $1.2 million in 1992 and $0.6 million in
1991. Balance sheet growth was strong, gross interest margin continued at
historically wide spreads, noninterest revenue growth was solid (18.48%
compound growth rate over the last five years) and noninterest expense control
improved (12.91% compound growth rate over the last five years). The return on
average equity for 1993 was 13.47% versus 11.86% for 1992 and 6.55% for 1991.
The return on average assets was .80% in 1993 versus .65% and .34% for 1992 and
1991, respectively.
EARNING ASSETS
Earning assets for Tampa are comprised of loans, investment securities and
other earning assets. Table 1 illustrates the composition of average earning
assets for the interim periods ended September 30, 1994 and September 30, 1993
as well as data for the years ended December 31, 1993, 1992 and 1991.
Discussion of the individual components of earning assets follows.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 1--COMPOSITION OF AVERAGE EARNING ASSETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
-----------------------------------
1994 1993
----------------- -----------------
AVERAGE PERCENT AVERAGE PERCENT
BALANCE OF TOTAL BALANCE OF TOTAL
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Loans net of unearned income................ $120,673 62.14% $121,843 68.76%
Investment Securities....................... 62,401 32.13 49,633 28.01
Other earning assets........................ 11,119 5.73 5,716 3.23
-------- ------ -------- ------
$194,193 100.00% $177,192 100.00%
======== ====== ======== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------------
1993 1992 1991
----------------- ----------------- -----------------
AVERAGE PERCENT AVERAGE PERCENT AVERAGE PERCENT
BALANCE OF TOTAL BALANCE OF TOTAL BALANCE OF TOTAL
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Loans net of unearned in-
come.................... $121,387 67.90% $112,185 67.40% $105,446 68.90%
Investment Securities.... 50,019 28.00 49,213 29.60 43,558 28.50
Other earning assets..... 7,325 4.10 5,037 3.00 4,042 2.60
-------- ------ -------- ------ -------- ------
$178,731 100.00% $166,435 100.00% $153,046 100.00%
======== ====== ======== ====== ======== ======
</TABLE>
LOANS AND LOAN QUALITY
The major portion of Tampa's earning assets is comprised of loans, which
generally provide a higher rate of return in proportion to risk exposure than
is available with other types of earning assets. Management decisions regarding
the extension of credit are based upon the correlation of a potential loan's
purpose, collateral and structure as compared to credit quality criteria
established by Tampa's loan policy. Loan pricing decisions are based upon the
level of credit risk, investment objectives and competitive pressures. Tampa
maintains a diversified portfolio in order to spread its risk and reduce its
exposure to economic downturns which may occur in different segments of the
economy or in particular industries.
46
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 2--COMPOSITION OF LOAN PORTFOLIO*
(IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30 AT DECEMBER 31
----------------- -------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Commercial, financial,
and agricultural....... $ 48,109 $ 47,800 $ 52,293 $ 51,753 $ 44,817 $ 43,973 $43,573
Commercial real estate
Commercial real estate
mortgage............. 32,708 36,220 35,150 36,561 29,541 26,992 24,770
Real estate
construction......... 7,247 4,671 4,381 3,280 3,063 4,950 5,299
-------- -------- -------- -------- -------- -------- -------
Total commercial
real estate........ 39,955 40,891 39,531 39,841 32,604 31,942 30,069
-------- -------- -------- -------- -------- -------- -------
Consumer:
Residential first
mortgages............ 8,834 9,087 7,159 7,740 8,718 10,213 8,561
Other residential
mortgages............ 8,901 7,739 7,116 7,856 7,180 4,235 3,498
Other consumer........ 14,866 15,823 15,978 16,638 14,497 14,209 13,800
-------- -------- -------- -------- -------- -------- -------
Total consumer...... 32,601 32,649 30,253 32,234 30,395 28,657 25,859
-------- -------- -------- -------- -------- -------- -------
120,665 121,340 122,077 123,828 107,816 104,572 99,501
Less unearned income.... -- -- 3 19 34 77 204
-------- -------- -------- -------- -------- -------- -------
$120,665 $121,340 $122,074 $123,809 $107,782 $104,495 $99,297
======== ======== ======== ======== ======== ======== =======
</TABLE>
- --------
* Amounts are rounded and may not agree with amounts included in the financial
statements of Tampa.
The composition of the loan portfolio at Tampa, as shown in Table 2, has
experienced identifiable trends over the last five years. Since peaking in
1989, commercial loans have fallen from 44% of the portfolio to 40% at
September 30, 1994 based on principal amount outstanding. In the same period,
commercial real estate loans have ranged from 30% of the portfolio to a recent
peak of 33% at September 30, 1994 based on principal amount outstanding. This
growth is largely comprised of loans secured by owner-occupied properties with
average maturities of three to five years. Consumer lending since 1988 has
remained approximately 25% of the portfolio based on principal amount
outstanding. About one-third of the consumer loans are residential first
mortgages. Though amortization schedules range from five to fifteen years,
these mortgages generally have three to five year balloon maturities. To help
increase mortgage production, Tampa has developed relationships with property
developers in central Florida through which Tampa provides short term
construction financing for approved buyers. Approximately 17% of consumer loans
are other residential mortgages made up of home equity lines of credit and
other junior mortgages of similar short maturities. The remaining 50% of
consumer lending since 1988 has been in traditional installment loans and a
small credit card portfolio.
Tampa extends credit to its customers structured either as floating or fixed-
rate instruments. At December 31, 1993 the loan portfolio included $46 million
in fixed-rate loans, which represented 39% of total loans. The weighted average
interest rate on this segment of the portfolio was 9.16%. The floating rate
segment of the portfolio yielded 7.23% at December 31, 1993 and has
historically averaged 1% over the prevailing prime rate.
47
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 3--SELECTED LOAN SENSITIVITY TO CHANGES IN INTEREST RATES
AT DECEMBER 31, 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
REPRICING AFTER ONE YEAR BUT
WITHIN FIVE YEARS* REPRICING AFTER FIVE YEARS*
REPRICING ---------------------------------- ----------------------------------
IN ONE VARIABLE VARIABLE
YEAR OR LESS FIXED RATE RATE* TOTAL FIXED RATE RATE* TOTAL TOTAL
------------ ----------- --------- ---------- ----------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial, financial,
and agricultural....... $48,241 $ 3,950 $ 0 $ 3,950 $ 102 $ 0 $ 102 $52,293
Real estate
construction........... 3,513 868 0 868 0 0 0 4,381
------- ---------- ------- ---------- --------- -------- --------- -------
Total................... $51,754 $ 4,818 $ 0 $ 4,818 $ 102 $ 0 $ 102 $56,674
======= ========== ======= ========== ========= ======== ========= =======
</TABLE>
- --------
* Approximately 99% of variable rate loans are tied to daily changes in the
prime rate.
Tampa has written loan policies which include loan underwriting procedures
and the approval process. Depending primarily on loan amount, there are various
approval levels ranging from individual loan officer authorities, to the
Officers Loan Committee and the full Board of Directors.
Tampa also has a loan review function to perform ongoing independent reviews
of specific loans for credit quality and proper documentation and of the risk
management process. This function is carried out using a combination of
internal staff and an outside consultant. The company's internal auditor acts
as Secretary of the Special Assets Administration Committee (SAAC), made up of
senior level lenders, the controller and the president. For each monthly
meeting of the SAAC the secretary prepares a calculation of the adequacy of the
company's allowance for loan losses based on a formula discussed below. The
SAAC evaluates the adequacy calculation along with the various loans on the
company's "watchlist", also discussed below. An outside consultant is retained
on a quarterly basis to independently review specific loans for credit quality
and proper documentation. The SAAC reviews the consultant's findings.
Activities of the SAAC and the loan loss reserve adequacy calculation are
reviewed with the Board of Directors on a monthly basis.
Each loan is assigned a risk rating on a numerical scale, subject to review
by the SAAC. The adequacy of the allowance for loan losses is estimated by
applying various percentages to the risk categories of loans booked as well as
to off-balance sheet loan commitments, letters of credit and availability of
lines of credit. Reserve percentages range from 50% on doubtfuls and 10-20% on
substandards to fractional percentages on lower risk loans and off-balance
sheet commitments. In addition to the reserve calculation, Tampa also considers
historical performance, the level of nonperforming and rated loans, specific
analysis of certain problem loans, loan activity since the previous review,
current economic conditions, and other pertinent information to determine the
adequacy of the allowance for loan losses. The level of allowance to net loans
outstanding will vary depending on the overall results of this analysis.
Management and the SAAC closely monitor loans and other assets which are
classified as non- performing assets (NPA's). NPA's include non-accrual loans,
loans restructured because of the debtor's financial difficulties, foreclosed
properties and repossessions. Close attention is also paid to loans on the
"watchlist". These are loans assigned a high risk rating by a loan officer or
the SAAC. Loans are generally placed on non-accrual if full collection of
principal and interest becomes doubtful (even if all payments are current), or
if the loan is delinquent in principal or interest payments for 90 days or
more, unless the loan is well secured and in the process of collection. Table 4
details the components of non-performing assets at September 30, 1994 and 1993
and year end for each of the last five years. The lack of any discernible trend
over this period demonstrates how efforts by management have been offset by the
poor condition of the commercial real estate market in the Tampa region. During
1993, Tampa incurred net credit-related costs (provision for loan losses and
foreclosed properties expense) of $1.46 million, a 14% increase over the $1.28
million for 1992. Such credit-related costs included losses on the sales of
foreclosed properties of $153,000 and $88,000 in 1993 and 1992, respectively.
During the first three quarters of 1994, several of the remaining properties
were sold at losses totaling $71,000. This reduced foreclosed properties 74%
from the December 31, 1993 balance of $1.47 million to the September 30, 1994
balance of $388,000.
48
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 4--NONPERFORMING ASSETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30 AT DECEMBER 31
---------------- --------------------------------------
1994 1993 1993 1992 1991 1990 1989
------- ------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Nonaccrual loans........ $ 868 $ 571 $1,667 $1,491 $ 736 $ 188 $1,300
Restructured loans...... 602 2,149 630 944 766 614 0
------- ------- ------ ------ ------ ------ ------
Nonperforming loans... 1,470 2,720 2,297 2,435 1,502 802 1,300
Foreclosed properties... 388 1,651 1,465 1,526 2,046 1,797 1,163
Repossessions........... 0 0 54 0 5 7 2
------- ------- ------ ------ ------ ------ ------
Total nonperforming
assets*.............. $1,858 $ 4,371 $3,816 $3,961 $3,553 $2,606 $2,465
======= ======= ====== ====== ====== ====== ======
Nonperforming assets* to
loans, net of unearned
income, foreclosed
properties and
repossessions.......... 1.54% 3.60% 3.13% 3.20% 3.30% 2.49% 2.48%
Accruing loans 90 days
past due............... $ 906 $ 125 $ 38 $ 24 $ 163 $ 38 $ 23
</TABLE>
- --------
* Exclusive of accruing loans 90 days past due.
Table 5 compares the balances of loans at September 30, 1994 and 1993 and
December 31, 1993 and 1992 with the related nonperforming loans, excluding
accruing loans 90 days past due. In addition, the net charge-offs for those
categories and dates are presented. As of December 31, 1993, nonperforming
loans as a percentage of total loans net of unearned income totaled 1.88%
compared to 1.97% at December 31, 1992. For the same periods, net charge-offs
as a percentage of total loans net of unearned income amounted to 80 and 110
basis points, respectively. As of September 30, 1994, non-performing loans as a
percentage of total loans, net of unearned income, had further decreased to
1.31%.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 5--LOANS AND CREDIT QUALITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
NONPERFORMING NET NONPERFORMING
LOANS LOANS AT CHARGE- LOANS LOANS AT NET
AT SEPTEMBER 30 SEPTEMBER 30* OFFS AT DECEMBER 31 DECEMBER 31* CHARGE-OFFS
----------------- ------------- ---------- ----------------- ------------- -----------
1994 1993 1994 1993 1994 1993 1993 1992 1993 1992 1993 1992
-------- -------- ------ ------ ---- ---- -------- -------- ------ ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial.............. $ 48,109 $ 47,800 $ 757 $ 520 $528 $777 $ 52,293 $ 51,752 $ 462 $ 871 $865 $1,166
Commercial real estate:
Commercial real estate
mortgage.............. 32,708 36,220 568 1,905 0 0 35,150 36,561 1,229 705 0 15
Real estate construc-
tion.................. 7,247 4,671 0 0 0 0 4,381 3,280 0 0 0 0
-------- -------- ------ ------ ---- ---- -------- -------- ------ ------ ---- ------
Total commercial real
estate................ 39,955 40,891 568 1,905 0 0 39,531 39,841 1,229 705 0 15
Consumer:
Residential first mort-
gages................. 8,834 9,087 0 0 (19) 13 7,159 7,740 18 640 0 0
Other residential
mortgages............. 8,901 7,739 253 254 0 40 7,116 7,856 563 178 53 149
Other consumer......... 14,866 15,823 5 41 28 25 15,978 16,639 25 41 56 28
-------- -------- ------ ------ ---- ---- -------- -------- ------ ------ ---- ------
Total consumer......... 32,601 32,649 258 295 9 78 30,253 32,235 606 859 109 177
-------- -------- ------ ------ ---- ---- -------- -------- ------ ------ ---- ------
$120,665 $121,340 $1,583 $2,720 $537 $855 $122,077 $123,828 $2,297 $2,435 $974 $1,358
======== ======== ====== ====== ==== ==== ======== ======== ====== ====== ==== ======
</TABLE>
- --------
* Exclusive of accruing loans 90 days past due
49
<PAGE>
Table 6 presents a listing of foreclosed properties by type of property and
their carrying and appraised values at September 30, 1994 and December 31,
1993. The coverage ratio, which is computed as the appraised value as a
percentage of carrying value, was 131.64% at September 30, 1994 and 126.14% at
December 31, 1993.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 6--COMPOSITION OF FORECLOSED PROPERTIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1994 AT DECEMBER 31, 1993
------------------------------------ ------------------------------------
CARRYING PERCENT APPRAISED COVERAGE CARRYING PERCENT APPRAISED COVERAGE
VALUE OF TOTAL VALUE RATIO VALUE OF TOTAL VALUE RATIO
-------- -------- --------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Land/lots............... $378 100% $362 $ 401 22.90% $ 383
Commercial buildings.... 0 0 0 1,075 61.40 1,200
Other................... 0 0 0 276 15.70 275
---- --- ---- ------ ------ ------
378 100% 1,752 100.00%
=== ======
Allowance for foreclosed
property losses........ 103 287
---- ------
$275 $362 131.64% $1,465 $1,848 126.14%
==== ==== ====== ====== ====== ======
</TABLE>
Table 7 is a reconciliation of the allowance for foreclosed property losses
for September 30, 1994 and 1993 and December 31, 1993, 1992 and 1991. The
balance in this allowance account represents temporary decreases in the value
of Tampa's foreclosed properties resulting from a recession in the Tampa real
estate market, depreciation of property improvements and other factors. It
reflects Tampa's intention to sell these properties in the near future.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 7--ALLOWANCE FOR FORECLOSED PROPERTY LOSSES
(IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER
30 AT DECEMBER 31
-------------- ------------------
1994 1993 1993 1992 1991
------ ------ ----- ----- ----
<S> <C> <C> <C> <C> <C>
Balance at beginning of period............... $ 287 $ 143 $ 143 $ 342 $140
Net write-downs/losses....................... (287) (80) (223) (384) (14)
Addition to allowance charged to expense..... 103 179 367 185 216
------ ----- ----- ----- ----
Balance at end of period..................... $ 103 $ 242 $ 287 $ 143 $342
====== ===== ===== ===== ====
</TABLE>
Despite Tampa's audit standards, internal controls and continuous loan review
system, the risk inherent in the nature of lending results in periodic loan
charge-offs. Tampa maintains an allowance for loan losses which it believes is
adequate to absorb losses in the loan portfolio. As previously discussed, a
formal review is prepared monthly to assess the risk in the portfolio in
determining the adequacy of the allowance for loan losses. The level of the
allowance as a ratio of net loans outstanding will vary depending on the
results of this monthly review.
Over the past several years, as Tampa's credit quality has improved,
management has maintained an allowance for loan losses at the end of each
period to loans net of unearned income ranging from 1.32% to 2.21%. At
September 30, 1994, this ratio was 2.32% compared to 1.86% for December 31,
1993 and 1.78% for December 31, 1992. For the same dates, these figures
translate to coverage ratios for nonperforming loans of 176.5%, 98.9% and
90.4%, respectively.
50
<PAGE>
Table 8 is a summary of the allocation of the allowance for loan losses as
determined by internal formulas. Although the table assigns amounts to certain
classifications of loans, the balance of the allowance for loan losses is
considered to be a general allowance and, therefore, is available for charge-
offs of any type of loan which may be necessary in the future.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 8--ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1994
------------------------
PERCENTAGE OF
LOANS IN EACH
ALLOWANCE CATEGORY TO
ALLOCATION TOTAL LOANS*
---------- -------------
<S> <C> <C>
Commercial............................................. $1,066 39.87%
Commercial real estate:
Commercial real estate mortgage...................... 725 27.11
Real estate construction............................. 160 6.00
------ ------
Total commercial real estate....................... 885 33.11
Consumer:
Residential first mortgages.......................... 196 7.32
Other residential mortgages.......................... 197 7.38
Other consumer....................................... 330 12.32
------ ------
Total consumer..................................... 723 27.02
Unfunded commitments................................... 104 0.00
Standby letters of credit.............................. 16 0.00
Unallocated............................................ 0 0.00
------ ------
$2,794 100.00%
====== ======
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31
---------------------------------------------------------------------------------------------------
1993 1992 1991 1990
------------------------ ------------------------ ------------------------ ------------------------
PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF PERCENTAGE OF
LOANS IN EACH LOANS IN EACH LOANS IN EACH LOANS IN EACH
ALLOWANCE CATEGORY TO ALLOWANCE CATEGORY TO ALLOWANCE CATEGORY TO ALLOWANCE CATEGORY TO
ALLOCATION TOTAL LOANS* ALLOCATION TOTAL LOANS* ALLOCATION TOTAL LOANS* ALLOCATION TOTAL LOANS*
---------- ------------- ---------- ------------- ---------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial....... $1,074 42.84% $ 920 41.78% $ 989 41.55% $ 738 42.08%
Commercial real
estate:
Commercial real
estate
mortgage....... 608 28.79 650 29.53 652 27.41 453 25.83
Real estate
construction... 117 3.59 58 2.65 68 2.84 83 4.74
------ ------ ------ ------ ------ ------ ------ ------
Total commercial
real estate.... 725 32.38 708 32.18 720 30.25 536 30.57
Consumer:
Residential
first
mortgages...... 115 5.86 138 6.25 192 8.09 171 9.77
Other
residential
mortgages...... 149 5.83 140 6.35 159 6.66 71 4.05
Other consumer.. 152 13.09 296 13.44 320 13.45 239 13.53
------ ------ ------ ------ ------ ------ ------ ------
Total consumer.. 416 24.78 574 26.04 671 28.20 481 27.35
Unfunded commit-
ments........... 0 0.00 0 0.00 0 0.00 0 0.00
Standby letters
of credit....... 0 0.00 0 0.00 0 0.00 0 0.00
Unallocated...... 57 0.00 0 0.00 0 0.00 0 0.00
------ ------ ------ ------ ------ ------ ------ ------
$2,272 100.00% $2,202 100.00% $2,380 100.00% $1,755 100.00%
====== ====== ====== ====== ====== ====== ====== ======
<CAPTION>
AT DECEMBER 31
-------------------------
1989
------------------------
PERCENTAGE OF
LOANS IN EACH
ALLOWANCE CATEGORY TO
ALLOCATION TOTAL LOANS*
---------- -------------
<S> <C> <C>
Commercial....... $ 575 43.88%
Commercial real
estate:
Commercial real
estate
mortgage....... 327 24.94
Real estate
construction... 70 5.33
------ ------
Total commercial
real estate.... 397 30.27
Consumer:
Residential
first
mortgages...... 113 8.62
Other
residential
mortgages...... 46 3.52
Other consumer.. 181 13.71
------ ------
Total consumer.. 340 25.85
Unfunded commit-
ments........... 0 0.00
Standby letters
of credit....... 0 0.00
Unallocated...... 0 0.00
------ ------
$1,312 100.00%
====== ======
</TABLE>
- -------
* Net of unearned income.
51
<PAGE>
Table 9 summarizes Tampa's loan loss experience and related coverage ratios
for the last 5 years.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 9--ALLOWANCE FOR LOAN LOSSES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30 AT DECEMBER 31
------------------ -----------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at beginning of
period................. $ 2,272 $ 2,202 $ 2,202 $ 2,380 $ 1,755 $ 1,312 $ 1,161
Loans charged off:
Commercial, financial
and agricultural...... 562 843 940 1,378 1,475 405 436
Commercial real estate
mortgage.............. 10 57 57 164 142 308 172
Commercial real estate
construction.......... 0 0 0 0 0 0 0
Installment............ 32 33 64 30 61 65 79
-------- -------- -------- -------- -------- -------- -------
Total charge-offs...... 604 933 1,061 1,572 1,678 778 687
-------- -------- -------- -------- -------- -------- -------
Recoveries of loans
previously charged off:
Commercial, financial
and agricultural...... 32 67 75 212 36 72 119
Commercial real estate. 29 4 4 0 4 23 35
Commercial real estate
construction.......... 0 0 0 0 0 0 0
Installment............ 5 7 8 2 13 12 9
-------- -------- -------- -------- -------- -------- -------
Total recoveries....... 66 78 87 214 53 107 163
-------- -------- -------- -------- -------- -------- -------
Net charge-offs......... 538 855 974 1,358 1,625 671 524
-------- -------- -------- -------- -------- -------- -------
Addition to allowance
charged to expense..... 1,060 864 1,044 1,180 2,250 1,114 675
-------- -------- -------- -------- -------- -------- -------
Balance at end of
period................. $ 2,794 $ 2,211 $ 2,272 $ 2,202 $ 2,380 $ 1,755 $ 1,312
======== ======== ======== ======== ======== ======== =======
Loans net of unearned
income, outstanding for
the period............. $120,665 $121,340 $122,074 $123,809 $107,782 $104,496 $99,297
Average loans net of
unearned income,
outstanding for the
period................. $120,673 $121,843 $121,387 $112,185 $105,446 $ 93,551 $88,350
Ratios
Allowance at end of
period to loans net of
unearned income........ 2.32% 1.82% 1.86% 1.78% 2.21% 1.68% 1.32%
Allowance at end of
period to average loans
net of unearned income. 2.32 1.81 1.87 1.96 2.26 1.88 1.49
Allowance at end of
period to nonperforming
loans*................. 190.07 81.29 98.90 90.43 158.50 218.80 100.90
Allowance at end of
periods to
nonperforming assets*.. 150.38 50.58 59.54 55.58 66.98 67.35 53.22
Net charge-offs to
average loans net of
unearned income........ 0.45 0.70 0.80 1.21 1.54 0.72 0.59
Net charge-offs to
allowance at end of
period................. 19.26 38.67 42.87 61.67 68.30 38.20 39.94
Recoveries to prior year
charge-offs............ 6.22 5.74 5.50 12.80 6.80 15.60 16.90
</TABLE>
- --------
* Exclusive of accruing loans 90 days past due.
52
<PAGE>
TOTAL SECURITIES
The securities portfolio consists primarily of U.S. Treasury obligations and
federal agency securities. Securities are utilized to provide an alternative
investment for available funds, a stable source of interest income, and as part
of Tampa's asset/liability strategy, which could involve sales in response to
potential liquidity needs, changes in interest rates, changes in prepayment
risk, or other similar factors. These securities are also used to pledge as
collateral for certain types of transactions. Table 10 summarizes total
securities levels at September 30, 1994 and 1993 and December 31, 1993, 1992
and 1991.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 10--TOTAL SECURITIES
(IN THOUSANDS)
<TABLE>
<CAPTION>
BOOK VALUE BOOK VALUE
AT SEPTEMBER 30 AT DECEMBER 31
--------------- -----------------------
1994 1993 1993 1992 1991
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total Securities:
U.S. Treasury and federal agency secu-
rities................................ $62,970 $48,014 $55,780 $51,590 $56,887
Other securities....................... 235 235 285 235 235
------- ------- ------- ------- -------
Total................................ $63,205 $48,249 $56,065 $51,825 $57,122
======= ======= ======= ======= =======
</TABLE>
As of January 1, 1994, management adopted Statement on Financial Standards
number 115, "Accounting for Certain Investments in Debt and Equity Securities"
issued by the Financial Accounting Standards Board. Although the company has
the ability and intent to hold investment securities to maturity for all
periods presented, a majority of the portfolio has been designated "available
for sale" (AFS) by management and will require lower of cost or market
accounting treatment. Accordingly, aggregate unrealized unfavorable
fluctuations in the market value of AFS securities will be reflected as a
separate component of shareholders' equity beginning January 1, 1994. Such
fluctuations are generally a result of changes in market interest rates. The
market value of the company's AFS portfolio exceeded cost at December 31, 1993,
but fell below cost by September 30, 1994 resulting in an unrealized loss of
$1,375,000. Realized gains on the sales of investment securities amounted to
$264,000, $20,000 and $1,222,000 for the years ended December 31, 1993, 1992
and 1991, respectively. For the first three quarters of 1994, realized gains
totaled $45,000.
Table 11 presents maturities of the securities portfolio as of December 31,
1993.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 11--SECURITIES RELATIVE MATURITIES AND WEIGHTED AVERAGE YIELDS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
BOOK VALUE AT DECEMBER 31, 1993
-------------------------------------------------------------------------
DUE WITHIN DUE AFTER ONE BUT DUE AFTER FIVE BUT DUE AFTER
ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS TEN YEARS
-------------- ------------------- -------------------- -------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------- ----- ---------- -------- --------- --------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total Securities:
U.S. Treasury and
federal agency
securities............. $10,327 5.33% $ 34,069 5.47% $ 0 0.00% $11,384 4.75%
Other securities........ 50 2.38 0 0.00 0 0.00 235 0.00
------- ---- ---------- ------- -------- --------- ------- ----
Total................. $10,377 5.32% $ 34,069 5.47% $ 0 0.00% $11,619 4.65%
======= ==== ========== ======= ======== ========= ======= ====
Percentage of total
portfolio.............. 18.51% 60.77% -- 20.72%
</TABLE>
- --------
Note: The weighted average yields were computed by dividing the interest income
by the book value of the appropriate securities.
53
<PAGE>
OTHER EARNING ASSETS
The other earning assets category consists of federal funds sold and
generally carries relatively low balances while serving as an alternative
short-term investment and assisting in the management of asset and liability
interest rate sensitivity. The average balance of other earning assets for 1993
was $7.3 million compared to $5.0 million and $4.0 million for 1992 and 1991,
respectively. For the first three quarters of 1994, the average increased to
$11.1 million.
DEPOSITS
Table 12 outlines the composition of the average deposits of Tampa for the
first three quarters of 1994 and 1993 and for the last five years. The
company's principal source of funds is its deposits, and the company is
committed to provide its customers with a wide variety of products with modern
technology at competitive interest rates. Management continues to emphasize
quality customer service and a strong sales culture as key to strengthening the
company's deposit base.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 12--AVERAGE DEPOSITS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30 DECEMBER 31
----------------- --------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Noninterest-bearing de-
mand................... $ 52,336 $ 43,935 $ 44,836 $ 36,870 $ 29,199 $ 26,101 $ 27,055
Interest-bearing demand. 31,577 27,756 28,622 23,776 20,832 19,496 13,167
Savings................. 80,571 74,568 74,728 69,454 51,130 38,506 39,998
Time:
Retail................ 19,214 17,918 18,282 18,783 26,164 27,509 22,355
Individual retirement
accounts............. 3,411 3,447 3,430 3,590 3,802 3,596 3,041
Other................. 0 0 0 0 0 64 50
-------- -------- -------- -------- -------- -------- --------
Total time.......... 22,625 21,365 21,712 22,373 29,966 31,169 25,446
-------- -------- -------- -------- -------- -------- --------
Certificates of Depos-
it--$100,000 or more... 10,378 13,775 13,195 17,479 25,718 31,008 28,004
-------- -------- -------- -------- -------- -------- --------
Total............... $197,487 $181,399 $183,093 $169,952 $156,845 $146,280 $133,670
======== ======== ======== ======== ======== ======== ========
</TABLE>
Average noninterest-bearing demand deposits have increased steadily since
1990 including growth of 21.6% from 1992 to 1993 and an additional 16.7% in the
first three quarters of 1994. Similar growth has been experienced in both
interest-bearing demand and savings deposits. Conversely, average time deposits
have gradually decreased since 1990 except for a slight upturn in the first
three quarters of 1994 in the average balances of retail time deposits. This
decline has partially funded the above increases in both noninterest- and
interest- bearing demand and savings deposits.
Table 13 provides a maturity schedule for time deposits of $100,000 or more
at September 30, 1994 and 1993 and the years ended 1993, 1992 and 1991.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 13--MATURITY OF TIME DEPOSITS OF $100,000 OR MORE
(IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30 AT DECEMBER 31
---------------- -----------------------
1994 1993 1993 1992 1991
------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Three months or less................... $ 3,015 $ 4,507 $ 5,739 $ 5,616 $11,747
Over three through six months.......... 2,501 3,809 1,684 4,895 4,910
Over six through twelve months......... 1,495 1,018 1,390 1,411 3,271
Over twelve months..................... 2,607 2,970 2,449 2,013 1,220
------- -------- ------- ------- -------
Total................................ $ 9,618 $ 12,304 $11,262 $13,935 $21,148
======= ======== ======= ======= =======
</TABLE>
54
<PAGE>
OTHER INTEREST-BEARING LIABILITIES
Other interest-bearing liabilities include all interest-bearing liabilities
except deposits. Short-term liabilities included in this category consist of
federal funds purchased which provide an overnight source of funds. Federal
funds purchased were not utilized in 1993, but averaged $14,000 and $107,000
for 1992 and 1991, respectively, as shown in Table 16B "Yields on Average
Earning Assets and Rates on Average Interest Bearing Liabilities".
Tampa had long-term debt outstanding averaging $1,980,000 for 1993 and
$2,200,000 for 1992 and 1991. The sole purpose of the long-term debt was the
injection of capital into its subsidiary, The Bank of Tampa. Interest on the
note is payable quarterly at prime plus 1% and the note matures March 3, 1995.
At that time, another short-term renewal is expected, unless the Merger has
been completed.
SHAREHOLDERS' EQUITY AND CAPITAL
Tampa has placed great emphasis on maintaining an adequate capital base while
growing its bank. At December 31, 1993, shareholders' equity totaled $12.7
million, or 6.03% of total assets, compared to $10.6 million, or 5.21% of total
assets, at December 31, 1992. Management is committed to maintaining
shareholders' equity at a level sufficient to assure its shareholders,
customers and regulators that Tampa is financially sound and to enable the
company to sustain an appropriate degree of leverage to provide a desirable
level of profitability. Regulators use a risk-adjusted capital calculation to
aid in their assessment of capital adequacy. This ratio is weighted to reflect
the credit risk associated with an institution's assets, both recorded and
unrecorded. At December 31, 1993, the minimum required risk-adjusted capital
ratio for Tier 1 Capital was 4% and the minimum required risk-adjusted total
capital ratio was 8%. Table 14 illustrates the calculation of the risk-adjusted
capital ratios for Tampa at year end 1993 and 1992 and at September 30, 1994
and 1993. Tampa's ratios exceeded required minimums for both years. All growth
in shareholders' equity has come from internal retained earnings and occasional
stock sales.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 14--CAPITAL RATIOS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AT SEPTEMBER 30 AT DECEMBER 31
------------------ ------------------
1994 1993 1993 1992
-------- -------- -------- --------
<S> <C> <C> <C> <C>
RISK-ADJUSTED CAPITAL RATIO:
Total assets........................... $213,428 $197,051 $211,163 $203,302
Adjusted allowance for loan losses..... 1,737 1,681 1,688 1,695
Adjustment for risk weighting of bal-
ance sheet items...................... (82,081) (68,694) (80,447) (74,614)
Adjustment for off-balance sheet items. 4,839 3,942 2,082 4,678
Less certain intangible assets......... 0 0 0 0
-------- -------- -------- --------
Total risk-adjusted assets........... 137,923 133,980 134,486 135,061
======== ======== ======== ========
Shareholders' equity................... 14,072 12,302 12,726 10,591
Less certain intangible assets......... 0 0 0 0
-------- -------- -------- --------
Tier 1 capital......................... 14,072 12,302 12,726 10,591
Adjusted allowance for loan losses..... 1,737 1,681 1,688 1,695
Qualifying long-term debt.............. 0 0 0 0
-------- -------- -------- --------
Tier 2 capital......................... 1,737 1,681 1,688 1,695
-------- -------- -------- --------
Total Capital........................ $ 15,809 $ 13,983 $ 14,414 $ 12,286
======== ======== ======== ========
Tier 1 capital to total risk-adjusted
assets................................ 10.20% 9.18% 9.46% 7.84%
Total capital to total risk-adjusted
assets................................ 11.46% 10.44% 10.72% 9.10%
OTHER CAPITAL RATIOS:
Leverage............................... 6.03% 6.24% 6.26% 5.51%
Equity to assets....................... 6.59% 6.24% 6.03% 5.21%
</TABLE>
55
<PAGE>
Tampa is generally dependent upon dividends from its subsidiary bank and the
occasional sale of its stock to fund its cash needs. Since the company has
historically not paid dividends to its shareholders, its expenditures have been
largely comprised of servicing the long-term note payable discussed above.
Table 15 shows the company's computation of its rate of internal capital
generation for the last five years.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 15--RATES OF INTERNAL CAPITAL GENERATION
<TABLE>
<CAPTION>
1993 1992 1991 1990 1989
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Return on average assets................ 0.80% 0.65% 0.34% 0.16% 0.68%
/
Average equity to average assets........ 5.94 5.48 5.19 5.36 5.41
=
Return of average equity................ 13.47 11.86 6.55 2.99 12.57
X
Earnings retention ratio................ 100.00 100.00 100.00 100.00 100.00
=
Internal capital generation ratio....... 13.47% 11.86% 6.55% 2.99% 12.57%
</TABLE>
GROSS INTEREST MARGIN
The gross interest margin is defined as the difference between the revenue
from earning assets, primarily interest income, and interest expense related to
interest-bearing liabilities. The gross interest margin is a function of the
average balances of earning assets and interest-bearing liabilities and the
yields earned and rates paid on those balances.
In managing the gross interest margin, management must maintain a
satisfactory spread between the yields on earning assets and the related cost
of interest-bearing funds. The gross interest spread is determined by comparing
the taxable equivalent gross interest margin to average earning assets before
deducting the allowance for loan losses. This ratio reflects the overall
profitability of earning assets, including both those funded by interest-
bearing sources and those which incur no interest cost (primarily noninterest-
bearing demand deposits). This ratio is most often used when analyzing a
banking institution's overall gross interest margin profitability compared to
that of other financial institutions. The incremental interest spread compares
the difference between the yields on earning assets and the cost of interest-
bearing funds. This calculation and similar ratios are used to assist in
pricing decisions for interest related products.
56
<PAGE>
Tables 16A and B illustrate for each of the periods indicated, by major
categories of assets and liabilities, the average balances, the components of
the gross interest margin (on a taxable equivalent basis), the yield or rate,
and the incremental gross interest spreads.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 16A--YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE
INTEREST BEARING LIABILITIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30
------------------------------------------------
1994 1993
----------------------- -----------------------
AVERAGE REVENUE/ YIELD AVERAGE REVENUE/ YIELD
BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- -------- ----- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Earning Assets:
Loans net of unearned income. $120,673 $7,901 8.73% $121,843 $7,634 8.35%
Investment securities:
Taxable securities........... 62,401 2,520 5.38 49,633 2,166 5.82
Tax-free securities.......... 0 0 0 0 0 0
-------- ------ ---- -------- ------ ----
Total investment securities. 62,401 2,520 5.38 49,633 2,166 5.82
Federal funds sold &
securities purchased under
agreements to resell........ 11,119 327 3.92 5,716 127 2.96
Trading account securities... 0 0 0 0 0 0
Securities held for sale..... 0 0 0 0 0 0
Mortgage loans held for sale. 0 0 0 0 0 0
-------- ------ ---- -------- ------ ----
Total earning assets........ 194,193 10,748 7.38 177,192 9,927 7.47
------ ---- ------ ----
Cash and other assets........ 21,470 20,868
Less allowance for loan loss-
es.......................... 2,473 2,092
-------- --------
$213,190 $195,968
======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Interest-bearing liabilities:
Interest-bearing demand de-
posits...................... $ 31,577 449 1.90 $ 27,756 399 1.92
Savings deposits............. 80,571 1,466 2.43 74,568 1,256 2.25
Time deposits................ 22,625 703 4.14 21,365 633 3.95
Certificates of deposit--
$100,000 or more............ 10,378 277 3.56 13,775 365 3.53
Federal funds purchased and
securities sold under
agreements to repurchase.... 0 0 0 0 0
Other borrowed funds......... 1,980 116 7.81 1,980 104 7.00
-------- ------ ---- -------- ------ ----
Total interest-bearing lia-
bilities................... 147,131 3,011 2.73 139,444 2,757 2.64
------ ---- ------ ----
Incremental interest spread... 4.65% 4.83%
==== ====
Noninterest-bearing liabili-
ties......................... 52,336 43,935
Other liabilities............. 678 1,050
Shareholders' equity.......... 13,045 11,539
-------- --------
$213,190 $195,968
======== ========
Gross interest margin/spread
on a taxable equivalent ba-
sis.......................... 7,737 5.31% 7,171 5.40%
==== ====
Taxable equivalent adjustment:
Loans........................ 0 0
Investment securities........ 0 0
Other earning assets......... 0 0
------ ------
Total taxable equivalent ad-
justment................... 0 0
------ ------
Gross interest margin......... $7,737 $7,171
====== ======
</TABLE>
- --------
Note: Loans net of unearned income includes nonaccrual loans for all periods
presented.
57
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 16B--YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE
INTEREST BEARING LIABILITIES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------------------------------------------------
1993 1992 1991
----------------------- ----------------------- -----------------------
AVERAGE REVENUE/ YIELD AVERAGE REVENUE/ YIELD AVERAGE REVENUE/ YIELD
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- -------- ----- -------- -------- ----- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Earning Assets:
Loans net of unearned
income................ $121,387 $10,130 8.35% $112,185 $10,011 8.92% $105,446 $10,973 10.41%
Investment securities:
Taxable securities..... 50,019 2,875 5.25 49,114 3,108 6.33 41,161 3,255 7.91
Tax-free securities.... 0 0 0.00 99 15 15.15 2,397 251 10.47
-------- ------- ---- -------- ------- ----- -------- ------- -----
Total investment
securities........... 50,019 2,875 5.25 49,213 3,123 6.35 43,558 3,506 8.05
Federal funds sold &
securities purchased
under agreements to
resell................ 7,325 218 2.98 5,037 169 3.36 4,042 215 5.32
Trading account
securities............ 0 0 0.00 0 0 0.00 0 0 0.00
Securities held for
sale.................. 0 0 0.00 0 0 0.00 0 0 0.00
Mortgage loans held for
sale.................. 0 0 0.00 0 0 0.00 0 0 0.00
-------- ------- ---- -------- ------- ----- -------- ------- -----
Total earning assets.. 178,731 13,223 7.40 166,435 13,303 7.99 153,046 14,694 9.60
------- ---- ------- ----- ------- -----
Cash and other assets.. 21,209 19,097 18,036
Less allowance for loan
losses................ 2,148 2,165 1,922
-------- -------- --------
$197,792 $183,367 $169,160
======== ======== ========
LIABILITIES AND
SHAREHOLDERS' EQUITY:
Interest-bearing
liabilities:
Interest-bearing demand
deposits.............. $ 28,622 539 1.88 $ 23,776 521 2.19 $ 20,832 912 4.38
Savings deposits....... 74,728 1,673 2.24 69,454 2,012 2.90 51,130 2,421 4.73
Time deposits.......... 21,712 863 3.97 22,373 1,038 4.64 29,966 2,002 6.68
Certificates of
deposit--$100,000 or
more.................. 13,195 464 3.55 17,479 785 4.49 25,718 1,707 6.64
Federal funds purchased
and securities sold
under agreements
to repurchase......... 0 0 0.00 14 0 0.00 107 7 6.54
Other borrowed funds... 1,980 138 6.97 2,200 162 7.36 2,200 204 9.27
-------- ------- ---- -------- ------- ----- -------- ------- -----
Total interest-bearing
liabilities.......... 140,237 3,677 2.62 135,296 4,518 3.34 129,953 7,253 5.58
------- ---- ------- ----- ------- -----
Incremental interest
spread................. 4.78% 4.65% 4.02%
==== ===== =====
Noninterest-bearing
liabilities............ 44,836 36,870 29,199
Other liabilities....... 973 1,160 1,227
Shareholders' equity.... 11,746 10,041 8,781
-------- -------- --------
$197,792 $183,367 $169,160
======== ======== ========
Gross interest
margin/spread on a
taxable equivalent
basis.................. 9,546 5.34% 8,785 5.28% 7,441 4.86%
==== ===== =====
Taxable equivalent
adjustment:
Loans.................. 0 0 0
Investment securities.. 0 5 85
Other earning assets... 0 0 0
------- ------- -------
Total taxable
equivalent
adjustment........... 0 5 85
------- ------- -------
Gross interest margin... $ 9,546 $ 8,780 $ 7,356
======= ======= =======
</TABLE>
- --------
Note: Loans net of unearned income includes nonaccrual loans for all years
presented.
The taxable equivalent adjustment has been computed based on a 34.0% tax
rate for all years presented.
58
<PAGE>
The growth in the company's spread continued in 1993, but at a much slower
rate. The incremental interest spread grew only 2.8% in 1993 compared to
15.67% during 1992 (spreads of 4.78%, 4.65% and 4.02%, respectively). The
gross interest margin on a tax equivalent basis performed similarly with 1993
growth of only 1.14% after growing 8.64% during 1992 (gross margins of 5.34%,
5.28% and 4.86%, respectively). The company's spreads have increased because
of continued declines in balances of time deposits being offset by growth in
noninterest-bearing demand deposits. Decreased earnings from assets repricing
over the same time period have not offset this overall lower cost of funds.
However, compression in spreads has been experienced in the first three
quarters of 1994 with increases in both short-term and prime interest rates
and is expected to continue for the balance of the year. Table 17 outlines the
analysis of changes in the gross interest spread.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 17--ANALYSIS OF CHANGE IN THE GROSS INTEREST SPREAD
<TABLE>
<CAPTION>
1993/1992 1992/1991
--------- ---------
<S> <C> <C>
Gross interest spread for the prior year ended December 31. 5.28% 4.86%
Effects of:
Change in the incremental interest spread................ 0.09 0.49
Change in the relative volume of earning assets funded by
noninterest-bearing sources............................. 0.09 0.18
Change in yield earned on earning assets funded by
noninterest-bearing sources............................. (0.12) (0.25)
----- -----
Gross interest spread for the current year ended December
31...................................................... 5.34% 5.28%
===== =====
</TABLE>
Table 18 shows the change from year to year for each component of the
taxable equivalent gross interest margin separated into the amount generated
by volume changes and the amount generated by changes in the yield/rate. The
$761,000 increase in the margin during 1993 was due to increased balances
slightly offset by a lower yield/rate. In 1992, the higher gross interest
margin compared to 1991 resulted from positive trends in both volume and
yield/rate.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 18--VOLUME AND YIELD/RATE VARIANCES
(IN THOUSANDS)
<TABLE>
<CAPTION>
1993 COMPARED TO 1992 1992 COMPARED TO 1991
CHANGE DUE TO CHANGE DUE TO
------------------------ ------------------------
VOLUME YIELD/RATE NET VOLUME YIELD/RATE NET
--------- ------------ ---- ---------- ------------ ------
(TAXABLE EQUIVALENT BASIS)
<S> <C> <C> <C> <C> <C> <C>
Revenue earned on
Loans net of unearned in-
come....................... $ 821 $ (702) $119 $ 701 $ (1,663) $ (962)
Investment securities:
Taxable securities........ 57 (290) (233) 629 (776) (147)
Tax-free securities....... (15) 0 (15) (241) 5 (236)
--------- ----------- ---- ---------- ----------- ------
Total investment securi-
ties................... 42 (290) (248) 388 (771) (383)
Federal funds sold and secu-
rities purchased under
agreements to resell....... 77 (28) 49 53 (99) (46)
--------- ----------- ---- ---------- ----------- ------
Total earning assets.... 940 (1,020) (80) 1,142 (2,533) (1,391)
--------- ----------- ---- ---------- ----------- ------
Interest paid on
Interest-bearing demand de-
posits..................... 106 (88) 18 129 (520) (391)
Savings deposits............ 153 (492) (339) 868 (1,277) (409)
Time deposits............... (31) (144) (175) (507) (457) (964)
Certificates of deposit--
$100,000 or more........... (192) (129) (321) (547) (375) (922)
Federal funds purchased and
securities sold under
agreements to repurchase... 0 0 0 (6) (1) (7)
Other borrowed funds........ (16) (8) (24) 0 (42) (42)
Total interest-bearing
liabilities............ 20 (861) (841) (63) (2,672) (2,735)
--------- ----------- ---- ---------- ----------- ------
Gross interest margin on a
taxable equivalent basis... $ 920 $ (159) 761 $ 1,205 $ 139 1,344
========= =========== ========== ===========
Less: taxable equivalent ad-
justment................... (5) (80)
---- ------
Gross interest margin..... $766 $1,424
==== ======
</TABLE>
- --------
Note: The change in interest resulting from both volume and yield/rate has
been allocated to change due to volume and change due to yield/rate in
proportion to the relationship of the absolute dollar amounts of the
change in each.
The taxable equivalent adjustment has been computed based on a 34.0% tax
rate for all years presented.
59
<PAGE>
ASSET AND LIABILITY MANAGEMENT AND LIQUIDITY
Tampa maintains a formal asset and liability management process to control
interest rate risk and assist management in maintaining stability in the gross
interest margin. The process uses an earnings simulation model to monitor real
(and projected) changes in the level of interest rates and their (potential)
impact upon the gross interest margin when applied to the maturity
distribution of the company's assets and liabilities. The model incorporates
the effects of future balance sheet trends, changes in the relationship
between yields earned and rates paid, patterns of rate movements, and changes
in prepayment speeds due to rate movements. It then projects the gross
interest margin over the next twelve months under a variety of interest rate
scenarios considered possible by management.
Each month, the Asset/Liability Committee reviews the earnings simulation
model output with respect to the estimated impact of various interest rate
scenarios on the gross interest margin and approves any major adjustments in
the company's interest rate sensitivity which are deemed necessary. During
1993, the company's gross interest margin continued to benefit from the wider
than normal interest rate spreads. As previously discussed, interest rate
spreads have compressed somewhat in the first half of 1994, a trend management
expects to continue.
As a secondary tool, a gap analysis is also used by the company to monitor
its overall interest rate sensitivity. Table 19 illustrates the company's
position at December 31, 1993. The analysis indicated that, at December 31,
1993, Tampa was in a slightly negative gap position for the six-month and
twelve-month time horizons. The company has not utilized any off-balance sheet
instruments in managing its interest rate risk.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 19--INTEREST SENSITIVITY ANALYSIS
DECEMBER 31, 1993
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
OVER ONE
AND LESS OVER
0-30 31-60 61-90 91-180 181-365 THAN FIVE
DAYS DAYS DAYS DAYS DAYS FIVE YEARS YEARS TOTAL
-------- ------- -------- -------- -------- ---------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Earning Assets:
Federal funds sold and
securities purchased
under agreements to
resell................ $ 11,118 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 11,118
Investment securities.. 11,434 0 0 2,005 8,322 34,069 235 56,065
Loans net of unearned
income................ 78,419 1,273 960 4,172 4,688 30,319 2,243 122,074
-------- ------- -------- -------- -------- ------- ------- --------
Total earning assets... 100,971 1,273 960 6,177 13,010 64,388 2,478 189,257
-------- ------- -------- -------- -------- ------- ------- --------
Cash and other assets.. 0 0 0 0 0 0 24,177 24,177
Less allowance for loan
losses................ 0 0 0 0 0 0 (2,271) (2,271)
-------- ------- -------- -------- -------- ------- ------- --------
$100,971 $ 1,273 $ 960 $ 6,177 $ 13,010 $64,388 $24,384 $211,163
======== ======= ======== ======== ======== ======= ======= ========
LIABILITIES AND SHARE-
HOLDERS' EQUITY:
Interest-bearing liabil-
ities:
Interest-bearing demand
deposits.............. $ 34,239 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 34,239
Savings deposits....... 58,521 0 15,636 0 0 0 0 74,157
Time deposits.......... 2,733 1,520 2,247 4,279 3,143 9,132 0 23,054
Certificates of deposit
of $100,000 or more... 2,470 1,828 1,442 1,684 1,389 2,449 0 11,262
Federal funds purchased
and securities sold
under agreements to
repurchase............ 0 0 0 0 0 0 0 0
Other borrowed funds... 1,980 0 0 0 0 0 0 1,980
-------- ------- -------- -------- -------- ------- ------- --------
Total interest-bearing
liabilities........... 99,943 3,348 19,325 5,963 4,532 11,581 0 144,692
-------- ------- -------- -------- -------- ------- ------- --------
Noninterest-bearing de-
mand deposits.......... 0 0 0 0 0 53,333 0 53,333
Other liabilities....... 0 0 0 0 0 0 413 413
Shareholders' equity.... 0 0 0 0 0 0 12,725 12,725
-------- ------- -------- -------- -------- ------- ------- --------
$ 99,943 $ 3,348 $ 19,325 $ 5,963 $ 4,532 $64,914 $13,138 $211,163
======== ======= ======== ======== ======== ======= ======= ========
Rate sensitivity gap:
Dollar amount.......... $ 1,028 $(2,075) $(18,365) $ 214 $ 8,478
Percent of total earn-
ing assets............ 0.50% (1.10)% (9.70)% 0.10% 4.50%
Cumulative dollar
amount................. $ 1,028 $(1,047) $(19,412) $(19,198) $(10,720)
</TABLE>
- --------
Note: Because interest-bearing demand accounts (e.g. NOW accounts) and money
market accounts (included in the savings category) are subject to
repricing on a weekly basis, they are included in the 0-30 days
category. Regular savings accounts reprice quarterly and are included in
the 61-90 days category.
60
<PAGE>
Tampa's goal in liquidity management is to satisfy the cash flow requirements
of depositors and borrowers while at the same time meeting the cash flow needs
of the company. This is accomplished through the active management of both
assets and liabilities. The liquidity position of the company is monitored on a
daily basis. In addition, the Asset/Liability Committee reviews liquidity
reports on a monthly basis and makes any changes necessary as a result of the
Asset/Liability management process or anticipated cash flow changes. The
Committee also compares on a monthly basis the company's liquidity position to
established liquidity guidelines. At December 31, 1993, the company was within
all of the limits which have been established and considers its liquidity to be
good. The primary forces affecting liquidity are maturities and cash flows in
loans and investments, changes in core deposits and the ability to obtain
economical wholesale funding in national and regional markets. The company's
most commonly used sources of borrowings are federal funds (i.e., the excess
reserves of other financial institutions) and repurchase agreements, whereby
U.S. government and government agency securities are pledged as collateral for
short-term borrowings. In addition to these sources, the company has the
ability to borrow from its primary correspondent bank.
NONINTEREST REVENUES AND NONINTEREST EXPENSES
Tampa's management stresses the importance of growth in noninterest revenues
as well as the control of noninterest expenses. Table 20 summarizes both for
the preceding five years and for the nine months ended September 30, 1994 and
1993.
THE TAMPA BANKING COMPANY AND SUBSIDIARY
TABLE 20--NONINTEREST REVENUES AND NONINTEREST EXPENSES
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30 YEAR ENDED DECEMBER 31
----------------- ----------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Noninterest revenues:
Service charges on de-
posit accounts......... $ 701 $ 674 $ 923 $ 792 $ 711 $ 596 $ 506
Investment services in-
come................... 114 105 160 0 0 0 0
Mortgage administration
fees................... 55 2 11 0 0 0 0
Investment securities
gains.................. 45 264 264 20 1,222 0 0
Credit card income...... 53 50 69 43 54 48 42
Other revenue........... 307 375 490 429 410 462 425
-------- -------- ------ ------ ------ ------ ------
Total................. $ 1,275 $ 1,470 $1,917 $1,284 $2,397 $1,106 $ 973
======== ======== ====== ====== ====== ====== ======
Noninterest expenses:
Salaries................ $ 2,145 $ 2,048 $2,807 $2,440 $2,347 $2,220 $1,981
Employee benefits....... 639 624 775 799 643 576 528
Net occupancy expense... 631 588 799 777 756 647 420
Equipment expense....... 563 448 582 589 682 699 591
FDIC premiums........... 376 371 494 398 345 190 130
Foreclosed properties
expense................ 222 373 442 198 319 385 223
Other operating ex-
penses................. 1,576 1,528 2,086 1,823 1,643 1,286 1,040
-------- -------- ------ ------ ------ ------ ------
Total................. $ 6,152 $ 5,980 $7,985 $7,024 $6,735 $6,003 $4,913
======== ======== ====== ====== ====== ====== ======
</TABLE>
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<PAGE>
For 1993, noninterest revenues increased $633,000 or 49.3% compared to 1992.
This increase included a $244,000 increase in gains on the sale of securities
for 1993 compared to 1992. Exclusive of these securities gains, noninterest
revenues increased $389,000, or 30.8%, from the prior year. Service charges on
deposit accounts increased $131,000, or 16.5% during 1993. Another $160,000 of
growth resulted from the opening of an investment services department in 1993.
A mortgage origination department also began operating late in the year and
contributed $11,000 in revenues. For the nine months ended September 30, 1994,
similar growth in noninterest revenue was experienced compared with the first
half of 1993.
Noninterest expenses for 1993 increased $961,000, or 13.7%. This growth
occurred in three main areas: salaries (15% or $367,000), foreclosed properties
expense (123% or $244,000), and other operating expenses (14.4% or $263,000).
The growth in salaries is mainly attributable to the two new departments,
investment services and mortgage origination, mentioned above. As previously
discussed, the company has experienced high levels of repossessed real estate
which led to additional foreclosed properties expenses in 1993 over 1992. The
growth of other operating expenses was spread across advertising, promotion,
training, and miscellaneous expenses. Although the company's occupancy expenses
have been higher than its peers, mainly due to newer facilities and two
important branch office leases, these costs have been well controlled with only
2.8% growth in both 1993 and 1992. Similarly controlled were equipment expenses
which actually decreased slightly (1.2%) from 1992 to 1993. The Federal Deposit
Insurance Corporation's deposit insurance premiums increased $96,000, or 24.1%,
in 1993 as deposits grew. In comparing the first three quarters of 1994 to that
of 1993, noninterest expenses grew modestly (2.9%) while noninterest income
decreased slightly (13.3%) due to lower securities gains in 1994 compared with
large third quarter gains in 1993. This was primarily the result of cost
controls implemented since the AmSouth merger announcement as well as decreased
levels of foreclosed properties.
INCOME TAXES
Tampa's income tax expense was $858,000 in 1993, $664,000 in 1992, and
$192,000 in 1991. The significant increases in income tax expense over the last
three years are due primarily to the effects of increased levels of pretax
income in each succeeding year . The increase in income tax expense in 1992 as
compared to 1991 was also partially attributable to an increase in the
company's effective tax rate.
The effective tax rates for 1993, 1992, and 1991, respectively were 35.3%,
35.7%, and 24.9%. These rates primarily consisted of standard federal and state
rates for all three years, with the 1991 rate reduced by adjustments for tax
exempt securities income and the alternative minimum tax which did not occur in
the subsequent years. Taxes actually payable for each year have differed from
income tax expense primarily due to the income tax treatment required in
accounting for loan losses. A detail of the deferred tax assets and liabilities
is included in Note 7 of the Notes to Consolidated Financial Statements set
forth in this Proxy Statement-Prospectus.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 109, entitled "Accounting for Income Taxes" which
requires companies to change from the deferred method of accounting for income
taxes to the liability method. Tampa adopted this statement effective January
1, 1993. There was no material impact on the company's financial condition or
results of operations upon adoption of this statement.
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<PAGE>
OWNERSHIP OF TAMPA COMMON STOCK
Principal Shareholders.
The following table sets forth information as of October 31, 1994 with
respect to the ownership of shares of Tampa stock owned by each person believed
by management to be the beneficial owner of more than 5% of any class of
Tampa's outstanding stock. Except as otherwise indicated, the persons shown in
the table have sole voting and dispositive power with respect to the entire
number of shares reported.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT OF CLASS
NAME AND ADDRESS OF BENEFICIAL OWNER TITLE OF CLASS OWNERSHIP(A) OUTSTANDING(B)
- ------------------------------------ -------------- ------------ ----------------
<S> <C> <C> <C>
G.R. Blanchard, Tampa, FL......... Common Stock 74,810(c) 11.73%
A.G. Divers, Tampa, FL............ Common Stock 48,775(d) 7.34%
J.L. Ferman, Jr., Tampa, FL....... Common Stock 75,579(e) 11.85%
The Bank of Tampa ESOP (the
"ESOP").......................... Common Stock 51,056(f) 8.00%
C.W. Sahlman, Tampa, FL........... Common Stock 55,950(g) 8.77%
</TABLE>
- --------
(a) In accordance with Rule 13d-3 under the Exchange Act, a person is deemed to
be the beneficial owner of a security for purposes of the Rule if he or she
has or shares voting power or dispositive power with respect to such
security or has the right to acquire such ownership within 60 days. As used
herein, "voting power" is the power to vote or direct the voting of shares,
and "dispositive power" is the power to dispose or direct the disposition
of shares. Fractional amounts of shares have been rounded to the nearest
whole number.
(b) For the purpose of computing the percentage of outstanding stock owned by
each beneficial owner, any securities that are not outstanding, but that
are subject to options, warrants, rights, or conversion privileges
exercisable within 60 days of October 31, 1994, are deemed to be
outstanding in determining the percentage owned by such person but are not
deemed outstanding in determining the percentage owned by any other person.
At October 31, 1994, 637,827 shares of Tampa Common Stock were outstanding
(excluding shares of the common stock which could be acquired upon the
exercise of options, warrants, rights or conversion privileges within 60
days of October 31, 1994).
(c) Includes 71,710 shares owned by WRB Enterprises, Inc., of which Mr.
Blanchard is part-owner, and 1,000 shares owned by his spouse.
(d) Includes options for 26,670 shares which may be exercised within 60 days,
4,413 shares held in Mr. Divers' account in the ESOP and 900 shares owned
by Mr. Divers' spouse.
(e) All shares are owned by Ferman Motor Car Co., Inc., of which Mr. Ferman is
a principal shareholder.
(f) Participants in the ESOP may vote the shares allocated to their account but
have no power of disposition regarding such shares. All shares held by the
ESOP have been allocated to participants' accounts.
(g) Includes 1,050 shares owned by Mr. Sahlman's spouse.
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<PAGE>
Security Ownership of Directors and Certain Executive Officers.
The following table sets forth information as of October 31, 1994, with
respect to the shares of Tampa Common Stock beneficially owned by each of
Tampa's directors, five most highly compensated executive officers and by all
directors and executive officers of Tampa as a group. Except as otherwise
noted, each beneficial owner listed has sole investment and voting power with
respect to the shares of common stock indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF COMMON
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(A) STOCK OUTSTANDING
------------------------ ----------------------- -----------------
<S> <C> <C>
A.C. Anderson..................... 2,643(b) *
E.R. Bourkard, Jr................. 573(c) *
S.C. Bexley....................... 16,000(d) 2.51%
G.R. Blanchard.................... 74,810(e) 11.73%
C.M. Davis, Jr.................... 5,000 *
A.G. Divers....................... 48,775(f) 7.34%
J.L. Ferman, Jr................... 75,579(g) 11.85%
James W. Gray, Jr................. 1,050 *
P.W. Minford...................... 5,062(h) *
W.O. West......................... 1,100(i) *
All directors and executive
officers as a group
(15 persons)..................... 248,823 37.04%
</TABLE>
- --------
* The percentage of outstanding common stock is less than 1%.
(a) Excludes shares of common stock subject to outstanding stock options unless
such options are exercisable within 60 days after October 31, 1994.
Fractional amounts of shares have been rounded to the nearest whole number.
(b) Includes options for 1,400 shares which may be exercised within 60 days and
1,243 shares held in the ESOP.
(c) Includes 391 shares held in the ESOP.
(d) Includes 15,500 shares owned by a trust of which Mr. Bexley is trustee and
500 shares owned by a corporation of which he is president.
(e) Includes 71,710 shares owned by WRB Enterprises, Inc., of which Mr.
Blanchard is a part-owner, and 1,000 shares owned by his spouse.
(f) Includes options for 26,670 shares that could be exercised within 60 days,
4,413 shares held in the ESOP and 900 shares owned by Mr. Divers' spouse.
(g) All shares are owned by Ferman Motor Car Co. Inc., of which he is a
principal shareholder.
(h) Includes 1,861 shares held by the ESOP.
(i) Includes 1,000 shares owned by Mr. West's spouse and 100 shares held by the
ESOP.
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<PAGE>
DESCRIPTION OF AMSOUTH CAPITAL STOCK
The following summaries of certain provisions of the Restated Certificate of
Incorporation, as amended (the "AmSouth Certificate") and Bylaws of AmSouth
(the "AmSouth Bylaws"), and the AmSouth Rights Agreement (defined below) do not
purport to be complete and are qualified in their entirety by reference to such
instruments, each of which is incorporated by reference as an exhibit to the
Registration Statement of which this Proxy Statement-Prospectus is a part. See
"AVAILABLE INFORMATION."
GENERAL
As provided in the AmSouth Certificate, AmSouth's authorized capital stock
consists of 200,000,000 shares of AmSouth Common Stock and 2,000,000 shares of
preferred stock, without par value (the "AmSouth Preferred Stock"). As of
November 18, 1994, there were 58,010,949 shares of AmSouth Common Stock issued
and outstanding and 1,500,000 shares of AmSouth Common Stock were held as
treasury stock. The AmSouth Preferred Stock may be issued from time to time as
a class without series, or if so determined by the AmSouth Board, either in
whole or in part in one or more series. As of the Record Date, no shares of
AmSouth Preferred Stock were issued and outstanding and none were held as
treasury stock.
The rights of AmSouth to participate in any distribution of assets of any
subsidiary upon its liquidation or reorganization or otherwise (and thus the
ability of AmSouth's shareholders to benefit indirectly from such distribution)
would be subject to the prior claims of creditors of that subsidiary, except to
the extent that AmSouth itself may be a creditor of that subsidiary with
recognized claims. Claims on AmSouth's subsidiaries by creditors other than
AmSouth will include substantial obligations with respect to deposit
liabilities and purchased funds. See also, "CERTAIN REGULATORY CONSIDERATIONS--
Payment of Dividends," "--Depositor Preference" and "--Support of Subsidiary
Banks."
COMMON STOCK
Dividends. Subject to the rights of holders of AmSouth Preferred Stock, if
any, to receive certain dividends prior to the declaration of dividends on
shares of AmSouth Common Stock, when and as dividends, payable in cash, stock
or other property, are declared by the AmSouth Board, the holders of AmSouth
Common Stock are entitled to share ratably in such dividends.
Voting Rights. Each holder of AmSouth Common Stock has one vote for each
share held on matters presented for consideration by the shareholders.
Preemptive Rights. The holders of AmSouth Common Stock have no preemptive
rights to acquire any additional shares of AmSouth.
Issuance of Stock. The AmSouth Certificate authorizes the AmSouth Board to
issue authorized shares of AmSouth Common Stock without shareholder approval.
However, AmSouth Common Stock is listed on the NYSE, which requires shareholder
approval of the issuance of additional shares of AmSouth Common Stock under
certain circumstances.
Liquidation Rights. In the event of the liquidation, dissolution or winding-
up of AmSouth, whether voluntary or involuntary, the holders of AmSouth Common
Stock will be entitled to share ratably in any of its assets or funds that are
available for distribution to its shareholders after the satisfaction of its
liabilities (or after adequate provision is made therefor) and after
preferences of any outstanding AmSouth Preferred Stock.
PREFERRED STOCK
AmSouth Preferred Stock may be issued from time to time as a class without
series, or if so determined by the AmSouth Board, either in whole or in part in
one or more series. The voting rights, and such
65
<PAGE>
designations, preferences and relative, participating, optional or other
special rights, if any, and the qualifications, limitations or restrictions
thereof, if any, including, but not limited to, the dividend rights, conversion
rights, redemption rights and liquidation preferences, if any, of any wholly
unissued series of AmSouth Preferred Stock (or of the entire class of AmSouth
Preferred Stock if none of such shares has been issued), the number of shares
constituting any such series and the terms and conditions of the issue thereof
may be fixed by resolution of the AmSouth Board. AmSouth Preferred Stock will
have a preference over AmSouth Common Stock with respect to the payment of
dividends and the distribution of assets in the event of the liquidation or
winding-up of AmSouth and such other preferences as may be fixed by the AmSouth
Board.
AMSOUTH RIGHTS AGREEMENT
Each share of AmSouth Common Stock has, and when issued each of the Merger
Shares will have, attached to it one right (an "AmSouth Right") issued pursuant
to a Stockholder Protection Rights Agreement (the "AmSouth Rights Agreement").
Each AmSouth Right entitles its registered holder to purchase one one-hundredth
of a share of AmSouth Series A Preferred Stock, without par value, for $115.00
(the "Exercise Price"), subject to adjustment, after the close of business on
the earlier of (i) the tenth day after commencement of a tender or exchange
offer which, if consummated, would result in a person's becoming the beneficial
owner of 15% or more of the outstanding shares of AmSouth Common Stock (an
"Acquiring Person") and (ii) the tenth day after the first date (the "Flip-in
Date") of public announcement that a person has become an Acquiring Person. In
any case, the time described in the foregoing sentence is referred to as the
"Separation Time."
The AmSouth Rights will not be exercisable until the business day following
the Separation Time. The AmSouth Rights will expire on the earlier of (i) the
close of business on June 15, 1999 and (ii) the date on which the AmSouth
Rights are redeemed as described below (the "Expiration Time"). The AmSouth
Board may, at its option, at any time prior to the Flip-in Date, redeem all the
AmSouth Rights at a price of $0.01 per right (the "Redemption Price").
If a Flip-in Date shall occur, AmSouth shall ensure and provide that each
AmSouth Right (other than AmSouth Rights beneficially owned by the Acquiring
Person or any affiliate or associate thereof or by any transferees, direct or
indirect, of any of the foregoing, which AmSouth Rights shall become void) will
constitute the right to purchase from AmSouth shares of AmSouth Common Stock
having an aggregate market price equal to twice the Exercise Price for an
amount in cash equal to the then-current Exercise Price. In addition, the
AmSouth Board may, at its option, at any time after a Flip-in Date and prior to
the time that an Acquiring Person becomes the beneficial owner of more than 50%
of the outstanding shares of AmSouth Common Stock, elect to exchange the
AmSouth Rights for shares of AmSouth Common Stock at an exchange ratio of one
share of AmSouth Common Stock per AmSouth Right.
AmSouth may not consolidate or merge, or engage in certain other
transactions, with an Acquiring Person without entering into a supplemental
agreement with the Acquiring Person providing that upon consummation or
occurrence of the transaction each AmSouth Right shall thereafter constitute
the right to purchase common stock of the Acquiring Person having an aggregate
market price equal to twice the Exercise Price for an amount in cash equal to
the then-current Exercise Price.
The AmSouth Rights will not prevent a takeover of AmSouth. The AmSouth
Rights, however, may have certain anti-takeover effects. The AmSouth Rights may
cause substantial dilution to a person or group that acquires 15% or more of
the outstanding AmSouth Common Stock unless the AmSouth Rights are first
redeemed by the AmSouth Board.
CHANGES IN CONTROL
Certain provisions of the AmSouth Certificate and AmSouth Bylaws may have the
effect of preventing, discouraging or delaying any change in control of
AmSouth. For a discussion of the AmSouth Rights
66
<PAGE>
Agreement and its effect on potential takeovers, see "AmSouth Rights
Agreement." The authority of the AmSouth Board to issue AmSouth Preferred Stock
with such rights and privileges, including voting rights, as it may deem
appropriate may enable the AmSouth Board to prevent a change in control despite
a shift in ownership of the AmSouth Common Stock. See "General" and "Preferred
Stock." In addition, the AmSouth Board's power to issue additional shares of
AmSouth Common Stock may help delay or deter a change in control by increasing
the number of shares needed to gain control. See "Common Stock." The following
provisions also may deter any change in control of AmSouth.
Classification of Board of Directors. The AmSouth Board is divided into three
classes, each serving three-year terms, so that approximately one-third of the
directors of AmSouth are elected at each annual meeting of the shareholders of
AmSouth. Classification of the AmSouth Board has the effect of decreasing the
number of directors that could be elected in a single year by any person who
seeks to elect its designees to a majority of the seats on the AmSouth Board
and thereby could impede a change in control of AmSouth.
Removal of Directors. The AmSouth Certificate provides that a director of
AmSouth may be removed only for cause by the affirmative vote of the holders of
80% of the shares of AmSouth Common Stock then entitled to vote at an election
of directors.
Written Consent. As permitted by Delaware law, the AmSouth Certificate
prohibits AmSouth shareholders from taking any action that either is required
to be taken or may be taken at an annual or special meeting without such a
meeting, whether by written consent or otherwise.
Business Combinations. The AmSouth Certificate provides that any "Business
Combination" involving AmSouth and (i) any person that beneficially owns more
than 10% of the AmSouth Common Stock, (ii) any affiliate of AmSouth which
beneficially owned more than 10% of the AmSouth Common Stock during the prior
two years or (iii) any transferee of any shares of AmSouth Common Stock that
were beneficially owned by an "Interested Stockholder" during the prior two
years (any of the foregoing being defined for the purpose of this paragraph as
an "Interested Stockholder") must be approved by (i) the holders of not less
than 80% of the outstanding shares of AmSouth's voting stock and (ii) the
holders of not less than 67% of such voting stock held by stockholders other
than the Interested Stockholder. These special voting requirements do not
apply, however, if either (i) a majority of the Continuing Directors (as
defined) of AmSouth has approved the Business Combination or the Interested
Stockholder becoming such or (ii) the terms of the proposed Business
Combination satisfy certain minimum price and other standards. For purposes of
these provisions, a "Business Combination" is defined to include (i) any merger
or other corporate reorganization of AmSouth with or into an Interested
Stockholder, (ii) the disposition by AmSouth of a Substantial Part (as defined)
of its assets to an Interested Stockholder, (iii) any merger or other corporate
reorganization of an Interested Stockholder with or into AmSouth, (iv) the
acquisition by AmSouth of a Substantial Part (as defined) of the assets of an
Interested Stockholder, (v) the issuance by AmSouth of any of its securities to
an Interested Stockholder, (vi) any recapitalization that would increase the
voting power of an Interested Stockholder, (vii) the adoption of any plan for
the liquidation or dissolution of AmSouth proposed by or on behalf of an
Interested Stockholder and (viii) any agreement providing for any of the
transactions described above. This provision is intended to deter an acquiring
party from utilizing two-tier pricing and similar coercive tactics in an
attempt to acquire control of AmSouth. However, it is not intended to, and will
not, prevent or deter all tender offers for shares of AmSouth.
Amendment of AmSouth Certificate. The provisions of the AmSouth Certificate
relating to the structure of the AmSouth Board may not be amended, altered or
repealed without the affirmative vote of 80% of the outstanding voting stock of
AmSouth. The Business Combination provision of the AmSouth Certificate may not
be amended, altered or repealed except by the supermajority vote required to
approve a Business Combination. The provision of the AmSouth Certificate
dealing with written consent in lieu of shareholders' meetings may not be
amended, altered or repealed without the affirmative vote of the holders of 67%
of the outstanding voting stock.
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<PAGE>
Delaware Business Combination Statute. Subject to certain exceptions, the
Delaware General Corporation Law (the "Delaware GCL") prohibits AmSouth from
entering into certain "business combinations" (as defined) involving persons
beneficially owning 15% or more of the outstanding AmSouth Common Stock (or any
person who is an affiliate of AmSouth and has over the past three years
beneficially owned 15% or more of such stock) (either, for the purpose of this
paragraph, an "Interested Stockholder"), unless the AmSouth Board has approved
either (i) the business combination or (ii) prior to the stock acquisition by
which such person's beneficial ownership interest reached 15% (the "Stock
Acquisition"), the Stock Acquisition. The prohibition lasts for three years
from the date of the Stock Acquisition. Notwithstanding the preceding, the
Delaware GCL allows AmSouth to enter into a business combination with an
Interested Stockholder if (i) the business combination is approved by the
AmSouth Board and authorized by an affirmative vote of at least 66 2/3% of the
outstanding voting stock of AmSouth which is not owned by the Interested
Stockholder or (ii) upon consummation of the transaction which resulted in the
stockholder becoming an Interested Stockholder, such stockholder owned at least
85% of the outstanding stock of AmSouth (excluding AmSouth stock held by
officers and directors of AmSouth or by certain AmSouth stock plans).
Control Acquisitions. The Change in Bank Control Act of 1978 prohibits a
person or group of persons from acquiring "control" of a bank holding company
unless the Federal Reserve Board has been given 60 days' prior written notice
of such proposed acquisition and within that time period the Federal Reserve
Board has not issued a notice disapproving the proposed acquisition or
extending for up to another 30 days the period during which such a disapproval
may be issued. An acquisition may be made prior to the expiration of the
disapproval period if the Federal Reserve Board issues written notice of its
intent not to disapprove the action. Under a rebuttable presumption established
by the Federal Reserve Board, the acquisition of more than 10% of a class of
voting stock of a bank holding company with a class of securities registered
under Section 12 of the Exchange Act, such as AmSouth, would, under the
circumstances set forth in the presumption, constitute the acquisition of
control.
In addition, any "company" would be required to obtain the approval of the
Federal Reserve Board under the BHCA before acquiring 25% (5% in the case of an
acquiror that is a bank holding company) or more of the outstanding shares of
AmSouth Common Stock, or otherwise obtaining control over AmSouth.
Changes in control of AmSouth are also subject to certain statutory notice
and approval requirements under the laws of the states in which certain of the
Subsidiary Banks are located.
COMPARISON OF RIGHTS OF SHAREHOLDERS
At the Effective Date, as a consequence of the Merger, shareholders of Tampa,
whose rights are governed by Tampa's Articles of Incorporation (the "Tampa
Articles") and bylaws (the "Tampa Bylaws") and by the Florida Business
Corporation Act (the "FBCA") will become shareholders of AmSouth, and their
rights as shareholders of AmSouth will be determined by the Delaware GCL, the
AmSouth Certificate and the AmSouth Bylaws. The following is a summary of
certain material differences in the rights of shareholders of AmSouth and
Tampa. THE SUMMARY DOES NOT PURPORT TO BE A COMPLETE DISCUSSION OF, AND IS
QUALIFIED IN THE ENTIRETY BY REFERENCE TO, THE GOVERNING LAWS, THE AMSOUTH
CERTIFICATE, THE AMSOUTH BYLAWS, THE TAMPA ARTICLES AND THE TAMPA BYLAWS.
REMOVAL OF DIRECTORS
Tampa. The Tampa Bylaws provide that any director may be removed, with or
without cause, by the vote of the holders of two-thirds of the issued and
outstanding shares of Tampa.
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<PAGE>
AmSouth. The AmSouth Certificate, as allowed by the Delaware GCL, provides
that a director may be removed from office, but only for cause and by the
affirmative vote of the holders of at least 80% of the voting shares then
entitled to vote at an election of directors, voting together as a single
class.
VACANCIES ON THE BOARD OF DIRECTORS
AmSouth. The AmSouth Certificate provides that, subject to the rights of the
holders of any AmSouth preferred stock, newly created directorships resulting
from any increase in the number of directors and any vacancy on the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal or other cause shall be filled by the affirmative vote of a majority of
the remaining directors then in office who have been elected by a majority of
the holders of AmSouth capital stock entitled to vote generally for the
election of directors, even though less than a quorum. The AmSouth Certificate
provides that any directors so elected will serve for the remainder of the full
term of the class in which the new directorship was created or the vacancy
occurred.
Tampa. The Tampa Bylaws provide that any vacancy occurring on the Board of
Directors may be filled by the affirmative vote of a majority of the remaining
directors, even if the number of remaining directors does not constitute a
quorum of the Board of Directors. A director elected to fill a vacancy holds
office until the expiration of the term for which he was elected.
AMENDMENTS TO THE CERTIFICATE OR ARTICLES OF INCORPORATION AND BYLAWS
AmSouth. Under the Delaware GCL, a corporation's certificate of incorporation
can be amended by the affirmative vote of the holders of a majority of the
outstanding shares entitled to vote thereon, and a majority of the outstanding
stock of each class entitled to vote as a class, after the Board of Directors
adopts a resolution proposing such amendment unless the certificate requires
the vote of a larger portion of the stock. The AmSouth Certificate requires
supermajority shareholder approval to amend or repeal any provision of, or
adopt any provision inconsistent with, certain provisions in the AmSouth
Certificate governing (i) business combinations between AmSouth and an
interested shareholder, (ii) shareholder meetings and (iii) the structure of
the AmSouth Board. See "DESCRIPTION OF AMSOUTH CAPITAL STOCK--Changes in
Control." As is permitted by the Delaware GCL, the AmSouth Certificate gives
its Board of Directors the power to adopt, amend or repeal the AmSouth Bylaws.
The AmSouth shareholders entitled to vote have concurrent power to adopt, amend
or repeal the AmSouth Bylaws.
Tampa. The Tampa Articles provide that the Board of Directors is authorized
to adopt bylaws provided that they are not contrary to the laws of Florida. The
Tampa Bylaws provide that the bylaws may be repealed or amended, and new bylaws
may be adopted, by either the Board of Directors or the shareholders, but the
Board of Directors may not amend or repeal any bylaws adopted by the
shareholders if the shareholders specifically provide that such bylaws are not
subject to amendment or repeal by the Directors. Amendment by either the Board
of Directors or the shareholders requires an affirmative vote of two-thirds of
the total of the outstanding shares in the event of a vote of the shareholders
and two-thirds of the membership of the Board of Directors.
The Tampa Articles provide that they may be amended "in the manner provided
by law." They further provide that every amendment must be approved by the
Board of Directors and approved at a stockholders' meeting by a majority (or
such greater number as specified in the bylaws) of the shares of stock entitled
to vote thereon, unless all of the directors and stockholders sign a written
statement manifesting their intention to amend the articles. No greater vote is
specified in the Tampa Bylaws.
AUTHORIZED CAPITAL STOCK
AmSouth. The AmSouth Certificate authorizes the issuance of up to 200,000,000
shares of AmSouth Common Stock, of which 58,010,949 shares were issued and
outstanding and 1,500,000 shares of AmSouth
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<PAGE>
Common Stock were held as treasury shares as of November 18, 1994, and up to
2,000,000 shares of AmSouth Preferred Stock, of which no shares were issued and
outstanding as of November 18, 1994. The AmSouth Preferred Stock is issuable in
series, each series having such rights and preferences as the AmSouth Board may
fix and determine by resolution.
Tampa. The Tampa Articles authorize the issuance of up to 1,000,000 shares of
Tampa Common Stock, of which 637,827 shares were issued and outstanding as of
the Record Date. No other class of capital stock is authorized.
CHANGES IN CONTROL
AmSouth. As a Delaware corporation, AmSouth is subject to the business
combination statute described under the heading "DESCRIPTION OF AMSOUTH CAPITAL
STOCK--Changes in Control--Delaware Business Combination Statute." As a bank
holding company, acquisitions of control of AmSouth are also subject to the
Change in Bank Control Act of 1978 and the BHCA as described under the heading
"DESCRIPTION OF AMSOUTH CAPITAL STOCK--Changes in Control--Control
Acquisitions." The AmSouth Articles also contain provisions regarding
shareholder approval of business combinations under certain circumstances, as
described under the heading "DESCRIPTION OF AMSOUTH CAPITAL STOCK--Changes in
Control--Business Combinations."
Tampa. The Tampa Bylaws require the approval by affirmative vote of the
holders of two-thirds of the issued and outstanding shares of Tampa as a
condition for a sale, merger, consolidation or other act which would cause a
change in control of ownership of Tampa.
The FBCA regulates the voting of shares of certain Florida corporations by
persons who acquire a large block of stock in those corporations. The FBCA
restricts the voting rights of a person who acquires "control shares" in an
"issuing public corporation." The Delaware GCL does not contain a similar
"control share" provision. "Control shares" are defined under the FBCA as those
shares that, when added to all other shares of the issuing public corporation
owned by a person or in respect to which that person may exercise or direct the
exercise of voting power, would entitle that person to exercise the voting
power of the corporation in the election of directors within any of the
following ranges of voting power: (a) one-fifth or more but less than one-third
of all voting power; (b) one-third or more but less than a majority of all
voting power; or (c) a majority or more of all voting power. An "issuing public
corporation" is a corporation that has (i) 100 or more shareholders; (ii) its
principal place of business, its principal office or substantial assets within
Florida; and (iii) either (a) more than 10% of its shareholders resident in
Florida, (b) more than 10% of its shares owned by Florida residents or (c)
1,000 shareholders resident in Florida.
If a control share acquisition has been made, the control shares only have
voting rights to the extent granted by resolution approved by the holders of a
majority of shares other than those held by the interested shareholder and by
members of the corporation's management. The interested shareholder has the
right to request a shareholders' meeting to determine his voting rights within
50 days of the date the interested shareholder gives notice of his control
share acquisition to the corporation. The notice must contain certain
information concerning the interested shareholder and the acquisition of his
shares. The interested shareholder must pay the expenses of the shareholders'
meeting. If no notice is filed with the corporation within 60 days of the date
of the control share acquisition, the corporation has the right to redeem the
control shares. In addition, the control shares are still subject to redemption
even after the notice has been filed, if the other shareholders do not accord
the control shares voting rights.
If an interested shareholder acquires a majority of the outstanding shares of
the corporation and is granted voting rights pursuant to the procedure outlined
above, the other shareholders of the corporation have dissenters' rights to
require the corporation to purchase their shares for a "fair value." The term
"fair value" is defined as a value not less than the highest price paid per
share by the acquiring person in the control share acquisition.
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The FBCA contains several provisions by which acquisitions approved by a
corporation's board of directors may be structured to avoid these provisions.
For example, the corporation can elect not to be subject to these provisions by
adopting an amendment to its articles of incorporation or bylaws expressly
stating that such provisions shall not apply to the corporation. In addition,
such provisions will not apply to an acquisition if the corporation executes a
merger agreement with the interested shareholder.
As a bank holding company, an acquisition of control of Tampa is also subject
to the Change in Bank Control Act of 1978 and the BHCA, as described under the
heading "DESCRIPTION OF AMSOUTH CAPITAL STOCK--Changes in Control--Control
Acquisitions."
SHAREHOLDER RIGHTS PLAN
AmSouth. As described above (see "DESCRIPTION OF AMSOUTH CAPITAL STOCK--
AmSouth Rights Agreement"), AmSouth adopted the AmSouth Rights Agreement in
1989. When issued upon consummation of the Merger, the Merger Shares will have
attached AmSouth Rights.
Tampa. The Tampa Board has not adopted a shareholder rights plan.
CUMULATIVE VOTING
Tampa. Pursuant to the Tampa Bylaws each shareholder is entitled to one vote
for each share of Tampa Common Stock held, and such holders are not entitled to
cumulative voting rights in the election of directors.
AmSouth. Pursuant to the AmSouth Bylaws each shareholder is entitled to one
vote for each share of AmSouth Common Stock held, and such holders are not
entitled to cumulative voting rights in the election of directors.
PREEMPTIVE RIGHTS
Tampa. The holders of Tampa Common Stock have no preemptive rights to acquire
any additional shares of Tampa Common Stock or any other shares of Tampa
Capital Stock.
AmSouth. The holders of AmSouth Common Stock have no preemptive rights to
acquire any additional shares of AmSouth Common Stock or any other shares of
AmSouth Capital Stock.
PROXY REQUIREMENTS
AmSouth. Under the Delaware GCL, proxies are valid for up to three years
unless otherwise specified therein. Under the Delaware GCL, a proxy is
irrevocable if it specifically states that it is irrevocable and if it is also
coupled with an interest sufficient in law to support that power.
Tampa. Under the FBCA, proxies are valid for up to eleven months unless a
longer period is specified therein. In addition, the FBCA specifies that a
proxy is irrevocable if the appointment form conspicuously states that it is
irrevocable, and it is coupled with an interest sufficient in law to support
that power.
DERIVATIVE ACTIONS
AmSouth. The Delaware GCL permits shareholders to bring derivative actions on
behalf of AmSouth.
Tampa. The FBCA permits shareholders to bring derivative actions on behalf of
Tampa. Under the FBCA, however, a shareholder must obtain court approval if he
wishes to settle or discontinue a derivative action. If the court finds that
the derivative action was without reasonable cause, the court may require the
plaintiff to pay the defendant's reasonable expenses, including attorneys'
fees.
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AFFILIATED TRANSACTIONS
AmSouth. As a Delaware corporation, AmSouth is subject to the business
combination statute described under the heading "DESCRIPTION OF AMSOUTH CAPITAL
STOCK--Changes in Control--Delaware Business Combination Statute."
Tampa. The FBCA requires that any affiliated transaction, which term includes
a merger, sale of significant assets of the corporation and similar
extraordinary corporate transactions, between the corporation and an interested
shareholder (generally defined as any person who is the beneficial owner of
more than 10% of the outstanding voting shares of the corporation) be approved
by the affirmative vote of the holders of two-thirds of the voting shares of
the corporation other than the shares beneficially owned by the interested
shareholder. The voting requirements of the FBCA will not apply, however, to an
affiliated transaction if: (a) the affiliated transaction has been approved by
a majority of the corporation's disinterested directors; (b) the corporation
has not had more than 300 shareholders at any time during the preceding three
years; (c) the interested shareholder has been the beneficial owner of at least
80 percent of the corporation's outstanding voting shares for at least five
years; (d) the interested shareholder is the beneficial owner of at least 90
percent of the outstanding voting shares of the corporation; or (e) certain
fair price requirements have been met.
DIRECTORS' LIABILITY
AmSouth. The AmSouth Certificate, as allowed by Delaware law, provides that a
director of AmSouth will have no personal liability to AmSouth or its
shareholders for any monetary damages for breach of his or her fiduciary duty
as a director except for (a) any breach of the director's duty of loyalty to
the corporation or its shareholders, (b) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of laws, (c) the
payment of certain unlawful dividends and the making of certain stock purchases
or redemptions, or (d) any transaction from which the director derived an
improper personal benefit. This provision would absolve directors of personal
liability for negligence in the performance of duties, including gross
negligence. It would not permit a director to be exculpated, however, for
liability for actions involving conflicts of interest or breaches of the
traditional "duty of loyalty" to AmSouth and its shareholders, and it would not
affect the availability of injunctive or other equitable relief as a remedy.
Tampa. The FBCA requires that a director of a Florida corporation, such as
Tampa, will have no personal liability to Tampa or any other person for
monetary damages for any statement, vote, decision or failure to act regarding
corporate management or policy, unless the director breaches or fails to
perform his or her duties as a director and the breach or failure constitutes:
(a) a violation of criminal law, unless the director had reasonable cause to
believe his or her conduct was lawful; (b) a transaction from which the
director derived an improper personal benefit, either directly or indirectly;
(c) an assent to an unlawful declaration of dividends or distribution of
Tampa's assets, or any unlawful purchase of Tampa's own shares; (d) in an
action by or in the right of Tampa or a shareholder, conscious disregard for
the best interest of Tampa or willful misconduct; or (e) in an action by any
person other than Tampa or its shareholders, recklessness, or an act or
omission committed in bad faith, or with malicious purpose, or in a manner
exhibiting wanton and willful disregard of human rights, safety or property.
These provisions would absolve directors of personal liability for negligence
in the performance of their duties, including gross negligence, and would
further absolve directors of personal liability for breaches of the traditional
"duty of loyalty" unless one of the five factors set forth above was found to
be present. The provisions of the FBCA are self-implementing in that a
corporation need not take any action to avail its directors of these
protections.
INDEMNIFICATION
Tampa. The Tampa Bylaws provide that each Director and each officer of Tampa
(including in their capacities as Directors and officers of Tampa's
subsidiaries), in consideration of his services as such shall be indemnified by
Tampa against all costs and expenses, including amounts paid in settlement
(other than payments to Tampa itself), reasonably incurred by him in connection
with any action, suit, or proceeding, civil or criminal, to which he may be a
party (or threatened to be made a party) by reason of any action
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taken or omitted to be taken by him in his capacity as such Director or
officer, to the fullest extent allowed by law.
Expenses incurred by a Director or officer in defending a civil or criminal
action, suit or proceeding may be paid by Tampa in advance of the final
disposition of such action, suit or proceeding as authorized by the Board in
the specific cause upon receipt of an undertaking by or on behalf of the
Director or officer to repay such amount unless it shall ultimately be
determined that he is entitled to be indemnified by Tampa. Such expenses
incurred by other employees and agents may be paid upon such terms and
conditions, if any, as the Tampa Board deems appropriate.
The FBCA establishes the scope of indemnification that a Florida corporation
such as Tampa may provide for officers, directors, employees and agents of such
corporation. A Florida corporation is permitted to indemnify any person who may
be a party to any third party action if the person is or was a director,
officer, employee or agent of the corporation and acted in good faith and in a
manner reasonably believed to be in, or not opposed to, the best interests of
the corporation. With respect to any criminal action or proceeding, to be
indemnified, the person must have had no reasonable cause to believe the
conduct was unlawful. A Florida corporation also may advance indemnification
expenses so long as indemnification is permitted under the circumstances.
A Florida corporation is also permitted to indemnify any person who may be a
party to a derivative action if the person is or was a director, officer,
employee or agent of the corporation and acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interests of the
corporation. However, no indemnification may be made for any claim, issue or
matter for which the person was found to be liable unless a court determines
that, despite adjudication of liability but in view of all circumstances of the
case, the person was fairly and reasonably entitled to indemnity.
Any indemnification made under the circumstances described above, unless
pursuant to a court determination, may be made only after a determination that
the person to be indemnified has met these standards of conduct. This
determination is to be made by (i) a majority vote of a quorum consisting of
the disinterested directors of the board of directors, (ii) a duly designated
committee of the board of directors, (iii) independent legal counsel or (iv) a
majority vote of a quorum of the disinterested shareholders, or, if no such
quorum is obtainable, by a majority vote of disinterested shareholders.
It is mandatory for a Florida corporation to indemnify a director, officer,
employee or agent against expenses actually and reasonably incurred, provided
the person has been successful in defense of any proceeding referred to in the
above discussion of permissive indemnifications.
A Florida corporation may to a certain extent deviate from the
indemnification procedures under the FBCA through a bylaw, agreement or vote of
shareholders or disinterested directors. Indemnification, however, may not be
made to or on behalf of any director, officer, employee or agent whose actions
or omissions were found to be material to the cause of action adjudicated and
whose actions or omissions constituted: (1) a violation of criminal law, unless
the person believed the conduct was lawful or had no reasonable cause to
believe it was unlawful; (2) a transaction in which the person derived an
improper benefit; (3) willful misconduct or conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder; or (4) in the case of a director, an assent to an
unlawful declaration of dividends.
AmSouth. Section 145 of the Delaware GCL contains detailed and comprehensive
provisions providing for indemnification of directors and officers of Delaware
corporations against expenses, judgments, fines and settlements in connection
with litigation. Under the Delaware GCL, other than an action brought by or in
the right of AmSouth, such indemnification is available if it is determined
that the proposed indemnitee acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of AmSouth
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his or
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her conduct was unlawful. In actions brought by or in the right of AmSouth,
such indemnification is limited to expenses (including attorneys' fees)
actually and reasonably incurred if the indemnitee acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of AmSouth and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been adjudged
to be liable to AmSouth unless and only to the extent that the Court of
Chancery or the court in which the action was brought determines upon
application that in view of all the circumstances of the case, he or she is
fairly and reasonably entitled to indemnity for such expenses as the court
deems proper. To the extent that the proposed indemnitee has been successful on
the merits or otherwise in defense of any action, suit or proceeding (or any
claim, issue or matter therein), he or she must be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection therewith. AmSouth's Certificate provides for indemnification of the
directors and officers of AmSouth against liability to the extent provided by
Delaware law.
SPECIAL MEETINGS OF SHAREHOLDERS; ACTION WITHOUT A MEETING
Tampa. The Tampa Bylaws authorize the President of Tampa, the Tampa Board or
holders of at least 40% of the shares entitled to vote to call a special
meeting of shareholders at any time. Pursuant to the FBCA, any action required
to be taken at any special or annual meeting may be taken without such meeting
and without action by the Tampa Board if all of the shareholders entitled to
vote on the action consent to taking such action without a meeting. The
affirmative vote of the number of shares that would be necessary to authorize
or take such action at a meeting constitutes an act of the shareholders.
AmSouth. Under the AmSouth Certificate and Bylaws, a special meeting of
AmSouth's shareholders may only be called by the AmSouth Board, the Chief
Executive Officer of AmSouth or the holders of a majority of the outstanding
AmSouth Common Stock entitled to be voted for directors. Under the AmSouth
Certificate and Bylaws, no action required to be taken or which may be taken at
any annual or special meeting of AmSouth shareholders may be taken without such
a meeting.
RIGHTS OF DISSENTING SHAREHOLDERS
Tampa. Under Florida law, a shareholder is entitled to dissent and obtain
payment of the fair value of his shares in the event of, among other things,
(i) consummation of a plan of merger to which the corporation is a party, if
either (a) shareholder approval is required and the shareholder is entitled to
vote on the merger or (b) the corporation is a subsidiary that is owned 80% by
and is merged into its parent; (ii) 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; (iii)
consummation of a sale or exchange of substantially all of the property of the
corporation other than in the usual and regular course of the business if
shareholder approval is required; (iv) an amendment to the charter that
materially and adversely affects the rights in respect of the dissenter's
shares in specified ways; or (v) any corporate action pursuant to a shareholder
vote to the extent that the charter, bylaws or board resolutions provide that
dissenters' rights shall apply. No holder of any shares of any class or series
is entitled to dissent, however, if such shares are either listed on a national
securities exchange or are held of record by more than 2,000 shareholders.
Tampa shares are not held of record by more than 2,000 shareholders and are not
registered on a national securities exchange, and, therefore, holders of Tampa
Common Stock will have certain dissenters' rights as a result of the Merger.
See "DISSENTERS' RIGHTS."
AmSouth. Under the Delaware GCL, a shareholder has the right, in certain
circumstances, to dissent from certain corporate transactions and receive the
fair market value (excluding any appreciation or depreciation as a consequence
or in expectation of the transaction) of his shares in cash in lieu of the
consideration he otherwise would have received in the transaction. Such fair
value is determined by the Delaware Court of Chancery if a petition for
appraisal is timely filed. Appraisal rights are not available, however, to
shareholders of a corporation (i) unless otherwise provided in such
corporation's certificate of
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incorporation (which the AmSouth Certificate does not so provide), if the
shares are listed on a national securities exchange (as is AmSouth Common
Stock) or quoted on the NASDAQ National Market System, or held of record by
more than 2,000 shareholders (as is AmSouth Common Stock), and shareholders are
permitted by the terms of the merger or consolidation to accept in exchange for
their shares (a) shares of stock of the surviving or resulting corporation, (b)
shares of stock of another corporation listed on a national securities exchange
or held of record by more than 2,000 shareholders, (c) cash in lieu of
fractional shares of such stock or (d) any combination thereof or (ii) in a
merger if such corporation is the surviving corporation and no vote of its
shareholders is required.
DIVIDENDS
Tampa. The FBCA provides that, subject to restrictions in a corporation's
charter, the corporation may declare and pay a dividend to its shareholders
unless the corporation would not be able to pay its debts as they become due in
the usual course of business or the corporation's total assets would be less
than the sum of its total liabilities plus the amount that would be needed, in
the case of dissolution, to satisfy the preferential rights of shareholders
whose preferential rights are superior to those receiving the dividend.
Substantially all of the funds available for the payment of dividends by Tampa
are derived from the Bank. There are various statutory limitations on the
ability of the Bank to pay dividends to Tampa.
AmSouth. The Delaware GCL provides that, subject to any restrictions in the
corporation's certificate of incorporation, dividends may be declared from the
corporation's surplus or, if there is no surplus, from its net profits for the
fiscal year in which the dividend is declared and the preceding fiscal year.
Dividends may not be declared, however, if the corporation's capital has been
diminished to an amount less than the aggregate amount of all capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Substantially all of the funds
available for the payment of dividends by AmSouth are derived from its
Subsidiary Banks. There are various statutory limitations on the ability of
AmSouth's Subsidiary Banks to pay dividends to AmSouth. See "CERTAIN REGULATORY
MATTERS."
DISSENTERS' RIGHTS
Under Section 607.1320 of the FBCA, Tampa shareholders have certain
dissenters' or appraisal rights. Specifically, a shareholder may dissent from
the Merger and elect to have the "fair value" of his shares (exclusive of any
appreciation or depreciation in value arising from the expectation of the
Merger) judicially determined and paid in cash, provided the shareholder
complies with the provisions of the FBCA. The following is only a summary of
the statutory procedures to be followed by a Tampa shareholder in order to
dissent from the Merger and perfect dissenters' rights under the FBCA.
Shareholders are encouraged to read Section 607.1320 and certain other
provisions of the FBCA attached as Appendix C, and consult their individual
advisors.
Any Tampa shareholder who elects to exercise his right to dissent from the
Merger and demand appraisal of the "fair value" of his shares must satisfy each
of the following conditions: Before the shareholder vote on the proposed
Merger, a shareholder who wishes to assert his right to dissent must deliver to
Tampa written notice of intent to demand payment of his shares ("Notice of
Intent"). The Notice of Intent must be in addition to and separate from any
proxy or vote against the Merger. The dissenting shareholder must either vote
against the Merger or abstain from voting. A vote in favor of the Merger,
either by proxy or in person, will nullify any previously filed Notice of
Intent. Within ten days of the shareholder vote, every shareholder who filed a
Notice of Intent and who did not vote in favor of the Merger will receive
written notice of the approval of the Merger. Within 20 days after receiving
this notice, a dissenting shareholder must file with Tampa a notice of election
to dissent ("Notice of Dissent"). This Notice of Dissent must state the
shareholder's name and address, the number, classes and series of shares as to
which he dissents and a demand for payment for the fair value of his shares.
The dissenting shareholder who files a Notice of Dissent must simultaneously
surrender to Tampa the certificates for any certificated shares as to which he
dissents. The transfer of any uncertificated shares may be restricted as of the
date the shareholder files his Notice of Dissent.
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If a dissenting shareholder fails to comply with any of these conditions and
the Merger becomes effective, he may be required to accept shares of AmSouth
Common Stock in accordance with the formula provided in the Merger Agreement.
Any Notice of Intent or Notice of Dissent should be addressed to The Tampa
Banking Company, P.O. Box One, Tampa, Florida 33601, Attention: Barbara A.
Diamond, Secretary, and should be executed by, or on behalf of, the holder of
record. The Notice of Intent and the Notice of Dissent must reasonably inform
Tampa of the identity of the shareholder and that such shareholder is thereby
objecting to the Merger and electing to receive the fair cash value of his
shares. Once a shareholder who has dissenters' rights files a Notice of Dissent
and otherwise complies with the procedures outlined above, he is entitled to
payment of the fair cash value of his shares, and is no longer entitled to vote
or exercise other rights as a Tampa shareholder.
The right of a dissenting shareholder to be paid fair value terminates, and
his status as a shareholder is restored without prejudice to any corporate
proceedings that may have taken place in the interim, if (a) the demand for
payment is withdrawn (which may occur at any time before an offer is made by
Tampa to pay for the dissenting shareholder's shares); (b) the Merger is
abandoned or the shareholders by a later vote revoke their approval of the
Merger; (c) no demand or petition for the determination of fair value by a
court has been made or filed within the time period contemplated by the FBCA;
or (d) a court of competent jurisdiction determines that the shareholder is not
entitled to dissenter's rights.
Tampa must make a written offer to pay fair value to all dissenting
shareholders who have made a proper demand for payment. This written offer must
be made within ten days after expiration of the 20-day period in which Tampa
shareholders may file their Notices of Dissent, or within ten days after the
Effective Date of the Merger, whichever is later (but in no case later than 90
days from the shareholders' vote approving the Merger). The written offer shall
reflect Tampa's estimate of the fair value for such shares. Tampa's offer must
be accompanied by a balance sheet and a profit and loss statement. If within 30
days after Tampa's offer, the offer is accepted by the dissenting shareholder
or the fair value of the dissenting shareholder's shares is otherwise agreed
upon between the dissenting shareholder and Tampa, payment for the shares must
be made within 90 days after the consummation of the Merger.
Under Florida law, AmSouth assumes the duty to make prompt payment of fair
value to dissenting shareholders after the Merger becomes effective. After the
shareholder receives payment by AmSouth of the agreed value, he will cease to
have any interest in the Tampa shares. If the fair value of the dissenting
shareholder's shares is not agreed upon by the dissenting shareholder, then a
judicial determination of the fair value may be required. As the surviving
corporation, AmSouth may file an action requesting judicial determination of
the fair value of Tampa shares held by dissenting shareholders. Filing must
occur within 30 days after receipt of written demand from any dissenting
shareholder given within 60 days after the Effective Date of the Merger. In the
absence of a written demand by a shareholder, AmSouth may, at its election,
file an action anytime within such period of 60 days. If AmSouth fails to
institute such an action, dissenting Tampa shareholders may do so in Tampa's
name. All dissenting Tampa shareholders, wherever residing, shall be made
parties to the proceeding as an action against their shares. A copy of the
initial pleading must be served on each dissenting shareholder.
Within ten days of judicial determination of the fair value after the
Effective Date, AmSouth would be required to pay each dissenting shareholder
the fair value as determined by the court. The judgment may include a fair rate
of interest at the discretion of, and determined by, the court. Upon payment of
the judgment, the dissenting shareholder will cease to have any interest in the
shares.
The expenses of any such proceeding will be determined by the court and be
assessed against the surviving corporate entity, AmSouth, but all or any part
of such expenses may be apportioned and assessed as the court may deem
equitable against any or all dissenting shareholders who are parties to the
proceeding to whom Tampa shall have made an offer to pay for the shares, if the
court finds that the action of such
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shareholders in failing to accept such offer was arbitrary, vexatious or not in
good faith. Such expenses shall include reasonable compensation for and
reasonable expenses of, appraisers appointed by the court, but shall exclude
the fees and expenses of counsel for, and experts employed by, any party. If
the fair value of the shares, as determined, materially exceeds the amount
Tampa offered to pay therefor or if no offer was made, the court may award to
any shareholder who is a party to the proceeding such sum as the court may
determine to be reasonable compensation to any attorney or expert employed by
the shareholder in the proceeding.
VALIDITY OF AMSOUTH COMMON STOCK
The validity of the Merger Shares (and the related AmSouth Rights) will be
passed upon by Carl L. Gorday, Counsel of AmSouth. Mr. Gorday owns less than
1/100 of one percent of the outstanding shares of AmSouth Common Stock.
EXPERTS
The consolidated balance sheets of Tampa included in this Proxy Statement-
Prospectus, at December 31, 1993 and 1992, and the related consolidated
statements of income, changes in shareholders' equity, and cash flows for each
of the years in the three year period ended December 31, 1993, have been so
included in reliance on the report of Dwight, Darby & Company, independent
certified public accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of AmSouth Bancorporation appearing in
AmSouth's Annual Report (Form 10-K) for the fiscal year ended December 31,
1993, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
With respect to the unaudited consolidated interim financial information for
the three month periods ended March 31, 1994 and March 31, 1993, the six month
periods ended June 30, 1994 and June 30, 1993 and the nine month periods ended
September 30, 1994 and September 30, 1993, incorporated by reference in this
Proxy Statement-Prospectus, Ernst & Young LLP have reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports, included in
AmSouth's Quarterly Reports on Forms 10-Q for the quarters ended March 31,
1994, June 30, 1994, and September 30, 1994, and incorporated herein by
reference, state that they did not audit and they do not express an opinion on
that interim financial information. Accordingly, the degree of reliance on
their reports on such information should be restricted in light of the limited
nature of the review procedures applied. The independent auditors are not
subject to the liability provisions of Section 11 of the Securities Act of 1933
(the "Act") for their reports on the unaudited interim financial information
because the reports are not a "report" or a "part" of the Registration
Statement prepared or certified by the auditors within the meaning of Sections
7 and 11 of the Act.
SHAREHOLDER PROPOSALS
If the Merger is not consummated, pursuant to Rule 14a-8 under the Exchange
Act, Tampa shareholders wishing to present proper proposals for consideration
at the next annual meeting of its shareholders must have submitted their
proposals to Tampa by no later than November 28, 1994, and must have otherwise
complied with the requirements of Rule 14a-8.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
THE TAMPA BANKING COMPANY AND SUBSIDIARY
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
Financial Statements
Report of Independent Accountants..................................... F-2
Consolidated Balance Sheets--December 31, 1993 and 1992............... F-3
Consolidated Statements of Income--For the Years Ended December 31,
1993, 1992 and 1991.................................................. F-4
Consolidated Statements of Changes in Stockholders' Equity--For the
Years Ended December 31, 1993, 1992 and 1991......................... F-5
Consolidated Statements of Cash Flows--For the Years Ended
December 31, 1993, 1992 and 1991..................................... F-6
Notes to Consolidated Financial Statements--For the Years Ended Decem-
ber 31, 1993, 1992 and 1991.......................................... F-7
Management's Statement Regarding Interim Consolidated Financial State-
ments................................................................ F-18
Consolidated Balance Sheet--September 30, 1994........................ F-19
Consolidated Statements of Income--For the Nine Months Ended September
30, 1994
and 1993............................................................. F-20
Consolidated Statements of Cash Flows--For the Nine Months Ended
September 30, 1994 and 1993.......................................... F-21
Notes to Consolidated Financial Statements--For the Nine Months Ended
September 30, 1994 and 1993.......................................... F-22
</TABLE>
F-1
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INDEPENDENT AUDITORS' REPORT
January 27, 1994, except for
Note 14, as to which the
date is February 14, 1994
and Notes 15, 16, and 17
as to which the date is
June 6, 1994
Board of Directors
The Tampa Banking Company
and Subsidiary
Tampa, Florida
We have audited the accompanying consolidated balance sheets of The Tampa
Banking Company and its subsidiary, The Bank of Tampa, as of December 31, 1993
and 1992, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 1993. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of The Tampa
Banking Company and its subsidiary as of December 31, 1993 and 1992, the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1993 in conformity with generally accepted
accounting principles.
Dwight, Darby & Company
Certified Public Accountants
F-2
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1993 1992
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks............................ $ 14,354,849 $ 14,067,076
Investment securities--approximate market value of
$56,761,526 and $52,662,521, respectively (Note
2)................................................ 56,065,272 51,825,495
Federal funds sold................................. 11,118,278 6,225,000
Loans (Note 3)..................................... 122,076,712 123,828,291
Less--Unearned discount.......................... (3,058) (19,132)
Allowance for loan losses..................... (2,271,874) (2,201,503)
------------ ------------
Net loans.................................... 119,801,780 121,607,656
------------ ------------
Bank premises and equipment, net (Note 4).......... 4,265,352 4,091,384
Accrued interest receivable........................ 1,200,889 1,453,478
Other assets....................................... 4,356,619 4,031,706
------------ ------------
9,822,860 9,576,568
------------ ------------
$211,163,039 $203,301,795
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Demand deposits.................................. $ 53,332,734 $ 54,095,548
NOW accounts..................................... 34,239,288 29,680,726
Money market accounts............................ 58,521,257 56,225,664
Savings deposits................................. 15,635,786 15,156,621
Time deposits ($100,000 and over)................ 11,261,671 13,935,472
Time deposits (under $100,000)................... 23,053,750 20,619,350
------------ ------------
Total deposits................................. 196,044,486 189,713,381
Note payable (Note 5)............................ 1,980,000 2,000,000
Accrued expenses and other liabilities........... 413,136 997,446
------------ ------------
Total liabilities.............................. 198,437,622 192,710,827
------------ ------------
STOCKHOLDERS' EQUITY
Common stock $.10 par value, 1,000,000 shares au-
thorized; issued and outstanding 626,015 and
601,885 shares.................................. 62,602 60,189
Capital surplus.................................. 7,307,641 6,751,746
Retained earnings................................ 5,355,174 3,779,033
------------ ------------
Total stockholders' equity..................... 12,725,417 10,590,968
------------ ------------
COMMITMENTS AND CONTINGENT LIABILITIES (Note 11)
$211,163,039 $203,301,795
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
F-3
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans............... $10,130,184 $10,011,040 $10,973,069
Other interest--
U.S. Treasury securities............... 1,939,703 2,004,639 2,019,781
U.S. Government agency securities...... 816,131 1,103,711 1,090,708
Federal funds sold and securities
purchased under reverse repurchase
agreement............................. 217,981 168,835 214,767
Interest on other securities........... 119,431 -- 100,297
Municipal securities................... -- 10,324 210,407
----------- ----------- -----------
13,223,430 13,298,549 14,609,029
----------- ----------- -----------
INTEREST EXPENSE
Deposits................................. 3,539,733 4,355,820 7,041,994
Other.................................... 138,239 162,159 204,187
Federal funds purchased and securities
sold under repurchase agreements........ -- 438 6,878
----------- ----------- -----------
3,677,972 4,518,417 7,253,059
----------- ----------- -----------
NET INTEREST INCOME........................ 9,545,458 8,780,132 7,355,970
PROVISION FOR LOAN LOSSES (Note 3)......... 1,044,000 1,180,000 2,250,000
----------- ----------- -----------
NET INTEREST INCOME AFTER LOAN LOSS PROVI-
SION...................................... 8,501,458 7,600,132 5,105,970
----------- ----------- -----------
OTHER INCOME
Service charges on deposit accounts...... 922,920 792,135 711,269
Other operating income................... 730,888 472,243 464,277
Security gains........................... 263,635 19,940 1,221,672
----------- ----------- -----------
1,917,443 1,284,318 2,397,218
----------- ----------- -----------
OTHER EXPENSES
Salaries and wages....................... 2,807,282 2,439,632 2,346,935
Employee benefits........................ 775,027 799,263 642,659
Occupancy expense........................ 799,363 777,456 755,923
Furniture and equipment expense.......... 582,419 589,378 681,908
Other expenses........................... 3,020,811 2,418,381 2,307,191
----------- ----------- -----------
7,984,902 7,024,110 6,734,616
----------- ----------- -----------
INCOME BEFORE PROVISION FOR INCOME TAXES... 2,433,999 1,860,340 768,572
PROVISION FOR INCOME TAXES (Note 7)........ 857,858 663,932 191,530
----------- ----------- -----------
NET INCOME................................. $ 1,576,141 $ 1,196,408 $ 577,042
=========== =========== ===========
EARNINGS PER SHARE (Note 8)................ $ 2.56 $ 2.00 $ .97
=========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
F-4
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
GUARANTEE
OF EMPLOYEE
COMMON SHARES STOCK
---------------- CAPITAL RETAINED OWNERSHIP
SHARES AMOUNT SURPLUS EARNINGS DEBT
------- ------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Balance, December 31,
1990..................... 592,018 $59,202 $6,532,880 $2,005,583 $(205,272)
Guarantee of employee
stock ownership trust.... -- -- -- -- (20,600)
Issuance of common stock.. 2,000 200 35,800 -- --
Net income................ -- -- -- 577,042 --
------- ------- ---------- ---------- ---------
Balance, December 31,
1991..................... 594,018 59,402 6,568,680 2,582,625 (225,872)
Issuance of common stock.. 13,892 1,389 300,760 -- --
Purchase and retirement of
common stock............. (6,025) (602) (117,694) -- --
Net income................ -- -- -- 1,196,408 --
Termination of employee
stock ownership debt
guarantee................ -- -- -- -- 225,872
------- ------- ---------- ---------- ---------
Balance, December 31,
1992..................... 601,885 60,189 6,751,746 3,779,033 --
Issuance of Common Stock.. 28,622 2,862 649,768 -- --
Purchase and retirement of
common stock............. (4,492) (449) (93,873) -- --
Net income................ -- -- -- 1,576,141 --
------- ------- ---------- ---------- ---------
Balance, December 31,
1993..................... 626,015 $62,602 $7,307,641 $5,355,174 $ --
======= ======= ========== ========== =========
</TABLE>
See Notes to Consolidated Financial Statements
F-5
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1993 1992 1991
------------ ------------ -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income........................... $ 1,576,141 $ 1,196,408 $ 577,042
Adjustments to reconcile net income
to net cash provided by operations--
Depreciation and amortization...... 569,796 570,357 620,256
Discount accretion................. (17,255) (44,703) (207,799)
Premium amortization............... 508,472 484,650 144,791
Writedown of investments........... -0- -0- 50,000
Provision for loan losses and
losses on acquired property....... 1,188,000 1,284,660 2,446,000
Deferred income taxes.............. (113,132) 146,179 (241,291)
Net investment securities (gains)
or losses......................... (263,635) (19,940) (1,221,672)
Losses from sale of equipment...... 4,498 1,192 1,947
Losses from sale of acquired prop-
erty.............................. 213,295 63,246 13,577
(Increase) decrease in interest re-
ceivable.......................... 252,589 153,676 (3,716)
Increase (decrease) in interest
payable........................... (13,610) (218,472) (274,594)
Other, net......................... (1,051,357) (160,657) 456,863
------------ ------------ -----------
Net cash provided by operating
activities...................... 2,853,802 3,456,596 2,361,404
------------ ------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net decrease in interest-bearing de-
posits.............................. -0- -0- 1,505,105
Net (increase) decrease in Federal
funds sold.......................... (4,893,278) (4,040,000) 5,010,000
Purchases of investment securities... (28,114,649) (11,168,512) (90,024,486)
Sales/maturities of investment secu-
rities.............................. 23,647,290 16,244,843 77,623,605
Net (increase) decrease in loans and
credit card receivables............. (127,910) (19,026,836) (5,636,291)
Purchases of premises and equipment,
and software........................ (687,273) (333,094) (192,642)
Proceeds from sales of premises and
equipment........................... -- 56,751 3,482
Proceeds from sale of acquired prop-
erty................................ 740,378 1,117,789 264,923
------------ ------------ -----------
Net cash used by investing activ-
ities........................... (9,435,442) (17,149,059) (11,446,304)
------------ ------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand and savings
accounts............................ 6,570,506 25,890,833 33,937,487
Net increase (decrease) in certifi-
cates of deposit.................... (239,401) (11,714,369) (21,937,119)
Payments on notes payable............ (20,000) (238,055) (8,487)
Purchase and retirement of common
stock............................... (94,322) (118,296) --
Proceeds from sale of common stock... 652,630 302,149 36,000
------------ ------------ -----------
Net cash provided by financing ac-
tivities.......................... 6,869,413 14,122,262 12,027,881
------------ ------------ -----------
NET INCREASE IN CASH AND DUE FROM
BANKS............................... 287,773 429,799 2,942,981
CASH AND DUE FROM BANKS--BEGINNING... 14,067,076 13,637,277 10,694,296
------------ ------------ -----------
CASH AND DUE FROM BANKS--ENDING...... $ 14,354,849 $ 14,067,076 $13,637,277
------------ ------------ -----------
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING AND FINANCING ACTIVITIES:
Other real estate acquired in settle-
ment of loans....................... $ 749,044 $ 1,641,816 $ 723,765
------------ ------------ -----------
Guarantee of Employee Stock Ownership
Trust Debt.......................... $ -- $ (225,872) $ 20,600
------------ ------------ -----------
SUPPLEMENTAL DISCLOSURE:
Cash paid for
Interest........................... $ 3,691,582 $ 4,736,889 $ 7,527,653
------------ ------------ -----------
Income taxes....................... $ 1,031,750 $ 437,037 $ 294,915
============ ============ ===========
</TABLE>
See Notes to Consolidated Financial Statements
F-6
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
NOTE 1--DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Tampa Banking Company (Company) was incorporated under the laws of the
State of Florida on January 21, 1987, for the purpose of becoming a registered
bank holding company under The Bank Holding Company Act of 1956, as amended,
through the acquisition of the common stock of The Bank of Tampa (Bank). The
Bank is a banking corporation organized under the laws of the State of Florida
on March 21, 1973. The accounting and reporting policies of the Bank in general
conform to predominant practices in the banking industry and are based on
generally accepted accounting principles. The following is a description of the
significant policies:
Principles of Consolidation--The consolidated financial statements include
the accounts of the Company and the Bank after elimination of material
intercompany transactions.
Investment Securities--Investment debt securities are those securities which
the Bank has the ability and intent to hold to maturity. These securities are
stated at cost adjusted for amortization of premium and accretion of discount,
computed by the interest method. Generally, such securities are sold only to
meet liquidity needs. Gains and losses on the sale of investment securities are
computed on the basis of specific identification of the adjusted cost of each
security.
Allowance for Loan Losses--The allowance is maintained at a level adequate to
absorb probable losses. Management determines the adequacy of the allowance
based upon reviews of individual credits, recent loss experience, current
economic conditions, the risk characteristics of the various categories of
loans and other pertinent factors. Credits deemed uncollectible are charged to
the allowance. Provisions for credit losses and recoveries on loans previously
charged off are added to the allowance.
Interest Income on Loans--Interest on loans is accrued and credited to income
based on the principal amount outstanding. The accrual of interest on loans is
discontinued when, in the opinion of management, there is an indication that
the borrower may be unable to meet payments as they become due. Upon such
discontinuance, all unpaid accrued interest is reversed.
Loan Origination Fees and Costs--Loan origination fees and certain direct
origination costs are capitalized and recognized as an adjustment of the yield
on the related loan.
Bank Premises and Equipment--Bank premises and equipment are stated at cost
less accumulated depreciation. Depreciation expense has been computed using the
straight-line method over the estimated useful lives of the assets. For income
tax purposes, the Bank utilizes the straight-line method and the accelerated
cost-recovery system.
Income Taxes--The provision for income taxes charged against earnings relates
to all items of revenue and expense recognized for financial accounting
purposes during each of the years. The actual current tax liability may be less
than the charge against earnings due to the effect of timing differences
between financial and tax accounting, resulting in deferred income taxes.
Off-Balance-Sheet Financial Instruments--In the ordinary course of business,
the Bank has entered into off-balance-sheet financial instruments consisting of
commitments to extend credit, commercial letters of credit and standby letters
of credit. Such financial instruments are recorded in the financial statements
when they become payable.
F-7
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
Cash and Cash Equivalents--For the purpose of presentation in the Statements
of Cash Flows, cash and cash equivalents are defined as those amounts included
in the balance sheet caption "Cash and Due from Banks."
NOTE 2--INVESTMENT SECURITIES
The amortized cost and estimated market values of investment securities are
as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1993
--------------------------------------
GROSS ESTIMATED
AMORTIZED UNREALIZED MARKET
COST GAINS (LOSSES) VALUE
----------- -------------- -----------
<S> <C> <C> <C>
U.S. Treasury securities.............. $35,020,024 $573,413 $35,593,437
U.S. Government agency securities..... 9,376,267 218,811 9,595,078
Collateralized mortgage obligations... 11,383,981 (95,970) 11,288,011
Other securities...................... 285,000 -- 285,000
----------- -------- -----------
$56,065,272 $696,254 $56,761,526
=========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1992
---------------------------------------
GROSS ESTIMATED
AMORTIZED UNREALIZED MARKET
COST GAINS (LOSSES) VALUE
----------- -------------- ------------
<S> <C> <C> <C>
U.S. Treasury securities............. $37,007,627 $ 515,029 $ 37,522,656
U.S. Government agency securities.... 14,582,868 321,997 14,904,865
Other securities..................... 235,000 -- 235,000
----------- --------- ------------
$51,825,495 $ 837,026 $ 52,662,521
=========== ========= ============
</TABLE>
The amortized cost and estimated market values, of investment securities at
December 31, 1993 by contractual maturity, are as shown below. Expected
maturities will differ from contractual maturities because borrowers may have
the right to call or prepay obligations with or without call or prepayment
penalties.
<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED MARKET
COST VALUE
----------- -----------
<S> <C> <C>
Due in one year or less.......................... $10,377,539 $10,496,641
Due after one year through five years............ 34,068,752 34,741,875
Due after ten years.............................. 11,383,981 11,288,010
Other securities................................. 235,000 235,000
----------- -----------
$56,065,272 $56,761,526
=========== ===========
</TABLE>
Proceeds from sales and maturities of investments during 1993 and 1992 were
$22,441,719 and $77,623,605, respectively. Gross gains of $275,094 and gross
losses of $11,459 were realized on sales in 1993. Gross gains of $45,863 and
gross losses of $25,923 were realized on sales in 1992.
Securities, with a carrying value of $9,372,920 and $7,370,631 and a market
value of $9,506,063 and $7,532,484 at December 31, 1993 and 1992, respectively,
were pledged to collateralize public funds and for other statutory
requirements.
F-8
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
NOTE 3--LOANS
The composition of loans outstanding by lending classification at December
31, 1993 and 1992 was as follows:
<TABLE>
<CAPTION>
1993 1992
------------ ------------
<S> <C> <C>
Commercial..................................... $ 52,292,279 $ 51,753,267
Commercial real estate:
Commercial real estate mortgage.............. 35,149,841 36,560,773
Real estate construction..................... 4,381,414 3,279,567
------------ ------------
Total commercial real estate............... 39,531,255 39,840,340
Consumer:
Residential first mortgages.................. 7,159,033 7,739,729
Other residential mortgages.................. 7,116,130 7,856,374
Other consumer............................... 15,978,015 16,638,581
------------ ------------
Total consumer............................. 30,253,178 32,234,684
------------ ------------
$122,076,712 $123,828,291
============ ============
</TABLE>
Loans on which accrual of interest has been discontinued amounted to $595,418
and $355,722 at December 31, 1993 and 1992, respectively. If interest on these
loans had been accrued, such income would have approximated $24,283 and $14,445
for 1993 and 1992, respectively. Interest income on these loans, which is
recorded only when received, amounted to $27,194 and $23,180 for 1993 and 1992,
respectively. There were no past due loans which were 5% or more of the Bank's
capital accounts at December 31, 1993 and 1992.
Other real estate acquired by the Bank with carrying values of $2,536,104 and
$2,745,629 is included in other assets at December 31, 1993 and 1992,
respectively.
Changes in the allowances for loan losses were as follows:
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- -----------
<S> <C> <C> <C>
Beginning balance................... $2,201,503 $2,379,953 $ 1,755,074
Provision charged to operations..... 1,044,000 1,180,000 2,250,000
Loans charged off, net of recov-
eries.............................. (973,629) (1,358,450) (1,625,121)
---------- ---------- -----------
Ending balance...................... $2,271,874 $2,201,503 $ 2,379,953
========== ========== ===========
</TABLE>
NOTE 4--BANK PREMISES AND EQUIPMENT
At December 31, 1993 and 1992, bank premises and equipment consisted of the
following:
<TABLE>
<CAPTION>
1993 1992
---------- ----------
<S> <C> <C>
Land............................................... $ 952,569 $ 952,569
Land improvements.................................. 158,954 158,954
Buildings.......................................... 2,470,821 2,487,801
Equipment.......................................... 4,240,528 3,695,080
Leasehold improvements............................. 620,218 479,910
Construction in progress........................... 320 --
---------- ----------
8,443,410 7,774,314
Less accumulated depreciation...................... 4,178,058 3,682,930
---------- ----------
$4,265,352 $4,091,384
========== ==========
</TABLE>
F-9
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
NOTE 5--NOTE PAYABLE
At December 31, 1993 and 1992, note payable consisted of the following:
<TABLE>
<S> <C> <C>
Note payable to First Mercantile National Bank in
the amount of $2,200,000 with interest payable
quarterly at prime plus 1%. A principal
installment in the amount of $220,000 is due on
March 3, 1993. However, $200,000 of this
installment was paid on December 31, 1992. The
entire remaining principal balance is payable on
March 3, 1994. The note is secured by The Bank
of Tampa Stock.................................. $1,980,000 $2,000,000
========== ==========
</TABLE>
NOTE 6--EMPLOYEE STOCK OWNERSHIP PLAN
Effective January 1, 1982, the Bank adopted an employee stock ownership plan
covering substantially all full-time employees. The annual contribution to the
plan is determined by the Board of Directors. The contribution expense for
1993, 1992 and 1991 was $175,000, $165,000 and $150,000, respectively. During
1983, the Bank obtained a favorable ruling from the Internal Revenue Service on
the plan's tax exempt status. At December 31, 1993, 51,513 shares of the
Company's stock are held by the Employee Stock Ownership Trust, which was
established to fund the plan.
NOTE 7--INCOME TAXES
The provision for income taxes, including taxes applicable to security gains,
consists of the following:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Currently payable:
Federal....................................... $ 918,353 $ 488,411 $ 407,991
State......................................... 52,637 28,253 27,837
--------- --------- ---------
970,990 516,664 435,828
Deferred income tax expense................... (113,132) 147,268 (244,298)
--------- --------- ---------
$ 857,858 $ 663,932 $ 191,530
========= ========= =========
</TABLE>
In January 1993, the Company adopted Statement of Financial Accounting
Standards No. 109 (FAS 109), Accounting for Income Taxes. FAS 109 is an asset
and liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events that have been
recognized in the Bank's financial statements or tax returns. In estimating
future tax consequences, FAS 109 generally considers all expected future events
other than enactments of changes in the tax law or rates. Previously the
Company used the FAS 96 asset and liability approach that gave no recognition
to future events other than the recovery of assets and settlement of
liabilities at their carrying amounts.
Deferred income tax expense arises from timing differences in the recognition
of revenue and expense for tax and financial reporting purposes. Deferred
income tax credits totaling $419,920 and $306,788 are included in other assets
at December 31, 1993 and 1992, respectively. The sources of these differences
and the related tax effects are as follows:
F-10
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
--------- -------- ---------
<S> <C> <C> <C>
Loan loss provision....................... $ (47,926) $150,820 $(120,663)
Acquired property loss provision.......... (50,790) 74,956 (73,755)
Depreciation.............................. 13,270 (6,731) (4,447)
Accretion of discount on investments...... 6,086 16,822 50,081
Deferred service fee income............... 549 (31,494) (18,505)
Gain on sale of securities................ (32,051) (43,478) (69,354)
Other..................................... (2,270) (13,627) (7,655)
--------- -------- ---------
Total deferred tax expense (credit)..... $(113,132) $147,268 $(244,298)
========= ======== =========
</TABLE>
The following reconciles the statutory Federal income tax rate to the
effective rate reflected in the statements of income:
<TABLE>
<CAPTION>
1993 1992 1991
----------------- ----------------- -----------------
PERCENT PERCENT PERCENT
OF OF OF
PRETAX PRETAX PRETAX
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
-------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Computed "expected" tax
expense................. $827,560 34.0% $632,516 34.0% $261,314 34.0%
State income tax, net of
Federal tax benefit..... 30,924 1.3 23,912 1.3 9,681 1.2
Other.................... (626) -- 11,015 .6 (21,057) (2.7)
Municipal securities in-
come.................... -- -- (3,511) (.2) (58,408) (7.6)
-------- ---- -------- ---- -------- ----
Reported tax expense..... $857,858 35.3% $ 63,932 35.7% $191,530 24.9%
======== ==== ======== ==== ======== ====
</TABLE>
NOTE 8--EARNINGS PER SHARE
Earnings per common share have been computed based on the weighted average
number of shares outstanding during 1993, 1992 and 1991.
NOTE 9--RELATED PARTY TRANSACTIONS
In the ordinary course of business, the Bank makes loans to its officers and
directors and expects to continue making such loans in the future. These loans
are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unrelated persons, and do not involve more than normal risk of collectibility.
Loans and standby letters of credit made to directors and officers of the Bank,
either directly or indirectly, amounted to $3,922,440 and $4,837,794 at
December 31, 1993 and 1992, respectively. Activity during 1993 in loans to
related parties resulted in additions of $3,583,489 representing new loans,
reductions of $4,435,056 representing payments, and net reductions of $63,787
representing other changes.
The Bank paid $103,112 in 1993, $138,674 in 1992, and $128,680 in 1991 in
insurance premiums to a company whose president is a director of the Bank.
NOTE 10--DIVIDENDS
The Company cannot pay dividends in any one year that exceed the sum of net
income for that year plus net income after dividends for the two preceding
years without approval of the Florida Department of Banking and Finance.
F-11
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
NOTE 11--COMMITMENTS AND CONTINGENT LIABILITIES
At December 31, 1993, the Bank is obligated under noncancelable leases, for
its branch offices and a drive-thru facility.
Branch office leases require the payment of insurance and certain other
expenses. In addition, the downtown branch lease requires additional rental
amounts based on the excess of the consumer price index for an anniversary
month over the consumer price index at commencement of the lease.
All leases contain various renewal options that are adjusted for increases in
the consumer price index or agreed upon rates.
Total rent expense amounted to $389,087, $379,344 and $354,550 for the years
ended December 31, 1993, 1992 and 1991, respectively.
The total minimum rental commitment at December 31, 1993, under the above
mentioned leases, is due as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
<S> <C>
1994........................................ $ 346,593
1995........................................ 221,412
1996........................................ 314,596
1997........................................ 365,824
1998........................................ 373,351
Thereafter.................................. 1,244,823
----------
$2,866,599
==========
</TABLE>
The Bank is a party to financial instruments with off-balance-sheet risk, in
the normal course of business, to meet the financing needs of its customers and
to reduce its own exposure to fluctuations in interest rates. These financial
instruments include commitments to extend credit and standby letters of credit.
The financial instruments involve, to varying degrees, elements of credit risk
in excess of the amount recognized in the statements of financial position. The
contract or notional amounts of these instruments reflect the extent of
involvement the Bank has in particular classes of financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual notional amount of
this instrument. The Bank uses the same credit policies in making commitments
and conditional obligations as it does for on-balance-sheet instruments.
<TABLE>
<CAPTION>
DECEMBER 31, 1993
CONTRACT OR
NOTIONAL AMOUNT
-----------------
<S> <C>
Financial instruments whose contract amounts repre-
sent credit risk:
Commitments to extend credit....................... $37,795,958
Standby letters of credit and financial guarantees
written........................................... $ 5,004,707
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since many of the commitments are expected to expire
F-12
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
without being drawn upon, the total commitment amounts do not necessarily
represent future cash requirements. The Bank evaluates each customer's
creditworthiness on a case-by-case basis. The amount of collateral obtained, if
deemed necessary by the Bank upon extension of credit, is based on management's
credit evaluation of the counterparty.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support public and private borrowing arrangements,
including commercial paper, bond financing, and similar transactions. The
credit risk involved in issuing letters of credit is essentially the same as
that involved in extending loan facilities to customers.
The bank is a legal defendant in legal actions arising from normal business
activities. Management believes that those actions are without merit or that
the ultimate liability, if any, resulting from them will not materially affect
the Bank's financial position.
NOTE 12--STOCK OPTIONS
The Bank has adopted an incentive stock option plan for the benefit of
employees. As of December 31, 1993, options had been granted and not exercised
to purchase shares of stock of the Bank as follows:
<TABLE>
<CAPTION>
NUMBER OF EXERCISE PRICE
SHARES PER SHARE
--------- --------------
<S> <C>
6,720 $14.76
12,600 $15.71
7,350 $16.67
1,572 $16.70
200 $17.50
1,000 $19.50
14,568 $20.00
5,290 $22.00
------
49,300
======
</TABLE>
The Board of Directors of the Tampa Banking Company, adopted a resolution
that the options granted be exercised into shares of The Tampa Banking Company
on a conversion basis based on the number of shares compared with the
outstanding shares of the Company at the time the options were granted.
NOTE 13--DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
Financial Accounting Standards No. 107, "Disclosures about Fair Value of
Financial Instruments", requires disclosures of the estimated fair values of
essentially all financial instruments.
Many of the Company's assets and liabilities have immediate or shorter-term
(generally 90 days or less) contractual maturities. For these financial
instruments, the differential between contractual rates and current rates of
interest would produce only minimal differences between recorded book value and
estimated fair value. Therefore, for purposes of this disclosure, estimated
fair value of financial instruments with immediate and shorter-term maturities
is assumed to be the same as the recorded book value.
F-13
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
At December 31, 1993 and 1992, the recorded book and estimated fair values of
financial instruments were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------------------
1993 1992
------------------------- -------------------------
RECORDED ESTIMATED RECORDED ESTIMATED
BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FINANCIAL ASSETS
Cash and due from banks.. $ 14,354,849 $ 14,354,849 $ 14,067,076 $ 14,067,076
Investment securities.... 56,065,272 56,761,526 51,825,495 52,662,521
Federal funds sold....... 11,118,278 11,118,278 6,225,000 6,225,000
Loans, net of allowance
for loan losses......... 119,801,780 120,521,201 121,607,656 122,563,356
FINANCIAL LIABILITIES
Deposits................. 196,044,486 196,462,757 189,713,381 189,892,802
Note payable............. 1,980,000 1,980,000 2,000,000 2,000,000
</TABLE>
<TABLE>
<CAPTION>
CONTRACT OR CONTRACT OR
NOTIONAL ESTIMATED NOTIONAL ESTIMATED
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OFF-BALANCE SHEET FINANCIAL
INSTRUMENTS
Commitments to extend credit. $37,795,958 $37,868,563 $39,486,180 $39,563,917
Standby letters of credit and
financial guarantees........ 5,004,707 5,063,198 6,217,466 6,282,889
</TABLE>
The estimated fair values shown above do not purport to represent the
underlying value of the Company or the values of the financial instruments at
any future date. Furthermore, the methods used to derive some of the estimated
fair values necessitated the use of assumptions, including expected future cash
flows, current rates of interest, and the experience of an active market which,
for many of these instruments, does not exist. The estimated fair values also
exclude the value of intangible assets (such as customer relationships and
servicing rights), which are inseparable from the financial instruments and
which would, in an active market, be expected to have considerable value.
Estimated fair values were determined as follows:
Cash and Due from Banks--The recorded book value is a reasonable estimate
of fair value.
Investment Securities--Fair value equals quoted market price, if
available. If a quoted market price is not available, fair value is
estimated using quoted market prices for similar securities.
Federal Funds Sold--The recorded book value is a reasonable estimate of
fair value.
Loans Receivable--Fair value of loans with floating interest rates are
generally presumed to approximate the recorded book value. Fair value of
loans with fixed rates are estimated by discounting the future cash flows
using the current rates at which similar loans would be made to borrowers
with similar credit ratings and for the same remaining maturities.
Deposits--The fair value of demand deposits, NOW accounts, money market
accounts and savings deposits is the amount payable on demand at the
reporting date. The fair value of fixed rate certificates of deposits are
estimated using a discounted cash flow calculation that applies interest
rates currently being offered to a schedule of aggregated expected monthly
time deposit maturities.
F-14
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
Note Payable--The recorded book value is a reasonable estimate of fair
value due to the fact that the interest rate charged is variable and
approximates market rate.
Commitments to Extend Credit, Standby Letters of Credit, and Financial
Guarantees--Commitments to make or sell loans, standby letters of credit,
and financial guarantees are not recorded on the balance sheet. Their fair
values are estimated as the fees that would be charged customers to enter
into a similar agreement with comparable pricing and maturity.
NOTE 14--SUBSEQUENT EVENT
On February 14, 1994, the Company and AmSouth Bancorporation agreed in
principle that all of the outstanding common stock of The Tampa Banking Company
would be acquired by AmSouth Bancorporation, subject to stockholders' and
regulatory agencies' approval.
NOTE 15--CASH AND DUE FROM BANKS
The Company's bank subsidiary is required to maintain average reserve
balances with the Federal Reserve Bank based on a percentage of deposits. The
average amount of those reserves for the year ended December 31, 1993 was
approximately $2.076 million.
NOTE 16--CONDENSED PARENT COMPANY INFORMATION
STATEMENT OF CONDITION
<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1993 1992
------- -------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Cash................................................... $ 53 $ 52
Investment in subsidiary............................... 14,416 12,235
Loans.................................................. 81 81
Other assets........................................... 247 235
------- -------
$14,716 $12,603
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Other long-term debt................................... $ 1,980 $ 2,000
Accrued interest payable and other liabilities......... 11 12
------- -------
Total liabilities.................................... 1,991 2,012
Shareholders' equity................................... 12,725 10,591
------- -------
$14,716 $12,603
======= =======
</TABLE>
F-15
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
STATEMENT OF EARNINGS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1992 1991
-------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
INCOME
Dividends from subsidiary........................ $ -- $ 80 $ 205
Interest and other............................... 13 11 --
-------- -------- ------
13 91 205
-------- -------- ------
EXPENSES
Interest......................................... 138 156 179
Other............................................ 30 18 11
-------- -------- ------
168 174 190
-------- -------- ------
Income before income taxes and equity in
undistributed earnings of subsidiary.............. (155) (83) 15
Income taxes (credit).............................. -- -- --
-------- -------- ------
Income before equity in undistributed earnings of
subsidiary........................................ (155) (83) 15
Equity in undistributed earnings of subsidiary..... 1,731 1,279 562
-------- -------- ------
Net Income................................... $ 1,576 $ 1,196 $ 577
======== ======== ======
OPERATING ACTIVITIES
Net income....................................... $ 1,576 $ 1,196 $ 577
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization of organization costs............. -- 8 11
(Increase) decrease in interest receivable and
other assets.................................. (12) (1) 60
Increase (decrease) in accrued expenses and
other liabilities............................. (1) (28) (11)
Equity in undistributed earnings of subsidiary. (1,731) (1,279) (562)
-------- -------- ------
Net cash provided by (used in) operating ac-
tivities.................................... (168) (104) 75
-------- -------- ------
INVESTING ACTIVITIES
Repayment of note receivable..................... 81 100 --
Net decrease (increase) in short-term invest-
ments........................................... -- -- (75)
Capital contributions to subsidiary.............. (450) -- --
-------- -------- ------
Net cash provided by (used in) investing ac-
tivities.................................... (369) 100 (75)
-------- -------- ------
FINANCING ACTIVITIES
Purchase and retirement of common stock.......... (94) (118) --
Payments on long-term debt....................... (20) (200) --
Proceeds from new debt........................... -- 19 --
Proceeds from stock offering..................... 652 302 36
-------- -------- ------
Net cash provided by financing activities.... 538 3 36
-------- -------- ------
Increase (decrease) in cash........................ 1 (1) 35
Cash at beginning of year.......................... 52 53 18
-------- -------- ------
Cash at end of year.............................. $ 53 $ 52 $ 53
======== ======== ======
</TABLE>
F-16
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
DECEMBER 31, 1993, 1992 AND 1991
NOTE 17--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
SELECTED QUARTERLY RESULTS OF OPERATIONS FOR THE FOUR QUARTERS ENDED
DECEMBER 31, 1993 AND 1992 ARE AS FOLLOWS:
<TABLE>
<CAPTION>
1993 1992
------------------------------- ---------------------------------
FOURTH THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenue from earning
assets................. $3,297 $3,319 $3,287 $3,321 $3,400 $3,260 $3,284 $3,354
Interest expense........ 922 899 946 912 984 1,042 1,171 1,321
Gross interest margin... 2,375 2,420 2,341 2,409 2,416 2,218 2,113 2,033
Provision for loan loss-
es..................... 180 444 210 210 570 210 220 180
Investment security
gains.................. -- 263 -- 1 (3) (5) 24 4
Income before income
taxes.................. 638 669 452 675 256 526 571 507
Net income.............. 430 427 288 431 168 342 364 322
Per Common Share:
Net income............. 0.70 0.70 0.46 0.70 0.28 0.57 0.61 0.54
</TABLE>
F-17
<PAGE>
MANAGEMENT'S STATEMENT REGARDING
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited consolidated financial statements have been prepared
by The Tampa Banking Company without review by independent certified public
accountants, and reflect in the opinion of management all adjustments,
consisting only of normal recurring accruals, necessary for a fair presentation
of the financial position, results of operations and cash flows. The results of
operations are not indicative of results to be expected for the year.
F-18
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30,
1994
-------------
(UNAUDITED)
<S> <C>
ASSETS
Cash and due from banks.......................................... $ 12,432,089
Available-for-sale securities.................................... 47,619,662
Held-to-maturity securities...................................... 15,585,245
Federal funds sold............................................... 11,107,187
Loans............................................................ 120,665,065
Less--Unearned discount.......................................... 0
Allowance for loan losses..................................... (2,794,003)
------------
Net loans.................................................... 117,871,062
------------
Bank premises and equipment, net................................. 4,417,746
Accrued interest receivable...................................... 1,490,912
Other assets..................................................... 2,904,395
------------
$213,428,298
============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Demand deposits.................................................. $ 56,192,791
NOW accounts..................................................... 31,676,343
Money market accounts............................................ 63,086,642
Savings deposits................................................. 15,331,290
Time deposits ($100,000 and over)................................ 9,617,652
Time deposits (under $100,000)................................... 21,882,091
------------
Total deposits................................................... 197,786,809
Note payable..................................................... 1,980,000
Accrued expenses and other liabilities........................... 496,461
------------
Total liabilities................................................ 200,263,270
------------
STOCKHOLDERS' EQUITY
Common stock $.10 par value, 1,000,000 shares authorized; issued
and outstanding 637,827 shares.................................. 63,783
Capital surplus.................................................. 7,504,668
Retained earnings................................................ 6,504,281
Net unrealized holding losses on available-for-sale securities... (907,704)
------------
Total stockholders' equity....................................... 13,165,028
------------
Total liabilities and stockholders' equity..................... $213,428,298
============
</TABLE>
See Notes to Consolidated Financial Statements
F-19
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
---------------------
1994 1993
---------- ----------
(UNAUDITED)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans............................. $7,900,591 $7,634,539
Other interest--
U.S. Treasury securities............................. 1,599,042 1,488,285
U.S. Government agency securities.................... 921,199 677,117
Federal funds sold and securities purchased under re-
verse repurchase agreement.......................... 327,448 127,243
Interest on other securities......................... 191 560
---------- ----------
10,748,471 9,927,744
---------- ----------
INTEREST EXPENSE
Deposits............................................... 2,895,399 2,652,879
Other.................................................. 116,114 103,684
---------- ----------
3,011,513 2,756,563
---------- ----------
NET INTEREST INCOME...................................... 7,736,958 7,171,181
PROVISION FOR LOAN LOSSES................................ 1,060,000 864,000
---------- ----------
NET INTEREST INCOME AFTER LOAN LOSS PROVISION............ 6,676,958 6,307,181
---------- ----------
OTHER INCOME
Service charges on deposit accounts.................... 701,280 673,730
Other operating income................................. 529,694 530,743
Security gains......................................... 44,569 263,635
---------- ----------
1,275,543 1,468,108
---------- ----------
OTHER EXPENSES
Salaries and wages..................................... 2,144,733 2,048,057
Employee benefits...................................... 639,468 623,530
Occupancy expense...................................... 631,299 587,616
Furniture and equipment expense........................ 562,569 448,238
Other expenses......................................... 2,173,918 2,272,502
---------- ----------
6,151,987 5,979,943
---------- ----------
INCOME BEFORE PROVISION FOR INCOME TAXES................. 1,800,514 1,795,346
PROVISION FOR INCOME TAXES............................... 651,407 649,841
---------- ----------
NET INCOME............................................... $1,149,107 $1,145,505
========== ==========
EARNINGS PER SHARE....................................... $ 1.82 $ 1.87
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements
F-20
<PAGE>
THE TAMPA BANKING COMPANY AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------------
1994 1993
------------ ------------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income........................................ $ 1,149,107 $ 1,145,506
Adjustments to reconcile net income to net cash
provided by operations--
Depreciation and amortization................... 547,433 424,167
Discount accretion.............................. (43,376) (15,397)
Premium amortization............................ 387,612 383,824
Provision for loan losses and losses on acquired
property....................................... 1,162,500 1,033,000
Deferred income taxes........................... (467,605) --
Net investment securities (gains) or losses..... (44,569) (263,635)
Losses from sale of equipment................... 12,782 4,381
Losses from sale of acquired property........... 70,516 205,520
(Increase) decrease in interest receivable...... (290,023) (46,785)
Increase (decrease) in interest payable......... (758) (29,015)
Other, net...................................... 1,013,208 (1,344,638)
------------ ------------
Net cash provided by operating activities..... 3,496,827 1,496,928
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in Federal funds sold... 11,091 (1,134,777)
Purchases of investment securities.............. (26,648,425) (13,872,344)
Sales/maturities of investment securities....... 17,833,816 17,343,774
Net (increase) decrease in loans and credit card
receivables.................................... 757,966 1,533,569
Purchases of premises and equipment, and
software....................................... (709,565) (456,859)
Proceeds from sale of acquired property......... 1,395,000 524,350
------------ ------------
Net cash used by investing activities......... (7,360,117) 3,937,713
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand and savings accounts..... 4,558,000 (6,960,788)
Net increase (decrease) in certificates of
deposit........................................ (2,815,678) (636,179)
Payments on notes payable....................... -- (20,000)
Purchase and retirement of common stock......... -- (94,322)
Proceeds from sale of common stock.............. 198,208 660,131
------------ ------------
Net cash provided by financing activities....... 1,940,530 (7,051,158)
------------ ------------
NET DECREASE IN CASH AND DUE FROM BANKS........... (1,922,760) (1,616,517)
CASH AND DUE FROM BANKS--BEGINNING................ 14,354,849 14,067,076
------------ ------------
CASH AND DUE FROM BANKS--ENDING................... $ 12,432,089 $ 12,450,559
============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Other real estate acquired in settlement of
loans.......................................... $ 380,405 $ 687,157
------------ ------------
SUPPLEMENTAL DISCLOSURE:
Cash paid for
Interest........................................ $ 3,012,271 $ 2,785,578
============ ============
Income taxes.................................... $ 736,500 $ 397,500
============ ============
</TABLE>
See Notes to Consolidated Financial Statements
F-21
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THE TAMPA BANKING COMPANY AND SUBSIDIARY
(UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
General--The consolidated financial statements conform to generally accepted
accounting principles and to general industry practices. The accompanying
interim financial statements are unaudited; however, in the opinion of
management, all adjustments necessary for the fair presentation of the
consolidated financial statements have been included. All such adjustments are
of a normal recurring nature. The notes included herein should be read in
conjunction with the notes to consolidated financial statements included in
Tampa's 1993 consolidated financial statements.
Effective January 1, 1994, Tampa adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" (Statement 115). The Statement generally requires that debt and
equity securities that have readily determinable fair values be carried at fair
value unless they are intended to be held to maturity. Securities are
classified as held-to-maturity and carried at amortized cost only if Tampa has
positive intent and ability to hold those securities to maturity. If not
classified as held-to-maturity, such securities are classified as trading
securities or securities available for sale. Net unrealized holding gains or
losses for securities available for sale are excluded from earnings and
reported as a separate component of shareholders' equity. The adoption of
Statement 115 resulted in no material impact on Tampa's financial condition.
Quarterly Results of Operations--Selected quarterly results of operations for
the quarters ended September 30, June 30 and March 31, 1994 are as follows:
<TABLE>
<CAPTION>
1994
-----------------------
THIRD SECOND FIRST
QUARTER QUARTER QUARTER
------- ------- -------
(IN THOUSANDS EXCEPT
PER SHARE DATA)
<S> <C> <C> <C>
Revenue from earnings assets.................... $3,879 $3,627 $3,242
Interest expense................................ 1,130 974 907
Gross interest margin........................... 2,749 2,653 2,335
Provision for loan losses....................... 660 250 150
Investment security gains....................... 2 3 40
Income before income taxes...................... 511 682 607
Net income...................................... 328 439 382
Per Common Share:
Net income..................................... 0.51 0.70 0.61
</TABLE>
F-22
<PAGE>
APPENDICES
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF MERGER
<PAGE>
AGREEMENT AND PLAN OF MERGER
BETWEEN
THE TAMPA BANKING COMPANY
AND
AMSOUTH BANCORPORATION
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
RECITALS
The Company............................................................ A.
AmSouth................................................................ B.
The Bank............................................................... C.
Rights, Etc............................................................ D.
Board Approvals........................................................ E.
Tax-Free Reorganization and Pooling.................................... F.
Voting Agreements...................................................... G.
ARTICLE I THE MERGER
The Continuing Corporation............................................. I(A)
Rights, Etc............................................................ I(B)
Liabilities, Etc....................................................... I(C)
Charter; By-Laws; Directors and Officers............................... I(D)
Subsidiaries........................................................... I(E)
ARTICLE II TERMS OF THE MERGER
Conversion of Company Stock............................................ II(A)
Transmittal Materials.................................................. II(B)
No transfers of Company Stock.......................................... II(C)
Rights of Company Shareholders......................................... II(D)
Company Price Protection............................................... II(E)
Stock Options--Net Appreciation Shares................................. II(F)
AmSouth Stock Split.................................................... II(G)
ARTICLE III ACTIONS PENDING MERGER
Prohibited Company Actions............................................. III(A)
Prohibited AmSouth Actions............................................. III(B)
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Recitals; Charter; By-Laws; Minutes.................................... IV(A)
Outstanding Shares--Validly Issued..................................... IV(B)
Authority to Conduct Business.......................................... IV(C)
Outstanding Shares--Owned Free of Liens................................ IV(D)
Plan Duly Authorized................................................... IV(E)
Plan Not Violation of Law, Charter, Etc................................ IV(F)
Financial Reports...................................................... IV(G)
Loans; Allowance for Loan Losses....................................... IV(H)
Taxes.................................................................. IV(I)
Material Adverse Change................................................ IV(J)
Litigation............................................................. IV(K)
Material Contracts--Cancelable......................................... IV(L)
Brokerage Commissions; Finders Fees.................................... IV(M)
Employee Benefit Plans................................................. IV(N)
Assets; Environmental.................................................. IV(O)
Regulatory Approvals................................................... IV(P)
AmSouth Stock Validly Authorized & Issued.............................. IV(Q)
AmSouth Stock--Sufficient Amount....................................... IV(R)
Material Contracts--Full Force; No Breach.............................. IV(S)
Compliance with Laws & Regulations..................................... IV(T)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Party to Certain Contracts............................................ IV(U)
Dividends............................................................. IV(V)
Disclosure............................................................ IV(W)
Insurance Policies.................................................... IV(X)
ARTICLE V COVENANTS
Consummation of Plan.................................................. V(A)
Registration Statement; Proxy Statement............................... V(B)
Filing of Registration Statement...................................... V(C)
Registration Statement--Compliance with Law........................... V(D)
Blue Sky Permits...................................................... V(E)
Press Releases........................................................ V(F)
Access to Information; Confidentiality................................ V(G)
No Shop............................................................... V(H)
Affiliates Agreements................................................. V(I)
Director Voting Agreements............................................ V(J)
Company to Modify Loan Loss Policies.................................. V(K)
Employees............................................................. V(L)
Rule 144/145 Current Information...................................... V(M)
Certain Agreements.................................................... V(N)
Merger Expenses....................................................... V(O)
Certain Agreements.................................................... V(P)
D&O Insurance; Indemnification........................................ V(Q)
AmSouth Payment of Certain Expenses................................... V(R)
Company Loan.......................................................... V(S)
ARTICLE VI REGULATORY APPROVALS
Applications.......................................................... VI(A)
Other Actions......................................................... VI(B)
ARTICLE VII CONDITIONS TO CONSUMMATION
Shareholder Approval.................................................. VII(A)
Regulatory Approvals; Insurance Approvals............................. VII(B)
Other Approvals; Unacceptable Conditions.............................. VII(C)
No Injunctions or Litigation.......................................... VII(D)
Pooling Letter........................................................ VII(E)
AmSouth Legal Opinion................................................. VII(F)
Company Legal Opinion................................................. VII(G)
Company Officers' Certificate......................................... VII(H)
AmSouth Officers' Certificate......................................... VII(I)
Registration Statement Effective...................................... VII(J)
Blue Sky Permits...................................................... VII(K)
Affiliates Agreements................................................. VII(L)
Tax Opinion........................................................... VII(M)
Material Adverse Condition--Company................................... VII(N)
Material Adverse Condition--AmSouth................................... VII(O)
Comfort Letter........................................................ VII(P)
ARTICLE VIII TERMINATION
Mutual Consent........................................................ VIII(A)
Breach of Representation.............................................. VIII(B)
Drop Dead Dates....................................................... VIII(C)
</TABLE>
<PAGE>
<TABLE>
<S> <C>
No Shareholder Approval............................................... VIII(D)
No Regulatory Approval................................................ VIII(E)
Unmet Condition to Closing............................................ VIII(F)
Price Protection...................................................... VIII(G)
Schedule 1............................................................ VIII(H)
Material Adverse Condition--Company................................... VIII(I)
Material Adverse Condition--AmSouth................................... VIII(J)
ARTICLE IX CLOSING
ARTICLE X OTHER MATTERS
Survival of Representations and Agreements............................ X(A)
Waiver and Amendment.................................................. X(B)
Counterparts.......................................................... X(C)
Expenses.............................................................. X(E)
Confidentiality....................................................... X(F)
Notices............................................................... X(G)
Entire Agreement...................................................... X(H)
Schedule 1............................................................ X(I)
No Assignment......................................................... X(J)
Remedies.............................................................. X(K)
</TABLE>
<PAGE>
Agreement and Plan of Merger, dated as of the 9th day of March, 1994 (the
"Plan"), between THE TAMPA BANKING COMPANY (the "Company"), which is the sole
shareholder of THE BANK OF TAMPA (the "Bank"), and AMSOUTH BANCORPORATION
("AmSouth").
RECITALS:
A. THE COMPANY. The Company is a corporation duly organized and existing in
good standing under the laws of Florida with its principal executive offices
located in Tampa, Florida. As of January 31, 1994, the Company had 1,000,000
authorized shares of common stock, each of $.10 par value (no other class of
capital stock being authorized), of which 626,015 shares of common stock were
issued and outstanding and, except as disclosed in Schedule 1, no shares were
held as treasury stock.
B. AMSOUTH. AmSouth is a corporation duly organized and existing in good
standing under the laws of the State of Delaware with its principal executive
offices located in Birmingham, Alabama. As of February 8, 1994, AmSouth had
200,000,000 authorized shares of common stock, each of $1.00 par value, and
2,000,000 authorized shares of preferred stock, no par value (no other class of
capital stock being authorized), of which 50,868,118 shares of common stock
were outstanding and 1,500,000 shares were held as treasury stock. No shares of
preferred stock were issued and outstanding and none were held as treasury
stock.
C. THE BANK. The Bank is a bank duly organized and existing in good standing
under the laws of the State of Florida and is a wholly-owned subsidiary of the
Company, with its principal executive offices located in Tampa, Florida. As of
January 31, 1994, Bank has 500,000 authorized shares of common stock, each of
$5.00 par value (no other class of capital stock being authorized), of which
400,000 shares of common stock are issued and outstanding and, except as
disclosed in Schedule 1, no shares are held as treasury stock.
D. RIGHTS, ETC. With respect to the Company and the Bank, there are no shares
of common stock or preferred stock reserved for issuance, and the Company and
the Bank have no commitment to issue or sell any such shares or any securities
or obligations convertible into or exchangeable for, or giving any person any
right to subscribe for or acquire from the Company or the Bank any such shares,
and no securities or obligations representing such rights are outstanding,
except for the rights of participants in the Company's Employee Stock Purchase
Plan to receive 1,892 shares of Company Common Stock and except as will be set
forth on Schedule 1 hereto.
E. BOARD APPROVALS. As of the date of execution hereof, the Boards of
Directors of the Company and AmSouth have approved this Plan and have
authorized the execution hereof at meetings of their respective Boards of
Directors.
F. TAX-FREE REORGANIZATION AND POOLING. The parties intend for the Merger to
qualify as a tax-free reorganization under section 368 of the Internal Revenue
Code of 1986, as amended, and to be accounted for as a pooling of interests
under generally accepted accounting principles.
G. VOTING AGREEMENTS. The directors of the Company will enter into Voting
Agreements (as defined in Paragraph (J) of Article V) in substantially the form
annexed hereto as Annex 1.
In consideration of their mutual promises and obligations, including the
promises and obligations under the Voting Agreements, the parties hereto adopt
and make this Plan and prescribe the terms and conditions thereof and the
manner and basis of carrying it into effect, which shall be as follows:
I. THE MERGER
I(A) THE CONTINUING CORPORATION. On the Effective Date the Company shall be
merged into AmSouth (the "Merger"), the separate existence of the Company shall
cease, and AmSouth (sometimes hereinafter referred to as the "Continuing
Corporation") shall survive, all with the effect provided by the
<PAGE>
General Corporation Law of the State of Delaware and, to the extent applicable,
the Florida law of corporations.
I(B) RIGHTS, ETC. The Continuing Corporation shall thereupon and thereafter
possess all the rights, privileges, immunities and franchises, of a public as
well as of a private nature, of each of the merging corporations; and all
property, real, personal and mixed, and all debts due on whatever account, and
all other choses in action, and all and every other interest, of or belonging
to or due to each of the corporations so merged, shall be taken and deemed to
be transferred to and vested in the Continuing Corporation without further act
or deed; and the title to any real estate or any interest therein, vested in
any of such corporations, shall not revert or be in any way impaired by reason
of the Merger.
I(C) LIABILITIES, ETC. The Continuing Corporation shall thenceforth be
responsible and liable for all the liabilities, obligations and penalties of
each of the corporations so merged.
I(D) CHARTER; BY-LAWS; DIRECTORS AND OFFICERS. The Certificate of
Incorporation and By-Laws of the Continuing Corporation shall be those of
AmSouth, as in effect immediately prior to the Effective Date (as defined in
Article IX) of the Merger. The directors and officers of AmSouth immediately
prior to the Effective Date shall be the directors and officers of the
Continuing Corporation until their successors are elected and qualify.
I(E) SUBSIDIARIES. The Company and AmSouth anticipate that the Bank will
merge (the "Subsidiary Reorganization") with AmSouth's subsidiary, AmSouth Bank
of Florida ("AmSouth Florida"), but AmSouth in its discretion may select
another structure for its subsidiaries at a later date, including without
limitation continuing the separate existence of the Bank as a subsidiary of
AmSouth. It shall be within AmSouth's discretion as to whether the Subsidiary
Reorganization occurs substantially simultaneously with the Merger.
II. TERMS OF THE MERGER.
Subject to the provisions of this Plan:
II(A) Subject to clause (3) of this Paragraph (A) and Paragraph (E) of
Article II:
(1)(i) Each share of Company common stock, par value $.10 per share (the
"Company Common Stock"), except for (x) shares as to which dissenters'
rights have been properly perfected, (y) shares held directly or indirectly
by the Company or the Bank other than shares held in a fiduciary capacity
or in satisfaction of a debt previously contracted, and (z) shares held as
treasury stock by the Company shall become and be converted into the right
to receive 1.5592 shares (the "Conversion Number") of common stock, par
value $1.00 per share ("AmSouth Common Stock"), of AmSouth; and (ii) each
share of Company Common Stock, if any, held in the treasury of the Company
shall be cancelled;
(2) certificates which represent shares of Company Common Stock issued and
outstanding immediately prior to the Effective Date shall automatically and
without further action on the part of the holders thereof be converted into
shares of AmSouth Common Stock and shall be exchangeable by the holders
thereof in the manner provided in the transmittal materials described below
for new certificates representing the number of full shares of AmSouth
Common Stock which such holders shall be entitled to receive in accordance
with the method of computation set forth in clause (1) of this Paragraph
(A); and
(3) notwithstanding any other provisions hereof, no fractional shares of
AmSouth Common Stock and no certificates or scrip therefor, or other
evidence of ownership thereof, will be issued; instead, AmSouth shall pay
to each holder of Company Common Stock who would otherwise be entitled to
fractional shares pursuant to clause (1) of this Paragraph (A) an amount in
cash determined by multiplying such holder's fractional interest by the
closing price for AmSouth Common Stock on the Effective Date on the New
York Stock Exchange.
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<PAGE>
II(B) As promptly as practicable after the Effective Date, AmSouth shall send
or cause to be sent to each former shareholder of record of the Company on the
Effective Date, transmittal materials for use in exchanging certificates of
Company Common Stock for certificates of AmSouth Common Stock. Pending delivery
of such certificates of Company Common Stock, dividends on the AmSouth Common
Stock to be exchanged therefor which are payable prior to the delivery date of
such certificates will be held by AmSouth and delivered to the persons entitled
thereto upon delivery of such certificates for exchange, together with any
fractional share checks referred to above.
II(C) On and after the Effective Date, there shall be no transfers on the
stock transfer books of the Company or the Continuing Corporation of the shares
of Company Common Stock which were issued and outstanding immediately prior to
the Effective Date.
II(D) On and after the Effective Date, holders of Company Common Stock shall
have no rights as shareholders of the Company other than to receive AmSouth
Common Stock and cash in lieu of fractional shares as provided above.
II(E)(1) The Company will have a right to elect to abandon the Merger and
terminate the Plan (and no provision of this Article II except Paragraph (E)
shall apply) if its Board of Directors so determines by a majority vote of the
members of its entire board, at any time during the ten-day period commencing
with the Determination Date if both of the following conditions are satisfied:
(i) the Average Closing Price of shares of AmSouth Common Stock shall be
less than $27.56 and
(ii) (A) the number obtained by dividing the Average Closing Price by the
Starting Price shall be less than (B) the number obtained by dividing the
Index Price on the Determination Date by the Index Price on the Starting
Date and subtracting .10 from such quotient in this clause (ii)(B);
subject, however, to the following three sentences. If the Company makes an
election to abandon the Merger, it shall give prompt written notice to AmSouth
(provided that such notice of election may be withdrawn at any time within the
aforementioned ten-day period). During the seven-day period commencing with its
receipt of such notice AmSouth shall have the option to increase the
consideration to be received by the holders of Company Common Stock in the
Merger by adjusting the Conversion Number up to the number (calculated to the
nearest one one-hundredth) obtained by dividing (A) the product of $27.56 and
1.5592 (i.e. $42.97) by (B) the Average Closing Price. If AmSouth so elects
within such seven-day period, it shall give prompt written notice to the
Company of such election and the revised Conversion Number, whereupon no
termination shall have occurred and this Plan shall remain in effect in
accordance with its terms (except as the Conversion Number shall have been so
modified).
(2) The following terms have the meanings indicated below:
(i) "Average Closing Price" means the average closing price per share of
AmSouth Common Stock as reported on the New York Stock Exchange ("NYSE")
Composite Transactions reporting system (as reported by The Wall Street
Journal or, if not reported thereby, another authoritative source), for the
10 consecutive NYSE trading days ending on the date (the "Determination
Date") which is the twentieth day (or if such twentieth day is not a NYSE
trading day, the first NYSE trading day immediately preceding such
twentieth day) prior to the Effective Date.
(ii) "Index Group" means the 15 bank holding companies listed in Annex 2
hereto, the common stock of all of which shall be publicly traded and as to
which there shall not have been a publicly announced proposal since the
Starting Date for any such company to be acquired. In the event that the
common stock of any such company ceases to be publicly traded or a proposal
to acquire any such company is announced after the Starting Date, such
company will be removed from the Index Group and any calculations.
(iii) "Index Price," on a given date, means the average of the closing
prices on such date of the common stocks of the companies comprising the
Index Group.
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<PAGE>
(iv) "Starting Date" means the first NYSE trading day immediately
succeeding the date of the first public announcement of the acquisition of
the Company by AmSouth, which the parties agree is February 16, 1994.
(v) "Starting Price" means the closing price per share of AmSouth Common
Stock, as reported on the NYSE Composite Transaction reporting system (as
reported by The Wall Street Journal or, if not reported thereby, another
authoritative source) for the Starting Date. The parties agree that the
Starting Price is $30.75.
II(F)(1) Each holder of an option to purchase shares of Company Common Stock
(a "Company Option") shall be afforded an opportunity prior to the Effective
Time to elect to convert, at the Effective Date, all his or her Company Options
which have not been exercised prior to the Effective Date into the right to
receive Net Appreciation Shares (as defined in (2) below). If a holder of
Company Options does not either convert such options to Company Common Stock or
elect to receive Net Appreciation Shares, such Company Options will terminate
on the Effective Date.
(2) With respect to holders of Company Options who elect to have their
Company Options converted into the right to receive Net Appreciation Shares,
each Company Option not exercised prior to the Effective Date shall at the
Effective Date be converted into the right to receive a number of shares of
AmSouth Common Stock ("Net Appreciation Shares") calculated as follows:
(i) First, the number of shares of Company Common Stock with respect to
which the Company Option relates shall be converted into a number of shares
of AmSouth Common Stock ("AmSouth Equivalent Shares") by multiplying the
Conversion Number (as adjusted by Paragraph II(E), if applicable) times
said number of shares of Company Common Stock;
(ii) Second, the number of AmSouth Equivalent Shares shall be multiplied
by the market value of one share of AmSouth Common Stock (calculated in
accordance with section (3) below), and the aggregate exercise price of the
Company Option (exercise price per share of the Company Common Stock times
the number of shares of Company Common Stock to which such Company Option
relates) shall be subtracted therefrom to yield the Net Cash Equivalent
Appreciation.
(iii) Third, the Net Cash Equivalent Appreciation shall be converted into
Net Appreciation Shares by dividing the Net Cash Equivalent Appreciation by
the market value of one share of AmSouth Common Stock.
(3) The market value of one share of AmSouth Common Stock for purposes of the
foregoing calculations shall be the average of the closing prices of AmSouth
Common Stock on the New York Stock Exchange Composite Transactions reporting
system (as reported by The Wall Street Journal or, if not reported thereby, any
other authoritative source) for the five trading days immediately preceding the
Effective Date.
(4) No fractional Net Appreciation Shares shall be issued, but rather cash in
an amount equal to the market value of AmSouth Common Stock determined in (3)
above multiplied by the fractional amount of Net Appreciation Shares determined
by the calculations described in (2)(iii) above shall be paid to holders
electing conversion of Company Options into Net Appreciation Shares in lieu of
fractional shares.
II(G) In the event that AmSouth changes the number of shares of AmSouth
Common Stock issued and outstanding prior to the Effective Time as a result of
a stock split, stock dividend, recapitalization, reclassification or other
similar transaction, the Conversion Number and the AmSouth Common Stock prices
in Article II(E) shall be proportionately adjusted.
III. ACTIONS PENDING MERGER.
III(A) Without the prior written consent or approval of AmSouth which will
not be unreasonably withheld or delayed, the Company will not, and will not
permit any subsidiary to:
4
<PAGE>
(1) in the case of the Company only, make, declare or pay any dividend;
or declare or make any distribution of, or directly or indirectly combine,
redeem, reclassify, purchase or otherwise acquire, any shares of its
capital stock or authorize creation or issuance of or issue any additional
shares of its capital stock, or any options, calls or commitments relating
to its capital stock or any securities or obligations convertible into or
exchangeable for or giving any person any right to subscribe for or acquire
from the Company or any subsidiary shares of capital stock, except pursuant
to the Stock Option Agreement and except pursuant to plans or agreements as
existing on the date hereof to be disclosed in Schedule 1, provided that no
stock options, restricted stock or similar benefits may be issued pursuant
to any existing Company plans without the prior written approval of
AmSouth; or, except as to be disclosed to AmSouth in Schedule 1, incur any
long term debt (except as incurred by the Bank in the ordinary course of
business);
(2) (i) enter into any employment contracts with, increase the rate of
compensation of, or pay or agree to pay any bonus to, any of its directors,
officers or employees, except in accordance with existing practices as
disclosed to AmSouth in Schedule 1 or (ii) employ any new officer or
employee at an annual salary that is in excess of $50,000;
(3) except as will be disclosed to AmSouth on Schedule 1, enter into,
terminate or modify (except as may be required by applicable law) any
pension, retirement, stock option, stock purchase, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement related thereto, in respect of any of its directors, officers or
other employees;
(4) substantially modify the manner in which it has heretofore conducted
its business, enter into any new line of business, engage or employ any
consultant or advisor not under contract on the date hereof as disclosed in
Schedule 1 or amend its (or the Bank's) Charter or By-laws;
(5) dispose of or discontinue any major portion of its business or
property, or merge or consolidate with, or acquire all or (relative to the
Company) any substantial portion of, the business or property of any other
entity;
(6) dispose of any material assets except in the ordinary course of
business;
(7) knowingly take any action for the purpose of, or that would have the
effect of, causing deterioration of its valuable customer deposit or loan
relationships; or
(8) agree to take any of the foregoing actions.
III(B) Without the prior written consent of the Company which will not be
unreasonably withheld or delayed, AmSouth will not, and will not permit any
bank subsidiary, to:
(1) substantially modify the manner in which it has heretofore conducted
its business;
(2) dispose of to a non-affiliate of AmSouth, or discontinue, any major
portion of its business; or
(3) agree to take any of the foregoing actions.
IV. REPRESENTATIONS AND WARRANTIES.
The Company hereby represents and warrants to AmSouth, and AmSouth represents
and warrants to the Company, as follows:
IV(A) the facts set forth in the recitals of this Plan with respect to it are
true and correct; in the case of the Company and its subsidiaries, the copies
of the Company's and the Bank's Charter and By-Laws to be delivered to AmSouth
in Schedule 1 are correct and complete and the minute books of the Company and
its subsidiaries contain substantially complete and accurate records of all
meetings and other corporate actions held or taken since January 1, 1990, by
their respective shareholders and Boards of Directors (including committees
thereof);
5
<PAGE>
IV(B) the outstanding shares of it and its subsidiaries are validly issued
and outstanding, fully paid and (subject to 12 U.S.C. (S) 55 in the case of a
national bank subsidiary) non-assessable, and subject to no preemptive rights;
IV(C) each of it and its subsidiaries has the corporate power and authority
to carry on its business as it is now being conducted and to own or lease all
its material properties and assets;
IV(D) as of the date hereof, the outstanding shares of capital stock of each
of its subsidiaries are owned by it, free and clear of all liens, claims,
encumbrances and restrictions on transfer, except as set forth in Schedule 1
hereto;
IV(E) subject to any necessary receipt of approval by its shareholders and
the regulatory and other approvals referred to in Paragraphs (B) and (C) of
Article VII, this Plan has been authorized by all necessary corporate action of
it and is a valid and binding agreement of it enforceable against it in
accordance with its terms, subject as to enforcement to bankruptcy,
reorganization, insolvency and other laws of general applicability relating to
or affecting creditors rights and to general equity principles and except that
the availability of the equitable remedies of specific performance or
injunctive relief are subject to the discretion of the court before which any
proceedings may be brought;
IV(F) except as disclosed to the other party hereto on Schedule 1, the
execution, delivery and performance of this Plan by it does not, and the
consummation of the transactions contemplated hereby by it will not, constitute
(i) a breach or violation of, or a default under, any law, rule or regulation
or any judgment, decree, order governmental permit or license, or agreement,
indenture or instrument of it, or any of its subsidiaries, or to which it, or
any of its subsidiaries, is subject, which breach, violation or default would
have a material adverse effect on the financial condition, results of
operations, business or business plans of it and its subsidiaries taken as a
whole or enable any party to enjoin the transactions contemplated hereby, or
(ii) a breach or violation of, or a default under, the Charter, Articles of
Incorporation, or Certificate of Incorporation, as the case may be, or By-laws
of it or its subsidiaries; and the consummation of the transactions
contemplated hereby will not require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or license
or the consent or approval of any other party to any such agreement, indenture
or instrument, other than the required approvals of applicable regulatory
authorities and others referred to in Paragraph (B) and (C) of Article VII;
IV(G) as of their respective dates, (i) in the case of AmSouth none of its
Annual Reports on Form 10-K for its two most recent fiscal years, its most
recent Quarterly Report on Form 10-Q, any Current Report on Form 8-K of it
since December 31, 1991 and any proxy statement or registration statement of it
since December 31, 1991, each in the form (including exhibits) filed with the
Securities and Exchange Commission (the "SEC"), or any such report to be filed
subsequent to the date hereof (collectively, its "Financial Reports") and (ii)
in the case of the Company and the Bank, none of its balance sheets and related
statements of income, statements of changes in shareholders' equity and
statements of cash flows (including related notes and schedules), including
without limitation the Bank's Call Reports filed with the Florida Department of
Banking and Finance or the FDIC since December 31, 1991, or any proxy statement
or registration statement of it since December 31, 1991 or any of the foregoing
to be filed subsequent to the date hereof (collectively, its "Financial
Reports") contained or will contain any untrue statement of a material fact or
omitted 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. Each of the balance sheets in or incorporated
by reference into the Financial Reports fairly presents or will fairly present
the financial position of the entity or entities to which it relates as of its
date and each of the statements of operations and retained earnings and cash
flows or equivalent statements in the Financial Reports (including any related
notes and schedules) fairly presents or will fairly present the results of
operations, retained earnings and cash flows, as the case may be, of the entity
or entities to which it relates for the periods set forth therein (subject in
the case of unaudited interim statements, to normal year-end audit adjustments
which will not be material in amount or effect to such entities taken as a
whole), in each case in accordance with generally accepted accounting
principles
6
<PAGE>
applicable to the particular entity consistently applied during the periods
involved, except as may be noted therein; and independent public accountants
for it have rendered or will render an unqualified opinion with respect to each
audited financial statement included in the Financial Reports or, if qualified,
such qualification is reasonably satisfactory to the other party hereto;
IV(H) in the case of the Company only, except as set forth in Schedule 1: (i)
to the best knowledge of the Company, all evidences of indebtedness in original
principal amount in excess of $50,000 reflected as assets in the Company's
Financial Reports are in all respects binding obligations of the respective
obligors named therein and no material amount of such assets is subject to any
defenses which may be asserted against it or any of its subsidiaries, (ii) the
allowances for possible loan losses shown on the Financial Reports as of
December 31, 1993, are, as of the date of such Financial Reports, adequate in
all material respects, under the principles described in Paragraph (G) of
Article IV, to provide for possible losses, net of recoveries relating to loans
previously charged off, on loans outstanding (including accrued interest
receivable), as of the respective dates of such Financial Reports; (iii) each
such allowance has been established in accordance with the principles described
in Paragraph (G) of this Article IV; and (iv) the Bank has duly filed in
correct form its Call Report with the Federal Deposit Insurance Corporation and
the Florida Department of Banking and Finance for the period ended December 31,
1993 (which Call Report is accurate and complete in all material respects), and
the Company will deliver to AmSouth in Schedule 1 an accurate and complete copy
of such report;
IV(I) in the case of the Company only, (1) the Company will deliver to
AmSouth in Schedule 1 copies of the federal income tax returns of the Company
for each of the last three fiscal years and all schedules and exhibits thereto.
Except as disclosed to AmSouth in Schedule 1, each of the Company and its
subsidiaries has duly filed in correct form or received approved extensions to
file all Federal, state and local information returns and tax returns required
to be filed by it and its subsidiaries on or prior to the date hereof (all such
returns to the best knowledge of the Company being accurate and complete in all
material respects) and, to the best knowledge of the Company, has duly paid or
made provisions for the payment of all taxes and other governmental charges
which have been incurred or are due or claimed to be due from them by Federal,
state or local taxing authorities (including, without limitation, those due in
respect of their properties, income, business, capital stock, deposits,
franchises, licenses, sales and payrolls) other than taxes or other charges (i)
which are not yet delinquent or are being contested in good faith and set forth
in Schedule 1 and (ii) have not been finally determined. Except as disclosed to
AmSouth in Schedule 1, in the reasonable opinion of the respective managements
of the Company and its subsidiaries, the amounts set up as liabilities for
taxes on the latest Financial Reports are sufficient in the aggregate for the
payment of all unpaid Federal, state and local taxes (including any interest or
penalties thereon), whether or not disputed or accrued, for the period ended
December 31, 1993 or for any year or period prior thereto, and for which the
Company or any of its subsidiaries may be liable in its own right or as
transferee of the assets of, or successor to, any corporation, person,
association, partnership, joint venture or other entity. Except as disclosed to
AmSouth in Schedule 1, there are no outstanding examinations by the appropriate
taxing authorities pending or deficiencies outstanding with respect to the
Federal income tax returns of the Company and its subsidiaries. Except as
disclosed to AmSouth in Schedule 1, to the best knowledge of the Company and
its subsidiaries, there are no material disputes pending, or claims asserted
for, taxes or assessments upon the Company or any of its subsidiaries, nor has
the Company or any of its subsidiaries been requested to give any currently
effective waivers extending the statutory period of limitation applicable to
any Federal, state or local income tax return for any period.
(2) to the best knowledge of the Company and its subsidiaries, (i) proper and
accurate amounts have been withheld by the Company and its subsidiaries from
their employees and others for all prior periods in compliance in all material
respects with the tax withholding provisions of applicable Federal, state and
local laws and regulations, and proper due diligence steps have been taken in
connection with back-up withholding, (ii) Federal, state and local returns
which are accurate and complete in all material respects have been filed by the
Company and each of its subsidiaries for all periods for which returns were due
with respect to income
7
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tax withholding, Social Security and unemployment taxes and (iii) the amounts
shown on such returns to be due and payable have been paid in full or, in the
reasonable opinion of the respective managements of the Company and each of its
subsidiaries, adequate provision therefore has been included by either the
Company or its subsidiaries in its or their most recent Financial Reports.
IV(J) except as disclosed to the other party hereto in writing (dated on or
prior to the date hereof), there has been no material adverse change in its
consolidated financial condition, results of operations, business or business
plans since December 31, 1993.
IV(K) except as disclosed in the Financial Reports or on Schedule 1, no
material litigation, proceeding or controversy before any court, governmental
agency or arbitrator is pending which in the opinion of management and its
legal counsel is likely to have a material and adverse effect on its
consolidated financial condition, results of operations, business or business
plans or prevent consummation of the transactions contemplated hereby, and, to
the best of its knowledge, no such litigation, proceeding or controversy has
been threatened or is contemplated, nor is there, to the best of its knowledge,
a reasonable basis for any such litigation, proceeding or controversy; no
judgment, decree, injunction, rule or order of any court, governmental agency
or arbitrator is outstanding against it or any of its subsidiaries having or
which, insofar as reasonably can be foreseen, in the future would have a
material adverse effect on the financial condition, results of operations,
business, or business plans of it and its subsidiaries taken as a whole; there
is no default under any material contract or agreement to which it or any of
its subsidiaries is a party which has had or would have a material adverse
effect on its consolidated financial condition, results of operations, business
or business plans; and neither it nor any of its subsidiaries is subject to any
agreement, memorandum of understanding or similar arrangement with any
regulatory authority materially restricting its operations or requiring that
certain actions be taken;
IV(L) in the case of the Company only, except as disclosed in the Financial
Reports or on Schedule 1 or as permitted herein, and except for this Plan,
neither it nor its subsidiaries are bound by any material contract to be
performed after the date hereof other than contracts which are cancelable on
less than 90 days notice without material penalty or cost to, or material
disruption of the business of, it and its subsidiaries taken as a whole;
IV(M) all negotiations relative to this Plan and the transactions
contemplated hereby have been carried on by it directly with the other parties
hereto and no action has been taken by it that would give rise to any valid
claim against any party hereto for a brokerage commission, finder's fee or
other like payment except as disclosed on Schedule 1;
IV(N) in the case of the Company only, except as disclosed in Schedule 1, it,
each of its subsidiaries and all "Employee Benefit Plans" as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), that cover any of its or their employees, comply with all laws,
requirements and orders under ERISA and the Internal Revenue Code of 1986 as
amended (the "Code") the breach or violation of which could have a material
adverse effect on its business; the present value of all of the assets of each
of its Employee Benefit Plans that is subject to Title IV of ERISA equals or
exceeds the present value of all of the benefits accrued under each such
Employee Benefit Plan as of the end of the most recent plan year with respect
to such plan ending prior to the date hereof, calculated on the basis of the
actuarial assumptions used in the last actuarial evaluation for each such plan;
none of the employees of the Company or any of its subsidiaries is covered by a
collective bargaining agreement; neither the Company nor any of its
subsidiaries has ever contributed to a "multiemployer plan" as defined in
Section 3(37) of ERISA; neither the Employee Benefit Plans nor any fiduciary or
administrator has engaged in a "prohibited transaction" as defined in Section
406 of ERISA or, where applicable, Section 4975 of the Code for which no
exemption is applicable, that may have any material adverse economic
consequence to the Company, nor have there been any "reportable events" within
Section 4043 of ERISA for which the thirty-day notice has not been waived;
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IV(O) in the case of the Company only, except as disclosed on Schedule 1 each
of it and its subsidiaries to the best of its knowledge after reasonable
inquiry and investigation has good and marketable title, insurable at regular
rates with respect to properties and assets which currently are of a type for
which insurance is generally available, free and clear (except as indicated in
the Financial Reports) of liens and encumbrances of a material nature, to its
property and assets that are material to its business on a consolidated basis;
except as disclosed on Schedule 1 with respect to all real property owned by
the Company or its subsidiaries or in which the Company or its subsidiaries has
any interest or which for purposes of any environmental law, regulation or
decree ("Environmental Law") is deemed to be under the Company's or any of its
subsidiaries' control (the "Real Property") to the best of its knowledge after
reasonable inquiry and investigation (i) there are no pending or threatened
claims against the Company or any such subsidiary or any prior owner of such
Real Property in an amount in excess of 10% of the appraised value of such Real
Property; (ii) no substance whether liquid, solid or gas, the use or disposal
of which is regulated under any Environmental Law or which is classified or
designated as hazardous or toxic under any Environmental Law ("Hazardous
Substance") has been or has been threatened to be discharged, released or
emitted into the air, water, surface water, ground water, land surface or
subsurface strata or transported to or from the Real Property except in
compliance with all applicable Environmental Laws; (iii) there are no storage
tanks underground or otherwise present on the Real Property; (iv) all permits
and licenses (the "Permits") required under any Environmental Law have been
issued in favor of the Company and have been in full force and effect at all
times when the Permits were required, and the Permits are transferable to
AmSouth without the consent of the issuer of the Permit or any governmental or
judicial authority and without AmSouth being required to provide any form of
security or assurance and otherwise at no cost to AmSouth; (v) no event has
occurred which would constitute a default or violation under any permit; and
(vi) no part of the Real Property has been or is listed as a site containing
Hazardous Substances;
IV(P) it knows of no reason why the regulatory and other approvals referred
to in paragraphs (B) and (C) of Article VII should not be obtained without the
imposition of any condition of the type referred to in the proviso following
such paragraph (C);
IV(Q) in the case of AmSouth only, the AmSouth Common Stock to be issued in
the Merger will have been duly authorized and, when issued in accordance with
the terms of the Plan will be validly authorized and issued and fully paid and
nonassessable, and no shareholder of AmSouth will have any preemptive rights
thereto;
IV(R) in the case of AmSouth only, it will have available sufficient AmSouth
Common Stock at or prior to the Effective Date to exchange for shares of
Company Common Stock to be converted into the right to acquire AmSouth Common
Stock pursuant to this Plan;
IV(S) in the case of the Company only, all of its and its subsidiaries'
material contracts are in full force and effect, and neither it nor any of its
subsidiaries (nor, to the best of its knowledge, any other party to any such
contract) has breached any provision of, or is in default in any respect under
the terms of, any such contract and no party to any such contract will have the
right to terminate any or all of the provisions of any such contract as a
result of the transactions contemplated by this Plan if the effect of such
breach, default or right to terminate, alone or in the aggregate, may be
material to the business, financial condition or results of operations of it
and its subsidiaries taken as a whole;
IV(T) in the case of the Company only, it and each of its subsidiaries are,
in the conduct of their businesses, in compliance with all federal, state and
local laws, statutes, ordinances and regulations, the failure to comply with
which would materially adversely affect its consolidated financial condition,
results of operations, business or business plans. Neither it nor any of its
subsidiaries has received any notification (not disclosed in Schedule 1) from
any agency or department of any federal, state or local government or any staff
thereof asserting, other than in a regular report of examination, that it or
any of its subsidiaries are not in compliance with any of the statutes,
regulations or ordinances which such governmental authority or regulatory
agency enforces which noncompliance would have a material adverse effect on its
consolidated
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financial condition, results of operations, business or business plans, or
threatening to revoke any license, franchise, permit or governmental
authorization, and none of them is subject to any formal agreement with any
such regulatory agency with respect to any of their assets or businesses;
IV(U) in the case of the Company only, (except for the contracts, plans and
documents copies of which will be provided to AmSouth in Schedule 1), neither
the Company nor any subsidiary of the Company is a party to or subject to;
(i) any employment, consulting or severance contract or arrangement with
any employee, officer or director of the Company or of any one or more of
its subsidiaries or with any former employee, officer or director of any of
them;
(ii) any plan, arrangement or contract providing for bonuses, pensions,
options, deferred compensation, retirement payments, incentive plans,
contingent pay, profit sharing or similar arrangements for or with its
officers, directors or employees or former directors, officers or
employees;
(iii) any contract materially limiting the freedom of the Company or any
of its subsidiaries to engage in any type of banking or bank-related
business; or
(iv) any contract which contains a financial covenant or other
restriction that would have a material adverse effect upon the business,
financial condition, results of operations or business plans of the
Continuing Corporation and its subsidiaries taken as a whole;
IV(V) in the case of the Company only, it will disclose to AmSouth in
Schedule 1, as to the Company and each of its subsidiaries, (i) each
contractual restriction or limitation on the payment of dividends, and (ii) the
amount available for dividends as of December 31, 1993; except as disclosed,
there are no restrictions or limitations with respect to dividends which may be
declared and paid by the Company or any of its subsidiaries, except limitations
under federal or state banking laws, as applicable, and state corporate
statutes;
IV(W) in the case of the Company only, to the best of its knowledge, all
material facts relating to the business, operations, properties, assets,
liabilities (contingent or otherwise) and financial conditions of the Company
and each of its subsidiaries will be disclosed to AmSouth in Schedule 1; no
representation or warranty contained in this Plan, and no provisions hereof, to
the best knowledge of the Company, contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make statements
herein or therein not misleading; no information material to the Merger which
is necessary to make the representations and warranties herein contained not
misleading, to the best knowledge of the Company, has been withheld from, or
will not be delivered in Schedule 1 to, AmSouth; and whenever reference is made
herein to the delivery of copies of documents and instruments to AmSouth, such
copies are true and accurate reproductions of original documents and
instruments in the possession of the party delivering same; and
IV(X) Schedule 1 sets forth a complete and accurate list and description of
all insurance policies in force naming the Company, any of its subsidiaries or
any employees of any of them as an insured or beneficiary or as a loss payable
payee (excluding homeowner's, automobile and consumer or commercial loan
policies in which the Bank is identified as the loss payee lender or any
mortgagee title insurance policies) or for which the Company or any of its
subsidiaries has paid or is obligated to pay all or part of the premiums.
Neither the Company nor its subsidiaries have received notice of any pending or
threatened termination or retroactive premium increase with respect thereto,
and the Company and its subsidiaries are in compliance with all conditions
contained therein, the noncompliance with which could result in termination of
insurance coverage or increased premiums for prior or future periods. There are
no pending material claims against such insurance by the Company or any of its
subsidiaries as to which insurers have denied liability, and there exists no
material claim under such insurance that has not been properly filed by the
Company or its subsidiaries.
V. COVENANTS.
The Company hereby covenants to AmSouth, and AmSouth hereby covenants to the
Company, that:
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V(A) it shall use its best efforts in good faith to take or cause to be taken
all action necessary or desirable under this Plan on its part as promptly as
practicable so as to permit the consummation of the transactions contemplated
by this Plan as promptly as practicable and to cooperate fully with the other
parties hereto to that end (it being understood that a resolicitation of
proxies or other action arising as a consequence of an acquisition by AmSouth
shall not violate this covenant even if such resolicitation or other action may
delay consummation of the Merger; provided that all costs and expenses of any
such resolicitation will be paid by AmSouth);
V(B) the Company and AmSouth jointly shall prepare a registration statement
on Form S-4 (the "Registration Statement") with respect to the AmSouth Common
Stock to be issued in the Merger; the Registration Statement shall include the
proxy statement ("the Company Proxy Statement") to be submitted to the
Company's shareholders in connection with the transactions contemplated hereby;
the Company Proxy Statement and the Registration Statement shall conform to all
applicable legal requirements;
V(C) in the case of AmSouth only, it shall, as promptly as practicable
following the preparation of the Registration Statement, file the Registration
Statement with the SEC and, in the case of AmSouth and the Company, the parties
shall diligently pursue such filing so that the Registration Statement will
become effective and remain effective through the Effective Date;
V(D) when the Registration Statement or any post-effective amendment thereto
shall become effective, and at all times subsequent to such effectiveness, such
Registration Statement and all amendments or supplements thereto, with respect
to all information set forth therein furnished or to be furnished by the
Company relating to the Company and its subsidiaries and by AmSouth relating to
AmSouth and its subsidiaries, (i) will comply in all material respects with the
provisions of the Securities Act of 1933 (the "Securities Act"), the rules and
regulations of the SEC thereunder and any other applicable statutory or
regulatory requirements and (ii) will not 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 contained therein, in light of the
circumstances under which they are made, not misleading. In no event, however,
shall any party hereto be liable for any untrue statement of a material fact or
omission to state a material fact in the Registration Statement made in
reliance upon, and in conformity with, written information concerning another
party furnished by such other party specifically for use in the Registration
Statement. AmSouth will advise the Company, promptly after AmSouth receives
notice thereof, of the time when the Registration Statement has become
effective or any supplement or amendment has been filed, of the issuance of any
stop order or the suspension of the qualification of the AmSouth Common Stock
for offering or sale in any jurisdiction, of the initiation or threat of any
proceeding for any such purpose, or of any request by the SEC for the amendment
or supplement of the Registration Statement or for additional information;
V(E) in the case of AmSouth only, it shall use its best efforts to obtain,
prior to the effective date of the Registration Statement, all necessary state
securities laws or "blue sky" permits and approvals required to carry out the
transactions contemplated by this Plan, provided that AmSouth shall not be
required by virtue thereof to submit to general jurisdiction in any state, and
will prepare and submit to the New York Stock Exchange a listing application
covering the AmSouth Common Stock issuable in connection with the Merger and
will use its best efforts to obtain, prior to the Effective Date, approval for
the listing of such stock upon official notice of issuance;
V(F) it agrees that, unless approved by the other parties hereto in advance,
in the case of the Company it will not issue any press release or written
statement for general circulation, except as otherwise required by law, and in
the case of AmSouth it will not issue any press release or written statement
for general circulation relating to the transactions contemplated hereby,
except as otherwise required by law;
V(G)(1) upon reasonable notice, it shall (and shall cause each of its
subsidiaries to) afford to the other party and its officers, employees,
counsel, accountants and other authorized representatives access, during normal
business hours throughout the period prior to the Effective Date, to all of its
and its subsidiaries'
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<PAGE>
properties, books, contracts, commitments and records and, during such period
it shall (and it shall cause each of its subsidiaries to) furnish promptly to
the other party (a) a copy of each report, schedule and other document filed by
it pursuant to the requirements of federal or state securities or banking laws,
(b) notice of (i) any material change in the business of it or any of its
significant subsidiaries, (ii) any significant governmental complaints,
investigations or hearings (or communications indicating that the same may be
contemplated), and (iii) the institution or threat of material litigation
involving it or any of its subsidiaries and (c) all other information
concerning its business, properties and personnel as the other party may
reasonably request, provided that no investigation pursuant to this Paragraph
(G) shall affect or be deemed to modify any representation or warranty made by,
or the conditions to the obligations to consummate the Merger of, any of the
parties to this Plan; and (2) each party hereto will not use any nonpublic
information or documents obtained pursuant to this Plan for any purpose
unrelated to the consummation of the transactions contemplated by this Plan
and, if the Merger is not consummated, will hold all such information and
documents, including those obtained pursuant to this paragraph, in confidence
unless and until such time as such information or documents become publicly
available (other than by reason of any action or failure to act by such party)
or if it is advised by counsel that any such information or document is
required by law to be disclosed, and in the event of the termination of this
Plan, each party will deliver to the others all documents so obtained by it;
V(H) in the case of the Company only, neither it nor any of its subsidiaries
shall solicit or encourage inquiries or proposals with respect to, furnish any
information relating to or, subject to the fiduciary duties of the Board of
Directors, participate in any negotiations or discussions concerning, any
acquisition or purchase of all or a substantial portion of the assets of, or of
a substantial equity interest in, the Company or any of its subsidiaries or any
business combination with the Company or any of its subsidiaries other than as
contemplated by this Plan; shall notify AmSouth immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated with, such
party; and the Company shall instruct its employees, officers, directors,
agents, advisors and affiliates to refrain from doing any of the above;
V(I) in the case of the Company only, it will obtain an agreement as
described below (the "Agreement of Affiliates") from each affiliated
shareholder of the Company (the "Affiliated Shareholders") prior to the
Effective Date. The Affiliated Shareholders shall be those shareholders of the
Company who may, in the opinion of counsel for the Company, be deemed to be
"affiliates" of the Company within the meaning of Rule 145 under the Securities
Act, and who may, in the opinion of such counsel, be deemed, pursuant to the
provisions of Rule 145, to be "underwriters", as such term is defined in the
Securities Act,on resale of the AmSouth Common Stock acquired hereunder (herein
referred to as the "Acquired Securities"). The Agreement of Affiliates shall be
an agreement, satisfactory to AmSouth and its counsel, which provides that: (i)
the Acquired Securities will not be acquired with a view to the distribution
thereof except as permitted by Rule 145, (ii) the Acquired Securities will not
be disposed of in such a manner as to violate Rule 145 under the Securities Act
or the Agreement of Affiliates and without AmSouth having received an opinion
of counsel satisfactory to it, to the foregoing effect, or other evidence of
compliance with Rule 145 and the Agreement of Affiliates satisfactory to
AmSouth, (iii) AmSouth may issue appropriate stop transfer instructions to its
transfer agent with respect to the Acquired Securities, (iv) no Affiliate will
sell or otherwise reduce such Affiliate's risk relative to any shares of the
Acquired Securities (which, prior to the Effective Date, will be deemed to
include shares of the Company Common Stock) from the date that is 30 days prior
to the Effective Date until financial results covering at least 30 days of
post-Merger combined operations have been published, (v) each Affiliated
Shareholder will obtain an agreement (a copy of which will be delivered to
AmSouth) similar to that entered into by him or her from each transferee of
Acquired Securities, unless such transferee may, as evidenced by an opinion of
counsel or other evidence, in each case satisfactory to AmSouth, dispose of the
Acquired Securities transferred to him or her without registration under the
Securities Act, and (vi) the certificates representing Acquired Securities may
bear the following or a substantially similar legend:
"The securities represented by this certificate were issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933, as amended (the "Act"), applies, are held subject to
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<PAGE>
the terms of an agreement between the holder hereof and AmSouth
Bancorporation, and may be sold or otherwise transferred only upon
receipt by AmSouth Bancorporation of an opinion of counsel (or other
evidence) satisfactory to such corporation and its counsel as to
satisfactory compliance with the limitations of such Rule 145 and such
agreement, or of an opinion of counsel (or other evidence) satisfactory
to AmSouth Bancorporation and its counsel that some other exemption
from registration under the Act is available, or pursuant to a
registration statement under the Act.";
V(J) in the case of the Company only, the Members of the Board of Directors
commit to support publicly this transaction and the Company commits that it
will within ten (10) days after the date of this Plan obtain an agreement (the
"Voting Agreements") from each of its directors substantially in the form set
forth in Annex 1;
V(K) in the case of the Company only, it shall at the request of AmSouth use
its best efforts to modify and change its loan and real estate valuation
policies and practices (including loan classifications and levels of reserves)
prior to the Effective Date so as to be consistent on a mutually satisfactory
basis with those of AmSouth. The Company shall not be required to modify or
change any such policies or practices, however, until the earlier of (i) such
time as AmSouth acknowledges that all conditions to its obligation to
consummate the Merger set forth in Article VII have been waived or satisfied
and (ii) immediately prior to the Effective Date. The Company's
representations, warranties and covenants contained in this Plan shall not be
deemed to be untrue or breached in any respect for any purpose as a consequence
of any modifications or changes undertaken solely on account of this Paragraph
(K) of Article V;
V(L) in the case of AmSouth only, it agrees (i) that employees and officers
of the Company and its subsidiaries who become employees of AmSouth or one of
its subsidiaries shall, at and after the Effective Date, be entitled to
participate in AmSouth pension, benefit and similar plans on the same terms and
conditions as employees and officers of AmSouth, giving effect to years of
service with the Company and its subsidiaries or any predecessors thereof as if
such service were with AmSouth; provided, however, that in the case of
AmSouth's Retirement Plan, giving effect to years of service shall be for
vesting purposes only and not for benefit accrual purposes and (ii) that
employees and officers of the Company and its subsidiaries who become employees
of AmSouth or one of its subsidiaries will, at and after the Effective Date,
receive compensation arrangements and fringe benefits as are provided to
AmSouth's and its subsidiaries' employees and officers of equal status and
position;
V(M) AmSouth shall continue to satisfy the current public information
requirements of Rules 144 and 145 of the Securities and Exchange Commission
with respect to the AmSouth Common Stock, and to provide the Affiliates with
such other information as they may reasonably require and to otherwise
cooperate with them to facilitate any sales of AmSouth Common Stock in
compliance with Rules 144 and 145;
V(N) the Company will within ten (10) days after the date of execution of
this Plan obtain from the individual listed on Exhibit A an agreement
substantially in the form set forth in Annex 3;
V(O) (a) From and after the date of this Plan to the Effective Date, the
Company and AmSouth shall consult and cooperate with each other with respect to
determining, as specified in a written notice from AmSouth to the Company,
based upon such consultation, appropriate accruals, reserves and charges to
establish and take in respect of excess facilities and equipment capacity,
severance costs, litigation matters, write-off or write-down of various assets
and other appropriate accounting adjustments taking into account the Continuing
Corporation's business plan following the Merger.
(b) The Company and AmSouth shall consult and cooperate with each other with
respect to determining, as specified in a written notice from AmSouth to the
Company, based upon such consultation, the amount and the timing for
recognizing for financial accounting purposes the expenses of the Merger and
the restructuring charges related to or to be incurred in connection with the
Merger;
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V(P) the Company will within ten (10) days after the date of execution of
this Plan obtain from the individuals listed on Exhibit B agreements
substantially in the form set forth in Annex 4, and, if requested by AmSouth,
the Company shall have such individuals execute such agreements again
immediately prior to the Effective Date; provided, however, that the term of
such agreements shall not be extended by such re-execution;
V(Q) (a) AmSouth shall or shall cause AmSouth Florida to use its reasonable
best efforts to purchase a runoff "discovery period" extension under the
Company's existing directors' and officers' liability insurance policy covering
persons who are currently covered by such insurance for a period of five (5)
years after the Effective Date; provided, however, that neither AmSouth nor
AmSouth Florida shall be obligated to pay more than $50,000 in premium costs
for such runoff extension period.
(b) Subject to the conditions set forth in subparagraph (c) below, for a
period of five (5) years after the Effective Date AmSouth shall and shall cause
AmSouth Florida to indemnify, defend and hold harmless each person entitled to
indemnification from the Company (each, an "Indemnified Party") against all
liabilities arising out of actions or omissions occurring at or prior to the
Effective Date (including without limitation the transactions contemplated by
this Agreement) to the extent allowed as provided in Annex 5.
(c) Any Indemnified Party wishing to claim indemnification under subparagraph
(b) above, upon learning of any such liability or litigation shall promptly
notify AmSouth thereof. In the event of any such litigation (whether arising
before or after the Effective Date) (i) AmSouth or AmSouth Florida shall have
the right to assume the defense thereof with counsel reasonably acceptable to
such Indemnified Party and, upon assumption of such defense, AmSouth 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 AmSouth or AmSouth Florida
elects not to assume such defense or counsel for the Indemnified Parties
advises that there are substantive issues which raise conflicts of interest
between AmSouth and the Indemnified Parties, the Indemnified Parties may retain
counsel satisfactory to them, and AmSouth or AmSouth Florida shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; provided, however, that AmSouth
shall be obligated pursuant to this subparagraph (c) 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) AmSouth shall not be liable for any settlement effected without its prior
written consent; and further provided that AmSouth and AmSouth Florida shall
not have any obligation hereunder 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;
V(R) if AmSouth terminates this Plan in accordance with Paragraph (H) of
Article VIII after reviewing the Company's Schedule 1, AmSouth shall reimburse
the Company for the expense incurred in obtaining an opinion from The Robinson-
Humphrey Company, Inc. that the consideration to be received in the Merger is
fair to the shareholders of the Company; provided that AmSouth shall not be
obligated to pay such expense if this Plan is terminated under a provision of
Article VIII other than Paragraph (H); and
V(S) immediately prior to the Effective Date the Company shall pay in full
without any prepayment penalty the debt it owes to First Mercantile Bank and
shall obtain the release of the shares of common stock of the Bank held as
collateral for such debt; and between the date of this Plan and the Effective
Date any extension or renewal of such debt will only be made with the prior
written approval of AmSouth which will not be unreasonably withheld or delayed.
VI. REGULATORY APPROVALS.
As promptly as practicable after the date hereof:
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<PAGE>
VI(A) AmSouth and the Company shall cooperate in the preparation and
submission of applications to the appropriate regulatory agencies for approval
of the Merger and the Subsidiary Reorganization, including but not limited to
the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the
Florida Department of Banking and Finance (the "Regulatory Approvals"); and
VI(B) all other appropriate action shall be duly taken to secure the
Regulatory Approvals and all other approvals, consents and rulings to satisfy
all other requirements prescribed by law which are necessary for the
consummation of the transactions contemplated hereby.
VII. CONDITIONS TO CONSUMMATION
The consummation of the Merger (and, if AmSouth determines that the
Subsidiary Reorganization shall occur simultaneously with the Merger, the
Subsidiary Reorganization) is conditioned upon:
VII(A) approval of the relevant aspects of this Plan by the holders of at
least the number of the outstanding shares of Company Common Stock required
under applicable law and the Company's governing documents;
VII(B) procurement of the Regulatory Approvals (which shall include the
Regulatory Approvals necessary for the Subsidiary Reorganization if AmSouth
determines that the Subsidiary Reorganization shall occur simultaneously with a
Merger) and the conclusion of any statutory waiting periods in connection
therewith;
VII(C) procurement of all other regulatory consents and approvals and
satisfaction of all other requirements prescribed by applicable laws, rules or
regulations which are necessary to the consummation of the transactions
contemplated by this Plan; provided, however, that no approval or consent in
Paragraph (B) or (C) of this Article VII shall have imposed any conditions or
requirements which would (i) result in any material limitation on the ability
of AmSouth effectively to exercise full rights of ownership of all the shares
of Company Common Stock, (ii) require a divestiture which would constitute, if
made solely by the Company or the Bank, a material portion of the Company's
business or properties or (iii) in the good faith reasonable judgment of the
Board of Directors of AmSouth, otherwise materially and adversely affect the
economic assumptions of the transactions contemplated hereby so as to render
inadvisable the consummation of the Merger;
VII(D) there being no unstayed or final injunction prohibiting the
consummation of the Merger and no litigation or proceeding by any governmental
authority shall be pending or threatened before any court or agency seeking to
restrain, prohibit or invalidate the transactions provided for in this Plan;
VII(E) AmSouth and its directors and officers who sign the Registration
Statement shall have received from Ernst & Young an opinion that the
transactions contemplated by this Plan will qualify for pooling accounting
treatment under generally accepted accounting principles;
VII(F) the Company and its directors shall have received an opinion, dated
the Effective Date, of Maria B. Campbell, counsel for AmSouth, or other counsel
acceptable to the Company, containing such opinions as are customary in a
transaction of this kind;
VII(G) AmSouth and its directors and officers who sign the Registration
Statement shall have received an opinion, dated the Effective Date, of counsel
acceptable to AmSouth, containing such opinions as are customary in a
transaction of this kind;
VII(H) each of the representations, warranties and covenants contained herein
of the Company shall be true in all material respects on, or complied with in
all material respects by, the Effective Date as if made on such date (or on the
date when made in the case of any representation or warranty which specifically
relates to any earlier date) except, in the case of such representations or
warranties, where the failure to be true
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<PAGE>
would not have a material adverse effect on the business, financial condition
or results of operations of the Company and its subsidiaries taken as a whole;
and AmSouth shall have received certificates signed by the Chief Executive
Officer and the Chief Financial Officer of the Company, dated the Effective
Date, to such effect;
VII(I) each of the representations, warranties and covenants contained herein
of AmSouth shall be true in all material respects on, or complied with in all
material respects by, the Effective Date as if made on such date (or the date
when made in the case of any representation or warranty which specifically
relates to an earlier date) except, in the case of such representations and
warranties, where the failure to be true would not have a material adverse
effect on the business, financial condition or results of operations of AmSouth
and its subsidiaries taken as a whole; and the Company shall have received
certificates signed by the Chief Executive Officer and Chief Financial Officer
of AmSouth, dated the Effective Date, to such effect;
VII(J) the Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC;
VII(K) AmSouth shall have received all state securities laws and "blue sky"
permits and other authorizations necessary to consummate the transactions
contemplated hereby;
VII(L) AmSouth shall have received from each person who may be deemed to be
an Affiliated Shareholder of the Company pursuant to Paragraph I of Article V
an executed Agreement of Affiliates as provided therein;
VII(M) the Company and its directors and AmSouth and its directors and
officers who sign the Registration Statement shall have received from Ernst &
Young, or other tax advisor acceptable to the Company, an opinion, dated the
Effective Date, in form and substance satisfactory to the Company, to the
effect that, on the basis of facts, representations and assumptions set forth
in such opinion, the Merger will for federal income tax purposes constitute a
reorganization within the meaning of Section 368, or any successor thereto, of
the Code and that (except with respect to holders of Company Common Stock who
exercise dissenters' rights and except for cash payments in lieu of a
fractional share interest), (i) no gain or loss will be recognized by a holder
of Company Common Stock upon conversion in the Merger of Company Common Stock
into AmSouth Common Stock, (ii) the basis of AmSouth Common Stock to be
received in the Merger by a holder of Company Common Stock will be the same as
such holder's basis in the Company Common Stock exchanged therefore, and (iii)
the holding period of AmSouth Common Stock to be received in the Merger by a
holder of Company Common Stock will include the period during which such holder
held the Company Common Stock exchanged therefor, provided that such Company
Common Stock was held as a capital asset immediately prior to the consummation
of the Merger; in rendering such opinion, such tax advisor may rely upon
certificates of officers of AmSouth and the Company as to factual matters;
VII(N) there shall have been no discovery by AmSouth of a material adverse
condition with respect to the Company or the Bank. For purposes of this
Paragraph (N) of Article VII a "material adverse condition" is a condition
arising from any circumstance other than the Merger which either alone or when
aggregated with other conditions has resulted or, in the reasonable opinion of
AmSouth, would result, in (i) a substantial loss or damage to the properties or
assets of the Company whether or not insured, that would materially affect or
impair the ability of the Company to conduct its business as presently
conducted, or (ii) a reduction of Six Hundred and Twenty-Five Thousand Dollars
($625,000) or more on a pre-tax basis in the consolidated total shareholders'
equity of the Company from the amounts reflected on the December 31, 1993
Financial Reports of the Company; provided, however, that for purposes of the
calculations contemplated herein, consolidated total shareholders' equity of
the Company shall not be reduced by the merger-related charges and expenses
taken by the Company pursuant to Paragraph (O) of Article V or by addition by
the Company to the allowance for possible loan losses prior to the Effective
Date in accordance with Paragraph (K) of
16
<PAGE>
Article V, and that such charges, expenses or additions shall not represent a
material adverse condition with respect to the Company;
VII(O) there shall have been no discovery by the Company of a material
adverse condition with respect to AmSouth. For purposes of this Paragraph (O)
of Article VII a "material adverse condition" is a condition arising from any
circumstance other than the Merger which either alone or when aggregated with
other conditions has resulted or, in the reasonable opinion of the Company,
would result, in (i) a substantial loss or damage to the properties or assets
of AmSouth whether or not insured, that would materially affect or impair the
ability of AmSouth to conduct its business as presently conducted, or (ii) a
reduction of Fifty-Four Million Dollars ($54,000,000) or more on a pre-tax
basis in the consolidated total shareholders' equity of AmSouth from the
amounts reflected on the December 31, 1993 Financial Reports of AmSouth;
provided however, that for purposes of the calculations contemplated herein,
consolidated total shareholders' equity of AmSouth shall not be reduced by the
payment of its per share regular quarterly dividend consistent with historical
practice, and that such payment shall not represent a material adverse
condition with respect to AmSouth; and
VII(P) AmSouth shall have received from Dwight Darby & Company letters dated
not more than five (5) days prior to (i) the date of the Company Proxy
Statement and (ii) the Effective Date, with respect to certain financial
information regarding the Company, in form and substance which is customary in
transactions of the nature contemplated by this Plan;
provided, however, that a failure to satisfy any of the conditions set forth
in Paragraphs (E), (G), (H), (L), (N) or (P) of this Article VII shall only
constitute conditions if asserted by AmSouth; and a failure to satisfy any of
the conditions set forth in Paragraphs (F), (I) or (O) of this Article VII
shall only constitute conditions if asserted by the Company.
VIII. TERMINATION.
This Plan may be terminated prior to the Effective Date, either before or
after its approval by shareholders:
VIII(A) by the mutual consent of AmSouth and the Company, if the Board of
Directors of each so determines by vote of a majority of the members of its
entire Board;
VIII(B) by AmSouth or the Company, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event of a
material breach by the other of any representation, warranty or agreement
contained herein which is not cured within 45 days after the date of written
notice from the other party hereto;
VIII(C) by AmSouth or the Company, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event that the
Merger is not consummated by January 3, 1995 (or such later date as may be
agreed to by the parties hereto) unless the failure to so consummate by such
time is due to a breach of the Plan by the party seeking to terminate;
VIII(D) by AmSouth or the Company if this Plan is not approved by the
requisite vote of the shareholders of the Company;
VIII(E) by AmSouth or the Company if the Regulatory Approvals are not
obtained or if the Regulatory Approvals contain any condition of the type
referred to in the proviso following Paragraph (C) of Article VII;
VIII(F) by AmSouth or the Company if any condition to closing is not met or
waived by the party to benefit from the unmet condition by thirty (30) days
after the Closing Date as defined in Article IX;
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<PAGE>
VIII(G) by the Company as provided in Paragraph (E) of Article II;
VIII(H) by AmSouth or the Company as provided in Paragraph (I) of Article X;
VIII(I) by AmSouth in the event it discovers a material adverse condition (as
defined in Paragraph (N) of Article VII) with respect to the Company or the
Bank; and
VIII(J) by the Company in the event it discovers a material adverse condition
(as defined in Paragraph (O) of Article VII) with respect to AmSouth.
IX. CLOSING.
On a date (the "Closing Date") selected by AmSouth and communicated in
writing to the Company which shall be no later than the 15th day of the month
following the end of the quarter in which the last to occur of the following
occurs: (i) the last Regulatory Approval required for the Merger (and, if
AmSouth determines that the Subsidiary Reorganization will occur simultaneously
with the Merger, the Subsidiary Reorganization) or (ii) the 30th day following
the expiration of the waiting period imposed by such Regulatory Approval (or if
such Regulatory Approval imposes no waiting period, the 60th day following the
receipt of such approval) or (iii) the 60th day following the approval of the
Merger by the shareholders of the Company, appropriate documents to consummate
the Merger (and, if AmSouth determines that the Subsidiary Reorganization shall
occur simultaneously with the Merger, the Subsidiary Reorganization) shall be
executed in accordance with all appropriate legal requirements and shall be
delivered and/or filed as required by law, and the Merger (and, if applicable,
the Subsidiary Reorganization) provided for herein shall become effective upon
such filings or on such later date as may be specified in the documents (the
date of such filing or such later date being herein called the "Effective
Date"); provided, however, that if the conditions of Paragraph (E)(1) of
Article II are met, the Closing shall not take place until the expiration of
all time periods allowed by said Paragraph (E) for notice and other actions
have expired. The closing shall take place in Birmingham, Alabama.
X. OTHER MATTERS.
X(A) The agreements of the parties which by their terms are applicable in
whole or in part after the Effective Date shall survive the Effective Date. All
other representations, warranties, agreements and covenants shall be deemed to
be conditions of the Merger and shall not survive the Effective Date. If this
Plan shall be terminated, the agreements of the parties in Paragraph (M) of
Article IV, Paragraph (G)(2) of Article V and Paragraphs (E), (F) and (H) of
this Article X shall survive such termination.
X(B) Prior to the Effective Date, any provision of this Plan may be (i)
waived by the party benefited by the provision or (ii) amended or modified at
any time (including the structure of the transaction), by an agreement in
writing among the parties hereto approved by their respective Boards of
Directors and executed in the same manner as this Plan, except that, after the
vote by the shareholders of the Company, the method for determining the number
of shares of AmSouth Common Stock per share of Company Common Stock to be
received by the shareholders of the Company in the Merger shall not be changed
except as provided in Paragraph (E)(1) of Article II.
X(C) This Plan may be executed in one or more counterparts, each of which
shall be deemed to constitute an original. This Plan shall become effective
when one counterpart has been signed by each party hereto.
X(D) [This paragraph was intentionally omitted.]
X(E) Except as otherwise provided herein or in the Stock Option Agreement,
each of the parties shall bear and pay all costs and expenses incurred by it or
on its behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial or other consultants,
investment
18
<PAGE>
bankers, accountants and counsel. The parties agree to divide equally the costs
of printing the Registration Statement and Company Proxy Statement, the SEC
registration fee and state "blue sky" fees as applicable, and fees and expenses
of experts and consultants providing market competition analysis and supporting
materials; provided, however, that in the event AmSouth terminates this Plan,
AmSouth shall reimburse the Company for its share of such costs and expenses
which would otherwise have been shared pursuant to this sentence.
X(F) Each of the parties and their respective agents, investment bankers,
attorneys and accountants will maintain the confidentiality of all information
provided in connection herewith which has not been publicly disclosed.
X(G) All notices, requests and other communications hereunder to a party
shall be in writing and shall be deemed to have been duly given when delivered
by hand, telegram, facsimile or telex (confirmed in writing) to such party at
its address set forth or such other address as such party may specify by notice
to the parties hereto.
If to AmSouth to: AmSouth Bancorporation
1400 AmSouth/Sonat Tower
Birmingham, Alabama 35203
Facsimile number: 205-581-7440
Attn: Chairman of the Board and Chief Executive Officer
Copy to: Maria B. Campbell
AmSouth Bancorporation
Suite 920 AmSouth/Harbert Plaza
1901 6th Avenue North
Birmingham, Alabama 35203
Facsimile number: 205-583-4497
If to Company, to: The Tampa Banking Company
c/o G. Robert Blanchard
Chairman of the Board
201 East Kennedy Boulevard
Suite 715
Tampa, Florida 33602
Facsimile number: 813-223-5406
Copy to: Andrew J. Lubrano
Hill, Ward & Henderson
101 East Kennedy Boulevard
Suite 3700
Tampa, Florida 33602
Facsimile number: 813-221-2900
X(H) This Plan represents the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and supersedes any and all
other oral or written agreements heretofore made.
X(I) Notwithstanding anything to the contrary herein, it is understood and
agreed that at the date of execution of this Plan the parties have not had the
opportunity to compile Schedule 1 hereto. No later than 30 days after the date
of execution of this Plan each party shall have provided the other party with
all documents and disclosures constituting Schedule 1. If in the reasonable and
good faith judgment of the Company or AmSouth Schedule 1 discloses matters
which indicate material adverse changes, occurrences or
19
<PAGE>
circumstances with respect to the other party, then within ten (10) days after
delivery of the last Schedule 1 information, either of the parties by written
notice to the other may terminate this Plan. Failure to terminate this Plan in
accordance with the preceding sentence shall not affect the ability of AmSouth
or the Company to terminate this Plan as provided in Article VIII. Prior to the
Effective Date, each party will promptly amend Schedule 1 with respect to any
matter which if existing, occurring or known at the date hereof would have been
required to be set forth in such Schedule 1 or which is necessary to correct
any information therein which has been rendered incorrect or incomplete.
X(J) Neither party hereto may assign or otherwise transfer its rights or
obligations under this Plan to any other person, partnership, corporation or
other entity without the prior written approval of the other party hereto.
X(K) Remedies. In the event of a material breach of any representation,
warranty or agreement contained herein by either party, such breaching party
will have 45 days after the date of written notice of such breach by the other
party in which to cure the breach. If such breach is not cured within the 45-
day period, the nonbreaching party will have the right to terminate this Plan.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in counterparts by their duly authorized officers and their corporate
seals to be hereunto affixed, all as of the day and year first above written.
AMSOUTH BANCORPORATION
ATTEST:
/s/ Carl L. Gorday By: /s/ John W. Woods
------------------------- -------------------------
Assistant Secretary Chairman of the Board
(Corporate Seal)
THE TAMPA BANKING COMPANY
ATTEST:
/s/ Barbara A. Diamond By: /s/ G. Robert Blanchard
------------------------- -------------------------
Secretary Chairman of the Board
(Corporate Seal)
20
<PAGE>
ANNEX 1
March , 1994
Mr. John W. Woods
Chairman of the Board, President and
Chief Executive Officer
AmSouth Bancorporation
1900 Fifth Avenue North
Birmingham, Alabama 35288
RE: The Tampa Banking Company;
Voting of Common Stock
Dear Mr. Woods:
I am writing to confirm the following agreement between AmSouth and me
regarding the pending merger between The Tampa Banking Company and AmSouth
Bancorporation. In consideration of AmSouth Bancorporation entering into the
Agreement and Plan of Merger (the "Agreement") dated March , 1994 with The
Tampa Banking Company, for a period of twelve months from the date of this
letter, I agree to vote all of the shares of The Tampa Banking Company that I
own or otherwise have the power to vote in favor of the merger of The Tampa
Banking Company and AmSouth, and in favor of the other transactions
contemplated by the Agreement. Furthermore, for the same period of time, I will
vote my shares against any business combination or other reorganization of any
kind involving The Tampa Banking Company or its subsidiaries with any entity
other than AmSouth.
If the Agreement is terminated I will have no further obligations under this
letter after the date of such termination. I further agree that if I sell or
otherwise dispose of any of the shares subject to this agreement, I will obtain
from the purchaser or transferee thereof an agreement in favor of AmSouth in
the same form as this letter.
Sincerely yours,
<PAGE>
ANNEX 2
Compass Bancshares, Inc.
SouthTrust Corporation
First Alabama Bancshares, Inc. (Regions Financial Corp.)
BankSouth Corporation
Deposit Guaranty Corporation
Trustmark Corporation
Southern National Corporation
CCB Financial Corporation
First Tennessee National Corp.
First American Corp.
Central Fidelity Banks, Inc.
Signet Banking Corporation
Crestar Financial Corporation
First Virginia Banks, Inc.
Centura Banks, Inc.
<PAGE>
ANNEX 3
March , 1994
Mr. John W. Woods
Chairman of the Board and
Chief Executive Officer
AmSouth Bancorporation
1900 Fifth Avenue North
Birmingham, AL 35288
RE: The Tampa Banking Company
Dear Mr. Woods:
I am writing to confirm the following agreement between AmSouth and me
regarding the pending merger between The Tampa Banking Company ("Tampa") and
AmSouth Bancorporation ("AmSouth"). In consideration of AmSouth entering into
the Agreement and Plan of Merger (the "Agreement") dated March , 1994 with
Tampa, for a period of twelve months from the date of this letter I agree as
follows:
A. If either (i) Tampa shall have authorized, recommended, publicly proposed
or publicly announced an intention to authorize, recommend or propose, or
entered into an agreement with any person (other than AmSouth or a subsidiary
of AmSouth) to effect (x) a merger, consolidation or similar transaction
involving Tampa or any of its subsidiaries, (y) the disposition by sale, lease,
exchange or otherwise of assets of Tampa or any of its subsidiaries
representing 20% or more of the consolidated assets of Tampa and its
subsidiaries or (z) the issuance, sale or disposition of by way of merger,
consolidation, share exchange or any similar transaction, securities
representing 10% or more of the voting power of Tampa or any of its
subsidiaries, or (ii) any person (other than AmSouth or any subsidiary of
AmSouth) shall have acquired beneficial ownership (as such term is defined in
Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") or the right to acquire beneficial ownership of, or any
"group" (as such term is defined in the Exchange Act) shall have been formed
which beneficially owns or has the right to acquire beneficial ownership of,
20% or more of the then outstanding shares of Tampa common stock; or (iii) any
person (other than AmSouth or any subsidiary of AmSouth, shall have commenced
(as such term is defined in Rule 14d-2 under the Exchange Act) or shall have
filed a registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to, a tender offer or exchange offer to
purchase any shares of Tampa common stock such that, upon consummation of such
offer, such person would own or control 20% of more of the then outstanding
shares of Tampa common stock, then I agree that I will, prior to the record
date for any meeting of shareholders of Tampa common stock at which any such
action shall be considered or at which the Agreement shall be considered by the
shareholders, exercise the options which I hold under any and all stock option
plans maintained by Tampa and that the shares of Tampa common stock obtain by
such option exercise will be subject to the Voting Agreement (as such term is
defined in the Agreement) executed by me.
B. If the provisions of Paragraph A above do not apply, I agree that I will
not exercise any options which I hold under any and all stock option plans
maintained by Tampa and I will elect to receive for each unexercised option Net
Appreciation Shares as set forth in Article II(F) of the Agreement.
If the Agreement is terminated I will have no further obligations under this
letter after the date of such termination.
Sincerely yours,
<PAGE>
ANNEX 4
March , 1994
Mr. John W. Woods
Chairman of the Board and
Chief Executive Officer
AmSouth Bancorporation
1900 Fifth Avenue North
Birmingham, AL 35288
RE: The Tampa Banking Company
Dear Mr. Woods:
I am writing to confirm the following agreement between AmSouth and me
regarding the pending merger between The Tampa Banking Company ("Tampa") and
AmSouth Bancorporation ("AmSouth"). In consideration of AmSouth entering into
the Agreement and Plan of Merger (the "Agreement") dated March , 1994 with
Tampa, I agree that for a period of two (2) years from the later of (1) the
date of this letter or (2) the date of voluntary termination (or my involuntary
termination due to willful misconduct, personal dishonesty, incompetence,
breach of fiduciary duties involving personal profit, intentional failure to
perform stated duties or willful violation of law, rule or regulation) of my
affiliation as a director, advisory director, officer or employee of Tampa or
one of its subsidiaries or AmSouth or one of its subsidiaries, I will not
directly or indirectly engage or participate in, become a director, officer or
employee of, or render advisory or other services for or make a financial
investment in any bank, bank holding company, savings bank, savings and loan
association, thrift holding company, credit union, mortgage banking company,
trust company or any other financial institution which has offices in the
following counties in Florida: Hillsborough, Pinellas, Hernando or Pasco. I
understand that the foregoing shall not prevent me from owning passive
investments in the securities of financial institutions so long as such
ownership does not require me to render any services or advice to the
institution in which I have invested.
I further agree that if any provision of this letter, including without
limitation the duration or geographic scope of the restrictions, is held to be
invalid or unenforceable, such provision shall automatically be deemed to be
amended to be the maximum restriction which is legally binding and enforceable.
If the Agreement is terminated I will have no further obligations under this
letter after the date of such termination.
Sincerely yours,
Provided, however, that the foregoing may be altered (i) in the case of G.
Robert Blanchard to omit the reference to Pasco County, and (ii) in the case of
Charles M. Davis, Jr. to restrict him only from serving as a director or
advisory director of another bank.
<PAGE>
ANNEX 5
The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed claim,
action suit, or proceeding, whether civil, criminal, administrative, or
investigative, (other than an action by, or in the right of the Corporation),
by reason of the fact that he is or was a director, officer, employee, or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against expenses (including
attorneys' fees), judgments, fines, and amount paid in settlement actually and
reasonably incurred by him in connection with such action, suit, or proceeding,
including any appeal thereof, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened, pending, or completed action
or suit by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee, or
agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, or is or was
serving at the request of the Corporation as a director, officer, employee, or
agent of the Corporation, partnership, joint venture, trust, or other
enterprise against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit, including any appeal thereof, if he acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Corporation, except that no indemnification shall be made in respect of any
claim, issue, or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
corporation unless, and only to the extent that, the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all circumstances of the case, such
person is fully and reasonably entitled to indemnity for such expenses which
such court shall deem proper.
To the extent that a director, officer, employee, or agent of the Corporation
has been successful on the merits or otherwise in defense of any such action,
suit, or proceeding referred to in this Article, or in defense of any claim,
issue, or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Any indemnification under this Article, unless pursuant to a determination by
a court shall be made by the Corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee, or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth above. Such determination will be made
(a) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit, or proceeding, or (b) if
such a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (c) by the shareholders by a majority vote of
a quorum consisting of shareholders who were not parties to such action, suit,
or proceeding.
Expenses, including attorneys' fees incurred in defending a civil or criminal
action, suit, or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit, or proceeding upon a preliminary
determination following one of the procedures set forth above that the
director, officer, employee, or agent met the applicable standard of conduct
set forth in this Article or as authorized by the Board of Directors in the
specific case and, in either event, upon receipt of an undertaking by or on
behalf of the director, officer, employee, or agent to repay such amount,
unless it shall ultimately be determined that he is entitled to be indemnified
by the Corporation as authorized in this Article.
<PAGE>
The indemnification provided by this Article shall not be deemed exclusive of
any other rights to which those indemnified may be entitled under any statute,
rule of law, provision of articles of incorporation, by-law, agreement, vote of
shareholders, or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
For purposes of this Article, references to the "Corporation" include all
constituent banking or other financial corporations absorbed in a consolidation
or merger as well as the resulting or surviving corporation, so that any person
who is or was a director, officer, employee, or agent of such a constituent
corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, shall stand in the same position
under the provisions of this Article with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving corporation
in the same capacity.
The Corporation shall have power to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of another Corporation, corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article.
<PAGE>
EXHIBIT A
A. Gerald Divers
<PAGE>
EXHIBIT B
S.C. Bexley, Jr.
G. Robert Blanchard
Charles M. Davis, Jr.
James L. Ferman, Jr.
James W. Gray, Jr.
<PAGE>
APPENDIX B
OPINION OF FINANCIAL ADVISER
DATED MARCH 9, 1994
<PAGE>
APPENDIX B
[LOGO OF THE ROBINSON-HUMPHREY COMPANY, INC. APPEARS HERE]
March 9, 1994
Board of Directors
The Tampa Banking Company
601 Bayshore Boulevard
Tampa, Florida 33601
Gentlemen:
In connection with the proposed acquisition of The Tampa Banking Company
("TBC") by AmSouth Bancorporation ("ASO") (the "Merger"), you have asked us to
render an opinion as to whether the financial terms of the Merger, as provided
in the Agreement and Plan of Merger dated as of March 9, 1994 among such
parties (the "Merger Agreement"), are fair, from a financial point of view, to
the stockholders of TBC. Under the terms of the Merger, holders of all
outstanding shares of TBC stock will receive consideration equal to 1.5592 ASO
shares for each TBC share, subject to adjustment under certain circumstances.
Our firm, as part of its investment banking business, is frequently involved
in the valuation of securities as related to public underwritings, private
placements, mergers, acquisitions, recapitalizations and other purposes.
In connection with our study for rendering this opinion, we have reviewed the
Merger Agreement, TBC's financial results for fiscal years 1989, 1990, 1991,
1992 and 1993, and certain documents and information we deem relevant to our
analysis. We have also held discussions with senior management of TBC for the
purpose of reviewing the historical and current operations of, and outlook for
TBC, industry trends, the terms of the proposed Merger, and related matters.
We have studied published financial data concerning certain other publicly
traded banks which we deem comparable to TBC as well as certain financial data
relating to acquisitions of other banks that we deem relevant or comparable. In
addition, we have reviewed other published information, performed certain
financial analyses and considered other factors and information which we deem
relevant.
As the proposed Merger Agreement entails the issuance of shares of ASO as the
consideration to be paid to TBC stockholders, we have examined publicly
available information, as well as internal data, relating to ASO including its
historical financial statements, from 1989 up through and including the fiscal
year ended December 31, 1993. We are generally familiar with ASO's business
practices and in the course of business, our firm publishes research coverage
of ASO from time to time.
In rendering this opinion, we have relied upon the accuracy of the Merger
Agreement, the financial information listed above, and other information
furnished to us by TBC and ASO. We have not separately verified this
information nor have we made an independent evaluation of any of the assets or
liabilities of TBC and ASO.
During the process, we participated in the marketing of the shares of TBC and
were solely responsible for gathering proposals for those shares. We are aware
of other proposals, made by similar institutions, that were presented to the
Board for its consideration.
Based upon the foregoing, our experience as investment bankers, and upon
current market and economic conditions, and such other facts as we deemed
relevant, we are of the opinion that, from a financial point of view, the terms
of the Merger as provided in the Merger Agreement are fair to the stockholders
of TBC.
Very truly yours,
/s/ The Robinson-Humphrey Company, Inc.
THE ROBINSON-HUMPHREY COMPANY, INC.
ATLANTA FINANCIAL CENTER
3333 PEACHTREE ROAD, NE . ATLANTA GEORGIA 30326
(404) 266-6000
<PAGE>
APPENDIX C
FLORIDA BUSINESS CORPORATION ACT (S)(S)1301, 1302, 1320
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Florida Business Corporation Act (S)(S) 1301, 1302, 1320
SECTION 607.1301 DISSENTERS' RIGHTS; DEFINITIONS.
The following definitions apply to ss. 607.1302 and 607.1320:
(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.
(2) "Fair value," with respect to a dissenter's shares, means the value of
the shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(3) "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date on which
the corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to s. 607.1104, the day prior to the date on which a copy of
the plan of merger was mailed to each shareholder of record of the subsidiary
corporation.
SECTION 607.1302 RIGHT OF SHAREHOLDERS TO DISSENT.
(1) Any shareholder of a corporation has the right to dissent from, and
obtain payment of the fair value of his shares in the event of, any of the
following corporate actions:
(a) Consummation of a plan of merger to which the corporation is a party:
1. If the shareholder is entitled to vote on the merger, or
2. If the corporation is a subsidiary that is merged with its parent
under s. 607.1104, and the shareholders would have been entitled to
vote on action taken, except for the applicability of s. 607.1104;
(b) Consummation of a sale or exchange of all, or substantially all, of
the property of the corporation, other than in the usual and regular course
of business, if the shareholder is entitled to vote on the sale or exchange
pursuant to s. 607.1202, including a sale in dissolution 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 1 year after the date of sale;
(c) As provided in s. 607.0902(11), the approval of a control-share
acquisition;
(d) Consummation of a plan of share exchange to which the corporation is
a party as the corporation the shares of which will be acquired, if the
shareholder is entitled to vote on the plan;
(e) Any amendment of the articles of incorporation if the shareholder is
entitled to vote on the amendment and if such amendment would adversely
affect such shareholder by:
1. Altering or abolishing any preemptive rights attached to any of
his shares;
2. Altering or abolishing the voting rights pertaining to any of his
shares, except as such rights may be affected by the voting rights of
new shares then being authorized of any existing or new class or series
of shares;
3. Effecting an exchange, cancellation, or reclassification of any of
his shares, when such exchange, cancellation, or reclassification would
alter or abolish his voting rights or alter his percentage of equity in
the corporation, or effecting a reduction or cancellation of accrued
dividends or other arrearages in respect to such shares;
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4. Reducing the stated redemption price of any of his redeemable
shares, altering or abolishing any provision relating to any sinking
fund for the redemption or purchase of any of his shares, or making any
of his shares subject to redemption when they are not otherwise
redeemable;
5. Making noncumulative, in whole or in part, dividends of any of his
preferred shares which had theretofore been cumulative;
6. Reducing the stated dividend preference of any of his preferred
shares; or
7. Reducing any stated preferential amount payable on any of his
preferred shares upon voluntary or involuntary liquidation; or
(f) Any corporate action taken, to the extent the articles of
incorporation provide that a voting or nonvoting shareholder is entitled to
dissent and obtain payment for his shares.
SECTION 607.1320 PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS.
(1) (a) If a proposed corporate action creating dissenters' rights under s.
607.1302 is submitted to a vote at a shareholders' meeting, the meeting notice
shall state that shareholders are or may be entitled to assert dissenters'
rights and be accompanied by a copy of ss. 607.1301, 607.1302, and 607.1320. A
shareholder who wishes to assert dissenters' rights shall:
1. 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. Not vote his shares in favor of the proposed action. A proxy or vote
against the proposed action does not constitute such a notice of intent to
demand payment.
(b) If proposed corporate action creating dissenters' rights under s.
607.1302 is effectuated by written consent without a meeting, the corporation
shall deliver a copy of ss. 607.1301, 607.1302, and 607.1320 to each
shareholder simultaneously with any request for his written consent or, if such
a request is not made, within 10 days after the date the corporation received
written consents without a meeting from the requisite number of shareholders
necessary to authorize the action.
(2) Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or consent or
adoption of the plan of merger, as the case may be, to each shareholder who
filed a notice of intent to demand payment for his shares pursuant to paragraph
(1)(a) or, in the case of action authorized by written consent, to each
shareholder, excepting any who voted for, or consented in writing to, the
proposed action.
(3) Within 20 days after the giving of notice to him, any shareholder who
elects to dissent shall file with the corporation a notice of such election,
stating his name and address, the number, classes, and series of shares as to
which he dissents, and a demand for payment of the fair value of his shares.
Any shareholder failing to file such election to dissent within the period set
forth shall be bound by the terms of the proposed corporate action. Any
shareholder filing an election to dissent shall deposit his certificates for
certificated shares with the corporation simultaneously with the filing of the
election to dissent. The corporation may restrict the transfer of
uncertificated shares from the date the shareholder's election to dissent is
filed with the corporation.
(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall
not be entitled to vote or to exercise any other rights of a shareholder. A
notice of election may be withdrawn in writing by the shareholder at any time
before an offer is made by the corporation, as provided in subsection (5), to
pay for his shares. After such offer, no such notice of election may be
withdrawn unless the corporation consents thereto. However, the right of such
shareholder to be paid the fair value of his shares shall cease, and he shall
be reinstated to have all his rights as a shareholder as of the filing of his
notice of election, including any intervening preemptive rights and the right
to payment
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of any intervening dividend or other distribution or, if any such rights have
expired or any such dividend or distribution other than in cash has been
completed, in lieu thereof, at the election of the corporation, the fair value
thereof in cash as determined by the board as of the time of such expiration or
completion, but without prejudice otherwise to any corporate proceedings that
may have been taken in the interim, if:
(a) Such demand is withdrawn as provided in this section;
(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such action;
(c) No demand or petition for the determination of fair value by a court
has been made or filed within the time provided in this section; or
(d) A court of competent jurisdiction determines that such shareholder is
not entitled to the relief provided by this section.
(5) Within 10 days after the expiration of the period in which shareholders
may file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
this section to pay an amount the corporation estimates to be the fair value
for such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:
(a) A balance sheet of the corporation, the shares of which the
dissenting shareholder holds, as of the latest available date and not more
than 12 months prior to the making of such offer; and
(b) A profit and loss statement of such corporation for the 12-month
period ended on the date of such balance sheet or, if the corporation was
not in existence throughout such 12-month period, for the portion thereof
during which it was in existence.
(6) If within 30 days after the making of such offer any shareholder accepts
the same, payment for his shares shall be made within 90 days after the making
of such offer or the consummation of the proposed action, whichever is later.
Upon payment of the agreed value, the dissenting shareholder shall cease to
have any interest in such shares.
(7) If the corporation fails to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30
days thereafter, then the corporation, within 30 days after receipt of written
demand from any dissenting shareholder given within 60 days after the date on
which such corporate action was effected, shall, or at its election at any time
within such period of 60 days may, file an action in any court of competent
jurisdiction in the county in this state where the registered office of the
corporation is located requesting that the fair value of such shares be
determined. The court shall also determine whether each dissenting shareholder,
as to whom the corporation requests the court to make such determination, is
entitled to receive payment for his shares. If the corporation fails to
institute the proceeding as herein provided, any dissenting shareholder may do
so in the name of the corporation. All dissenting shareholders (whether or not
residents of this state), other than shareholders who have agreed with the
corporation as to the value of their shares, shall be made parties to the
proceeding as an action against their shares. The corporation shall serve a
copy of the initial pleadings in such 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 and publication or in such
other manner as is permitted by law. The jurisdiction of the court is plenary
and exclusive. All shareholders who are proper parties to the proceeding are
entitled to judgment against the corporation for the amount of the fair value
of their shares.
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The court may, if it so elects, appoint one or more persons as appraisers to
receive evidence and recommend a decision on the question of fair value. The
appraisers shall have such power and authority as is specified in the order of
their appointment or an amendment thereof. The corporation shall pay each
dissenting shareholder the amount found to be due him within 10 days after
final determination of the proceedings. Upon payment of the judgment, the
dissenting shareholder shall cease to have any interest in such shares.
(8) The judgment may, at the discretion of the court, include a fair rate of
interest, to be determined by the court.
(9) The costs and expenses of any such proceeding shall be determined by the
court and shall be assessed against the corporation, but all or any part of
such costs and expenses may be apportioned and assessed as the court deems
equitable against any or all of the dissenting shareholders who are parties to
the proceeding, to whom the corporation has made an offer to pay for the
shares, if the court finds that the action of such shareholders in failing to
accept such offer was arbitrary, vexatious, or not in good faith. Such expenses
shall include reasonable compensation for, and reasonable expenses of, the
appraisers, but shall exclude the fees and expenses of counsel for, and experts
employed by, any party. If the fair value of the shares, as determined,
materially exceeds the amount which the corporation offered to pay therefor or
if no offer was made, the court in its discretion may award to any shareholder
who is a party to the proceeding such sum as the court determines to be
reasonable compensation to any attorney or expert employed by the shareholder
in the proceeding.
(10) Shares acquired by a corporation pursuant to payment of the agreed value
thereof or pursuant to payment of the judgment entered therefor, as provided in
this section, may be held and disposed of by such corporation as authorized but
unissued shares of the corporation, except that, in the case of a merger, they
may be held and disposed of as the plan of merger otherwise provides. The
shares of the surviving corporation into which the shares of such dissenting
shareholders would have been converted had they assented to the merger shall
have the status of authorized but unissued shares of the surviving corporation.
