<PAGE>
Filed pursuant to Rule 424(b)(3)
Registration Statement No. 33-52961
[AMSOUTH LETTERHEAD APPEARS HERE]
May 27, 1994
Dear Fortune Shareholder:
On May 23, 1994, the shareholders of Fortune Bancorp, Inc. ("Fortune")
approved an Agreement and Plan of Merger, dated as of September 12, 1993 and
amended as of May 11, 1994 (as so amended, "Merger Agreement"), which provides
for the merger of Fortune with and into AmSouth Bancorporation ("AmSouth") (the
"Merger").
As described in the Proxy Statement-Prospectus referred to below, the Merger
Agreement provides that in the Merger (1) each Fortune common shareholder will
receive either all cash or all shares of AmSouth common stock in exchange for
all his or her shares of Fortune common stock and (2) each Fortune preferred
shareholder will receive either all cash or all shares of AmSouth common stock
plus approximately $1.81 per share in cash in exchange for all his or her
shares of Fortune preferred stock.
Accordingly, AmSouth is now asking you to indicate whether you wish to elect
to receive either all cash or all AmSouth common stock (plus approximately
$1.81 in cash per share of Fortune preferred stock) in exchange for your shares
of Fortune stock. To assist you in making this election, enclosed are an
Election Form and Letter of Transmittal (the "Election Form") and a Prospectus
Supplement to the original Proxy Statement-Prospectus, dated April 5, 1994, as
supplemented by a supplement dated May 12, 1994, which was sent to Fortune
shareholders of record as of March 14, 1994. The Prospectus Supplement is
attached to this letter; for those of you who did not previously receive a copy
of the original Proxy Statement-Prospectus as supplemented, a copy is also
enclosed.
There can be no guarantee that any given shareholder's election will be
honored. Each election will be subject to the results of the procedures set
forth in the Merger Agreement for allocating the amounts available for cash and
AmSouth common stock payments among Fortune shareholders. To the extent that
shareholder elections exceed the total amounts available for cash or AmSouth
common stock payments, the Exchange Agent will be required to select certain
shareholders whose shares will be converted into AmSouth common stock or cash,
respectively, notwithstanding their elections.
You will need to complete and return the accompanying Election Form to the
Exchange Agent, AmSouth Bank N.A., in order to indicate whether you wish to
receive either all cash or all AmSouth common stock (plus approximately $1.81
in cash per share of Fortune preferred stock). You also may indicate on the
Election Form that you do not have a preference as to cash or AmSouth common
stock.
We urge you to consult your own financial advisor before making your
election. Moreover, although certain federal income tax consequences of the
Merger for Fortune shareholders are described in the Prospectus Supplement, you
should consult your own tax advisor because of the complexities of the federal,
state and local tax laws. We make no recommendation as to whether you should
elect cash or stock or indicate no preference.
It is important that you read the accompanying documents carefully, complete
the enclosed Election Form, and ensure that it, together with all stock
certificates (other than certificates held through Fortune's Dividend
Reinvestment Plan) representing your Fortune common stock and/or Fortune
preferred stock to which the Election Form relates, is actually received by the
Exchange Agent at one of the proper locations specified in the Election Form by
5:00 P.M., Central Time, on June 16, 1994. If such materials are not actually
received by the Exchange Agent at one of the proper locations by the proper
time, you will be deemed to have expressed no preference and will receive
either cash or AmSouth common stock (plus approximately $1.81 in cash per share
of Fortune preferred stock), depending upon the choices made by other Fortune
shareholders.
Sincerely,
/s/ John W. Woods
John W. Woods
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
AMSOUTH BANCORPORATION
COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
PROSPECTUS SUPPLEMENT
TO
PROXY STATEMENT-PROSPECTUS
DATED APRIL 5, 1994
----------------
This Prospectus Supplement ("Supplement") is being furnished to holders of
common stock, par value $.01 per share ("Fortune Common Stock"), and shares of
Series A 8% Cumulative Convertible Preferred Stock, par value $.01 per share
("Fortune Preferred Stock"), of Fortune Bancorp, Inc. ("Fortune"), as a
supplement to the Proxy Statement-Prospectus, dated April 5, 1994 and
supplemented by the supplement thereto, dated May 12, 1994 (as so
supplemented, the "Proxy Statement-Prospectus"), of Fortune and AmSouth
Bancorporation ("AmSouth"). The Proxy Statement-Prospectus was previously sent
to holders of record of Fortune Common Stock as of March 14, 1994 in
connection with the Annual Meeting of Shareholders of Fortune held on May 23,
1994 (the "Annual Meeting"). A copy of the Proxy Statement-Prospectus is
enclosed herewith for shareholders to whom a Proxy Statement-Prospectus has
not previously been sent. At the Annual Meeting, Fortune shareholders approved
the Agreement and Plan of Merger, dated as of September 12, 1993, as amended
(as so amended, the "Merger Agreement"), by and between AmSouth and Fortune,
which provides for the acquisition of Fortune by AmSouth (the "Merger").
This Supplement updates certain information contained in the Proxy
Statement-Prospectus and, together with the Proxy Statement-Prospectus, is for
the use of Fortune shareholders of record in determining whether they would
elect to receive either all cash or all shares of common stock, par value
$1.00 per share (including the associated preferred stock purchase rights,
"AmSouth Common Stock"), of AmSouth (plus approximately $1.81 in cash per
share of Fortune Preferred Stock (the "Preferred Stock Cash Amount")) or would
have no preference as between cash and AmSouth Common Stock (plus the
Preferred Stock Cash Amount) for all their shares of Fortune Common Stock or
Fortune Preferred Stock. A Fortune shareholder should consider current price
information prior to making an election, but, because the market price of
AmSouth Common Stock fluctuates, the market price of AmSouth Common Stock
(and, therefore, the relative values of the cash and stock consideration) may
vary from the price (and relative values) on the date hereof. Under the terms
of the Merger Agreement, no consideration will be paid to holders of Fortune
stock until the completion of the election and allocation procedures described
herein, which will not occur until June 23, 1994 at the earliest. Furthermore,
as discussed under "ELECTION AND ALLOCATION PROCEDURES," no guarantee can be
given that an election by any given shareholder will be honored.
PLEASE READ THIS SUPPLEMENT AND THE PROXY STATEMENT-PROSPECTUS CAREFULLY.
FAILURE OF A HOLDER OF FORTUNE COMMON STOCK AND/OR FORTUNE PREFERRED STOCK TO
PROPERLY COMPLETE AND DELIVER THE ACCOMPANYING ELECTION FORM AND LETTER OF
TRANSMITTAL (THE "ELECTION FORM"), TOGETHER WITH THE CERTIFICATES REPRESENTING
SHARES OF FORTUNE COMMON STOCK AND/OR FORTUNE PREFERRED STOCK TO WHICH THE
ELECTION FORM RELATES (OTHER THAN CERTIFICATES FOR SUCH SHARES THAT ARE OWNED
THROUGH FORTUNE'S DIVIDEND REINVESTMENT PLAN), TO ONE OF THE PROPER LOCATIONS
SPECIFIED IN THE ELECTION FORM, BY 5:00 P.M., CENTRAL TIME, ON JUNE 16, 1994
(THE "ELECTION DEADLINE") AND TO COMPLY WITH THE PROCEDURES DESCRIBED IN THIS
SUPPLEMENT WILL CAUSE SUCH HOLDER TO BE DEEMED TO HAVE EXPRESSED NO PREFERENCE
AND TO RECEIVE EITHER ALL CASH OR ALL AMSOUTH COMMON STOCK (PLUS THE PREFERRED
STOCK CASH AMOUNT), DEPENDING UPON THE ELECTIONS MADE BY OTHER FORTUNE
SHAREHOLDERS. IF YOUR STOCK CERTIFICATE(S) IS LOST, STOLEN OR DESTROYED, YOU
ARE URGED TO REFER TO INSTRUCTION 12 SET FORTH ON THE ACCOMPANYING ELECTION
FORM.
This Supplement and the Proxy Statement-Prospectus constitute prospectuses
of AmSouth with respect to the shares of AmSouth Common Stock issuable
pursuant to the Merger. This Supplement shall not constitute an offer to sell
or solicitation of an offer to purchase unless accompanied or preceded by the
Proxy Statement-Prospectus.
The outstanding shares of AmSouth Common Stock are listed on the NYSE under
the symbol "ASO."
All information contained in this Supplement or the Proxy Statement-
Prospectus relating to Fortune has been supplied by Fortune and all
information relating to AmSouth has been supplied by AmSouth.
----------------
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 SUPPLEMENT OR
THE 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 PROSPECTUS SUPPLEMENT IS MAY 27, 1994.
<PAGE>
AVAILABLE INFORMATION
Fortune and AmSouth are subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by Fortune and AmSouth with the
Commission can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at Seven World Trade
Center (13th Floor), New York, New York 10048, and Northwestern Atrium Center,
500 West Madison, Suite 1400, Chicago, Illinois 60661. Copies of such material
also can be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549, at prescribed rates. In addition, material filed by
AmSouth can be inspected at the offices of the NYSE, 20 Broad Street, New York,
New York 10005, on which the AmSouth Common Stock is listed.
AmSouth has filed with the Commission 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
securities to be issued pursuant to the Merger Agreement. This Supplement does
not contain all the information set forth in the Registration Statement. Such
additional information may be obtained from the Commission's principal office
in Washington, D.C. Statements contained in this Supplement or in any document
incorporated by reference in this Supplement 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.
THIS SUPPLEMENT INCORPORATES DOCUMENTS BY REFERENCE THAT ARE NOT PRESENTED
HEREIN OR DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE
AVAILABLE TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER TO WHOM THIS SUPPLEMENT
IS DELIVERED, ON WRITTEN OR ORAL REQUEST, WITHOUT CHARGE, IN THE CASE OF
DOCUMENTS RELATING TO FORTUNE, DIRECTED TO FORTUNE, 16120 U.S. HIGHWAY 19
NORTH, CLEARWATER, FLORIDA 34624-6895 (TELEPHONE NUMBER 813/538-1114),
ATTENTION: CORPORATE SECRETARY, OR, IN THE CASE OF DOCUMENTS RELATING TO
AMSOUTH, DIRECTED TO AMSOUTH, POST OFFICE BOX 11007, BIRMINGHAM, ALABAMA 35288
(TELEPHONE NUMBER 205/583-4439), ATTENTION: INVESTOR RELATIONS DEPARTMENT. IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUESTS SHOULD BE MADE
BY JUNE 10, 1994.
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS SUPPLEMENT IN CONNECTION WITH
THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FORTUNE,
AMSOUTH OR ANY OTHER PERSON. THIS SUPPLEMENT DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES, OR THE SOLICITATION
OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS NOT LAWFUL
TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS SUPPLEMENT NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF FORTUNE OR AMSOUTH SINCE THE DATE HEREOF OR THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
A copy of Fortune's Annual Report on Form 10-K and Annual Report to
Shareholders for the fiscal year ended September 30, 1993, has previously been
provided to shareholders. A copy of Fortune's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1994, is enclosed herewith. SHAREHOLDERS MAY
OBTAIN, FREE OF CHARGE, AN ADDITIONAL COPY OF FORTUNE'S ANNUAL REPORT OR
QUARTERLY REPORT BY WRITING TO THE CORPORATE SECRETARY OF FORTUNE AT THE ABOVE
ADDRESS.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fortune (File No. 0-
11608) and AmSouth (File No. 1-7476) pursuant to the Exchange Act are
incorporated by reference in this Supplement:
1. Fortune's Annual Report on Form 10-K for the year ended September 30,
1993 ("Fortune's Annual Report");
2. Fortune's Quarterly Report on Form 10-Q for the quarterly periods ended
December 31, 1993 and March 31, 1994 (a copy of which is enclosed);
3. Fortune's Current Reports on Form 8-K filed on (i) September 17, 1993,
(ii) December 16, 1993, as amended by a Form 8-K/A filed on December 24, 1993,
(iii) March 4, 1994, (iv) April 1, 1994, and (v) May 13, 1994.
4. 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);
5. AmSouth's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 1994.
6. 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 a Form 8-K/A filed on 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.
7. 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);
and
8. AmSouth's Registration Statement on Form 8-A, filed on July 10, 1989,
with respect to the AmSouth's Stockholder Protection Rights Agreement (and any
amendment or report filed for the purpose of updating such description).
9. The Proxy Statement-Prospectus.
All documents and reports subsequently filed by Fortune and AmSouth pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Supplement shall be deemed to be incorporated by reference in this
Supplement and to be part hereof from the date of filing of such documents or
reports. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Supplement to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Supplement.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................................................. 2
Incorporation of Certain Documents
by Reference......................................................... 3
Summary............................................................... 4
Comparative Market and Stock Price
Data................................................................. 13
Comparative Per Share Information..................................... 15
Summary Condensed Consolidated
Financial Information................................................ 16
Introduction.......................................................... 21
General............................................................. 21
Parties to the Merger............................................... 21
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
The Merger............................................................ 24
Effect of the Merger................................................. 25
Merger Consideration................................................. 25
Election and Allocation Procedures.................................... 28
Description of Elections............................................. 28
Allocation Procedures................................................ 29
Issuance of Stock and Payment of Cash................................ 31
Certain Federal Income Tax Consequences.............................. 32
Backup Withholding................................................... 34
NYSE Listing.......................................................... 35
Experts............................................................... 35
</TABLE>
3
<PAGE>
SUMMARY
The following is a summary of certain information contained elsewhere in this
Supplement or in the Proxy Statement-Prospectus. Reference is made to, and this
summary is qualified in its entirety by, the more detailed information
contained, or incorporated by reference, in this Supplement. Unless otherwise
defined herein, capitalized terms used in this summary have the respective
meanings ascribed to them elsewhere in this Supplement. Shareholders are urged
to read this Supplement and the Proxy Statement-Prospectus in their entirety.
All historical financial and share-price information of AmSouth contained
herein has been adjusted to give effect to the three-for-two split of AmSouth
Common Stock paid on January 15, 1992 to AmSouth shareholders of record on
December 13, 1991 (the "AmSouth Stock Split"). As used in this Supplement, the
terms "AmSouth" and "Fortune" refer to those entities respectively and, where
the context requires, to such entities and their subsidiaries.
PARTIES TO THE MERGER
AmSouth............................. AmSouth is a bank holding company or-
ganized in November, 1970, under Del-
aware law. AmSouth provides bank and
bank-related services primarily
through subsidiaries operating in Al-
abama, Florida and Tennessee. The
principal executive offices of
AmSouth are located at 1400 AmSouth-
Sonat Tower, Birmingham, Alabama
35203, and its telephone number is
(205) 320-7151.
Based on total consolidated assets of ap-
proximately $13.2 billion at March 31,
1994, AmSouth was the second largest bank
holding company headquartered in Alabama.
At March 31, 1994, AmSouth's total con-
solidated deposits were approximately
$10.0 billion and total consolidated
shareholders' equity was approximately
$1.1 billion. AmSouth Bank N.A. ("AmSouth
Alabama") is the largest subsidiary of
AmSouth. As of March 31, 1994, AmSouth
Alabama had total consolidated assets of
approximately $8.8 billion, total consol-
idated deposits of approximately $6.4
billion, and total consolidated share-
holders' equity of approximately $749.7
million. AmSouth Alabama is a full-serv-
ice commercial bank with approximately
148 banking offices located throughout
Alabama at March 31, 1994. AmSouth's
other major subsidiaries are AmSouth Bank
of Florida ("AmSouth Florida") and
AmSouth Bank of Tennessee ("AmSouth Ten-
nessee").
At March 31, 1994, AmSouth Florida had
total consolidated assets of approxi-
mately $3.5 billion, total consolidated
deposits of approximately $2.6 billion
and total consolidated shareholders' eq-
uity of approximately $270.3 million.
AmSouth Florida operated 94 offices in
Florida at March 31, 1994.
4
<PAGE>
At March 31, 1994, AmSouth Tennessee had
total consolidated assets of approxi-
mately $1.0 billion, total consolidated
deposits of approximately $794.7 million
and total consolidated shareholders' eq-
uity of approximately $111.6 million.
AmSouth Tennessee operated 21 offices in
Tennessee as of March 31, 1994.
Fortune............................. Fortune is a savings and loan holding
company organized in November 1983 under
Florida law. Fortune provides commercial
and retail banking services through its
principal subsidiary, Fortune Bank a Sav-
ings Bank ("Fortune Bank"). The principal
executive offices of Fortune are located
at 16120 U.S. Highway 19 North, Clearwa-
ter, Florida 34624-6895, and its tele-
phone number is (813) 538-1000.
At March 31, 1994, Fortune had total con-
solidated assets of approximately $2.7
billion, total consolidated deposits of
approximately $1.8 billion and total con-
solidated shareholders' equity of approx-
imately $181.3 million. Fortune Bank is a
Florida-chartered stock savings associa-
tion headquartered in Clearwater, Flori-
da, and operates 46 branches located from
approximately 50 miles north to approxi-
mately 200 miles south of Clearwater.
Based on total consolidated assets at
March 31, 1994, it is currently the larg-
est independent banking organization
headquartered on the west coast of Flori-
da. Its deposit accounts are insured by
the Federal Deposit Insurance Corporation
through the Savings Association Insurance
Fund.
THE MERGER
Effect of the Merger................ Pursuant to the Merger Agreement, at the
Effective Date (as defined below), For-
tune will merge with and into AmSouth,
which will be the surviving corporation.
Merger Consideration................ The Merger Agreement provides that (sub-
ject to the election and allocation pro-
cedures provided for therein) each issued
and outstanding share of Fortune Common
Stock will be converted into the right to
receive, at the election of each holder
thereof, either (a) a number of shares of
AmSouth Common Stock equal to the sum of
.538522 and the ratio of $17.125 to the
Average AmSouth Closing Price (as defined
below) (the "Conversion Ratio"), or (b)
cash equal to the sum of $17.125 and the
product of .538522 and the Average
AmSouth Closing Price (the "Cash Consid-
eration"). When used with respect to
shares of Fortune Preferred
5
<PAGE>
Stock, the term "Cash Consideration" in-
cludes the Preferred Stock Cash Amount
(as defined below). The Merger Agreement
also provides that (subject to the elec-
tion and allocation procedures provided
for therein) each issued and outstanding
share of Fortune Preferred Stock will be
converted into the right to receive, at
the election of each holder thereof, (a)
either (x) a number of shares of AmSouth
Common Stock equal to the product of the
Conversion Ratio and 1.333333 (the number
of shares of Fortune Common Stock issua-
ble upon conversion of one share of For-
tune Preferred Stock, as provided in For-
tune's Restated Articles of Incorpora-
tion, as amended), or (y) cash equal to
the product of the Cash Consideration and
1.333333, plus (b) in either case (x) or
(y), $1.81159 in cash per share of For-
tune Preferred Stock (the "Preferred
Stock Cash Amount"). The "Average AmSouth
Closing Price" means the average of the
closing prices of shares of AmSouth Com-
mon Stock as reported by the NYSE on the
NYSE composite transactions tape for the
ten consecutive trading days ending on
the tenth business day before the Effec-
tive Date.
As further described below, the values of
the per share stock consideration and the
Cash Consideration to be received by For-
tune shareholders will be based on the
Average AmSouth Closing Price and will be
equal (on that basis). Also, the Merger
Agreement provides that the aggregate
number of shares of AmSouth Common Stock
to be issued in the Merger shall be
fixed. Based on the number of shares of
Fortune Common Stock and Fortune Pre-
ferred Stock outstanding on March 31,
1994, and assuming further the exercise
of all stock options currently outstand-
ing under Fortune's stock option plans,
AmSouth will issue approximately
4,507,000 shares of AmSouth Common Stock
and approximately $145.8 million of cash
in the Merger.
The following is an example of how the
consideration to be received by Fortune
shareholders will be determined. Under
the Merger Agreement, if the Average
AmSouth Closing Price is $31.31, which
was a recent average market price of
AmSouth Common Stock, the Conversion Ra-
tio will be 1.085428 shares of AmSouth
Common Stock for each share of Fortune
Common Stock, and the Cash Consideration
will be $33.99. In such event, each share
of Fortune Common Stock will be converted
into either $33.99 in cash or 1.085428
shares of AmSouth Common Stock, and each
share of
6
<PAGE>
Fortune Preferred Stock will convert into
either (a) 1.447237 shares of AmSouth
Common Stock, plus the Preferred Stock
Cash Amount, or (b) $47.13 in cash (in-
cluding the Preferred Stock Cash Amount).
Based on an assumed Average AmSouth Clos-
ing Price of $31.31, 1.085428 shares of
AmSouth Common Stock would have a value
of $33.99 and 1.447237 shares of AmSouth
Common Stock would have a value of $47.13
(including the Preferred Stock Cash
Amount).
If the Average AmSouth Closing Price ex-
ceeds $31.31, the Conversion Ratio will
be reduced below 1.085428 and the Cash
Consideration will be increased pursuant
to a formula, set forth in the Merger
Agreement, designed so that, basing the
value of the stock consideration on the
Average AmSouth Closing Price, the Cash
Consideration and the stock consideration
will be equal in value. Thus, if the Av-
erage AmSouth Closing Price is above
$31.31, the Cash Consideration and the
value of the stock consideration avail-
able to holders of Fortune Common Stock
will be above $33.99 (with a correspond-
ing value above $47.13 for holders of
Fortune Preferred Stock, including the
Preferred Stock Cash Amount).
If the Average AmSouth Closing Price is
less than $31.31, the Conversion Ratio
will be increased and the Cash Considera-
tion decreased pursuant to a formula, set
forth in the Merger Agreement, designed
so that, basing the value of the stock
consideration on the Average AmSouth
Closing Price, the Cash Consideration and
the stock consideration will be equal in
value. Thus, if the Average AmSouth Clos-
ing Price is below $31.31, the Cash Con-
sideration and the value of the stock
consideration available to holders of
Fortune Common Stock will be below $33.99
(with a corresponding value below $47.13
for holders of Fortune Preferred Stock,
including the Preferred Stock Cash
Amount).
Fractional shares of AmSouth Common Stock
will not be issued in the Merger. Fortune
shareholders otherwise entitled to a
fractional share will be paid the value
of such fraction in cash determined as
described herein under "THE MERGER--Ef-
fect of the Merger."
7
<PAGE>
The following table sets forth various assumed Average AmSouth Closing Prices
and the resulting Conversion Ratio, the value of AmSouth Common Stock and the
Cash Consideration (including, in both cases, the Preferred Stock Cash Amount)
to be received per share of Fortune Common Stock and Fortune Preferred Stock
and the percentage of shares of Fortune stock to be converted into AmSouth
Common Stock and cash.
<TABLE>
<CAPTION>
PERCENTAGE(2) OF
VALUE OF AMSOUTH SHARES OF FORTUNE
COMMON STOCK CASH CONSIDERATION STOCK TO BE
TO BE RECEIVED(1) TO BE RECEIVED CONVERTED INTO
--------------------- --------------------- --------------------
ASSUMED PER SHARE PER SHARE PER SHARE PER SHARE
AVERAGE OF FORTUNE OF FORTUNE OF FORTUNE OF FORTUNE AMSOUTH
AMSOUTH CONVERSION COMMON PREFERRED COMMON PREFERRED COMMON
CLOSING PRICE RATIO STOCK STOCK STOCK STOCK(1) STOCK CASH
------------- ---------- ---------- ---------- ---------- ---------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$36.00.................. 1.014216 $36.51 $50.49 $36.51 $50.49 53.1% 46.9%
35.00.................. 1.027808 35.97 49.78 35.97 49.78 52.4 47.6
34.00.................. 1.042198 35.43 49.06 35.43 49.06 51.7 48.3
33.00.................. 1.057461 34.90 48.34 34.90 48.34 50.9 49.1
32.00.................. 1.073678 34.36 47.62 34.36 47.62 50.2 49.8
31.80.................. 1.077044 34.25 47.48 34.25 47.48 50.0 50.0
31.00.................. 1.090941 33.82 46.90 33.82 46.90 49.4 50.6
30.00.................. 1.109355 33.28 46.19 33.28 46.19 48.5 51.5
29.00.................. 1.129039 32.74 45.47 32.74 45.47 47.7 52.3
28.00.................. 1.150129 32.20 44.75 32.20 44.75 46.8 53.2
27.00.................. 1.172781 31.67 44.03 31.67 44.03 45.9 54.1
</TABLE>
--------
(1) The column entitled "Per Share of Fortune Preferred Stock" includes the
Preferred Stock Cash Amount to be received by the holder of each share of
Fortune Preferred Stock.
(2) For the purpose of computing these percentages, each share of Fortune
Common Stock is counted as one share, and each share of Fortune Preferred
Stock is counted as 1.333333 shares, the number of shares of Fortune Common
Stock into which it is convertible under the terms of the Fortune Preferred
Stock. In addition to being converted into AmSouth Common Stock or cash,
shares of Fortune Preferred Stock will also be converted into the right to
receive the Preferred Stock Cash Amount.
8
<PAGE>
Because the number of shares of AmSouth Common Stock and the total amount of
cash to be issued in the Merger will be fixed, no guarantee can be given that
an election by any given shareholder will be honored. Rather, the election by
each holder will be subject to the election and allocation procedures described
herein. Thus, holders may not receive their chosen form of consideration. See
"ELECTION AND ALLOCATION PROCEDURES."
Description of Elections............ Each shareholder of Fortune, is now being
asked to indicate on the enclosed elec-
tion form ("Election Form") the kind of
consideration sought to be received in
exchange for his Fortune shares. As de-
scribed below, such election may not nec-
essarily be honored. See "ELECTION AND
ALLOCATION PROCEDURES." It is essential
that you complete your Election Form
properly and that the Exchange Agent ac-
tually receive it, together with the cer-
tificates representing your shares of
Fortune stock to which your Election Form
relates, at one of the proper locations
specified in the Election Form by the
Election Deadline, which is 5:00 P.M.,
Central Time, on June 16, 1994.
Each Fortune shareholder of record is en-
titled to make an election and submit an
Election Form covering all shares of For-
tune Common Stock and/or all shares of
Fortune Preferred Stock actually held of
record by such holder. Nominee record
holders, which include any nominee, any
trustee or any other person that holds
shares of Fortune Common Stock and/or
shares of Fortune Preferred Stock in any
capacity whatsoever on behalf of another
person or entity, are entitled to make an
election for such nominee record holder
as well as an election on behalf of each
beneficial owner of shares of Fortune
stock held through such nominee record
holder, but such elections must be made
on a single Election Form. Such Election
Form must set forth the election for each
beneficial owner separately. Beneficial
owners who are not record holders are NOT
entitled to submit Election Forms.
Any Cash Election, Stock Election or in-
dication of no preference may be revoked,
but only by written notice actually re-
ceived by the Exchange Agent at one of
the proper locations specified in the
Election Form by the Election Deadline.
NEITHER AMSOUTH NOR THE EXCHANGE AGENT
WILL BE UNDER ANY OBLIGATION TO NOTIFY
ANY PERSON OF ANY DEFECT IN AN ELECTION
FORM OR NOTICE OF REVOCATION SUBMITTED TO
THE EXCHANGE AGENT. See "ELECTION AND AL-
LOCATION PROCEDURES" in this Supplement.
The Election Form permits holders of rec-
ord of Fortune Common Stock and/or For-
tune Preferred Stock
9
<PAGE>
(1) to indicate that they elect to re-
ceive in exchange for their Fortune
shares (a) only AmSouth Common Stock
(plus the Preferred Stock Cash Amount
with respect to shares of Fortune Pre-
ferred Stock) ("Stock Election Shares")
or (b) only cash ("Cash Election Shares")
or (2) to make no election ("No Election
Shares"). The Election Form, together
with stock certificates representing all
shares of Fortune stock covered thereby,
must be returned to AmSouth Alabama, as
exchange agent (the "Exchange Agent"), no
later than 5:00 p.m., Central Time, on
June 16, 1994 (the "Election Deadline").
Fortune shares for which a properly com-
pleted Election Form has not been re-
ceived by the Exchange Agent by the Elec-
tion Deadline will be deemed No Election
Shares. See "THE MERGER--Election and Al-
location Procedures."
Because the number of shares of AmSouth
Common Stock to be issued and the total
amount of cash to be paid in the Merger
will be fixed pursuant to the Merger
Agreement, the extent to which particular
elections will be accommodated will de-
pend upon the respective numbers of For-
tune shareholders who elect cash and
stock and who fail to make an election.
Accordingly, a Fortune shareholder who
elects to receive cash may instead re-
ceive shares of AmSouth Common Stock
(plus cash in lieu of fractional shares
and, in the case of Fortune Preferred
Stock, the Preferred Stock Cash Amount),
or a Fortune shareholder who elects to
receive shares of AmSouth Common Stock
(plus cash in lieu of fractional shares
and, in the case of Fortune Preferred
Stock, the Preferred Stock Cash Amount)
may instead receive cash.
If the cash election is oversubscribed,
the Fortune shareholders making no elec-
tion shall have their Fortune shares ran-
domly selected and converted into AmSouth
Common Stock (plus, in the case of For-
tune Preferred Stock, the Preferred Stock
Cash Amount), to the extent necessary so
that the cash election is not oversub-
scribed. If the cash election is still
oversubscribed, the Fortune shareholders
making a cash election shall have their
Fortune shares randomly selected and con-
verted into AmSouth Common Stock (plus,
in the case of Fortune Preferred Stock,
the Preferred Stock Cash Amount), to the
extent necessary.
In circumstances where the cash election
is oversubscribed, the Merger Agreement
provides that no particular holder who
has elected to receive cash will be se-
lected randomly to receive AmSouth Common
Stock
10
<PAGE>
if such selection would threaten satis-
faction of the conditions to the consum-
mation of the Merger. One such condition
is the receipt of opinions from counsel
and an accounting firm that the Merger
qualifies as a tax-free reorganization.
In order to permit such qualification and
to receive such opinions, the cash elec-
tions of the two largest holders of For-
tune Common Stock, The Dyson-Kissner Mo-
ran Corporation group (the "Moran Group")
and John T. Oxley (who have indicated
their intent to make cash elections if
the Merger is approved), would be satis-
fied on a priority basis. John A. Moran,
a member of the Moran Group, is a direc-
tor of Fortune. Other than as a holder of
Fortune Common Stock and Mr. Moran's sta-
tus as both a member of the Moran Group
and as a director of Fortune, the Moran
Group is not affiliated with Fortune.
Other than as a holder of Fortune Common
Stock, Mr. Oxley is not affiliated with
Fortune. Neither Mr. Moran, the Moran
Group, nor Mr. Oxley is an affiliate of
AmSouth within the meaning of the Securi-
ties Act of 1933.
In addition, cash elections of other
large Fortune shareholders also may be
satisfied on a priority basis if such
satisfaction would be necessary in order
to meet the conditions required for con-
summation of the Merger. One such condi-
tion is the receipt of opinions from
counsel and an accounting firm that the
Merger qualifies as a tax-free reorgani-
zation. As a result, under such circum-
stances, cash elections of smaller For-
tune shareholders would be less likely to
be satisfied. Except as indicated above
with respect to Mr. Moran as a member of
the Moran Group and possibly director
Ezra K. Zilkha (as a result of his hold-
ing 4.92% of Fortune Common Stock as of
March 30, 1994), cash elections of direc-
tors and officers of Fortune will likely
not be satisfied on a priority basis. See
"ELECTION AND ALLOCATION PROCEDURES."
Because the tax consequences of receiving
cash or AmSouth Common Stock will differ,
shareholders of Fortune are urged to read
carefully the information under the cap-
tion "ELECTION AND ALLOCATION PROCE-
DURES--Certain Federal Income Tax Conse-
quences."
Certain Federal Income Tax
Consequences........................ The Merger is intended to be a reorgani-
zation within the meaning of Section 368
of the Internal Revenue Code of 1986, as
amended (the "Code"); accordingly no gain
or loss will be recognized by Fortune
share-
11
<PAGE>
holders who receive solely AmSouth Common
Stock in exchange for their Fortune Com-
mon Stock. Receipt of cash (including re-
ceipt of the Preferred Stock Cash Amount)
in the Merger will be a taxable event.
The Merger Agreement provides that con-
summation of the Merger is conditioned
upon receipt by AmSouth and Fortune of an
opinion of independent accountants and
counsel to the effect that the Merger
will constitute a reorganization within
the meaning of Section 368 of the Code.
For a further discussion of the federal
income tax consequences of the Merger,
see "ELECTION AND ALLOCATION PROCEDURES--
Certain Federal Income Tax Consequences."
BECAUSE CERTAIN TAX CONSEQUENCES OF THE
MERGER MAY VARY DEPENDING UPON THE PAR-
TICULAR CIRCUMSTANCES OF EACH SHAREHOLDER
AND OTHER FACTORS, EACH HOLDER OF FORTUNE
COMMON STOCK AND/OR FORTUNE PREFERRED
STOCK IS URGED TO CONSULT SUCH HOLDER'S
OWN TAX ADVISOR TO DETERMINE THE PARTICU-
LAR TAX CONSEQUENCES TO SUCH HOLDER OF
THE MERGER (INCLUDING THE APPLICATION AND
EFFECT OF STATE AND LOCAL INCOME AND
OTHER TAX LAWS).
12
<PAGE>
COMPARATIVE MARKET AND STOCK PRICE DATA
AmSouth Common Stock is listed on the NYSE. Fortune Common Stock and Fortune
Preferred Stock are traded on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") National Market System ("NMS"). The table below
sets forth, for the calendar quarters indicated, the reported high and low
sales prices of AmSouth Common Stock as reported on the NYSE and Fortune Common
Stock and Fortune Preferred Stock as reported on the NMS, in each case based on
published financial sources, and the dividends declared on such stock. The
Fortune Preferred Stock was not issued until December 1, 1992.
<TABLE>
<CAPTION>
AMSOUTH COMMON STOCK FORTUNE COMMON STOCK FORTUNE PREFERRED STOCK
----------------------- ----------------------- -----------------------------
HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS
------ ------ --------- ------ ------ --------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1991
First Quarter......... $17.25 $12.38 .24 $10.50 $ 7.13 .075 n/a n/a n/a
Second Quarter........ 19.13 16.63 .24 10.25 9.00 .075 n/a n/a n/a
Third Quarter......... 22.13 18.75 .24 9.25 7.25 .075 n/a n/a n/a
Fourth Quarter........ 22.13 19.13 .26 9.50 7.00 .075 n/a n/a n/a
1992
First Quarter......... 27.38 21.38 .26 12.00 8.38 .075 n/a n/a n/a
Second Quarter........ 31.13 26.13 .26 17.00 9.25 .075 n/a n/a n/a
Third Quarter......... 29.00 26.00 .26 20.75 15.25 .075 n/a n/a n/a
Fourth Quarter........ 32.63 26.88 .29 18.50 15.50 .075 29.88 26.00 n/a
1993
First Quarter......... 34.13 29.63 .29 20.25 16.75 .075 31.50 28.13 .50
Second Quarter........ 35.88 30.38 .29 22.75 17.75 .075 35.25 29.50 .50
Third Quarter......... 33.63 29.25 .29 30.00 26.75 .075 43.00 33.00 .50
Fourth Quarter........ 31.50 27.38 .35 31.75 27.25 .075 42.50 38.50 .50
1994
First Quarter......... 32.00 29.25 .35 31.75 30.38 .075 43.25 41.25 .50
Second Quarter
(through May 20)..... 32.63 29.63 .35 33.25 30.50 .075 45.75 42.00 .50
</TABLE>
On May 20, 1994, the closing price of AmSouth Common Stock was $31.38 per
share on the NYSE, the closing price of Fortune Common Stock was $33.25 per
share, and the closing price of Fortune Preferred Stock was $45.00 per share,
on the NMS.
The Cash Consideration and the value of the stock consideration in the Merger
will be determined using a formula, set forth in the Merger Agreement, which is
based on the Average AmSouth Closing Price (i.e., the average of the closing
prices per share of AmSouth Common Stock as reported by the NYSE on the NYSE
composite transactions tape for the ten consecutive trading days ending on the
tenth business day before the Effective Date (the "Valuation Period")).
Assuming that the Merger is consummated on June 23, 1994, the Valuation Period
would begin on May 26 and end on June 9, 1994.
The following table sets forth (i) the closing price per share of AmSouth
Common Stock and the closing price per share of Fortune Common Stock and
Fortune Preferred Stock on May 20, 1994, (ii) a hypothetical Average AmSouth
Closing Price determined as if the Effective Date were such date and (iii) the
pro forma equivalent price per share of Fortune Common Stock and Fortune
Preferred Stock determined as if the Effective Date were such date. The pro
forma equivalent price per share of Fortune Common Stock and Fortune Preferred
Stock (including the Preferred Stock Cash Amount) at each specified date
represents a hypothetical Average AmSouth Closing Price (as if such date had
been the Effective Date) multiplied, in the case of Fortune Common Stock, by a
fraction equal to the Conversion Ratio that would have existed if such date had
been the Effective Date and, in the case of Fortune Preferred Stock, by such
Conversion Ratio multiplied by 1.333333.
13
<PAGE>
COMPARATIVE MARKET AND STOCK PRICE DATA (CONTINUED)
<TABLE>
<CAPTION>
AMSOUTH FORTUNE FORTUNE HYPOTHETICAL PRO FORMA EQUIVALENT PRO FORMA EQUIVALENT
COMMON COMMON PREFERRED AVERAGE AMSOUTH PRICE PER SHARE OF PRICE PER SHARE OF
STOCK STOCK STOCK CLOSING PRICE FORTUNE COMMON STOCK FORTUNE PREFERRED STOCK
------- ------- --------- --------------- -------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
May 20, 1994............ $31.38 $33.25 $45.00 $31.31 $33.99(a) $47.13 (a)(b)
</TABLE>
--------
(a) Represents a Conversion Ratio of 1.085428. At this Conversion Ratio
(assuming a quarterly dividend of $0.35 per share of AmSouth Common Stock),
the pro forma equivalent per share dividend for the Fortune Common Stock
would be $0.38 per share or $1.52 per share on an annualized basis and the
pro forma equivalent per share dividend for the Fortune Preferred Stock
(determined by multiplying the pro forma equivalent per share dividend for
Fortune Common Stock by 1.333333) would be $0.51 per share or $2.03 per
share on an annualized basis.
(b) Includes the Preferred Stock Cash Amount.
If the Merger had been consummated on May 20, 1994, the Average AmSouth
Closing Price would have been $31.31. No assurance can be given as to what the
Average AmSouth Closing Price will be during the actual Valuation Period or as
to what the market price of AmSouth Common Stock will be at the time the Merger
is consummated. Because the market price of AmSouth Common Stock is subject to
fluctuation, the Conversion Ratio and the Cash Consideration may change before
the Merger. In addition, because the Average AmSouth Closing Price may be
higher or lower than the market price at the Election Deadline and at the
Effective Date, the relative values of the stock consideration and Cash
Consideration may vary. See "THE MERGER--Merger Consideration." Fortune
shareholders are encouraged to obtain current market quotations for AmSouth
Common Stock, Fortune Common Stock and Fortune Preferred Stock. In addition,
there are statutory and regulatory limitations on the ability of AmSouth to pay
dividends to its shareholders and there can be no assurance that AmSouth will
continue to pay dividends at its current quarterly rate.
14
<PAGE>
COMPARATIVE PER SHARE INFORMATION
The following table sets forth for the AmSouth Common Stock, the Fortune
Common Stock and the Fortune Preferred 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 on
January 1, 1993. As discussed under "THE MERGER--Merger Consideration," the
Conversion Ratio and the Cash Consideration are subject to adjustment as a
result of a change in the price of AmSouth Common Stock. The pro forma
information presented would be different if the Conversion Ratio and the Cash
Consideration were so adjusted.
At December 31, 1993 or March 31, 1994, certain business combination
transactions that were pending on December 31, 1993 or March 31, 1994,
respectively (whether completed or pending at the date hereof) are sometimes
referred to collectively herein, with respect to such date, as the "Other
Business Combinations." See "INTRODUCTION--Parties to the Merger" below.
The information shown below should be read in conjunction with the historical
and pro forma financial statements of AmSouth, including the respective notes
thereto, incorporated by reference herein, and with the historical financial
statements of Fortune appearing in Fortune's Annual Report on Form 10-K for the
year ended September 30, 1993, a copy of which has been provided to
shareholders, and Quarterly Report on Form 10-Q for the quarter ended March 31,
1994, a copy of which is enclosed, in each case including the notes thereto.
See "AVAILABLE INFORMATION," "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE"
and "SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION."
<TABLE>
<CAPTION>
AMSOUTH,
FORTUNE
AND OTHER
AMSOUTH BUSINESS FORTUNE
HISTORICAL AND FORTUNE FORTUNE COMBINATIONS PRO FORMA
----------------------------------- FORTUNE PRO FORMA PRO FORMA PRO FORMA EQUIVALENT
FORTUNE FORTUNE PRO FORMA EQUIVALENT EQUIVALENT COMBINED, COMMON,
PER SHARE AMSOUTH COMMON PREFERRED COMBINED COMMON(A) PREFERRED(A) AS ADJUSTED AS ADJUSTED(A)
--------- ------- ------- --------- --------- ---------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET INCOME
(LOSS)(b)
For the three
months ended
March 31,
1994............ $ .80 $ (.03) $ .06 $ .70 $ .75 $ 1.01 $ .63 $ .68
1993............ .78 .40 .39 -- -- -- -- --
For the year
ended
December 31,
1993............ $ 3.10 $ .52 (c)(d) $ .76(c) $ 2.81(e) $ 3.03(e) $ 4.04(e) $ 2.54(f) $ 2.74(f)
1992............ 2.51(g) 1.60 (c)(h) -- -- -- -- -- --
1991............ 2.07(g) (2.34)(c)(h) -- -- -- -- -- --
CASH DIVIDENDS
For the three
months ended
March 31,
1994............ $ .35 $ .08 $ .50 $ .35(i) $ .38 $ .50 $ .35(i) $ .38
1993............ .29 .08 .50 -- -- -- -- --
For the year
ended
December 31,
1993............ $ 1.22 $ .30 (c) $ 2.00(c) $ 1.22(i) $ 1.31 $ 1.75 $ 1.22(i) $ 1.31
1992............ 1.07 .30 (c) -- -- -- -- -- --
1991............ .98 .30 (c) -- -- -- -- -- --
BOOK VALUE(j)
As of March 31,
1994............ $22.13 $23.02 $22.09(k) $22.61 $24.35 $32.47 $22.07 $23.77
<CAPTION>
FORTUNE
PRO FORMA
EQUIVALENT
PREFERRED,
PER SHARE AS ADJUSTED(A)
--------- --------------
<S> <C>
NET INCOME
(LOSS)(b)
For the three
months ended
March 31,
1994............ $ .90
1993............ --
For the year
ended
December 31,
1993............ $ 3.65(f)
1992............ --
1991............ --
CASH DIVIDENDS
For the three
months ended
March 31,
1994............ $ .50
1993............ --
For the year
ended
December 31,
1993............ $ 1.75
1992............ --
1991............ --
BOOK VALUE(j)
As of March 31,
1994............ $31.69
</TABLE>
--------
(a) Fortune pro forma equivalent amounts are computed by multiplying the pro
forma combined amounts by an assumed Conversion Ratio of 1.077044 for
Fortune Common Stock and such Conversion Ratio multiplied by 1.333333, or
1.436058, for Fortune Preferred Stock.
(b) Net income (loss) per common share is based on weighted average common
shares outstanding, except for (i) Fortune Common historical amounts which
are based on weighted average common shares and common stock equivalent
shares outstanding and (ii) Fortune Preferred historical amounts which are
based on the weighted average common shares and common equivalent shares
outstanding plus the effect of the Fortune Preferred Stock assuming that
all such shares of Fortune Preferred Stock were converted into shares of
Fortune Common Stock on January 1, 1993.
(c) Amounts have been restated to conform to a calendar year.
(d) Amount is before the cumulative effect of a change in accounting principle
for Fortune's adoption of Statement of Financial Standards No. 109,
"Accounting for Income Taxes" ("FAS 109").
(e) Amounts are adjusted to include the pro forma effect of the December 9,
1993 acquisition of Mid-State Federal Savings Bank ("Mid-State Federal"),
as if such acquisition had taken place on January 1, 1993.
(f) Amounts are adjusted to include the pro forma effect of the December 9,
1993 acquisition of Mid-State Federal and the Other Business Combinations
(as defined in "Introduction--Parties to the Merger--AmSouth") as if such
acquisitions had taken place on January 1, 1993.
(g) Amounts have been restated for the pooling of interests of Mickler
Corporation ("Mickler") and The First National Bank of Clearwater
("Clearwater") but have not been restated for the pooling of interests of
First Sunbelt Bankshares, Inc. ("First Sunbelt"), the effect of which is
not material to AmSouth's financial statements.
(h) Amounts are before extraordinary items.
(i) Pro forma cash dividends represent historical cash dividends of AmSouth.
(j) Book value per common share is based on total period-end shareholders'
equity, except for Fortune Common Stock historical amounts which are
adjusted to exclude the liquidation preference on the Fortune Preferred
Stock.
(k) Amount is computed assuming all Fortune Preferred Stock is converted into
Fortune Common Stock.
15
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following tables present summary consolidated financial data for (i)
AmSouth on an historical basis, (ii) Fortune on an historical basis, (iii)
AmSouth and Fortune on a pro forma combined basis giving effect to the Merger
and (iv) AmSouth and Fortune on a pro forma combined basis giving effect to the
Merger, as adjusted to give effect to the Other Business Combinations by
AmSouth. For information on the accounting treatment of these other
acquisitions see "Introduction--Parties to the Merger." The pro forma data in
the tables assume (i) that each of the outstanding shares of Fortune Common
Stock and Fortune Preferred Stock are converted in the Merger into either cash
or shares of AmSouth Common Stock (plus, the Preferred Stock Cash Amount with
respect to shares of Fortune Preferred Stock), (ii) that each of the
outstanding options to purchase Fortune Common Stock outstanding on March 31,
1994 (other than AmSouth's option pursuant to the Stock Option Agreement), are
exercised prior to the Effective Date and converted in the Merger into either
cash or shares of AmSouth Common Stock, (iii) that each of the Fortune's
outstanding convertible debentures are converted into shares of Fortune Common
Stock prior to the Effective Date and converted in the Merger into either cash
or shares of AmSouth Common Stock, (iv) that the total cash paid is
approximately $145.8 million and the number of shares of AmSouth Common Stock
issued in the Merger is approximately 4,507,000 and (v) that the Merger is
accounted for as a purchase. These tables should be read in conjunction with
the historical and pro forma financial statements of AmSouth, including the
respective notes thereto, incorporated by reference herein and with the
historical financial statements of Fortune, including the notes thereto,
appearing in Fortune's Annual Report on Form 10-K for the year ended September
30, 1993, a copy of which has been provided to shareholders, and Fortune's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1994, a copy of
which is enclosed herewith. See "Available Information," and "Incorporation of
Certain Documents by Reference." Interim 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 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 selected consolidated financial data of AmSouth at or for the three
months ended March 31, 1993 and March 31, 1994 included in the following table
give effect to the acquisitions of Mickler Corporation/First National Bank of
Clearwater ("Clearwater"), First Sunbelt Bankshares, Inc. ("First Sunbelt"),
Orange Banking Corporation ("OBC") and FloridaBank, a Federal Savings Bank
("FloridaBank") on a pooling-of-interests accounting basis, and the acquisition
of First Chattanooga Financial Corporation ("FCFC") on a purchase accounting
basis. The selected consolidated financial data of AmSouth for the three months
ended March 31, 1994 also give effect to the acquisitions of Charter Banking
Corp. ("Charter") and Mid-State Federal Savings Bank ("Mid-State Federal") on a
purchase accounting basis. The selected consolidated financial data of AmSouth
at or for the year ended December 31, 1993 included in the following table give
effect to the acquisitions of Clearwater and First Sunbelt on a pooling-of-
interests accounting basis, and the acquisitions of FCFC, Charter and Mid-State
Federal on a purchase accounting basis. The selected consolidated financial
data of AmSouth for the years ended December 31, 1989 through December 31, 1992
included in the following table have been restated for the pooling of interests
of Clearwater but have not been restated for the pooling of interests of First
Sunbelt, OBC and FloridaBank, the effect of which is not material to AmSouth's
financial statements. The selected consolidated financial data do not give
effect to any business combination completed subsequent to March 31, 1994.
16
<PAGE>
AMSOUTH--HISTORICAL
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31
------------------ ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
(In Thousands)
Gross Interest Margin. $129,164 $118,504 $462,077 $393,437 $334,712 $297,525 $277,743
Provision for Loan
Losses............... 1,042 7,184 18,980 36,555 46,029 41,583 44,766
Noninterest Revenues.. 47,955 49,116 194,361 164,249 162,502 130,243 124,857
Noninterest Expenses.. 114,324 105,532 420,087 370,056 340,748 288,488 275,446
Applicable Income Tax-
es................... 20,473 17,510 71,144 43,026 27,636 22,297 15,185
Net Income............ 41,280 37,394 146,227 108,049 82,801 75,400 67,203
PER COMMON SHARE DATA
Net Income............ $ 0.80 $ 0.78 $ 3.10 $ 2.51 $ 2.07 $ 1.97 $ 1.71
Cash Dividends De-
clared............... 0.35 0.29 1.22 1.07 0.98 0.94 0.89
Book Value............ 22.13 20.14 22.01 19.10 17.65 16.40 15.32
AVERAGE STATEMENT OF
CONDITION
(In Millions)
Securities(a)......... $ 3,046 $ 3,108 $ 2,399 $ 2,536 $ 2,476 $ 2,196 $ 2,088
Loans, Net of Unearned
Income............... 8,370 7,011 7,043 5,757 5,631 5,734 5,597
Allowance for Loan
Losses............... 129 108 108 90 91 87 76
Total Earning Assets.. 11,809 10,531 10,543 8,756 8,417 8,095 7,841
Total Assets.......... 12,880 11,485 11,464 9,591 9,266 8,939 8,688
Deposits.............. 10,000 8,808 8,745 7,608 7,441 7,093 6,811
Long-Term Debt........ 165 158 159 138 135 131 131
Shareholders' Equity.. 1,143 946 979 791 682 607 588
END-OF-PERIOD STATEMENT
OF CONDITION
(In Millions)
Securities(a)......... $ 3,299 $ 3,256 $ 1,618 $ 2,415 $ 2,664 $ 2,150 $ 2,105
Loans, Net of Unearned
Income............... 8,563 7,261 7,930 6,139 5,723 5,840 5,831
Allowance for Loan
Losses............... 126 131 118 93 89 88 93
Total Earning Assets.. 12,120 10,976 11,402 9,297 9,009 8,145 8,135
Total Assets.......... 13,187 12,063 12,548 10,209 9,925 9,148 8,993
Deposits.............. 10,006 9,132 9,568 7,800 7,779 7,449 7,047
Long-Term Debt........ 161 162 163 136 139 129 131
Shareholders' Equity.. 1,145 994 1,090 825 754 625 600
SELECTED FINANCIAL RA-
TIOS
Return on Average To-
tal Assets........... 1.30% 1.32% 1.28% 1.13% 0.89% 0.84% 0.77%
Return on Average
Common Equity........ 14.64 16.03 14.93 13.66 12.14 12.43 11.43
Taxable Equivalent
Gross Interest Margin
to Average Earning
Assets............... 4.57 4.73 4.55 4.72 4.24 3.97 3.86
Overhead Ratio(b)..... 63.16 61.35 62.34 64.07 65.56 63.88 64.41
Dividend Payout....... 43.75 37.18 39.35 42.63 47.34 47.72 52.05
Average Equity to
Average Assets....... 8.88 8.24 8.54 8.25 7.36 6.79 6.77
Allowance at End of
Period to Loans, Net
of Unearned Income... 1.47 1.56 1.49 1.51 1.56 1.50 1.60
Allowance at End of
Period to
Nonperforming
Loans(c)............. 202.33 182.80 245.82 164.28 134.54 103.35 118.33
Nonperforming Assets
to Loans, Net of
Unearned Income,
Foreclosed Properties
and Repossessions(d). 0.99 1.53 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 at March 31, 1993 and 1994 reflect
AmSouth's total securities portfolio, which includes trading securities,
available-for-sale securities and held-to-maturity securities. All other
amounts include only investment securities.
(b) The Overhead 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.
17
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION--CONTINUED
FORTUNE BANCORP, INC.--HISTORICAL(A)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MARCH 31 YEAR ENDED SEPTEMBER 30
------------------ -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF EARNINGS
(In Thousands)
Gross Interest Margin.. $34,855 $36,224 $70,986 $64,198 $61,319 $52,304 $44,020 $42,908
Provision for Loan
Losses................ 14,088 8,899 13,819 17,163 32,370 15,803 11,537 20,721
Noninterest Revenues... 4,021 11,240 9,147 18,574 10,225 3,633 4,853 19,486
Noninterest Expenses... 29,450 27,267 55,430 52,101 50,578 47,158 46,587 43,393
Applicable Income Tax-
es.................... (1,656) 4,320 3,969 7,677 270 (1,483) (2,505) (1,929)
Extraordinary items,
net................... -- -- 2,319 519 -- -- -- --
Cumulative Effect of
Accounting Change..... 4,013(b) -- -- -- -- -- -- --
Net Income (Loss)...... 1,007 6,978 9,234 6,350 (11,674) (5,541) (6,746) 209
PER COMMON SHARE DATA
Net Income (Loss)...... $ (0.06) $ 1.09 $ 1.23 $ 1.15 $ (2.40) $ (1.27) $ (1.48) $ 0.05
Cash Dividends De-
clared................ 0.15 0.15 0.30 0.30 0.30 0.30 0.30 0.25
Book Value at End of
Period................ 23.02 23.49 23.92 22.95 22.36 28.70 28.92 30.10
AVERAGE STATEMENT OF
CONDITION
(In Millions)
Investment Securities.. $ 993 $ 855 $ 952 $ 753 $ 865 $ 879 $ 948 $ 1,036
Loans, Net of Unearned
Income................ 1,481 1,586 1,531 1,740 1,987 2,126 2,182 1,770
Allowance for Loan
Losses................ 28 27 25 24 12 11 12 9
Total Earning Assets... 2,474 2,445 2,484 2,493 2,852 3,005 3,129 2,806
Total Assets........... 2,613 2,577 2,620 2,609 2,982 3,181 3,321 2,993
Deposits............... 1,794 1,987 1,930 2,204 2,319 2,199 2,242 1,898
Shareholders' Equity... 176 153 160 124 127 129 136 143
END-OF-PERIOD STATEMENT
OF CONDITION
(In Millions)
Investment Securities.. $ 1,015 $ 951 $ 947 $ 737 $ 778 $ 813 $ 852 $ 1,016
Loans, Net of Unearned
Income................ 1,513 1,584 1,443 1,667 1,851 2,087 2,198 1,992
Allowance for Loan
Losses................ 29 25 23 26 20 9 10 24
Total Earning Assets... 2,528 2,535 2,390 2,404 2,629 2,890 3,050 3,008
Total Assets........... 2,681 2,705 2,551 2,550 2,788 3,064 3,247 3,175
Deposits............... 1,767 1,925 1,826 2,041 2,318 2,243 2,220 2,089
Shareholders' Equity... 181 165 168 127 122 125 131 136
SELECTED FINANCIAL RA-
TIOS
Return on Average Total
Assets................ 0.08% 0.54% 0.35% 0.24% (0.39)% (0.17)% (0.20)% 0.01%
Return on Average Com-
mon Equity............ 1.15 9.29 5.77 5.11 (9.19) (4.29) (4.97) 1.47
Taxable Equivalent
Gross Interest Margin
to Average Earning As-
sets.................. 2.81 2.96 2.85 2.57 2.15 1.74 1.40 1.52
Overhead Ratio(c)...... 75.75 57.45 69.17 62.95 70.69 84.31 95.32 69.55
Dividend Payout Ratio.. n/a 13.76 24.39 26.09 n/a n/a n/a 500.00
Average Equity to Aver-
age Assets............ 6.73 5.94 6.11 4.76 4.36 4.07 4.09 4.65
Allowance at End of Pe-
riod to Loans, Net of
Unearned Income....... 2.06 1.69 1.69 1.73 1.08 0.43 0.47 1.20
Allowance at End of Pe-
riod to Nonperforming
Loans(d).............. 73.30 33.92 42.17 29.11 20.93 15.19 18.35 107.07
Net Charge-Offs to
Average Loans Net of
Unearned Income....... 1.17 1.25 1.07 0.61 1.08 0.83 1.15 0.07
Nonperforming Assets to
Loans, Net of Unearned
Income, Foreclosed
Properties and
Repossessions(e)...... 3.29 5.92 4.86 6.76 6.08 4.34 3.63 1.77
</TABLE>
--------
(a) Certain terminology used in the presentation of Fortune's historical data
has been changed to conform with terminology used in AmSouth's
presentation.
(b) This amount reflects the effect of the adoption of FAS 109.
(c) The Overhead Ratio is defined as noninterest expenses divided by the sum of
the taxable equivalent gross interest margin and noninterest revenues.
(d) Nonperforming loans include nonaccrual loans and restructured loans.
(e) Nonperforming assets include nonaccrual loans, accruing loans contractually
past due 90 days or more, restructured loans and real estate and other
assets owned.
18
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION--CONTINUED
AMSOUTH AND FORTUNE PRO FORMA COMBINED
<TABLE>
<CAPTION>
AS OF
MARCH 31, 1994
--------------
<S> <C>
STATEMENT OF CONDITION
(In Thousands, Except Per Share Amounts)
Cash and Due from Banks....................................... $ 563,797
Federal Funds Sold and Securities Purchased Under Agreements
to Resell.................................................... 85,931
Trading Securities............................................ 120,619
Available-for-Sale Securities................................. 1,245,072
Held-to-Maturity Securities................................... 2,907,885
Mortgage Loans Held for Sale.................................. 324,876
Loans, Net of Unearned Income................................. 9,965,553
Less Allowance for Loan Losses................................ 154,737
-----------
Net Loans.................................................... 9,810,816
Premises and Equipment, Net................................... 266,347
Other Real Estate Owned....................................... 28,700
Intangible Assets............................................. 264,246
Mortgage Servicing Rights..................................... 58,533
Other Assets.................................................. 305,309
-----------
Total Assets................................................. $15,982,131
===========
Deposits and Interest-Bearing Liabilities:
Deposits...................................................... $11,788,946
Federal Funds Purchased and Securities Sold Under Agreements
to Repurchase................................................ 1,484,865
Other Borrowed Funds.......................................... 551,090
Long-Term Debt................................................ 527,508
-----------
Total Deposits and Interest-Bearing Liabilities.............. 14,352,409
Other Liabilities............................................. 357,705
-----------
Total Liabilities............................................ 14,710,114
Shareholders' Equity:
Common Stock.................................................. 57,757
Capital Surplus............................................... 586,186
Retained Earnings............................................. 661,893
Cost of Common Stock in Treasury.............................. (24,173)
Deferred Compensation on Restricted Stock..................... (4,539)
Unrealized Losses on Available-for-Sale Securities............ (5,107)
-----------
Total Shareholders' Equity................................... 1,272,017
-----------
Total Liabilities and Shareholders' Equity................. $15,982,131
===========
Book Value per Common Share................................... $ 22.61
===========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS TWELVE MONTHS
ENDED ENDED
MARCH 31, 1994 DECEMBER 31, 1993(A)
-------------- --------------------
<S> <C> <C>
STATEMENT OF EARNINGS
(In Thousands, Except Per Share Amounts)
Gross Interest Margin.................... $145,693 $554,444
Provision for Loan Losses................ 5,962 39,608
Noninterest Revenues..................... 50,057 205,186
Noninterest Expenses..................... 129,958 503,020
Applicable Income Taxes.................. 20,599 71,934
Net Income(b)............................ $ 39,231 $145,068
Net Income per Share(b).................. $ 0.70 $ 2.70
Average Common Shares Outstanding........ 56,163 53,701
</TABLE>
--------
(a) Adjusted to include the pro forma effect of the December 9, 1993
acquisition of Mid-State Federal as if such acquisition had taken place on
January 1, 1993.
(b) Amounts are before the cumulative effect of a change in accounting
principle.
For more detailed pro forma financial information, see "INCORPORATION OF
CERTAIN
DOCUMENTS BY REFERENCE."
19
<PAGE>
SUMMARY CONDENSED CONSOLIDATED FINANCIAL INFORMATION--CONTINUED
AMSOUTH, FORTUNE AND OTHER BUSINESS COMBINATIONS
PRO FORMA COMBINED (A)
<TABLE>
<CAPTION>
AS OF
MARCH 31, 1994
--------------
<S> <C>
STATEMENT OF CONDITION
(In Thousands, Except Per Share Amounts)
Cash and Due from Banks........................................ $ 601,654
Federal Funds Sold and Securities Purchased Under Agreements
to Resell..................................................... 131,715
Trading Securities............................................. 120,619
Available-for-Sale Securities.................................. 1,232,778
Held-to-Maturity Securities.................................... 3,058,154
Mortgage Loans Held for Sale................................... 325,303
Loans, Net of Unearned Income.................................. 10,529,908
Less Allowance for Loan Losses................................. 162,505
-----------
Net Loans.................................................... 10,367,403
Premises and Equipment, Net.................................... 281,844
Other Real Estate Owned........................................ 34,830
Intangible Assets.............................................. 272,200
Mortgage Servicing Rights...................................... 58,633
Other Assets................................................... 316,877
-----------
Total Assets................................................. $16,802,010
===========
Deposits and Interest-Bearing Liabilities:
Deposits....................................................... $12,534,353
Federal Funds Purchased and Securities Sold Under Agreements
to Repurchase................................................. 1,485,271
Other Borrowed Funds........................................... 557,070
Long-Term Debt................................................. 537,508
-----------
Total Deposits and Interest-Bearing Liabilities.............. 15,114,202
Other Liabilities.............................................. 365,551
-----------
Total Liabilities............................................ 15,479,753
Shareholders' Equity:
Common Stock................................................... 61,411
Capital Surplus................................................ 612,664
Retained Earnings.............................................. 682,001
Cost of Common Stock in Treasury............................... (24,173)
Deferred Compensation on Restricted Stock...................... (4,539)
Unrealized Losses on Available-for-Sale Securities............. (5,107)
-----------
Total Shareholders' Equity..................................... 1,322,257
-----------
Total Liabilities and Shareholders' Equity..................... $16,802,010
===========
Book Value per Common Share.................................... $ 22.07
===========
</TABLE>
<TABLE>
<CAPTION>
THREE MONTHS TWELVE MONTHS
ENDED ENDED
MARCH 31, 1994 DECEMBER 31, 1993(B)
-------------- --------------------
<S> <C> <C>
STATEMENT OF EARNINGS
(In Thousands, Except Per Share Amounts)
Gross Interest Margin..................... $154,260 $616,074
Provision for Loan Losses................. 7,287 49,748
Noninterest Revenues...................... 51,185 218,991
Noninterest Expenses...................... 139,145 557,968
Applicable Income Taxes................... 21,440 76,078
Net Income(c)............................. $ 37,573 $151,271
Net Income per Share(c)................... $ 0.63 $ 2.54
Average Common Shares Outstanding......... 59,819 59,446
</TABLE>
--------
(a) Adjusted to reflect the Other Business Combinations.
(b) Adjusted to include the pro forma effect of the December 9, 1993
acquisition of Mid-State Federal as if such acquisition had taken place on
January 1, 1993.
(c) Amounts are before the cumulative effect of a change in accounting
principle.
For more detailed pro forma financial information, see "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE."
20
<PAGE>
INTRODUCTION
GENERAL
This Supplement contains important information for the holders of record of
Fortune Common Stock and Fortune Preferred Stock concerning the elections to be
made in connection with the Merger.
PLEASE READ THIS SUPPLEMENT AND THE PROXY STATEMENT-PROSPECTUS CAREFULLY. THE
FAILURE OF A FORTUNE SHAREHOLDER OF RECORD TO PROPERLY COMPLETE AND DELIVER THE
ACCOMPANYING ELECTION FORM, TOGETHER WITH CERTIFICATES REPRESENTING THE SHARES
OF FORTUNE COMMON STOCK AND FORTUNE PREFERRED STOCK TO WHICH THAT ELECTION FORM
RELATES, TO ONE OF THE PROPER LOCATIONS SPECIFIED BELOW BY 5:00 P.M., CENTRAL
TIME, ON JUNE 16, 1994 (THE "ELECTION DEADLINE") AND TO COMPLY WITH THE
PROCEDURES DESCRIBED IN THIS SUPPLEMENT AND THE INSTRUCTIONS TO THE ELECTION
FORM WILL CAUSE SUCH SHAREHOLDER TO BE DEEMED TO HAVE EXPRESSED NO PREFERENCE
AND TO RECEIVE, IN EXCHANGE FOR THEIR FORTUNE STOCK, EITHER CASH OR AMSOUTH
COMMON STOCK (PLUS THE PREFERRED STOCK CASH AMOUNT IN THE CASE OF SHARES OF
FORTUNE PREFERRED STOCK), DEPENDING UPON THE ELECTIONS MADE BY OTHER FORTUNE
SHAREHOLDERS. IF A SHAREHOLDER IS DEEMED TO HAVE EXPRESSED NO PREFERENCE AND IF
EITHER THE NUMBER OF SHARES OF FORTUNE COMMON STOCK AND FORTUNE PREFERRED STOCK
WITH RESPECT TO WHICH CASH ELECTIONS ARE MADE EXCEEDS THE NUMBER OF SHARES
WHICH CAN BE CONVERTED INTO CASH OR THE NUMBER OF SHARES OF FORTUNE COMMON
STOCK AND FORTUNE PREFERRED STOCK WITH RESPECT TO WHICH STOCK ELECTIONS ARE
MADE EXCEEDS THE NUMBER OF SHARES WHICH CAN BE CONVERTED INTO SHARES OF AMSOUTH
COMMON STOCK, SUCH SHAREHOLDER WILL RECEIVE THE FORM OF CONSIDERATION THAT WAS
NOT OVERSUBSCRIBED.
--------------------------------------------------------------------------------
IMPORTANT: To make a valid election, record holders of Fortune Common Stock
and/or Fortune Preferred Stock must complete and return the accompanying
Election Form and the certificates with respect to all of the shares of Fortune
Common Stock and/or Fortune Preferred Stock to which the Election Form relates,
in accordance with the instructions on the Election Form. A properly completed
Election Form must be received by the Exchange Agent at one of the proper
locations specified in the Election Form by the Election Deadline (5:00 P.M.,
Central Time, on June 16, 1994) together with certificate(s) representing all
of the Fortune Common Stock and/or Fortune Preferred Stock to which the
Election Form relates, other than certificate(s) representing such shares held
through Fortune's Dividend Reinvestment Plan (see Instructions to the
accompanying Election Form).
--------------------------------------------------------------------------------
ALL ELECTION FORMS MUST BE ACTUALLY RECEIVED BY THE EXCHANGE AGENT AT ONE OF
THE PROPER LOCATIONS LISTED BELOW BY THE ELECTION DEADLINE. THE EXCHANGE AGENT
AND THE PROPER LOCATIONS ARE:
AMSOUTH BANK N.A.
By Mail:
By Hand/Overnight Delivery:
P.O. Box 370808
Corporate Securities Services Birmingham, Alabama 35237-0808
7th Floor
AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203
It is recommended that certificates be sent via certified mail and
appropriately insured.
If you have any questions, you should contact the Exchange Agent toll-free at
(800) 396-6776.
PARTIES TO THE MERGER
AmSouth. AmSouth is a regional bank holding company headquartered in
Birmingham, Alabama, with 268 banking offices located in Alabama, Florida,
Tennessee and Georgia at March 31, 1994. At March 31, 1994, AmSouth had total
consolidated assets of approximately $13.2 billion, total consolidated deposits
of approximately $10.0 billion and total consolidated shareholders' equity of
approximately $1.1 billion.
21
<PAGE>
AmSouth was the largest bank holding company headquartered in Alabama in terms
of equity capital and the second largest in terms of assets, based on March 31,
1994 information. Through its subsidiaries, AmSouth offers a broad range of
banking and bank-related services.
AmSouth's largest subsidiary is AmSouth Bank N.A. ("AmSouth Alabama"). At
March 31, 1994, AmSouth Alabama had total consolidated assets of approximately
$8.8 billion, total consolidated deposits of approximately $6.4 billion and
total consolidated shareholders' equity of approximately $749.7 million.
AmSouth Alabama is a full-service bank with 148 banking offices located
throughout Alabama at March 31, 1994. AmSouth's other major banking
subsidiaries are AmSouth Bank of Florida ("AmSouth Florida") and AmSouth Bank
of Tennessee ("AmSouth Tennessee").
At March 31, 1994, AmSouth Florida had total consolidated assets of
approximately $3.5 billion, total consolidated deposits of approximately $2.6
billion and total consolidated shareholders' equity of approximately $270.3
million. AmSouth Florida operated 94 offices in Florida at March 31, 1994.
At March 31, 1994, AmSouth Tennessee had total consolidated assets of
approximately $1.0 billion, total consolidated deposits of approximately $794.7
million and total consolidated shareholders' equity of approximately $111.6
million. AmSouth Tennessee operated 21 offices in Tennessee as of March 31,
1994.
Recently completed transactions of AmSouth are described below.
Effective October 14, 1993, Mickler Corporation, headquartered in
Clearwater, Florida ("Mickler"), merged with AmSouth, and The First
National Bank of Clearwater ("Clearwater"), a subsidiary of Mickler, merged
with AmSouth Florida. AmSouth issued approximately 2,987,000 shares of
AmSouth Common Stock in exchange for the outstanding shares of Mickler and
Clearwater. These acquisitions were accounted for as a pooling of interests
under generally accepted accounting principles ("GAAP"). At September 30,
1993, Mickler had total consolidated assets of approximately $436 million
and total consolidated deposits of approximately $335 million.
Also effective October 14, 1993, Charter Banking Corp., headquartered in
St. Petersburg, Florida ("Charter"), merged with AmSouth, and First Gulf
Bank, a subsidiary of Charter, merged with AmSouth Florida. AmSouth paid
approximately $12.8 million in cash for all of the outstanding shares of
both institutions. These acquisitions were accounted for as a purchase
under GAAP. At September 30, 1993, Charter had total consolidated assets of
approximately $106 million and total consolidated deposits of approximately
$96 million.
Effective December 9, 1993, Mid-State Federal Savings Bank, located in
Ocala, Florida ("Mid-State Federal"), merged with AmSouth Florida. AmSouth
issued approximately 2,041,000 shares of AmSouth Common Stock and paid
approximately $31.7 million for all of the outstanding shares of Mid-State
Federal common stock; AmSouth also paid $542,000 upon cancellation of the
outstanding options to purchase Mid-State Federal common stock. This
acquisition was accounted for as a purchase under GAAP. At September 30,
1993, Mid-State Federal had total consolidated assets of approximately $734
million and total consolidated deposits of approximately $645 million.
Effective December 17, 1993, First Sunbelt Bankshares, Inc.,
headquartered in Rome, Georgia ("First Sunbelt"), the parent company of The
Georgia State Bank of Rome, merged with AmSouth. AmSouth issued
approximately 537,000 shares of AmSouth Common Stock in exchange for all of
the outstanding shares of First Sunbelt common stock. This acquisition was
accounted for as a pooling of interests under GAAP. At September 30, 1993,
First Sunbelt had total consolidated assets of approximately $102 million
and total consolidated deposits of approximately $92 million.
Effective January 3, 1994, Orange Banking Corporation ("OBC"),
headquartered in Orlando, Florida, the parent company of Orange Bank,
merged with AmSouth. AmSouth issued approximately 1,332,000 shares of
AmSouth Common Stock in exchange for all of the outstanding shares of OBC
common stock. This acquisition was accounted for as a pooling of interests
under GAAP. At December
22
<PAGE>
31, 1993, OBC had total consolidated assets of approximately $354 million
and total consolidated deposits of approximately $323 million.
Effective February 10, 1994, FloridaBank, a Federal Savings Bank, located
in Jacksonville, Florida ("FloridaBank"), merged with AmSouth Florida.
AmSouth issued approximately 759,000 shares of AmSouth Common Stock in
exchange for all of the outstanding shares of FloridaBank common stock.
This acquisition was accounted for as a pooling of interests under GAAP. At
December 31, 1993, FloridaBank had total consolidated assets of
approximately $271 million and total consolidated deposits of approximately
$203 million.
Effective April 4, 1994, Parkway Bancorp, Inc. ("Parkway"), which is
headquartered in Fort Meyers, Florida, the parent company of Parkway Bank,
merged with AmSouth. AmSouth issued approximately 629,000 shares of AmSouth
Common Stock for all of the outstanding shares of Parkway common stock.
These acquisitions were accounted for as a pooling of interests under GAAP.
At March 31, 1994, Parkway had total consolidated assets of approximately
$127 million and total consolidated deposits of approximately $117 million.
Effective April 4, 1994, Citizens National Corporation ("Citizens"),
which is headquartered in Naples, Florida, the parent company of Citizens
National Bank of Naples, merged with AmSouth. AmSouth issued approximately
1,604,000 shares of AmSouth Common Stock in exchange for the outstanding
shares of Citizens. These acquisitions were accounted for as a pooling of
interests under GAAP. At March 31, 1994, Citizens had total consolidated
assets of approximately $313 million and total consolidated deposits of
approximately $283 million.
On April 7, 1994, First Federal Savings Bank, Calhoun, Georgia
("Calhoun"), headquartered in Calhoun, Georgia merged with AmSouth Bank of
Georgia. At March 31, 1994, Calhoun had total assets of approximately $72
million and total deposits of approximately $59 million. AmSouth issued
approximately 442,000 shares of AmSouth Common Stock in exchange for the
outstanding shares of Calhoun.
In addition, AmSouth is a party to the pending business combinations
described below. Consummation of each of these transactions remains subject to
fulfillment of a number of conditions, including shareholder and regulatory
approvals. No assurances can be given that such conditions will be fulfilled or
that such transactions will be consummated.
On March 9, 1994, AmSouth signed an agreement to acquire The Tampa
Banking Company ("Tampa"), which is located in Tampa, Florida, and its
subsidiary, The Bank of Tampa. At March 31, 1994, Tampa had total
consolidated assets of approximately $213 million and total consolidated
deposits of approximately $197 million. Under the terms of the agreement,
AmSouth will issue 1.5592 shares of AmSouth Common Stock for each of the
outstanding shares of Tampa common stock, subject to adjustment. At March
31, 1994, Tampa had approximately 626,000 shares of common stock
outstanding. The transaction will be accounted for as a pooling of
interests under GAAP.
On March 31, 1994, AmSouth signed an agreement to acquire Community
Federal Savings Bank ("Community"), headquartered in Fort Oglethorpe,
Georgia. At March 31, 1994, Community had total assets of approximately
$103 million and total deposits of approximately $89 million. Under the
terms of the agreement, AmSouth will pay $65.50 for each of the outstanding
shares of Community common stock for a total purchase price of
approximately $17.2 million.
At December 31, 1993 or March 31, 1994, each of the foregoing transactions
that was pending on December 31, 1993 or March 31, 1994, respectively (whether
completed or pending at the date hereof) are sometimes referred to collectively
herein, with respect to such date, as the "Other Business Combinations."
23
<PAGE>
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. 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 acquirors.
On May 25, 1994, AmSouth sold $150,000,000 aggregate principal amount of 7
3/4% Subordinated Notes due 2004 in an underwritten public offering. AmSouth
intends to utilize approximately $145.8 million of proceeds from the issuance
of such securities to fund the cash portion of the Fortune purchase price.
Additionally, AmSouth has line of credit arrangements with two financial
institutions enabling AmSouth to borrow up to $21 million upon such terms as
AmSouth and the banks mutually agree. Such available credit and proceeds from
the issuance of the debt securities may be utilized to fund future business
combinations.
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.
Additional information about AmSouth and its subsidiaries is included in
documents incorporated by reference in this Supplement. See "AVAILABLE
INFORMATION" and "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
Fortune. Fortune is a savings and loan holding company organized in November
1983, under Florida law. Fortune provides commercial and retail banking
services through its principal subsidiary, Fortune Bank a Savings Bank
("Fortune Bank"). The principal executive offices of Fortune are located at
16120 U.S. Highway 19 North, Clearwater, Florida 34624-6895, and its telephone
number is (813) 538-1000.
At March 31, 1994, Fortune had total consolidated assets of approximately
$2.7 billion, total consolidated deposits of approximately $1.8 billion and
total consolidated shareholders' equity of approximately $181.3 million.
Fortune Bank is a Florida-chartered stock savings association headquartered in
Clearwater, Florida, and operates 46 branches located from approximately 50
miles north to approximately 200 miles south of Clearwater. Based on
consolidated assets at March 31, 1994, it is currently the largest independent
banking organization headquartered on the west coast of Florida. Its deposit
accounts are insured by the Federal Deposit Insurance Corporation through the
Savings Association Insurance Fund. Additional information about Fortune and
Fortune Bank is included in Fortune's Annual Report on Form 10-K for the year
ended September 30, 1993, a copy of which has been provided to shareholders,
and Fortune's Quarterly Report on Form 10-Q for the quarter ended March 31,
1994, a copy of which is enclosed. See "AVAILABLE INFORMATION" and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
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. A more detailed
discussion of the terms and conditions of the Merger is contained in the Proxy
Statement-Prospectus.
24
<PAGE>
EFFECT OF THE MERGER
The Merger Agreement provides that AmSouth will acquire Fortune through a
merger of Fortune into AmSouth, with AmSouth being the surviving entity. Upon
consummation of the Merger, all shares of Fortune Common Stock and Fortune
Preferred Stock will no longer be outstanding and will automatically be
cancelled and retired and will cease to exist, and each holder of a certificate
representing any shares of Fortune Common Stock or Fortune Preferred Stock will
cease to have any rights with respect thereto, except the right to receive cash
and/or shares of AmSouth Common Stock to be paid or issued upon the surrender
of such certificate, without interest, as described below.
At the Effective Date, as defined below, Fortune will merge with and into
AmSouth. The Fortune Common Stock and Fortune Preferred Stock will be exchanged
for shares of AmSouth Common Stock and/or cash as described under "Merger
Consideration." Each share of AmSouth Common Stock outstanding immediately
prior to the Effective Date will remain outstanding and unchanged as a result
of the Merger.
The Merger will become effective on the date articles of merger are filed
with the Secretary of State of the State of Florida in accordance with the
Florida Business Corporation Act and with the Secretary of State of the State
of Delaware in accordance with the Delaware General Corporation Law, or on such
later date as the articles of merger may specify (the "Effective Date"). The
articles of merger are currently expected to be filed with both states on June
23, 1994.
No fractional shares of AmSouth Common Stock will be issued in connection
with the Merger. In lieu of issuing fractional shares, AmSouth will make a cash
payment equal to the fractional interest which a Fortune shareholder would
otherwise receive multiplied by the closing price of AmSouth Common Stock on
the NYSE on the Effective Date.
MERGER CONSIDERATION
Upon consummation of the Merger, each issued and outstanding share of Fortune
Common Stock and each issued and outstanding share of Fortune Preferred Stock
will be converted as follows: each such share of Fortune Common Stock will be
converted into the right to receive, at the election of each holder thereof
(subject to the election and allocation procedures provided for in the Merger
Agreement and described below), either (a) a number of shares of AmSouth Common
Stock equal to the sum of .538522 and the ratio of $17.125 to the Average
AmSouth Closing Price (as defined below) (the "Conversion Ratio"), or (b) cash
equal to the sum of $17.125 and the product of .538522 and the Average AmSouth
Closing Price (the "Cash Consideration"); and each such share of Fortune
Preferred Stock will be converted into the right to receive, at the election of
each holder thereof (subject to the election and allocation procedures provided
for in the Merger Agreement and described below), either (x) a number of shares
of AmSouth Common Stock equal to the product of the Conversion Ratio and
1.333333 (the number of shares of Fortune Common Stock issuable upon conversion
of one share of Fortune Preferred Stock, as provided in Fortune's Restated
Articles of Incorporation, as amended, the document which governs the terms of
the Fortune Preferred Stock), or (y) cash equal to the product of the Cash
Consideration and 1.333333, plus in either case (x) or (y), $1.81159 in cash
per share of Fortune Preferred Stock (the "Preferred Stock Cash Amount"). When
used with respect to shares of Fortune Preferred Stock, the term "Cash
Consideration" includes the Preferred Stock Cash Amount. The "Average AmSouth
Closing Price" means the average of the closing prices of shares of AmSouth
Common Stock as reported on the NYSE composite transactions tape for the ten
consecutive trading days ending on the tenth business day before the Effective
Date (the "Valuation Period"). Assuming that the Merger is consummated on June
23, 1994, the Valuation Period will begin on May 26 and end on June 9, 1994.
As further described below, the values of the per share stock consideration
and the Cash Consideration to be received by Fortune shareholders will be based
on the Average AmSouth Closing Price and will be equal. Also, the Merger
Agreement provides that the aggregate number of shares of AmSouth Common Stock
to be issued in the Merger shall (subject to certain exceptions) be fixed at a
number (the "Stock Limit") equal to the product of .538522 and the total number
of shares of Fortune Common Stock and Fortune Preferred
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Stock outstanding on the Effective Date (for this purpose each share of Fortune
Common Stock is counted as one share, and each share of Fortune Preferred Stock
is counted as 1.333333 shares, the number of shares of Fortune Common Stock
into which it is convertible) including dissenting shares, but excluding any
shares of Fortune Common Stock and Fortune Preferred Stock held by Fortune or
any subsidiary other than in a fiduciary capacity or in satisfaction of a debt
previously contracted, which shares will not be converted and will be
cancelled. Based on the number of shares of Fortune Common Stock and Fortune
Preferred Stock outstanding on March 31, 1994, and assuming further the
exercise of all stock options currently outstanding under Fortune's stock
option plans, AmSouth will issue approximately 4,507,000 shares of AmSouth
Common Stock and approximately $145.8 million cash in the Merger.
The total number of shares of AmSouth Common Stock issuable in the Merger and
the total amount of cash payable in the Merger will be fixed through the
operation of the terms of the Merger Agreement. As a result, the percentage of
Fortune shares to be converted into AmSouth Common Stock (plus the Preferred
Stock Cash Amount in the case of shares of Fortune Preferred Stock) and the
percentage to be converted into cash will vary with upward and downward
fluctuations in the Average AmSouth Closing Price. Assuming an Average AmSouth
Closing Price between $27 and $36 per share, the percentage of Fortune shares
to be converted into AmSouth Common Stock (plus the Preferred Stock Cash Amount
in the case of shares of Fortune Preferred Stock) will range between
approximately 46% and 53%, respectively, as set forth in the table below.
For example, under the Merger Agreement, if the Average AmSouth Closing Price
is $31.31, which was a recent average market price of AmSouth Common Stock, the
Conversion Ratio will be 1.085428 shares of AmSouth Common Stock for each share
of Fortune Common Stock, and the Cash Consideration will be $33.99. In such
event, each share of Fortune Common Stock will be converted into either $33.99
in cash or 1.085428 shares of AmSouth Common Stock, and each share of Fortune
Preferred Stock will convert into either 1.447237 shares of AmSouth Common
Stock, plus the Preferred Stock Cash Amount, or $47.13 in cash (including the
Preferred Stock Cash Amount). Based on an assumed Average AmSouth Closing Price
of $31.31, 1.085428 shares of AmSouth Common Stock will have a value of $33.99
and 1.447237 shares of AmSouth Common Stock, plus the Preferred Stock Cash
Amount, will have a value of $47.13.
If the Average AmSouth Closing Price exceeds $31.31, the Conversion Ratio
will be reduced below 1.085428 and the Cash Consideration will be increased
pursuant to a formula, set forth in the Merger Agreement, designed so that,
basing the value of the stock consideration on the Average AmSouth Closing
Price, the Cash Consideration and the stock consideration will remain equal in
value (on that basis). Thus, if the Average AmSouth Closing Price is above
$31.31, the Cash Consideration and the value of the stock consideration
available to holders of Fortune Common Stock will be above $33.99 (with a
corresponding value above $47.13, including the Preferred Stock Cash Amount,
for holders of Fortune Preferred Stock). In such event, because Common Stock
and the total amount of cash payable in the Merger will be fixed, the
percentage of shares of Fortune stock to be converted into AmSouth Common Stock
will be increased and the percentage of shares of Fortune stock to be converted
into cash will be reduced.
If the Average AmSouth Closing Price is less than $31.31, the Conversion
Ratio will be increased and the Cash Consideration decreased pursuant to a
formula, set forth in the Merger Agreement, designed so that, basing the value
of the stock consideration on the Average AmSouth Closing Price, the Cash
Consideration and the stock consideration will still be equal in value. Thus,
if the Average AmSouth Closing Price is below $31.31, the Cash Consideration
and the value of the stock consideration available to holders of Fortune Common
Stock will be below $33.99 (with a corresponding value below $47.13, including
the Preferred Stock Cash Amount, for holders of Fortune Preferred Stock). In
such event, because the aggregate number of shares of AmSouth Common Stock and
the total amount of cash payable in the Merger will be fixed, the percentage of
shares of Fortune stock to be converted into AmSouth Common Stock (plus the
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Preferred Stock Cash Amount in the case of shares of Fortune Preferred Stock)
will be reduced and the percentage of shares of Fortune stock to be converted
into cash will be increased.
The following table sets forth various assumed Average AmSouth Closing Prices
and the resulting Conversion Ratio, the value of AmSouth Common Stock and the
Cash Consideration (including, in both cases, the Preferred Stock Cash Amount)
to be received per share of Fortune Common Stock and Fortune Preferred Stock
and the percentage of shares of Fortune stock to be converted into AmSouth
Common Stock and cash.
<TABLE>
<CAPTION>
PERCENTAGE(2) OF
VALUE OF AMSOUTH SHARES OF FORTUNE
COMMON STOCK CASH CONSIDERATION STOCK TO BE
TO BE RECEIVED(1) TO BE RECEIVED CONVERTED INTO
--------------------- --------------------- --------------------
ASSUMED PER SHARE PER SHARE PER SHARE PER SHARE
AVERAGE OF FORTUNE OF FORTUNE OF FORTUNE OF FORTUNE AMSOUTH
AMSOUTH CONVERSION COMMON PREFERRED COMMON PREFERRED COMMON
CLOSING PRICE RATIO STOCK STOCK STOCK STOCK(1) STOCK CASH
------------- ---------- ---------- ---------- ---------- ---------- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$36.00.................. 1.014216 $36.51 $50.49 $36.51 $50.49 53.1% 46.9%
35.00.................. 1.027808 35.97 49.78 35.97 49.78 52.4 47.6
34.00.................. 1.042198 35.43 49.06 35.43 49.06 51.7 48.3
33.00.................. 1.057461 34.90 48.34 34.90 48.34 50.9 49.1
32.00.................. 1.073678 34.36 47.62 34.36 47.62 50.2 49.8
31.80.................. 1.077044 34.25 47.48 34.25 47.48 50.0 50.0
31.00.................. 1.090941 33.82 46.90 33.82 46.90 49.4 50.6
30.00.................. 1.109355 33.28 46.19 33.28 46.19 48.5 51.5
29.00.................. 1.129039 32.74 45.47 32.74 45.47 47.7 52.3
28.00.................. 1.150129 32.20 44.75 32.20 44.75 46.8 53.2
27.00.................. 1.172781 31.67 44.03 31.67 44.03 45.9 54.1
</TABLE>
--------
(1) The column entitled "Per Share of Fortune Preferred Stock" includes the
Preferred Stock Cash Amount to be received by the holder of each share of
Fortune Preferred Stock.
(2) For the purpose of computing these percentages, each share of Fortune
Common Stock is counted as one share, and each share of Fortune Preferred
Stock is counted as 1.333333 shares, the number of shares of Fortune Common
Stock into which it is convertible under the terms of the Fortune Preferred
Stock. In addition to being converted into AmSouth Common Stock or cash,
shares of Fortune Preferred Stock will also be converted into the right to
receive the Preferred Stock Cash Amount.
Because the number of shares of AmSouth Common Stock and the total amount of
cash to be issued in the Merger will be fixed, no guarantee can be given that
an election by any given shareholder to receive a particular form of
consideration will be honored. Rather, the election by each holder will be
subject to the election and allocation procedures described below. Thus,
holders may not receive their chosen form of consideration. See "ELECTION AND
ALLOCATION PROCEDURES."
If AmSouth effects a reclassification, recapitalization, stock split,
consolidation or similar change in AmSouth Common Stock before the Effective
Date, the Conversion Ratio and Cash Consideration will be appropriately
adjusted.
Although the Average AmSouth Closing Price, which will determine the value of
the cash or stock consideration to be received by Fortune shareholders, will be
based on the average market price of AmSouth Common Stock during the Valuation
Period, the market price of AmSouth Common Stock may fluctuate thereafter and,
on the Effective Date, may be more or less than the Average AmSouth Closing
Price.
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<PAGE>
At the Effective Date, all rights with respect to Fortune Common Stock
pursuant to stock options granted by Fortune under Fortune's stock option plans
that are outstanding at such time, whether or not then exercisable, will be
converted into the right to receive, in AmSouth's sole discretion, either an
option to purchase shares of AmSouth Common Stock or cash, as discussed under
the heading "PROPOSAL TO APPROVE THE MERGER--Interests of Certain Persons in
the Merger--Stock Options" in the Proxy Statement-Prospectus.
It is possible that certain shares of Fortune Common Stock and Fortune
Preferred Stock will not be converted in the Merger. Shares of Fortune Common
Stock or Fortune Preferred Stock with respect to which dissenters' rights have
been properly perfected will not be converted into the right to receive shares
of AmSouth Common Stock or Cash Consideration. See "DISSENTERS' RIGHTS" in the
Proxy Statement-Prospectus. In addition, as of the Effective Date, each share
of Fortune Common Stock and Fortune Preferred Stock held directly or indirectly
by Fortune or Fortune Bank, other than shares held in a fiduciary capacity or
in satisfaction of a debt previously contracted, will be canceled and retired,
and no exchange or payment will be made with respect to such shares.
ELECTION AND ALLOCATION PROCEDURES
The following is a summary of information concerning the election and
allocation procedures which are applicable to the Merger. The procedures for
completing the enclosed Election Form are described in detail in such Election
Form and the accompanying instructions, which shareholders are urged to read
carefully. The terms of such conversion and such procedures are set forth in
the Merger Agreement and are also described in the Proxy Statement-Prospectus
under the heading "PROPOSAL TO APPROVE THE MERGER" and herein under the heading
"THE MERGER--Merger Consideration."
DESCRIPTION OF ELECTIONS
Each record holder of Fortune Common Stock and of Fortune Preferred Stock has
the right to submit an Election Form specifying the kind of consideration
sought to be received. Holders of record of shares of Fortune Common Stock or
Fortune Preferred Stock who hold such shares as nominees, trustees, or in other
representative capacities must submit Election Forms that separately cover all
the shares of Fortune Common Stock or Fortune Preferred Stock held by such
record holder for each beneficial owner thereof.
The Election Form permits Fortune shareholders (1) to indicate that they
elect to receive in exchange for their Fortune shares (a) only AmSouth Common
Stock (plus the Preferred Stock Cash Amount in the case of shares of Fortune
Preferred Stock) ("Stock Election Shares") or (b) only cash ("Cash Election
Shares") or (2) to make no election ("No Election Shares"). The Election Form,
together with stock certificates representing all shares of Fortune stock
covered thereby, must be completed, signed and returned to the Exchange Agent
no later than the Election Deadline (5:00 P.M., Central Time, on June 16,
1994). If a certificate for Fortune stock has been lost, stolen or destroyed,
an Election Form will be properly completed only if accompanied by appropriate
evidence as to such loss, theft or destruction, appropriate evidence as to the
ownership of such certificate by such Fortune shareholder and appropriate and
customary indemnification. Fortune shares for which an Election Form has not
been properly completed and received by the Exchange Agent by the Election
Deadline will be deemed No Election Shares. The Election Forms include
instructions specifying other details of the exchange.
In the Merger, the aggregate number of shares of AmSouth Common Stock to be
issued and the total amount of cash payable will be fixed. Accordingly, there
can be no assurance that each Fortune shareholder will receive the form of
consideration that such holder elects. In the event that the elections result
in an oversubscription of either AmSouth Common Stock or cash, the procedures
for allocating AmSouth Common Stock and cash, described below under "Allocation
Procedures," will be followed by the Exchange Agent.
28
<PAGE>
Any Election Form may be revoked or changed by written notice from the person
submitting such Election Form to the Exchange Agent, but to be effective such
notice must actually be received by the Exchange Agent at or before the
Election Deadline.
The Exchange Agent has the discretion to determine whether Election Forms
have been properly completed, signed and submitted or revoked and to disregard
immaterial defects in Election Forms and revocations. The decisions of the
Exchange Agent with respect to the effectiveness of any Election Form will be
conclusive and binding. Allocations will be made by the Exchange Agent and will
be conclusive and binding on holders of Fortune Common Stock and Fortune
Preferred Stock.
IF A FORTUNE SHAREHOLDER DOES NOT MAKE AN EFFECTIVE CASH ELECTION, STOCK
ELECTION OR NO ELECTION (WHICH WOULD RESULT, FOR EXAMPLE, FROM THE FAILURE TO
SEND TO THE EXCHANGE AGENT CERTIFICATES REPRESENTING FORTUNE COMMON STOCK
AND/OR FORTUNE PREFERRED STOCK WITH A PROPERLY COMPLETED ELECTION FORM OR FROM
THE EXCHANGE AGENT NOT ACTUALLY RECEIVING THE PROPER DOCUMENTS AT ONE OF THE
PROPER LOCATIONS SPECIFIED IN THE ELECTION FORM BY THE ELECTION DEADLINE), THE
SHAREHOLDER WILL BE DEEMED NOT TO HAVE MADE AN ELECTION AND WILL BE DEEMED TO
HAVE INDICATED NO ELECTION WITH RESPECT TO RECEIVING EITHER AMSOUTH COMMON
STOCK (PLUS THE PREFERRED STOCK CASH AMOUNT IN THE CASE OF SHARES OF FORTUNE
PREFERRED STOCK) OR CASH FOR ALL OF SUCH SHAREHOLDER'S SHARES. NEITHER AMSOUTH
NOR THE EXCHANGE AGENT WILL BE UNDER ANY OBLIGATION TO NOTIFY ANY PERSON OF ANY
DEFECT IN AN ELECTION FORM OR REVOCATION SUBMITTED TO THE EXCHANGE AGENT.
In determining whether to make a Cash Election, a Stock Election or No
Election, shareholders of Fortune should consult their own financial and tax
advisors. NO RECOMMENDATION IS MADE WITH RESPECT TO WHETHER A CASH ELECTION,
STOCK ELECTION OR NO ELECTION SHOULD BE MADE.
Persons who become shareholders of Fortune after the date five days before
the Mailing Date and before the close of business on the day before the
Election Deadline, or any other shareholders who need an Election Form, may
obtain copies of the Election Form upon request from AmSouth either in writing
at AmSouth Bancorporation, Post Office Box 11007, Birmingham, Alabama 35288,
Attention: Investor Relations Department, or by telephone at 205/583-4439.
ALLOCATION PROCEDURES
Within five business days after the Election Deadline, the Exchange Agent
will allocate among holders of Fortune Common Stock and Fortune Preferred Stock
rights to receive AmSouth Common Stock (plus the Preferred Stock Cash Amount in
the case of shares of Fortune Preferred Stock) or cash as follows (provided
that in no event will the Exchange Agent be required to effectuate the
allocation before the Effective Date):
(a) If the number of shares of AmSouth Common Stock to be issued for
Stock Election Shares is less than the Stock Limit, then (i) all Stock
Election Shares will be converted into AmSouth Common Stock (plus the
Preferred Stock Cash Amount in the case of such shares that are shares of
Fortune Preferred Stock), (ii) a sufficient number of No Election Shares
and then, if necessary, Cash Election Shares will be selected randomly by
the Exchange Agent (except as noted below) to receive AmSouth Common Stock
(plus the Preferred Stock Cash Amount in the case of such shares that are
shares of Fortune Preferred Stock), so that the total of AmSouth Common
Stock shares to be issued will equal as closely as practicable the Stock
Limit and (iii) the Cash Election Shares and No Election Shares not so
selected will be converted into cash.
(b) If the number of shares of AmSouth Common Stock to be issued for
Stock Election Shares exceeds the Stock Limit, then (i) all Cash Election
Shares and No Election Shares will be converted into cash, (ii) a
sufficient number of Stock Election Shares will be selected randomly by the
Exchange Agent to receive cash so that the total of AmSouth Common Stock
shares to be issued will equal as closely as practicable the Stock Limit
and (iii) the Stock Election Shares not so selected will be converted into
AmSouth Common Stock (plus the Preferred Stock Cash Amount in the case of
such shares that are shares of Fortune Preferred Stock).
29
<PAGE>
(c) If the number of shares of AmSouth Common Stock to be issued on
conversion of Stock Election Shares equals or is nearly equal to (as
determined by the Exchange Agent) the Stock Limit, Stock Election Shares
will receive AmSouth Common Stock (plus the Preferred Stock Cash Amount in
the case of such shares that are shares of Fortune Preferred Stock), and
all Cash Election Shares and No Election Shares will receive cash.
(d) If the number of shares of AmSouth Common Stock to be issued on
conversion of Stock Election Shares and No Election Shares equals or is
nearly equal to (as determined by the Exchange Agent) the Stock Limit, all
Cash Election Shares will receive cash and all Stock Election Shares and No
Election Shares will receive AmSouth Common Stock (plus the Preferred Stock
Cash Amount in the case of such shares that are shares of Fortune Preferred
Stock).
Notwithstanding the selection procedures described above, the Merger
Agreement provides that no particular Cash Election Shares or Stock Election
Shares will be selected randomly to receive AmSouth Common Stock (plus the
Preferred Stock Cash Amount in the case of shares of Fortune Preferred Stock)
or cash, as the case may be, if such selection would threaten satisfaction of
any of the conditions to consummation of the Merger. One of the conditions to
consummation of the Merger is the receipt by the parties of an opinion from
counsel and an accounting firm that the Merger will constitute a tax-free
reorganization for federal income tax purposes.
Under applicable tax rules the inclusion of certain large Fortune
shareholders in the random selection process in the event cash elections are
oversubscribed may jeopardize the status of the Merger as a tax-free
reorganization. The two largest holders of Fortune Common Stock, The Dyson-
Kissner-Moran Corporation group (the "Moran Group"), and John T. Oxley, have
indicated to Fortune that they intend to make a cash election if the Merger is
approved. John A. Moran, a member of the Moran Group, is a director of Fortune.
Other than as a holder of Fortune Common Stock and Mr. Moran's status as both a
member of the Moran Group and as a director of Fortune, the Moran Group is not
affiliated with Fortune. Other than as a holder of Fortune Common Stock, Mr.
Oxley is not affiliated with Fortune. As of March 30, 1994, the Moran Group and
Mr. Oxley owned approximately 13.30% and 14.03%, respectively, of the
outstanding shares of Fortune Common Stock. As a result of the foregoing, in
the event cash elections are oversubscribed, the cash elections of the Moran
Group and Mr. Oxley will be satisfied on a priority basis so as not to
jeopardize the status of the Merger as a tax-free reorganization. In addition,
cash elections of other large Fortune shareholders may be satisfied on a
priority basis if necessary so as not to jeopardize the status of the Merger as
a tax-free reorganization. Thus, in circumstances where cash elections are
oversubscribed, under the terms of the Merger Agreement and in order to
preserve the Merger as a tax-free reorganization, the largest Fortune
shareholders will be more likely to receive their choice of cash consideration
than smaller Fortune shareholders. In general, elections to receive cash or
stock by Fortune directors and executive officers will not be satisfied on a
priority basis. In the event cash elections are oversubscribed, however, cash
elections by director John A. Moran (in his capacity as a member of the Moran
Group) and possibly director Ezra K. Zilkha (as a result of his holding 4.92%
of Fortune Common Stock as of March 30, 1994) will be given priority over other
Fortune shareholders in order to preserve the Merger as a tax-free
reorganization. It is also conceivable, although unlikely, that any other
director or executive officer of Fortune would be given priority treatment with
respect to their cash elections. Priority treatment, if applicable, is a
function of the relative size of such persons' share ownership, the Average
AmSouth Closing Price and the effect of certain tax laws. Such treatment is not
a result of their status as directors or executive officers.
Any necessary selection process to be used by the Exchange Agent will consist
of such procedures as will be mutually determined by Fortune and AmSouth. No
assurance can be given that an election by any given shareholder, except the
cash elections of the two largest shareholders named above, will be honored.
Because the number of shares of AmSouth Common Stock to be issued and the total
amount of cash to be paid in the Merger will be fixed pursuant to the Merger
Agreement, the extent to which elections will be accommodated will depend upon
the numbers of shares which elect cash and stock and as to which no
30
<PAGE>
election is made. Accordingly, a Fortune shareholder who elects to receive cash
may instead receive shares of AmSouth Common Stock (plus cash in lieu of a
fractional share and for the Preferred Stock Cash Amount in the case of shares
of Fortune Preferred Stock) or a Fortune shareholder who elects to receive
shares of AmSouth Common Stock (plus cash in lieu of a fractional share) may
instead receive all cash. In addition, it is possible, in such cases, that a
beneficial owner of Fortune Common Stock who holds his shares in more than one
record ownership or a record holder of both Fortune Common Stock and Fortune
Preferred Stock could receive both cash (in addition to cash received in lieu
of fractional shares and for the Preferred Stock Cash Amount in the cash of
shares of Fortune Preferred Stock) and AmSouth Common Stock in the Merger.
Because the tax consequences of receiving cash, AmSouth Common Stock or a
combination of cash and AmSouth Common Stock will differ, shareholders of
Fortune are urged to read carefully the information under "Certain Federal
Income Tax Consequences." and to consult with their own tax advisors before
returning the Election Form.
ISSUANCE OF STOCK AND PAYMENT OF CASH
General. On and after the Effective Date, AmSouth will deliver to the
Exchange Agent certificates representing the number of shares of AmSouth Common
Stock issuable and the amount of cash payable in the Merger. The Exchange Agent
will not be entitled to vote or exercise any rights of ownership with respect
to the shares of AmSouth Common Stock held by it pursuant to the Merger
Agreement, except that it will receive and hold all dividends or other
distributions paid or distributed with respect to such shares for the account
of the persons entitled thereto.
Exchange of Certificates; Delivery of AmSouth Common Stock and Cash. On the
Effective Date, holders of certificates representing Fortune Common Stock and
Fortune Preferred Stock will cease to have any rights as shareholders of
Fortune and will have only the right to receive the cash or AmSouth Common
Stock into which their Fortune shares are to be converted. No holder of
certificates formerly representing Fortune shares will be entitled to receive
either cash or shares of AmSouth Common Stock until the certificates are
surrendered to the Exchange Agent, and no interest will accrue in respect
thereof. Each AmSouth Common Stock share for which Fortune shares are exchanged
in the Merger will be deemed to have been issued on the Effective Date.
Accordingly, Fortune shareholders who receive AmSouth Common Stock in the
Merger will be entitled to vote their shares and to receive any dividends or
other distributions, without interest, that may be payable to holders of record
of AmSouth Common Stock after the Effective Date, except that no such dividend
will be remitted until the certificates representing Fortune Common Stock or
Fortune Preferred Stock have been properly delivered to the Exchange Agent.
Until so surrendered, each certificate that before the Effective Date
represented outstanding Fortune Common Stock or Fortune Preferred Stock will,
except as otherwise provided in the Merger Agreement, be deemed to evidence
ownership of the number of shares of AmSouth Common Stock or the right to
receive the amount of cash into which the same has been converted in the
Merger. After the Effective Date, there will be no further transfers on the
records of Fortune of certificates theretofore representing Fortune Common
Stock or Fortune Preferred Stock and, if such certificates are presented to
Fortune for transfer, they will be canceled against delivery of certificates
for AmSouth Common Stock or cash.
Within five business days after the allocation described above under
"ELECTION AND ALLOCATION PROCEDURES--Allocation Procedures," the Exchange Agent
will distribute AmSouth Common Stock and cash with respect to shares of Fortune
Common Stock and Fortune Preferred Stock which have been properly surrendered
to the Exchange Agent. No dividends that have been declared on AmSouth Common
Stock will be remitted with respect to shares of Fortune Common Stock or
Fortune Preferred Stock that have been converted into shares of AmSouth Common
Stock in the Merger until the certificate or certificates previously
representing Fortune Common Stock or Fortune Preferred Stock have been
surrendered to the Exchange Agent, at which time such dividends will be
remitted to such person, without interest. Stock certificates will not be
delivered for fractional shares resulting from the exchange of Fortune stock
for AmSouth Common Stock. Instead, each holder of Fortune stock who would
otherwise be
31
<PAGE>
entitled to a fractional share will receive in lieu thereof a check in an
amount equal to the value of such fractional share based upon the closing price
of AmSouth Common Stock on the NYSE composite transactions tape on the
Effective Date.
Neither AmSouth, Fortune nor the Exchange Agent will be liable to any former
holder of Fortune Common Stock or Fortune Preferred Stock for any amount
delivered to a public official pursuant to applicable abandoned property,
escheat or similar laws.
Any shares of Fortune Common Stock or Fortune Preferred Stock with respect to
which dissenters' rights have been properly perfected will be treated in
accordance with the procedures described in the Proxy Statement-Prospectus
under "DISSENTERS' RIGHTS"
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The discussion below provides general information about certain expected
federal income tax consequences of the Merger. EACH FORTUNE SHAREHOLDER SHOULD
CONSULT HIS OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE MERGER
FOR SUCH SHAREHOLDER, INCLUDING THE APPLICABLE AND POSSIBLE EFFECT OF FOREIGN,
STATE AND LOCAL TAX LAWS. The consummation of the Merger is conditioned upon
the receipt by Fortune of an opinion from counsel that is satisfactory to
Fortune and upon the receipt by AmSouth of an opinion from independent
accountants that is satisfactory to AmSouth, both opinions dated the Effective
Date, to the effect that for federal income tax purposes the Merger will
constitute a reorganization within the meaning of Section 368 of the Code.
Also, counsel's opinion to Fortune is to cover the following additional federal
income tax consequences:
(a) except with respect to holders of Fortune Common Stock and Fortune
Preferred Stock who exercise dissenters' rights and except for cash
payments, including cash in lieu of a fractional share interest and the
Preferred Stock Cash Amount, to holders of Fortune Common Stock or Fortune
Preferred Stock, no gain or loss will be recognized by a holder of Fortune
Common Stock or Fortune Preferred Stock upon conversion in the Merger of
such stock into AmSouth Common Stock,
(b) the basis of the shares of AmSouth Common Stock to be received by a
shareholder of Fortune will be the same as such shareholder's basis in the
Fortune Common Stock or Fortune Preferred Stock (less the Preferred Stock
Cash Amount) exchanged therefor, and
(c) the holding period of the AmSouth Common Stock received in the Merger
by a holder of Fortune Common Stock or Fortune Preferred Stock exchanged
therefor will include the period during which such holder held the Fortune
Common Stock or Fortune Preferred Stock exchanged therefor, provided that
such Fortune Common Stock or Fortune Preferred Stock was held as a capital
asset immediately before the Effective Date.
In rendering the foregoing opinions, counsel and the independent accountants
will be entitled to rely on representations by AmSouth and Fortune as to
factual matters.
The federal income tax consequences of the Merger to a Fortune shareholder
will differ depending primarily upon whether such shareholder receives for his
Fortune stock solely cash, solely AmSouth Common Stock (except for cash
received in lieu of fractional shares of AmSouth Common Stock and the Preferred
Stock Cash Amount) or both cash and AmSouth Common Stock. The following
discussion describes generally counsel's opinion to Fortune with respect to the
federal income tax consequences to Fortune shareholders in each of these
categories. The discussion is based on the assumption that the Fortune shares
constitute a capital asset in the hands of the shareholders.
Tax Consequences to Fortune Shareholders Who Receive Solely Cash for their
Shares in the Merger. The exchange by a Fortune shareholder of all his Fortune
shares solely for cash in the Merger (or as the result of such shareholder's
exercise of dissenters' rights) will be a taxable transaction for federal
income tax purposes. Such a shareholder will recognize gain or loss measured by
the difference between the tax basis for his Fortune shares and the amount of
cash received (unless the receipt of cash is treated as a dividend, as
described below).
32
<PAGE>
In general, such gain or loss will be computed separately for each block of
stock held by the shareholder and will be capital gain or loss.
In certain circumstances, the receipt of solely cash by a Fortune shareholder
could be treated as a dividend (to the extent of the shareholder's ratable
share of applicable earnings and profits) if the shareholder constructively
owns shares of Fortune stock that are exchanged for AmSouth Common Stock in the
Merger. Additionally, in certain circumstances, although the application of the
law is not entirely clear, the receipt of solely cash by a Fortune shareholder
could be treated as a dividend (to the extent of the shareholder's ratable
share of applicable earnings and profits) if the shareholder owns AmSouth
Common Stock, actually or constructively, after the Merger (other than AmSouth
shares received in the Merger). Generally, a shareholder constructively owns
stock that is owned by members of the shareholder's family, and by certain
controlled or related partnerships, estates, trusts and corporations, pursuant
to the constructive ownership rules of Section 318 of the Code, as well as any
shares that the shareholder has an option to acquire.
The receipt of solely cash by a Fortune shareholder in exchange for his
Fortune stock will not be treated as a dividend if such exchange or receipt
results in a meaningful reduction or a substantially disproportionate reduction
in the shareholder's ownership interest or results in a complete termination of
the shareholder's interest, taking into account, in each case, the constructive
ownership rules described above. A complete termination of a shareholder's
interest will occur if, after receipt of cash in exchange for Fortune stock,
the shareholder owns no shares of stock in AmSouth. Thus, a Fortune shareholder
who receives solely cash for all of the Fortune shares actually owned by him
will generally qualify for capital gain treatment under the complete
termination test if none of the Fortune shares constructively owned by him are
exchanged in the Merger for AmSouth Common Stock and the shareholder does not
otherwise own, actually or constructively, any shares of AmSouth Common Stock
after the Merger. Where the complete termination of interest test is not
satisfied with respect to a particular shareholder (because, for example,
Fortune shares owned by a related party are exchanged for AmSouth Common Stock
in the Merger), that shareholder will nonetheless generally be entitled to
capital gain treatment if the receipt of cash in exchange for his Fortune
shares results in a "substantially disproportionate" reduction or a
"meaningful" reduction in his ownership interest.
Although the application of the law is not entirely clear, a shareholder's
reduction in ownership interest should normally be "substantially
disproportionate," and capital gain treatment should normally result, if the
shareholder's proportionate stock interest in AmSouth immediately after the
Merger is 20% or more below what his proportionate interest in AmSouth would
have been if he had received solely AmSouth Common Stock in the Merger. Even if
such reduction in interest would not amount to 20%, the Internal Revenue
Service has indicated in published rulings that a distribution that results in
any actual reduction in interest of a small, minority shareholder in a publicly
held corporation will result in a "meaningful" reduction and will not
constitute a dividend if the shareholder exercises no control with respect to
corporate affairs.
Tax Consequences to Fortune Shareholders Who Receive Solely AmSouth Stock in
the Merger. A Fortune shareholder will recognize neither gain nor loss on the
exchange of all his Fortune shares solely for AmSouth Common Stock in the
Merger. The tax basis of the AmSouth Common Stock received in the Merger by
such a Fortune shareholder will be equal to the shareholder's tax basis for the
Fortune stock exchanged therefor, and such shareholder will include the period
during which the Fortune stock surrendered was held in his holding period for
the AmSouth Common Stock received in exchange therefor.
Fortune shareholders who receive cash in lieu of fractional shares of AmSouth
Common Stock will be treated for federal income tax purposes as if the
fractional shares were distributed as part of the exchange and then redeemed by
AmSouth. These cash payments will be treated as having been received in full
payment in exchange for the amount of AmSouth Common Stock so redeemed. The
shareholders will recognize capital gain or loss equal to the difference
between the cash received and the basis of the fractional share interest that
would have been issued.
33
<PAGE>
Tax Consequences to Fortune Shareholders Who Receive Both Cash and AmSouth
Stock in the Merger. The election procedures will relate to record ownership of
each class of Fortune stock. Accordingly, it is possible that a beneficial
owner of Fortune Common Stock who holds his shares in more than one record
ownership or a record holder of both Fortune Common Stock and Fortune Preferred
Stock could receive both cash (in addition to cash received in lieu of
fractional shares of AmSouth Common Stock) and AmSouth Common Stock in exchange
for shares of Fortune stock. Fortune shareholders who receive cash in exchange
for some of their shares of Fortune stock, and who realize a gain upon the
exchange (with gain or loss computed separately for each block of Fortune stock
exchanged and measured by the excess of the fair market value of the
consideration received over the tax basis of the Fortune stock exchanged), will
recognize such gain only to the extent of the cash received with respect to
such shares. In certain circumstances, although the application of the law is
not entirely clear, it is possible that the cash received in the Merger by a
shareholder in exchange for some of his shares of Fortune stock will be treated
for federal income tax purposes as received by such shareholder ratably as
partial consideration (in addition to AmSouth Common Stock) for each share of
Fortune stock exchanged by him in the Merger. An analysis similar to the
analysis relating to Fortune shareholders who receive solely cash for their
shares in the Merger will apply to determine if the receipt of any of such cash
by the shareholder will be treated as the receipt of a dividend (rather than a
capital gain). No loss will be recognized by a Fortune shareholder who realizes
a loss with respect to the exchange of some of his Fortune shares for cash, but
also receives AmSouth Common Stock in exchange for other shares of Fortune
stock.
A holder of Fortune Preferred Stock who realizes a gain upon the exchange of
his or her shares of Fortune Preferred Stock for a combination of AmSouth
Common Stock and the Preferred Stock Cash Amount (with gain or loss measured by
the excess of the fair market value of the consideration received over the tax
basis of the shares of Fortune Preferred Stock exchanged) will recognize such
gain only to the extent of the Preferred Stock Cash Amount received by such
holder. An analysis similar to the analysis relating to Fortune shareholders
who receive solely cash for their shares in the Merger will apply to determine
if the receipt of the Preferred Stock Cash Amount by the shareholder will be
treated as the receipt of a dividend (rather than capital gain). No loss will
be recognized by a Fortune shareholder who realizes a loss with respect to the
exchange of his or her shares of Fortune Preferred Stock for a combination of
AmSouth Common Stock and the Preferred Stock Cash Amount. If a holder of
Fortune Preferred Stock has more than one block of Fortune Preferred Stock, the
computation of gain or loss realized, and the amount recognized, will be
performed separately with respect to each such block. A beneficial owner of
Fortune Preferred Stock that holds such stock in more than one record ownership
or that also holds shares of Fortune Common Stock may, in some circumstances,
receive both AmSouth Common Stock and cash (in addition to cash received in
lieu of fractional shares and the Preferred Stock Cash Amount). The tax basis
of AmSouth Common Stock received in the Merger by a holder of Fortune Preferred
Stock will equal such holder's tax basis for the Fortune Preferred Stock
exchanged therefor, decreased by the Preferred Stock Cash Amount and increased
by the amount of any gain recognized on such exchange, and such holder will
include the period during which the Fortune Preferred Stock surrendered was
held in his or her holding period for the AmSouth Common Stock received in
exchange therefor.
BACKUP WITHHOLDING
Unless an exemption applies under the applicable law and regulations, the
Exchange Agent will be required to withhold 31% of any cash payments to which a
Fortune shareholder or other payee is entitled pursuant to the Merger unless
the shareholder or other payee provides its taxpayer identification number
(social security number or employer identification number) and certifies that
such number is correct. Each shareholder and, if applicable, each other payee
should complete and sign the substitute Form W-9 included as part of the
transmittal letter that accompanies the Election Form, so as to provide the
information and certification necessary to avoid backup withholding, unless an
applicable exemption exists and is established in a manner satisfactory to the
Exchange Agent.
34
<PAGE>
THE DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. IT
DOES NOT ADDRESS THE STATE, LOCAL OR FOREIGN TAX ASPECTS OF THE MERGER. THE
DISCUSSION AND THE OPINIONS DESCRIBED ABOVE ARE BASED ON CURRENTLY EXISTING
PROVISIONS OF THE CODE, EXISTING TREASURY REGULATIONS THEREUNDER AND CURRENT
ADMINISTRATIVE RULINGS AND COURT DECISIONS. THE OPINIONS DESCRIBED ABOVE ARE
NOT BINDING UPON THE INTERNAL REVENUE SERVICE, AND NO RULINGS OF THE INTERNAL
REVENUE SERVICE WILL BE SOUGHT OR OBTAINED. THERE IS NO ASSURANCE THAT THE
INTERNAL REVENUE SERVICE WILL AGREE WITH THE FOREGOING DISCUSSION OR THE
OPINIONS DESCRIBED ABOVE. ALL OF THE FOREGOING ARE SUBJECT TO CHANGE AND ANY
SUCH CHANGE COULD AFFECT THE CONTINUING VALIDITY OF THIS DISCUSSION AND THE
OPINIONS. BECAUSE OF THE COMPLEXITIES OF THE TAX LAWS IN GENERAL, AND THE
COMPLEXITIES AND UNCERTAINTIES OF THE TAX CONSEQUENCES ASSOCIATED WITH THE
RECEIPT OF CASH IN THE MERGER IN PARTICULAR, EACH FORTUNE SHAREHOLDER SHOULD
CONSULT HIS OWN TAX ADVISOR WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF
THE MERGER TO HIM, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL AND
FOREIGN TAX LAWS.
NYSE LISTING
AmSouth Common Stock is listed on the NYSE. AmSouth has agreed in the Merger
Agreement to use its best efforts to assure that the shares of AmSouth Common
Stock to be issued pursuant to the Merger Agreement be authorized for listing
on the NYSE. An application will be filed by AmSouth for listing the shares of
AmSouth Common Stock on the NYSE.
EXPERTS
The financial statements incorporated in this Supplement by reference to the
Annual Report on Form 10-K of Fortune for the year ended September 30, 1993,
have been so incorporated in reliance on the reports of KPMG Peat Marwick,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of AmSouth Bancorporation included and
incorporated by reference in AmSouth's Annual Report on Form 10-K for the year
ended December 31, 1993, have been audited by Ernst & Young, 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, incorporated
by reference in this Supplement, Ernst & Young have reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate report, included in
AmSouth's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994
and incorporated herein by reference, states that they did not audit and they
do not express an opinion on that interim financial information. Accordingly,
the degree of reliance on their report on 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 for their report on the unaudited interim financial
information because the report is 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 Securities Act.
35
<PAGE>
FORTUNE BANCORP, INC.
ELECTION FORM AND LETTER OF TRANSMITTAL
[_] CHECK THIS BOX IF
THIS ELECTION REPRESENTS
A REVOCATION OF ANY EAR-
LIER ELECTION.
RESPONSE DEADLINE JUNE 16, 1994
TO ACCOMPANY CERTIFICATES REPRESENTING SHARES OF COMMON STOCK, PAR VALUE $.01
PER SHARE ("FORTUNE COMMON STOCK"), AND/OR SHARES OF SERIES A 8% CUMULATIVE
CONVERTIBLE PREFERRED STOCK, PAR VALUE $.01 PER SHARE ("FORTUNE PREFERRED
STOCK"), OF FORTUNE BANCORP, INC. ("FORTUNE") (TOGETHER, THE FORTUNE COMMON
STOCK AND THE FORTUNE PREFERRED STOCK ARE COLLECTIVELY REFERRED TO HEREIN AS
THE "SHARES") WHEN SUBMITTED PURSUANT TO AN ELECTION IN CONNECTION WITH THE
PENDING MERGER OF FORTUNE WITH AND INTO AMSOUTH BANCORPORATION, A DELAWARE
CORPORATION ("AMSOUTH"), WHICH WAS APPROVED BY THE SHAREHOLDERS OF FORTUNE ON
MAY 23, 1994. AS USED HEREIN (I) THE "AVERAGE AMSOUTH CLOSING PRICE" MEANS THE
AVERAGE OF THE CLOSING PRICES OF SHARES OF AMSOUTH COMMON STOCK AS REPORTED ON
THE NEW YORK STOCK EXCHANGE COMPOSITE TRANSACTION TAPE FOR THE TEN CONSECUTIVE
TRADING DAYS ENDING ON THE TENTH BUSINESS DAY BEFORE THE EFFECTIVE DATE OF THE
MERGER, (II) THE "CONVERSION RATIO" MEANS .538522 PLUS THE RATIO OF $17.125 TO
THE AVERAGE AMSOUTH CLOSING PRICE, (III) AMSOUTH COMMON STOCK MEANS SHARES OF
COMMON STOCK, PAR VALUE $1.00 PER SHARE OF AMSOUTH AND (IV) THE FORTUNE
PREFERRED STOCK CASH AMOUNT MEANS $1.81159 IN CASH AND (V) THE "CASH
CONSIDERATION" MEANS CASH EQUAL TO THE SUM OF $17.125 AND THE PRODUCT OF
.538522 AND THE AVERAGE AMSOUTH CLOSING PRICE.
THE INSTRUCTIONS ACCOMPANYING THIS ELECTION FORM AND LETTER OF TRANSMITTAL
SHOULD BE READ CAREFULLY BEFORE THIS ELECTION FORM AND LETTER OF TRANSMITTAL
ARE COMPLETED. THE ELECTION DEADLINE IS 5:00 P.M., CENTRAL TIME, ON JUNE 16,
1994.
Nominee record holders, which include nominees, trustees or any other persons
that hold shares of Fortune Common Stock or Fortune Preferred Stock in any
capacity whatsoever on behalf of another person or entity ("Nominees"), are
directed to Instruction 13 and, if submitting more than one election with
respect to either Fortune Common Stock or Fortune Preferred Stock, must
complete Box C on page 6. Each record holder, unless such record holder is a
Nominee, should indicate such holder's election in the boxes in Section A
and/or Section B.
EACH RECORD HOLDER OF FORTUNE COMMON STOCK WHO IS ALSO A RECORD HOLDER OF
FORTUNE PREFERRED STOCK SHOULD INDICATE SUCH RECORD HOLDER'S ELECTION WITH
RESPECT TO BOTH FORTUNE COMMON STOCK (IN SECTION A ON PAGE 2) AND FORTUNE
PREFERRED STOCK (IN SECTION B ON PAGE 3).
ALL HOLDERS MAY MAKE DIFFERENT ELECTIONS FOR SHARES OF FORTUNE COMMON STOCK
AND FORTUNE PREFERRED STOCK.
1
<PAGE>
A. FORTUNE COMMON STOCKHOLDER ELECTION
------
Check the appropriate box below to make an election (i) to have each of your
shares of Fortune Common Stock, if any, converted into the right to receive
that number of shares of AmSouth Common Stock equal to the Conversion Ratio in
the Merger, or (ii) to have each of your shares of Fortune Common Stock
converted into the right to receive the Cash Consideration in the Merger, or
(iii) to indicate no election:
TO BE COMPLETED BY ALL HOLDERS OF
FORTUNE COMMON STOCK EXCEPT [_] STOCK ELECTION
NOMINEES. NOMINEES SUBMITTING CHECK ONLY ONE BOX [_] CASH ELECTION
MULTIPLE ELECTIONS MUST USE BOX C [_] NO ELECTION
TO MAKE VALID ELECTIONS.
AMSOUTH RESERVES THE RIGHT TO DEEM THAT YOU HAVE CHECKED THE "NO ELECTION"
BOX IF:
(A) NO CHOICE IS INDICATED ABOVE;
(B) YOU FAIL TO FOLLOW THE INSTRUCTIONS ON THIS ELECTION FORM (INCLUDING
SUBMISSION OF YOUR FORTUNE STOCK CERTIFICATES*) OR OTHERWISE FAIL TO
PROPERLY MAKE AN ELECTION; OR
(C) A COMPLETED ELECTION FORM (INCLUDING SUBMISSION OF YOUR FORTUNE STOCK
CERTIFICATES, OTHER THAN CERTIFICATES FOR SHARES HELD THROUGH FORTUNE'S
DIVIDEND REINVESTMENT PLAN**) IS NOT ACTUALLY RECEIVED BY THE ELECTION
DEADLINE.
*If your certificate(s) has been either lost, stolen or destroyed,
see Instruction 12.
**See Instruction 6.
FORTUNE COMMON STOCK
--------------------------------------------------------------------------------
DESCRIPTION OF SHARES OF FORTUNE COMMON STOCK ENCLOSED
--------------------------------------------------------------------------------
Name and Address of Certificate(s) Enclosed
Registered Holder(s) (Please list below--
attach additional list if necessary)
--------------------------------------------------------------------------------
Certificate Number of
Number(s) Shares
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Number of Shares:
--------------------------------------------------------------------------------
IF YOUR STOCK CERTIFICATE(S) HAS BEEN EITHER LOST, STOLEN OR DESTROYED AND YOU
REQUIRE ASSISTANCE IN REPLACING IT/THEM, CALL AMSOUTH BANK N.A. TOLL-FREE AT
(800) 396-6776 IMMEDIATELY TO RECEIVE INSTRUCTIONS REGARDING REPLACEMENT. SEE
INSTRUCTION 12. YOU CANNOT SUBMIT AN EFFECTIVE ELECTION FORM WITHOUT YOUR STOCK
CERTIFICATES ATTACHED HERETO.
2
<PAGE>
B. FORTUNE PREFERRED STOCKHOLDER ELECTION
---------
Check the appropriate box below to make an election (i) to have each of your
shares of Fortune Preferred Stock, if any, converted into the right to receive
that number of shares of AmSouth Common Stock equal to the product of the
Conversion Ratio and 1.333333 together with the Fortune Preferred Stock Cash
Amount in the Merger, or (ii) to have each of your shares of Fortune Preferred
Stock converted into the right to receive an amount in cash equal to the
Fortune Preferred Stock Cash Amount plus the product of the Cash Consideration
and 1.333333 in the Merger, or (iii) to indicate no election:
TO BE COMPLETED BY ALL HOLDERS OF
FORTUNE PREFERRED STOCK EXCEPT [_] STOCK ELECTION
NOMINEES. NOMINEES SUBMITTING CHECK ONLY ONE BOX [_] CASH ELECTION
MULTIPLE ELECTIONS MUST USE BOX C [_] NO ELECTION
TO MAKE VALID ELECTIONS.
AMSOUTH RESERVES THE RIGHT TO DEEM THAT YOU HAVE CHECKED THE "NO
ELECTION" BOX IF:
(A) NO CHOICE IS INDICATED ABOVE;
(B) YOU FAIL TO FOLLOW THE INSTRUCTIONS ON THIS ELECTION FORM (INCLUDING
SUBMISSION OF YOUR FORTUNE STOCK CERTIFICATES*) OR OTHERWISE FAIL TO
PROPERLY MAKE AN ELECTION; OR
(C) A COMPLETED ELECTION FORM (INCLUDING SUBMISSION OF YOUR FORTUNE STOCK
CERTIFICATES) IS NOT ACTUALLY RECEIVED BY THE ELECTION DEADLINE.
*If your certificate(s) has been either lost, stolen or destroyed, see
Instruction 12.
FORTUNE PREFERRED STOCK
--------------------------------------------------------------------------------
DESCRIPTION OF SHARES OF FORTUNE PREFERRED STOCK ENCLOSED
--------------------------------------------------------------------------------
Name and Address of Certificate(s) Enclosed
Registered Holder(s) (Please list below--
attach additional list if necessary)
--------------------------------------------------------------------------------
Certificate Number of
Number(s) Shares
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Number of Shares:
--------------------------------------------------------------------------------
IF YOUR STOCK CERTIFICATE(S) HAS BEEN EITHER LOST, STOLEN OR DESTROYED AND YOU
REQUIRE ASSISTANCE IN REPLACING IT/THEM, CALL AMSOUTH BANK N.A. TOLL-FREE AT
(800) 396-6776 IMMEDIATELY TO RECEIVE INSTRUCTIONS REGARDING REPLACEMENT. SEE
INSTRUCTION 12. YOU CANNOT SUBMIT AN EFFECTIVE ELECTION FORM WITHOUT YOUR STOCK
CERTIFICATES ATTACHED HERETO.
3
<PAGE>
To AmSouth:
In connection with the pending merger (the "Merger") of Fortune with and into
AmSouth and pursuant to an Agreement and Plan of Merger, dated as of the 12th
day of September, 1993 and amended as of May 11, 1994 (as so amended, the
"Merger Agreement"), by and between AmSouth and Fortune, the undersigned hereby
makes the election or elections set forth herein and surrenders to you for
cancellation, as Exchange Agent, certificates representing all of the
undersigned's shares of Fortune Common Stock and/or Fortune Preferred Stock
(together, the "Shares") listed on page 2 or 3 in exchange for either (i) the
right to receive that number of shares of AmSouth Common Stock (the "Stock
Consideration") as determined by the formula set forth in Section A, under
"FORTUNE COMMON STOCKHOLDER ELECTION," or in Section B, under "FORTUNE
PREFERRED STOCKHOLDER ELECTION," as the case may be, on pages 2 and 3, together
with, in the case of certificates representing Fortune Preferred Stock, an
amount in cash equal to the product of the Fortune Preferred Stock Cash Amount
and the number of shares of Fortune Preferred Stock represented by such
certificates, or (ii) the right to receive an amount in cash as determined by
the formula set forth under "FORTUNE COMMON STOCKHOLDER ELECTION" or under
"FORTUNE PREFERRED STOCKHOLDER ELECTION" (as the case may be). In addition, it
is understood that AmSouth will pay cash in lieu of any fractional shares of
the Stock Consideration in connection with the Merger. As used herein, the term
"Merger Consideration" refers to the Stock Consideration, the Cash
Consideration and any cash payable in lieu of fractional shares.
The undersigned understands that the election referred to above is subject to
certain terms, conditions and limitations that have been set out in the
following documents: the Merger Agreement; the Proxy Statement-Prospectus,
dated April 5, 1994 ("the Proxy Statement-Prospectus"); a Supplement dated May
12, 1994 (the "Proxy Statement Supplement") and a Prospectus Supplement (the
"Election Supplement") which accompanies this Election Form and Letter of
Transmittal (the "Election Form"). The Merger Agreement is included as Appendix
A to the Proxy Statement-Prospectus; the First Amendment thereto, dated as of
May 11, 1994 is included as Appendix A to the Proxy Statement Supplement. Extra
copies of the Election Form, Proxy Statement Supplement, Election Supplement or
Proxy Statement-Prospectus may be requested from AmSouth Bank N.A. as Exchange
Agent, at the addresses or phone number shown on page 12. THE FILING OF THIS
ELECTION FORM CONSTITUTES AN ACKNOWLEDGEMENT THAT THE UNDERSIGNED HAS RECEIVED,
READ AND UNDERSTOOD EACH OF THE PROXY STATEMENT-PROSPECTUS, THE PROXY STATEMENT
SUPPLEMENT AND THE ELECTION SUPPLEMENT.
The undersigned hereby represents and warrants that the undersigned is the
registered holder of the Shares, with good title to the previously described
Shares and full power and authority to sell, assign and transfer the Shares
represented by the enclosed certificates, free and clear of all liens, claims
and encumbrances, and not subject to any adverse claims. The undersigned will,
upon request, execute any additional documents necessary or desirable to
complete the surrender and exchange of such Shares. The undersigned hereby
irrevocably appoints the Exchange Agent, as agent of the undersigned, to effect
the exchange. All authority conferred or agreed to be conferred in this
Election Form shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Unless otherwise indicated below under Special Issuance and Payment
Instructions, in exchange for the enclosed certificates, the undersigned
requests issuance of a certificate representing the appropriate number of
shares of the Stock Consideration and/or a check for the Cash Consideration
(which shall include cash in lieu of fractional shares, if any, and the
Preferred Stock Cash Amount in respect of shares of Fortune Preferred Stock, if
any, covered by this Election Form), as the case may be, in the name of the
undersigned. Similarly, unless otherwise indicated under Special Delivery
Instructions, please mail such certificate and check to the undersigned at the
address shown on page 1. In the event that both the Special Delivery
Instructions and the Special Issuance and Payment Instructions are completed,
please issue such certificate or check, as the case may be, in the name of, and
mail such certificate and check to, the person or entity so indicated at the
address so indicated. Appropriate signature guarantees have been included with
respect to Shares for which Special Delivery Instructions and/or Special
Issuance and Payment Instructions have been given.
4
<PAGE>
SPECIAL ISSUANCE AND PAYMENT SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS (SEE INSTRUCTIONS 1, 4 AND 5)
(SEE INSTRUCTIONS 1, 4 AND 5)
To be completed ONLY if the cer-
To be completed ONLY if the cer- tificate(s) representing the Stock
tificate(s) representing the Stock Consideration or the check repre-
Consideration or the check repre- senting the Cash Consideration and
senting the Cash Consideration, cash in lieu of fractional shares
cash in lieu of fractional shares and the Preferred Stock Cash
and the Preferred Stock Cash Amount, if any, as the case may
Amount, if any, as the case may be, issued in the name of the un-
be, are to be issued in the name dersigned, are to be sent to some-
of and mailed to someone other one other than the undersigned or
than the undersigned. to the undersigned at the address
other than that shown on page 1.
Issue the certificate(s) repre-
senting the Stock Consideration or Mail the certificate(s) represent-
the check representing the Cash ing the Stock Consideration or the
Consideration, cash in lieu of check representing the Cash Con-
fractional shares and the Pre- sideration, cash in lieu of frac-
ferred Stock Cash Amount, if any, tional shares and the Preferred
to: Stock Cash Amount, if any, to:
Name Name
------------------------------ ------------------------------
(Please Print) (Please Print)
Address Address
--------------------------- ---------------------------
----------------------------------- -----------------------------------
(Include Zip Code) (Include Zip Code)
----------------------------------- -----------------------------------
(Tax Identification or Social (Tax Identification or Social
Security No.) Security No.)
SIGN HERE
-----------------------------------------------------------------
-----------------------------------------------------------------
(Signature(s) of Owner(s))
(Must be signed by registered holder(s) as name(s) appear(s) on
stock certificate(s) or by person(s) authorized to become regis-
tered holder(s) of certificates and documents transmitted. If
signed by an attorney, trustee, executor, administrator, guard-
ian, officer or other person acting in a fiduciary or represen-
tative capacity, the capacity of the person signing should be
included.) (See Instruction 8.)
Dated: 1994
------------------------------
Name(s):
--------------------------------------------------------
-----------------------------------------------------------------
(Please Print)
Capacity:
-------------------------------------------------------
Area Code and
Telephone Number:
-----------------------------------------------
SIGNATURE GUARANTEE
(REQUIRED ONLY IN CASES SPECIFIED IN INSTRUCTION 5)
Signature(s)
Guaranteed:
-----------------------------------------------------
-----------------------------------------------------------------
(Name of Firm Providing Signature Guarantee--Please Print)
-----------------------------------------------------------------
(Authorized Signature)
Date: 1994
-------------------------------
5
<PAGE>
BOX C: TO BE COMPLETED ONLY BY NOMINEES SUBMITTING MULTIPLE ELECTIONS.
FOR SUCH PURPOSES A NOMINEE INCLUDES, A NOMINEE, TRUSTEE OR ANY OTHER
PERSON THAT HOLDS SHARES OF FORTUNE COMMON STOCK AND/OR FORTUNE PREFERRED
STOCK IN ANY CAPACITY WHATSOEVER ON BEHALF OF ANOTHER PERSON OR ENTITY.
[_] CHECK THIS BOX IF
THE ELECTIONS BELOW
REPRESENT A REVOCATION
OF ANY PRIOR ELECTION.
If this Box C is completed, the undersigned acting for itself and as
nominee, trustee or in another representative capacity on behalf of
another person or entity, hereby submits the following elections and
attaches share certificates for all shares held of record by the
undersigned (attach additional sheets if necessary). See Instruction 8.
<TABLE>
<CAPTION>
FORTUNE COMMON STOCK
--------------------------------------------------------------------------------
TOTAL NUMBER OF
FORTUNE COMMON CHECK ONE:
------ ------------------------------------------
SHARES SUBJECT
NUMBER OF ELECTION TO ELECTION CASH ELECTION STOCK ELECTION NO ELECTION
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
7
--------------------------------------------------------------------------------
<CAPTION>
FORTUNE PREFERRED STOCK
--------------------------------------------------------------------------------
TOTAL NUMBER OF
FORTUNE PREFERRED CHECK ONE:
--------- ------------------------------------------
SHARES SUBJECT
NUMBER OF ELECTION TO ELECTION CASH ELECTION STOCK ELECTION NO ELECTION
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
7
</TABLE>
6
<PAGE>
INSTRUCTIONS
Shareholders of Fortune will not receive any certificates representing shares
of the Stock Consideration or the check representing the Cash Consideration,
cash in lieu of fractional shares (if any) and the Preferred Stock Cash Amount
(if any) in exchange for their certificates representing Shares of Fortune
Common Stock and/or Fortune Preferred Stock ("Certificates"), or any dividends
payable on such shares of AmSouth Common Stock comprising the Stock
Consideration, until the Certificates owned by such shareholders are received
by the Exchange Agent at the address set forth on page 12, together with such
documents as the Exchange Agent may require and until the same are processed
for exchange by the Exchange Agent. No interest will accrue on such dividends.
Such dividends will not be reinvested pursuant to AmSouth's Dividend
Reinvestment and Common Stock Purchase Plan. If your stock certificate(s) is
lost, stolen or destroyed, refer to Instruction 12 below.
UNLESS THE SPECIAL CIRCUMSTANCES DESCRIBED BELOW IN INSTRUCTION 13 "HOLDERS
WHO ARE NOMINEES, TRUSTEES OR OTHER REPRESENTATIVES" APPLY, A HOLDER OF FORTUNE
COMMON STOCK AND/OR FORTUNE PREFERRED STOCK MUST CHECK ONE BOX IN SECTION A
WITH RESPECT TO FORTUNE COMMON STOCK AND/OR ONE BOX IN SECTION B WITH RESPECT
TO FORTUNE PREFERRED STOCK TO MAKE AN EFFECTIVE ELECTION.
You should understand that your election is subject to certain terms,
conditions and limitations that have been set out in the following documents:
the Merger Agreement; the Proxy Statement-Prospectus, dated April 5, 1994,
previously sent to you or which is enclosed herewith (the "Proxy Statement-
Prospectus"); the Supplement, dated May 12, 1994 (the "Proxy Statement
Supplement"), also previously sent to you or which is enclosed herewith, and
the Prospectus Supplement which accompanies this Election Form (the "Election
Supplement"). The Merger Agreement was included as Appendix A to the Proxy
Statement-Prospectus; and the First Amendment thereto was included as Appendix
A to the Proxy Statement Supplement. Extra copies of the Proxy Statement
Supplement, Election Supplement or Proxy Statement-Prospectus may be requested
from the Exchange Agent, at the addresses or phone number shown on page 12. The
delivery of this Election Form is acknowledgement that you have received, read
and understood the Proxy Statement-Prospectus, Proxy Statement Supplement and
the Election Supplement.
1. ELECTION DEADLINE. For any election contained herein to be considered,
this Election Form, properly completed, and the related Fortune Common Stock
and/or Fortune Preferred Stock certificates must be received by the Exchange
Agent at the address on the back of this Election Form no later than 5:00 p.m.,
Central Time, on June 16, 1994. The Exchange Agent will determine whether any
Election Form is received on a timely basis and whether an Election Form has
been properly completed, as described in the Election Supplement. Any such
determination will be conclusive and binding.
2. REVOCATION OR CHANGE OF ELECTION FORM. Any Election Form may be revoked
or changed by written notice from the person submitting such Election Form to
the Exchange Agent, but to be effective such notice must be received by the
Exchange Agent at or prior to the Election Deadline. The Exchange Agent will
have discretion to determine whether any revocation or change is received on a
timely basis and whether any such revocation or change has been properly made.
Any such determination by the Exchange Agent will be conclusive and binding.
Shareholders revoking earlier elections by submitting a new Election Form
should so indicate by checking the appropriate box on page 1.
3. ELECTION PROCEDURES. As set forth in the Election Supplement and the
Proxy Statement-Prospectus previously delivered to you or enclosed herewith,
the number of shares of AmSouth Common Stock to be issued and the total amount
of cash to be paid in the Merger will be fixed pursuant to the Merger
Agreement. Therefore, the extent to which particular elections will be
accommodated will depend upon the respective
7
<PAGE>
numbers of Fortune shareholders who elect to receive cash, elect to receive
AmSouth Common Stock or make no election. A Fortune shareholder who elects to
receive cash may instead receive shares of AmSouth Common Stock and a Fortune
shareholder who elects to receive shares of AmSouth Common Stock may instead
receive cash. To the extent that all elections cannot be accommodated, the
consideration to be issued in the Merger will be allocated pursuant to the
procedures set forth in the Merger Agreement and described in the Election
Supplement under the caption "ELECTION AND ALLOCATION PROCEDURES". Thus, an
election made by you may not be honored in certain circumstances.
4. NO FRACTIONAL INTERESTS. No certificate representing a fraction of a full
share of AmSouth Common Stock will be issued and, in lieu thereof, the Exchange
Agent will remit on AmSouth's behalf cash in an amount equal to the product of
(i) the fraction of a share of AmSouth Common Stock, if any, to which any
Fortune shareholder would otherwise be entitled and (ii) the closing price of a
share of AmSouth Common Stock on the New York Stock Exchange on the date of the
Merger (the "Effective Date"). No such holder shall be entitled to dividends,
voting rights or any other rights in respect of any fractional share.
5. GUARANTEE OF SIGNATURES. A signature guarantee on this Election Form is
required if the holder has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Issuance and Payment Instructions"
on the Election Form or both. Such guarantee must be made by an Eligible
Institution.
Eligible Institutions include: (i) a bank; (ii) a broker, dealer, municipal
securities dealer, municipal securities broker, governmental securities dealer,
or government securities broker; (iii) a credit union; (iv) a savings
association; or (v) any other entity so long as any of the foregoing is a
member of a recognized Medallion Program approved by The Securities Transfer
Association, Inc. Public notaries cannot execute acceptable guarantees of
signatures.
6. DELIVERY OF ELECTION FORM AND CERTIFICATES. This Election Form, properly
completed and duly executed, together with the Certificate(s), should be
delivered to the Exchange Agent at the addresses set forth in this Election
Form. Certificates for shares held through Fortune's Dividend Reinvestment Plan
need not be delivered herewith; such Certificates will be delivered to the
Exchange Agent by the agent under such plan.
The method of delivery of Certificate(s) and all other required documents is
at the election and risk of the owner. However, if Certificates are sent by
mail, it is recommended that they be sent by certified mail, appropriately
insured.
7. INADEQUATE SPACE. If the space provided herein is inadequate, the
Certificate numbers and the numbers of shares of Fortune Common Stock and/or
Fortune Preferred Stock represented thereby should be listed on additional
sheets attached hereto.
8. SIGNATURES ON ELECTION FORM, STOCK POWERS AND ENDORSEMENTS. If the
Election Form is signed by the registered holder of the shares of Fortune
Common Stock and/or Fortune Preferred Stock to which it relates, the signature
must correspond with the name as written on the face of the Certificate(s)
without any change whatsoever.
If any of the shares of Fortune Common Stock and/or Fortune Preferred Stock
to which the Election Form relates are owned of record by two or more joint
owners, all such owners must sign the Election Form.
If any shares of Fortune Common Stock and/or Fortune Preferred Stock to which
the Election Form relates are registered in different names on several
Certificate(s), it will be necessary to complete, sign, and submit as many
separate Election Forms as there are different registrations of Certificate(s).
If this or any Certificate(s) or stock powers are signed by trustees,
executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to
the Exchange Agent of their authority so to act must be submitted.
8
<PAGE>
When the Election Form is signed by the registered holder(s) of the shares of
Fortune Common Stock and/or Fortune Preferred Stock to which it relates, no
endorsements of Certificate(s) or separate stock powers are required unless
payment is to be made to or Certificate(s) for shares of AmSouth Common Stock
are to be issued to a person other than the registered holder(s). Signatures on
such Certificate(s) or stock powers must be guaranteed by an Eligible
Institution.
If the Election Form is signed by a person other than the registered
holder(s) of Fortune Common Stock and/or Fortune Preferred Stock to which it
relates, the Certificate(s) must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name or names of the
registered owner or owners appears on the Certificate(s). Signatures on such
Certificate(s) or stock powers must be guaranteed by an Eligible Institution.
If you hold share certificates for which you are not the record holder you
may not submit an election. You may, however, want to request the record holder
to make an election on your behalf.
9. STOCK TRANSFER TAXES. In the event that any transfer or other taxes
become payable by reason of the issuance of shares of AmSouth Common Stock in
any name other than that of the record holder, such transferee or assignee must
pay such tax to AmSouth or must establish to the satisfaction of AmSouth that
such tax has been paid.
10. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Indicate the name and/or
address of the person(s) to whom the Stock Consideration or the check
representing the Cash Consideration, cash in lieu of fractional shares (if any)
and the Preferred Stock Cash Amount (if any) are to be issued and sent, if
different from the name and/or address of the person(s) signing this Election
Form as listed on page 1.
11. SUBSTITUTE FORM W-9. Each surrendering shareholder is required to
provide the Exchange Agent with such holder's correct Taxpayer Identification
Number ("TIN") on the Substitute Form W-9 which is a part of this Election Form
and to certify whether the shareholder is subject to backup withholding.
Failure to provide the information on the form may subject the surrendering
shareholder to 31% federal income tax withholding on payments made to such
surrendering shareholder with respect to the Shares and on future dividends
paid by AmSouth. A holder must cross out item (2) in the Certification box of
Substitute Form W-9 if such holder has been notified by the Internal Revenue
Service that such holder is currently subject to backup withholding. The box in
Part 3 of the form should be checked if the surrendering holder has not been
issued a TIN and has applied for a TIN or intends to apply for a TIN in the
near future. If the box in Part 3 is checked and the Exchange Agent is not
provided with a TIN within 60 days, AmSouth will withhold 31% of all such
payments and dividends until a TIN is provided to the Exchange Agent.
12. LOST, STOLEN OR DESTROYED CERTIFICATES. If your stock certificate(s) has
been either lost, stolen or destroyed, a completed affidavit of loss and bond
must be submitted to AmSouth Bank N.A. prior to the Election Deadline in order
for you to make a valid election. You are urged to call AmSouth Bank N.A. toll-
free at (800) 396-6776 immediately to receive instructions as to the steps you
must take in order to effect an exchange of your Fortune shares.
13. HOLDERS WHO ARE NOMINEES, TRUSTEES OR OTHER REPRESENTATIVES. Each holder
of record is entitled to make an election and submit an Election Form covering
all shares of Fortune Common Stock and/or Fortune Preferred Stock actually held
of record by such holder. Nominee record holders, which include nominees,
trustees or any other persons that hold shares of Fortune Common Stock and/or
Fortune Preferred Stock in any capacity whatsoever on behalf of another person
or entity, are entitled to make an election for such nominee record holders as
well as an election on behalf of each beneficial owner of shares of Fortune
Common Stock and/or Fortune Preferred Stock held through such nominee record
holders, but such elections must be made on one Election Form. Such Election
Form must set forth the election for each beneficial owner separately.
Beneficial owners who are not record holders are not entitled to submit
Election Forms.
14. INFORMATION AND ADDITIONAL COPIES. Information and additional copies of
this Election Form may be obtained by writing to AmSouth Bancorporation, Post
Office Box 11007, Birmingham, Alabama 35288, Attention: Investor Relations, or
by telephoning (800) 396-6776.
9
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax laws, a holder who receives payments pursuant to the
merger of Fortune with and into AmSouth is required by law to provide the
Exchange Agent (as payer) with such holder's correct TIN on Substitute Form W-9
below. If such holder is an individual, the TIN is his or her social security
number. If the holder is a business or other entity, such holder's tax
identification number will be the same as such holder's employer identification
number. If the Exchange Agent is not provided with the correct TIN, a $50
penalty may be imposed by the Internal Revenue Service, and cash payments
received by such holder in the merger of Fortune into AmSouth and any future
dividends paid on AmSouth Common Stock will be subject to backup withholding.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on Substitute
Form W-9. In order for a foreign individual to qualify as an exempt recipient,
such individual must submit a Form W-8, signed under penalties of perjury,
attesting to such individual's exempt status. A Form W-8 may be obtained from
the Exchange Agent. See the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional instructions.
If backup withholding applies, the Exchange Agent is required to withhold 31%
of any payments made to the holder or other payee. Backup withholding is not an
additional tax. Rather, the federal income tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made with respect to Shares, the
holder is required to notify the Exchange Agent of such holder's correct TIN by
completing the form on page 11, certifying that the TIN provided on the
Substitute Form W-9 is correct (or that such holder is awaiting a TIN) and that
(a) such holder is exempt from backup withholding, (b) such holder has not been
notified by the Internal Revenue Service that he is subject to backup
withholding as a result of a failure to report all interest or dividends or (c)
the Internal Revenue Service has notified such holder that such holder is no
longer subject to backup withholding.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The holder is required to give the Exchange Agent the TIN (i.e., social
security number or employer identification number) of the holder of the Shares
tendered hereby. If the Shares are held in more than one name or are not held
in the name of the actual owner, consult the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional guidance on which number to report.
10
<PAGE>
PAYER'S NAME: AMSOUTH BANK N.A.
------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE ----------------------
FORM W-9 YOUR TIN IN THE BOX AT Social Security Number
(SEE INSTRUCTION 11) RIGHT AND CERTIFY BY OR
SIGNING AND DATING BELOW
PLEASE FILL IN YOUR ------------------------------
NAME AND ADDRESS BELOW Employer Identification Number
---------------------------------------------------------
---------------------- PART 2 -- CERTIFICATION -- UNDER
Name PENALTIES OF PERJURY, I CERTIFY THAT: PART 3 --
(If joint names, list (1) The number shown on this form is
first and circle the my correct Taxpayer Identifica-
name of the person or tion Number (or I am waiting for Awaiting TIN [_]
entity whose name is a number to be issued to me) and
entered in Part 1) -------------------
(2) I am not subject to backup with-
---------------------- holding because (a) I am exempt PART 4 --
Address (number and from backup withholding or (b) I
street) have not been notified by the
Internal Revenue Service ("IRS")
---------------------- that I am subject to backup Exempt [_]
City, State and withholding as a result of fail-
Zip Code ure to report all interest or
dividends, or (c) the IRS has
DEPARTMENT OF THE notified me that I am no longer
TREASURY subject to backup withholding.
INTERNAL REVENUE
SERVICE ---------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out
item (2) in Part 2 above if you have been notified
by the IRS that you are subject to backup withhold-
ing because of underreporting interest or dividends
on your tax return. However, if after being notified
by the IRS that you are no longer subject to backup
withholding you received another notification from
the IRS stating that you are no longer subject to
backup withholding, do not cross out item (2). If
PAYER'S REQUEST FOR you are exempt from backup withholding, check the
TAXPAYER box in Part 4 above.
IDENTIFICATION NUMBER
(TIN) SIGNATURE DATE , 1994
-------------------------- -----
--------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM WILL RESULT IN BACKUP WITHHOLD-
ING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE MERGER OF FORTUNE
WITH AND INTO AMSOUTH AND ANY FUTURE DIVIDENDS PAID ON AMSOUTH COMMON
STOCK. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAX-
PAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DE-
TAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF THE SUBSTITUTE FORM W-9
--------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number within
60 days, 31% of all reportable payments made to me will be withheld until I
provide a number.
, 1994
---------------------------------------------------------
Signature Date
--------------------------------------------------------------------------------
11
<PAGE>
This Election Form and Letter of Transmittal should be promptly (i) completed
and signed in the spaces required and on the Substitute Form W-9 and (ii)
mailed or delivered with your certificates representing shares of Fortune
Common Stock and/or Fortune Preferred Stock to AmSouth Bank N.A., acting as
exchange agent (the "Exchange Agent") at either of the following addresses:
AMSOUTH BANK N.A.
FOR INFORMATION CALL:
BY MAIL: (800) 396-6776 BY HAND/OVERNIGHT
AmSouth Bank N.A. (Toll-Free) COURIER:
P.O. Box 370808 AmSouth Bank N.A.
Birmingham, Alabama Corporate Securities
35237-0808 Services Department
(800) 396-6776 7th Floor, AmSouth/Harbert
Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203
(800) 396-6776
The method of delivery of certificate(s) for shares of Fortune stock, this
Election Form and all other required documents is at the election and risk of
the shareholder. If delivery is by mail, certified mail properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
----------------
The tax consequences to a holder of Shares will vary depending upon, among
other things, whether a Stock Election or Cash Election is made. For
information as to the federal income tax consequences of receiving shares of
AmSouth Common Stock or cash in exchange for your shares of Fortune Common
Stock and/or Fortune Preferred Stock, see "ELECTION AND ALLOCATION PROCEDURES--
Certain Federal Income Tax Consequences" in the Election Supplement delivered
herewith. You are urged, in addition, to consult with your tax advisor.
12
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 000-000000. The table below will help determine the
number to give the payer.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the
SOCIAL SECURITY
For this type of account: number of --
------------------------------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner
of the account or,
if combined funds,
any one of the
individual's/1/
3. Husband and wife (joint account) The actual owner
of the account or,
if joint funds,
either person/1/
4. Custodian account of a minor (Uniform Gift to Minors The minor/2/
Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the
minor/1/
6. Account in the name of guardian or committee for a The ward, minor,
designated ward, minor, or incompetent person or incompetent
person/3/
7. a The usual revocable savings trust account (grantor The grantor-
is also trustee) trustee/1/
b So-called trust account that is not a legal or The actual
valid trust under State law owner/1/
------------------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the EMPLOYER
IDENTIFICATION
For this type of account: number of --
-------------------------------------------------------------------------------
<C> <S> <C>
8. Sole proprietorship account The Owner/4/
9. A valid trust, estate, or pension trust Legal entity (Do
not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity
itself is not
designated in the
account title.)/5/
10. corporate account The Corporation
11. Religious, charitable, or educational organization The organization
account
12. Partnership account held in the name of the business The partnership
13. Association, club, or other tax-exempt organization The organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of Agriculture in the The public entity
name of a public entity (such as a State or local
government, school district, or prison) that receives
agricultural program payments.
-------------------------------------------------------------------------------
</TABLE>
/1/List first and circle the name of the person whose number you furnish.
/2/Circle the minor's name and furnish the minor's social security number.
/3/Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
/4/Show the name of the owner.
/5/List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt interest dividends under
section 852).
. Payments described in section 6048(b)(6) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOU TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Cer-
tain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications
or affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
