<PAGE>
Filed pursuant to Rule 424(b)(3)
Registration Statement No. 33-52961
[FORTUNE LETTERHEAD]
May 12, 1994
Dear Common and Preferred Shareholders:
On or about April 5, 1994, Fortune mailed to its shareholders of record on
March 14, 1994, a Notice of the 1994 Annual Meeting of Shareholders and an
accompanying Proxy Statement/Prospectus, relating to, among other things, a
proposed merger between Fortune and AmSouth Bancorporation. Pursuant to an
Agreement and Plan of Merger, dated as of September 12, 1993 (the "Original
Agreement"), between Fortune and AmSouth, consummation of the merger was
subject to various conditions, including the favorable vote of the holders of a
majority of Fortune's Common Stock and two-thirds of Fortune's Series A
Preferred Stock. As described in the Proxy Statement/Prospectus, the Original
Agreement provides that, if it is not approved by the requisite number of
holders of the Preferred Stock, the parties will seek to provide an alternate
treatment of the Preferred Stock.
During the week of May 1, 1994, your management and that of AmSouth became
aware that it was unlikely that the Original Agreement would receive the
approval of the requisite number of holders of Preferred Stock. Therefore,
after discussions with representatives of AmSouth and consultation with
Fortune's financial and other advisors, your Board of Directors has approved an
amendment to the Original Agreement. The amendment provides for a cash payment
in connection with the merger to holders of the Preferred Stock, in addition to
the cash or stock consideration to which they would be entitled under the
election procedures set forth in the Original Agreement. Other than providing
for such additional cash payment to the holders of the Preferred Stock, the
amendment does not alter the terms of the Original Agreement. Holders of
Fortune Common Stock will be entitled to receive the same consideration under
the Original Agreement, as amended, that they would be entitled to receive
under the Original Agreement. As previously announced, your Board of Directors
has postponed the date of the Annual Meeting of Shareholders from May 12, 1994
to May 23, 1994 in order to disseminate to shareholders information concerning
the Original Agreement, as amended.
The terms of the amendment to the Original Agreement are described in detail
in the accompanying Supplement to the Proxy Statement/Prospectus and I urge you
to read it carefully.
Your Board of Directors has reaffirmed its approval of the Original
Agreement, as amended, and recommends its approval by the Common and Preferred
shareholders. A revised proxy card with a GREEN STRIPE is enclosed for the
convenience of the shareholders. If a shareholder has not yet returned a proxy
card, we urge her or him to do so and to vote FOR approval of the Original
Agreement, as amended, and the other proposals being presented at the Annual
Meeting. Submission of a revised proxy card with a GREEN STRIPE will constitute
a revocation of a proxy bearing an earlier date. Proxy cards previously
returned by shareholders in favor of or against approval of the Original
Agreement will be treated as votes in favor of or against approval of the
Original Agreement, as amended, as the case may be, unless otherwise revoked.
Sincerely yours,
/s/ John R. Torell III
John R. Torell III
Chairman of the Board
and Chief Executive Officer
<PAGE>
----------------
NOTICE OF POSTPONED ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 23, 1994
----------------
NOTICE IS HEREBY GIVEN that the date of the Annual Meeting of Shareholders
(the "Annual Meeting") of Fortune Bancorp, Inc., a Florida corporation
("Fortune"), has been postponed from May 12, 1994, to May 23, 1994. The
postponed Annual Meeting will be held at Fortune's corporate headquarters,
16120 U.S. Highway 19 North, Clearwater, Florida 34624-6895, on Monday, May 23,
1994, at 11:00 a.m., local time, for the following purposes:
1. To consider and vote upon a proposal to approve an Agreement and Plan of
Merger dated as of September 12, 1993 (the "Original Agreement"), as
amended by the First Amendment thereto, dated as of May 11, 1994 (the
"Amended Agreement"), which provides for the merger (the "Merger") of
Fortune with and into AmSouth Bancorporation, a Delaware corporation;
2. To elect three directors each for terms of three years or, if the Merger
is approved by Fortune shareholders, for terms ending on the date of
consummation of the Merger;
3. To ratify the appointment by the Board of Directors of the firm of KPMG
Peat Marwick as independent public accountants of Fortune for the fiscal
year ending September 30, 1994; and
4. To transact such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof. As of the date
hereof, management is not aware of any other such business.
The terms of the Amended Agreement are described in the accompanying
Supplement (the "Supplement") dated May 12, 1994, to the Proxy
Statement/Prospectus for the Annual Meeting that was previously mailed to
Fortune shareholders on or about April 5, 1994, and in the Proxy
Statement/Prospectus. If the Merger is effectuated, shareholders dissenting
therefrom shall be entitled to be paid the fair value of their shares
(exclusive of any appreciation in value arising from the expectation of the
Merger) if they file a written objection to the Merger before the shareholder
vote at the Annual Meeting and comply with the further requirements of Sections
607.1301, 607.1302 and 607.1320 of the Florida Business Corporation Act, the
full texts of which are included as Annex E to the Proxy Statement/Prospectus.
For a summary of the dissenters' rights of Fortune shareholders, see
"Dissenters' Rights" in the Proxy Statement/Prospectus.
Pursuant to Fortune's Bylaws, the Board of Directors has fixed March 14,
1994, as the record date for the determination of shareholders who will receive
notice of and be entitled to vote at the Annual Meeting or any adjournments or
postponements thereof. If there are not sufficient votes to approve one or more
of the foregoing proposals at the time of the Annual Meeting, the Annual
Meeting may be adjourned or postponed in order to permit further solicitation
of proxies by Fortune.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ John R. Torell III
John R. Torell III
Chairman of the Board
and Chief Executive Officer
Clearwater, Florida
May 12, 1994
THE FORTUNE BOARD RECOMMENDS THAT THE HOLDERS OF FORTUNE COMMON STOCK AND
FORTUNE PREFERRED STOCK VOTE TO APPROVE THE PROPOSALS ON WHICH THEY ARE
ENTITLED TO VOTE.
<PAGE>
PROXY STATEMENT SUPPLEMENT PROSPECTUS SUPPLEMENT
DATED MAY 12, 1994 DATED MAY 12, 1994
FORTUNE BANCORP, INC. AMSOUTH BANCORPORATION
1994 ANNUAL MEETING OF SHAREHOLDERS COMMON STOCK
(PAR VALUE $1.00 PER SHARE)
TO
PROXY STATEMENT/PROSPECTUS DATED APRIL 5, 1994
This Supplement, dated May 12, 1994 ("Supplement"), to the Proxy
Statement/Prospectus, dated April 5, 1994, of Fortune Bancorp, Inc. ("Fortune")
and AmSouth Bancorporation ("AmSouth") is being furnished to the shareholders
of Fortune in connection with the solicitation of proxies by the Board of
Directors of Fortune for use at the Annual Meeting of Shareholders ("Annual
Meeting") now scheduled to be held on May 23, 1994. On May 10, 1994, Fortune
announced the postponement of its Annual Meeting from May 12, 1994 to May 23,
1994 in order to enable Fortune to disseminate information to shareholders with
respect to the terms of a First Amendment to the Agreement and Plan of Merger,
dated as of May 11, 1994 (the "First Amendment"), between Fortune and AmSouth,
a copy of which is attached to this Supplement as Annex A. The Proxy
Statement/Prospectus and the accompanying forms of proxy were first transmitted
to holders of Fortune Common Stock, par value $.01 per share ("Fortune Common
Stock"), and holders of Fortune Series A 8% Cumulative Convertible Preferred
Stock, par value $.01 per share ("Fortune Preferred Stock"), on or about April
5, 1994. This Supplement is first being transmitted to holders of Fortune
Common Stock and holders of Fortune Preferred Stock on or about May 12, 1994.
The Agreement and Plan of Merger, dated as of September 12, 1993, by and
between Fortune and AmSouth, as originally entered into and described in the
Proxy Statement/Prospectus, is referred to in this Supplement as the "Original
Agreement." As amended by the First Amendment, the Agreement and Plan of Merger
is referred to in this Supplement as the "Amended Agreement." Capitalized terms
used but not defined herein shall have the same meaning assigned to them in the
Proxy Statement/Prospectus.
During the week of May 1, 1994, senior management of Fortune and AmSouth
became aware that it was unlikely that the Original Agreement would receive the
approval of the holders of the requisite number of outstanding shares of
Fortune Preferred Stock. As contemplated by the terms of the Original
Agreement, the parties began to explore an alternative treatment of the Fortune
Preferred Stock. As a result, AmSouth has agreed to increase the consideration
to be paid by AmSouth in the Merger to holders of Fortune Preferred Stock in
the form of an additional cash payment of approximately $2.5 million, in the
aggregate, or approximately $1.81 per share of Fortune Preferred Stock (the
"Preferred Stock Cash Amount"), AN EFFECT OF WHICH WILL BE TO COMPENSATE THE
HOLDERS OF THE FORTUNE PREFERRED STOCK FOR, AMONG OTHER THINGS, THE VALUE OF
THE PREFERENCES AND DIVIDEND RIGHTS AND THE REMAINING TWO AND ONE-HALF YEARS OF
CALL PROTECTION THAT THEY WOULD HAVE LOST UNDER THE TERMS OF THE ORIGINAL
AGREEMENT. This modification to the Original Agreement was unanimously
authorized by the Executive Committee of the Board of Directors of AmSouth on
May 9, 1994 and by the Board of Directors of Fortune on May 12, 1994.
----------------
AN ADDITIONAL COPY OF THE PROXY STATEMENT/PROSPECTUS, OR ANY DOCUMENTS
INCORPORATED BY REFERENCE THEREIN, WILL BE SENT, FREE OF CHARGE, TO ANY
FORTUNE SHAREHOLDER THAT SO REQUESTS. SUCH REQUESTS SHOULD BE DIRECTED
TO FORTUNE AT 16120 U.S. HIGHWAY 19 NORTH, CLEARWATER, FLORIDA 34624-
6895, ATTENTION: CORPORATE SECRETARY, OR AT TELEPHONE NUMBER (813) 538-
1114.
----------------
IN ORDER TO ENSURE TIMELY DELIVERY, ANY REQUESTS SHOULD BE RECEIVED BY
FORTUNE BY MAY 18, 1994.
----------------
THE SECURITIES TO BE ISSUED PURSUANT TO THE PROXY STATEMENT/
PROSPECTUS, INCLUDING THIS SUPPLEMENT, 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 THE PROXY
STATEMENT/PROSPECTUS, INCLUDING THIS SUPPLEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
THE AMENDED AGREEMENT
The Amended Agreement provides that the holders of Fortune Preferred Stock
will receive the Preferred Stock Cash Amount in addition to either cash or
shares of common stock of AmSouth, par value $1.00 per share ("AmSouth Common
Stock"), to which they will be entitled under the election procedures set forth
in the Original Agreement. Other than providing for the payment of the
Preferred Stock Cash Amount to the holders of the Fortune Preferred Stock, the
Amended Agreement does not alter the terms of the Original Agreement. Holders
of Fortune Common Stock will be entitled to receive the same consideration
under the Amended Agreement as they were entitled to receive under the Original
Agreement. The election and allocation procedures set forth in the Original
Agreement also remain unchanged. AmSouth and Fortune believe that the Amended
Agreement does not alter the fundamental economic assumptions upon which the
transaction was based. The Amended Agreement will, however, continue to require
the approval of the holders of not less than 66 2/3% of the Fortune Preferred
Stock. In consideration of the increase in the amount payable to holders of the
Fortune Preferred Stock, certain of those holders have agreed to vote or
deliver proxies for approximately 37.22% of the outstanding Fortune Preferred
Stock in favor of the Merger.
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. There is no change in this table from the table
presented on pages 13 and 37 of the Proxy Statement/Prospectus except to
reflect the addition of the Preferred Stock Cash Amount in the columns relating
to Fortune Preferred Stock.
<TABLE>
<CAPTION>
PERCENTAGE(2)
OF SHARES OF
VALUE OF AMSOUTH FORTUNE STOCK
COMMON STOCK CASH CONSIDERATION 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 (approximately $1.81 per share of Fortune
Preferred Stock) to be received by the holder of each share of Fortune
Preferred Stock under the terms of the Amended Agreement.
(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.
Assuming May 9, 1994 had been the Effective Date, the hypothetical Average
AmSouth Closing Price would have been $32.04 and the per share value of the
consideration to the holders of Fortune Common Stock and Fortune Preferred
Stock would have been approximately $34.38 and $47.65, respectively.
2
<PAGE>
Based on the number of shares of Fortune Common Stock and Fortune Preferred
Stock outstanding on May 9, 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 pay
approximately $145.9 million cash in the Merger, which cash amount includes an
additional $2.5 million as a result of the payment of the Preferred Stock Cash
Amount. The payment of the Preferred Stock Cash Amount is not material in the
context of the total consideration to be paid in the Merger, and will not have
a material effect on the pro forma financial condition or capitalization of
AmSouth after giving effect to the Merger on a purchase accounting basis.
Under the Amended Agreement, 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). Any such holder is urged to review the discussion entitled
"Tax Consequences to Fortune Shareholders Who Receive Both Cash and AmSouth
Stock in the Merger" on page 57 of the Proxy Statement/Prospectus. 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.
Consummation of the Merger remains subject to receipt of the tax opinions and
other conditions referred to in the Proxy Statement/Prospectus.
RECOMMENDATION OF THE FORTUNE BOARD
AS DESCRIBED IN THE PROXY STATEMENT/PROSPECTUS, THE BOARD OF DIRECTORS OF
FORTUNE UNANIMOUSLY APPROVED THE ORIGINAL AGREEMENT AND RECOMMENDED A VOTE IN
FAVOR OF ITS APPROVAL BY THE SHAREHOLDERS. THE BOARD OF DIRECTORS CONTINUES TO
BELIEVE THAT THE TERMS OF THE MERGER, AS EMBODIED IN THE ORIGINAL AGREEMENT AND
THE AMENDED AGREEMENT, ARE FAIR TO, AND IN THE BEST INTERESTS OF, FORTUNE'S
SHAREHOLDERS AND THAT THE MERGER WILL PROVIDE SIGNIFICANT VALUE TO ALL FORTUNE
SHAREHOLDERS.
OPINION OF FINANCIAL ADVISOR
As stated in the Proxy Statement/Prospectus, the Board of Directors of
Fortune retained Dillon, Read & Co. ("Dillon Read") to evaluate the fairness,
from a financial point of view, of the consideration to be received by Fortune
shareholders in the Merger.
At the May 12, 1994 meeting of the Board of Directors of Fortune at which the
Amended Agreement was approved, Dillon Read orally reconfirmed its written
opinion dated April 4, 1994 and delivered an updated written opinion, dated May
12, 1994, to the effect that, as of that date, the consideration provided for
in the Amended Agreement was fair to holders of shares of Fortune Common Stock
and Fortune Preferred Stock from a financial point of view.
3
<PAGE>
A copy of Dillon Read's updated written opinion dated May 12, 1994 is
attached as Annex B to this Supplement. The summary of Dillon Read's opinion
set forth herein is qualified in its entirety by reference to the full text of
the opinion. FORTUNE SHAREHOLDERS ARE URGED TO READ THE OPINION IN ITS ENTIRETY
FOR A DESCRIPTION OF ASSUMPTIONS MADE, MATTERS CONSIDERED, PROCEDURES FOLLOWED
AND LIMITS ON THE REVIEW UNDERTAKEN BY DILLON READ.
Dillon Read's opinion is directed only to the consideration to be received by
Fortune shareholders in the Merger and does not constitute a recommendation to
any Fortune shareholder as to how such shareholder should vote at the Annual
Meeting. Dillon Read did not determine or recommend the kind or amount of
consideration to be paid in the Merger.
In connection with its opinion dated May 12, 1994, Dillon Read confirmed the
appropriateness of its reliance on the analyses used to render its earlier
opinion by performing procedures to update certain of such analyses and
reviewing the assumptions on which such analyses were based and the factors
considered in connection therewith. Such analyses are summarized on pages 41-44
of the Proxy Statement/Prospectus.
THE ANNUAL MEETING
As described in the Proxy Statement/Prospectus, approval of the Merger will
require the affirmative vote of the holders of a majority of the outstanding
shares of Fortune Common Stock entitled to vote thereon, and the affirmative
vote of the holders of at least 66 2/3% of the outstanding shares of Fortune
Preferred Stock entitled to vote thereon. As of May 10, 1994, directors and
executive officers of Fortune and its affiliates may have been deemed to be
beneficial owners of approximately 22.09% of the outstanding shares of Fortune
Common Stock and no shares of Fortune Preferred Stock.
In consideration of the increase in the amount payable to holders of the
Fortune Preferred Stock, certain of those holders have agreed to vote or
deliver proxies for approximately 37.22% of the outstanding Fortune Preferred
Stock in favor of the Merger.
Shareholders that have not returned the proxy card accompanying the Proxy
Statement/Prospectus are requested promptly to sign, date and return such proxy
card or the enclosed revised proxy card with a GREEN STRIPE accompanying this
Supplement.
If the enclosed revised proxy card with a GREEN STRIPE is executed and
returned, it nevertheless may be revoked by a shareholder at any time before it
has been voted. Shares represented at the Annual Meeting by proxy will be voted
FOR election as directors those nominees listed on the enclosed revised form of
proxy, FOR ratification of the appointment of KPMG Peat Marwick as auditors and
FOR the approval of the Amended Agreement (and as to any other business that
may come before the Annual Meeting in accordance with a recommendation of a
majority of Fortune's Board of Directors) unless the shareholder does not wish
the proxy so voted on any of these proposals and checks the appropriate box or
boxes on the proxy card. If a shareholder has already executed and delivered a
proxy and does not want to change the vote reflected on such proxy, there is no
need to execute the enclosed revised proxy card with a GREEN STRIPE, because
the shareholder's instruction for or against the Original Agreement on the
original proxy card that accompanied the Proxy Statement/Prospectus will be
voted for or against the Amended Agreement. Submission of a revised proxy card
with a GREEN STRIPE will constitute a revocation of a proxy bearing an earlier
date.
SHAREHOLDERS WHO HAVE ALREADY RETURNED THE PROXY CARD ORIGINALLY SENT
THEM WITH THE PROXY STATEMENT/PROSPECTUS SHOULD NOT RETURN THE ENCLOSED
PROXY CARD WITH A GREEN STRIPE UNLESS THEY WISH TO REVOKE THE EARLIER
PROXY AND CHANGE THEIR VOTE.
4
<PAGE>
CLOSING DATE
If the Amended Agreement is approved by the Fortune shareholders and the
other conditions of the Amended Agreement are fulfilled, the parties intend to
consummate the Merger on or about June 23, 1994, as previously announced.
----------------
The Board of Directors of Fortune urges each shareholder, whether or not he
or she intends to be present at the Annual Meeting, to vote in favor of the
Merger and the other proposals to be presented at the Annual Meeting, as
described in the Proxy Statement/Prospectus.
By Order of the Board of Directors
of Fortune Bancorp, Inc.
/s/ John R. Torell III
_____________________________________
John R. Torell III
Chairman of the Board and Chief
Executive Officer
Clearwater, Florida
May 12, 1994
5
<PAGE>
APPENDIX A
FIRST AMENDMENT TO AGREEMENT
AND PLAN OF MERGER
THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "Amendment") is
made and entered into as of May 11, 1994, by and between AmSouth
Bancorporation, a Delaware corporation ("AmSouth"), and Fortune Bancorp, Inc.,
a Florida corporation (the "Company"). Except as otherwise provided herein, the
capitalized terms used but not defined herein shall have the meanings assigned
to them in the Plan (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, AmSouth and the Company have entered into an Agreement and Plan of
Merger, dated as of September 12, 1993 (the "Plan"), providing for the merger
of Company into and with AmSouth, with AmSouth as the surviving corporation
(the "Merger") and the conversion of Company Common Stock and Company
Convertible Preferred Stock into AmSouth Common Stock and/or cash pursuant to
certain election procedures set forth in Article II thereof;
WHEREAS, AmSouth and the Company deem it desirable to modify certain of the
terms of the Plan relating to the consideration to be paid to holders of
Company Convertible Preferred Stock in the Merger;
NOW, THEREFORE, AmSouth and the Company, by appropriate action of their
Boards of Directors, hereby agree as follows:
Section 1. Revision of Election Procedures. Article II of the Plan is hereby
amended to read in its entirety as follows:
"II. TERMS OF THE MERGER
Subject to the provisions of this Plan:
II(A) Subject to clause (3) of this Paragraph (A) and Paragraph (C) of
Article II:
(1) Each share of Company common stock, par value $.01 per share (the
"Company Common Stock"), issued and outstanding on the Effective Date
shall become and be converted into the right to receive, at the
election of each holder thereof subject to the provisions of Paragraph
(B) below, either (i) a number of shares of common stock, par value
$1.00 per share ("AmSouth Common Stock"), of AmSouth equal to the sum
of .538522 and the ratio of $17.125 to the Average Closing Price (as
defined below) (the "Conversion Ratio"), or (ii) cash equal in amount
to the sum of $17.125 and the product of .538522 and the Average
Closing Price (the "Cash Consideration"), and each share of Company
Preferred Stock, par value $.01 per share (the "Company Convertible
Preferred Stock") issued and outstanding on the Effective Date shall
become and be converted into the right to receive at the election of
each holder thereof subject to the provisions of Paragraph (B) below,
either (x) a number of shares of AmSouth Common Stock equal to the
product of the Conversion Ratio and 1.333333 or (y) cash in an amount
equal to the product of the Cash Consideration and 1.333333, plus in
either case (x) or (y) cash in an amount equal to $1.81159 (the
"Preferred Stock Cash Amount"); provided (subject to Paragraph (B)
below) that the number of shares of AmSouth Common Stock which will be
issued (the "Stock Limit") shall equal the number obtained by
multiplying (1) 1.077044 by (2) the product of (a) the total number of
shares (including shares described in clause (4)(i) and excluding
shares described in clause (4)(ii) of this Paragraph (A)) of Company
Common Stock and Company Common Stock Equivalents outstanding on the
Effective Date by (b) .50; and provided, further, that the Stock Limit
may be adjusted upward in a
A-1
<PAGE>
mutually acceptable manner if necessary in the event neither Holland &
Knight nor Sullivan & Cromwell can give an opinion that the Merger
qualifies as a reorganization within the meaning of Section 368 of the
Code. In the event of any recapitalization, reclassification, stock
split, consolidation or similar change in the AmSouth Common Stock, the
Conversion Ratio and Cash Consideration will be appropriately adjusted
to reflect such change;
(2) For purposes of this Plan:
(i) Average Closing Price shall mean 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 (10)
consecutive trading days ending on the tenth business day prior to
the Effective Date.
(ii) Company Common Stock Equivalents shall mean the shares of
Company Common Stock into which each share of Company Convertible
Preferred Stock (as defined below) would convert if such share of
Company Convertible Preferred Stock had been converted into Company
Common Stock on the day prior to the date of this Plan and as though
this Plan had never been contemplated.
(3) notwithstanding any other provisions hereof, no fractional shares
of AmSouth Common Stock and no certificates or scrip therefor, or other
evidence of ownership thereof, will be issued; instead, AmSouth shall
pay to each holder of Company Common Stock or Company Convertible
Preferred Stock who would otherwise be entitled to fractional shares
pursuant to clause (1) of this Paragraph (A) an amount in cash
determined by multiplying such holder's fractional interest by the
closing price for AmSouth Common Stock on the Effective Date on the New
York Stock Exchange.
(4) notwithstanding any other provisions hereof, (i) each share of
Company Common Stock and Company Convertible Preferred Stock the holder
of which has perfected his right to dissent under applicable law and
has not effectively withdrawn or lost such right as of the Effective
Date (the "Dissenting Shares") shall not be converted into or represent
a right to receive shares of AmSouth Common Stock or cash hereunder,
and the holder thereof shall be entitled only to such rights as are
granted by applicable law, and (ii) each share of Company Common Stock
and Company Convertible Preferred Stock held directly or indirectly by
the Company or the Bank (other than shares held in a fiduciary capacity
or in satisfaction of a debt previously contracted) shall not be
converted into or represent a right to receive shares of AmSouth Common
Stock or cash hereunder, and such shares shall be cancelled.
II(B) An election form and other appropriate transmittal materials as
AmSouth and the Company shall mutually agree ("Election Form") will be sent
twenty-seven (27) days before the anticipated Effective Date or on such
other date as AmSouth and the Company shall mutually agree (the "Mailing
Date") to each holder of record of Company Common Stock and Company
Convertible Preferred Stock as of five (5) business days prior to the
Mailing Date permitting such holder (or in the case of nominee record
holders, the beneficial owner through proper instructions and
documentation) (i) to elect to receive only AmSouth Common Stock with
respect to such holder's Company Common Stock or Company Convertible
Preferred Stock (together, in the case of Company Convertible Preferred
Stock, with the Preferred Stock Cash Amount) as hereinabove provided (the
"Stock Election Shares"), (ii) to elect to receive only cash with respect
to such holder's Company Common Stock or Company Convertible Preferred
Stock (including, in the case of Company Convertible Preferred Stock, the
Preferred Stock Cash Amount) as hereinabove provided (the "Cash Election
Shares"), or (iii) to indicate that such holder makes no such election (the
"No-Election Shares"). Any shares of Company Common Stock and Company
Convertible Preferred Stock with respect to which the holder thereof shall
not, as of the Election Deadline (as defined below), have submitted to
AmSouth Bank N.A. as an exchange agent (the "Exchange Agent"), an
effective, properly completed Election Form shall be deemed to be No-
Election Shares.
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The term "Election Deadline", shall mean 5:00 p.m., Central Time, on the 20th
day following but not including the Mailing Date or such other date as the
Company and AmSouth shall mutually agree upon. AmSouth shall make an election
form available to all persons who become holders of Company Common Stock or
Company Convertible Preferred Stock between the date five (5) days prior to the
Mailing Date and the close of business on the day prior to the Election
Deadline; provided that the Company will provide to the Exchange Agent in a
timely manner all information necessary to comply with this provision.
Any election to receive AmSouth Common Stock or cash (together, in the case
of Company Convertible Preferred Stock, with the Preferred Stock Cash Amount)
shall have been properly made only if the Exchange Agent shall have actually
received a properly completed Election Form by the Election Deadline. An
Election Form will be properly completed only if accompanied by certificates
(or customary affidavits and indemnities regarding the loss thereof)
representing all shares of Company Common Stock or Company Convertible
Preferred Stock covered thereby. Any Election Form may be revoked or changed by
the person submitting such Election Form to the Exchange Agent at or prior to
the Election Deadline. The certificate or certificates representing Company
Common Stock or Company Convertible Preferred Stock relating to any revoked
Election Form shall be promptly returned without charge to the person
submitting the Election Form to the Exchange Agent. The Exchange Agent shall
have reasonable discretion to determine when any election, modification or
revocation is received and whether any such election, modification or
revocation has been properly made.
Within five business days after the Election Deadline, the Exchange Agent
shall effectuate the allocation among holders of Company Common Stock and
Company Convertible Preferred Stock of rights to receive AmSouth Common Stock
or cash (other than the Preferred Stock Cash Amount) in the Merger in
accordance with the Election Forms as follows (provided, however, that in no
event shall the Exchange Agent be required to effectuate the allocation prior
to the Effective Date):
(i) If the number of shares of AmSouth Common Stock that would be issued
upon the conversion into AmSouth Common Stock of the Stock Election Shares
is less than the Stock Limit, then:
(1) all Stock Election Shares will be converted into the right to
receive AmSouth Common Stock (except that Stock Election Shares that
are Company Convertible Preferred Stock will be converted into the
right to receive AmSouth Common Stock and the Preferred Stock Cash
Amount),
(2) the Exchange Agent will select first from among the holders of
No-Election Shares and then (if necessary) from among the holders of
Cash Election Shares, by random selection (as described below), a
sufficient number of such holders ("Stock Designees") such that the
number of shares of AmSouth Common Stock that will be issued upon the
conversion into AmSouth Common Stock of shares of Company Common Stock
and Company Convertible Preferred Stock held by the Stock Designees
will, when added to the number of shares of AmSouth Common Stock that
will be issued upon the conversion of the Stock Election Shares, equal
as closely as practicable the Stock Limit, and all shares held by the
Stock Designees will be converted into the right to receive AmSouth
Common Stock (provided that shares held by the Stock Designees that are
Company Convertible Preferred Stock will be converted into the right to
receive AmSouth Common Stock and the Preferred Stock Cash Amount and
provided, further, that no particular holder of Cash Election Shares
will be deemed to be a Stock Designee if such designation would
threaten satisfaction of any of the conditions to consummation of the
Merger in Article VII), and
(3) the Cash Election Shares and the No-Election Shares not held by
Stock Designees will be converted into the right to receive cash; or
(ii) If the number of shares of AmSouth Common Stock that would be issued
upon the conversion into AmSouth Common Stock of the Stock Election Shares
is greater than the Stock Limit, then:
(1) all Cash Election Shares and No-Election Shares will be converted
into the right to receive cash,
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<PAGE>
(2) the Exchange Agent will select from among the holders of Stock
Election Shares, by random selection (as described below), a sufficient
number of such holders to receive cash ("Cash Designees") such that the
number of shares of AmSouth Common Stock that will be issued upon the
conversion of the Stock Election Shares not held by Cash Designees
will, equal as closely as practicable the Stock Limit, and all shares
held by the Cash Designees will be converted into the right to receive
cash (provided, that no particular holder of Stock Election Shares will
be deemed to be a Cash Designee if such designation would threaten
satisfaction of any of the conditions to consummation of the Merger in
Article VII), and
(3) all Stock Election Shares not held by the Cash Designees will be
converted into the right to receive AmSouth Common Stock (except that
such Stock Election Shares that are shares of Company Convertible
Preferred Stock will be converted into the right to receive AmSouth
Common Stock and the Preferred Stock Cash Amount);
(iii) If the number of shares of AmSouth Common Stock that would be
issued upon the conversion into AmSouth Common Stock of the Stock Election
Shares is equal or nearly equal (as determined by the Exchange Agent) to
the Stock Limit, then subparagraphs (i) and (ii) above and subparagraph
(iv) below shall not apply and all Stock Election Shares will be converted
into the right to receive AmSouth Common Stock (except that such Stock
Election Shares that are shares of Company Convertible Preferred Stock will
be converted into the right to receive AmSouth Common Stock and the
Preferred Stock Cash Amount) and all Cash Election Shares and No-Election
Shares will be converted into the right to receive cash; or
(iv) If the number of shares of AmSouth Common Stock that would be issued
upon the conversion into AmSouth Common Stock of the Stock Election Shares
and No-Election Shares would equal or nearly equal (as determined by the
Exchange Agent) the Stock Limit, then subparagraphs (i), (ii) and (iii)
above shall not apply and all Cash Election Shares will be converted into
the right to receive cash and all Stock Election Shares and No-Election
Shares will be converted into the right to receive AmSouth Common Stock
(except that such Stock Election Shares and No-Election Shares that are
shares of Company Convertible Preferred Stock will be converted into the
right to receive AmSouth Common Stock and the Preferred Stock Cash Amount).
The selection process to be used by the Exchange Agent shall consist of such
processes as shall be mutually determined by the Company and AmSouth as shall
be further described in the Election Form. On the Effective Date of the Merger,
AmSouth shall issue to the Exchange Agent the number of shares of AmSouth
Common Stock issuable and the amount of cash payable in the Merger. Upon
completion of the allocation procedure described above, AmSouth shall, if
necessary, issue to the Exchange Agent any additional shares of AmSouth Common
Stock in exchange for cash or issue to the Exchange Agent any additional cash
in exchange for AmSouth Common Stock, as may be required to effect the
conversion of Company Common Stock and Company Convertible Preferred Stock as
contemplated hereby. Within 5 business days after the allocation described
above, the Exchange Agent shall distribute AmSouth Common Stock and cash as
provided herein. The Exchange Agent shall not be entitled to vote or exercise
any rights of ownership with respect to the shares of AmSouth Common Stock held
by it from time to time hereunder, except that it shall receive and hold all
dividends or other distributions paid or distributed with respect to such
shares for the account of the persons entitled thereto.
After the completion of the foregoing allocation, each holder of an
outstanding certificate or certificates which prior thereto represented shares
of Company Common Stock or Company Convertible Preferred Stock who surrenders
such certificate or certificates to the Exchange Agent will, upon acceptance
thereof by the Exchange Agent, be entitled to a certificate or certificates
representing the number of full shares of AmSouth Common Stock and/or the
amount of cash into which the aggregate number of shares of Company Common
Stock or Company Convertible Preferred Stock previously represented by such
certificate or certificates surrendered shall have been converted pursuant to
this Plan and, if such holder's shares of Company Common Stock or Company
Convertible Preferred Stock have been converted into AmSouth Common Stock, any
other distribution theretofore paid with respect to the AmSouth Common Stock
issuable in the Merger,
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<PAGE>
in each case without interest. The Exchange Agent shall accept such
certificates upon compliance with such reasonable terms and conditions as the
Exchange Agent may impose to effect an orderly exchange thereof in accordance
with normal exchange practices. Each outstanding certificate which prior to the
Effective Date of the Merger represented Company Common Stock or Company
Convertible Preferred Stock and which is not surrendered to the Exchange Agent
in accordance with the procedures provided for herein shall, except as
otherwise herein provided, until duly surrendered to the Exchange Agent be
deemed to evidence ownership of the number of shares of AmSouth Common Stock
and/or the right to receive the amount of cash into which such Company Common
Stock or Company Convertible Preferred Stock shall have been converted. After
the Effective Date of the Merger, there shall be no further transfer on the
records of the Company of certificates representing Company Common Stock or
Company Convertible Preferred Stock and if such certificates are presented to
the Company for transfer, they shall be cancelled against delivery of
certificates for AmSouth Common Stock or cash as hereinabove provided. No
dividends which have been declared will be remitted to any person entitled to
receive shares of AmSouth Common Stock under this Article II until such person
surrenders the certificate or certificates representing Company Common Stock or
Company Convertible Preferred Stock, at which time such dividends shall be
remitted to such person, without interest.
Neither the Exchange Agent nor any party to this Plan shall be liable to any
holder of stock for any consideration paid to a public official pursuant to
applicable abandoned property, escheat or similar laws. AmSouth and the
Exchange Agent shall be entitled to rely upon the stock transfer books of the
Company to establish the identity of those persons entitled to receive
consideration specified in this Plan, which books shall be conclusive with
respect thereto. In the event of a dispute with respect to ownership of stock,
AmSouth and the Exchange Agent shall be entitled to deposit any consideration
represented thereby in escrow with an independent third party and thereafter be
relieved with respect to any claims thereto.
II(C) The Company will have a right to elect to abandon the Merger and
terminate the Plan, (and no provision of this Article II except this Paragraph
(C) shall apply) if its Board of Directors so determines by a majority vote of
the members of its entire board, at any time during the ten-day period
commencing with the Approval Date if the average closing prices of AmSouth
Common Stock as reported on the New York Stock Exchange Composite Transactions
Tape for the ten (10) consecutive trading days ending on the date (the
"Approval Date") of the last federal regulatory approval (excluding any
applicable waiting period) required for consummation of the Merger shall be
less than $27.00;
subject, however, to the following three sentences. If the Company makes an
election to abandon the Merger, it shall give prompt written notice to AmSouth
(provided that such notice of election may be withdrawn at any time within the
aforementioned ten-day period). During the seven-day period commencing with its
receipt of such notice, AmSouth shall have the option to increase the value of
the cash, the AmSouth Common Stock or a combination thereof being offered to
shareholders of the Company such that the per share value of the cash and stock
consideration (valued at the average closing price of AmSouth Common Stock
computed in accordance with this Paragraph II(C) in the case of the stock
consideration) is at least equal to the per share consideration which would
have been received if the average closing price computed in accordance with
this Paragraph II(C) had been $27.00 per share (provided that the Merger shall
qualify as a reorganization within the meaning of Section 368 of the Code). If
AmSouth so elects within such seven-day period, it shall give prompt written
notice to the Company of such election and the increase in the average per
share value of the cash and stock consideration whereupon no termination shall
have occurred and this Plan shall remain in effect in accordance with its terms
(except as the value of the cash and/or stock consideration shall have been so
modified).
II(D) Each stock option to purchase shares of Company Common Stock, including
options granted but not yet vested, (except options granted pursuant to the
Stock Option Agreement) not exercised prior to the Effective Date shall be
converted into the right to receive in AmSouth's sole discretion on a case-by-
case basis with respect to each holder of such options either (1) an option to
purchase, on the same terms as the option to purchase shares of Company Common
Stock, shares of AmSouth Common Stock in an amount
A-5
<PAGE>
and at a price appropriately adjusted to reflect the per share consideration
received by holders of Company Common Stock in the Merger; or (2) cash in an
amount equal to the difference between (a) the per share consideration to be
received by holders of Company Common Stock in the Merger and (b) the exercise
price of such option, whereupon such option shall terminate.
II(E) Appendix A hereto illustrates, among other things, the value to be
received per share of Company Common Stock, whether in cash or AmSouth Common
Stock, at varying Average Closing Prices of AmSouth Common Stock as well as the
Conversion Ratio. For purposes of this Appendix it has been assumed that all of
the Company Convertible Preferred Stock will have been converted to Company
Common Stock at a conversion ratio of 1.333333."
Section 2. Authorization. The Company hereby represents and warrants to
AmSouth, and AmSouth hereby represents and warrants to the Company that,
subject to any necessary approval by its shareholders and the regulatory and
other approvals referred to in Paragraphs (B) and (C) of Article VII of the
Plan, the Plan, as amended by this Amendment, has been authorized by all
necessary corporate action of it and is a valid and binding agreement of it
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, reorganization, insolvency and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles and
except that the availability of the equitable remedies of specific performance
or injunctive relief are subject to the discretion of the court before which
any proceedings may be brought.
Section 3. No Other Modifications. Except as amended by this Amendment, the
Plan and the exhibits and appendices thereto remain in full force and effect
without modification, alteration or change; provided that all references
therein to the Plan shall be deemed references to the Plan as amended hereby.
Section 4. Governing Law. This Amendment shall be governed by and construed
in accordance with the laws of the State of Alabama except to the extent the
Business Corporation Law of Florida or General Corporation Law of Delaware
shall govern the merger of Florida and Delaware corporations, respectively.
Section 5. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute one and the same instrument.
In Witness Whereof, each of the parties has caused this Amendment to be
executed on its behalf and its corporate seal hereunto affixed and attested by
officers thereunto duly authorized all as of the day and year first written
above.
Attest: AmSouth Bancorporation
/s/ Maria B. Campbell By: /s/ John W. Woods
- ------------------------------------- ----------------------------------
As its Secretary As its Chairman
[Corporate Seal]
Attest: Fortune Bancorp, Inc.
/s/ Kay R. Degen By: /s/ John R. Torrell III
- ------------------------------------- ----------------------------------
As its Secretary As its Chairman
[Corporate Seal]
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<PAGE>
[LETTERHEAD OF DILLON, READ & CO. INC. APPEARS HERE]
May 12, 1994
The Board of Directors
Fortune Bancorp, Inc.
16120 U.S. 19 North
Clearwater, FL 34624
Gentlemen:
You have requested our opinion as to the fairness, from a financial point of
view, to the holders of the outstanding shares of Common Stock, par value $.01
per share (the "Common Shares"), and the holders of Series A 8% Cumulative
Convertible Preferred Stock, par value $0.01 per share (the "Preferred
Shares"), of Fortune Bancorp, Inc. (the "Company") of the consideration, as
herein defined, offered by AmSouth Bancorporation ("AmSouth") to such holders
in the proposed merger (the "Merger") of the Company into AmSouth, pursuant to
the Agreement and Plan of Merger dated as of the 12th day of September, 1993,
between the Company and AmSouth (the "Agreement"), as amended by the First
Amendment to the Agreement and Plan of Merger, dated as of May 11, 1994 (the
"First Amendment") between the Company and AmSouth. The number of shares of
AmSouth common stock and the amount of cash that will be exchanged for each
share of Fortune common and preferred stock (the "Consideration") will be
determined by applying a formula as set forth in the Agreement as amended by
the First Amendment.
Dillon, Read & Co. Inc. ("Dillon Read"), as part of its investment banking
services, is continually engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distribution of listed and
unlisted securities and private placements, and valuations for estate,
corporate and other purposes. Dillon Read has not been retained to provide
investment banking or advisory services to the Company outside of rendering
this fairness opinion. We have acted exclusively for the Board of Directors of
the Company in rendering this fairness opinion and will receive a fee from the
Company for our services.
In arriving at our opinion, we have reviewed and analyzed, among other
things: (i) the Agreement and the First Amendment; (ii) Annual Reports to
Shareholders and Annual Reports on Form 10-K of the Company and AmSouth for
five years ended September 30, 1993 and December 31, 1993, respectively;
(iii) certain interim reports to shareholders and Quarterly Reports on Form 10-
Q of the Company and AmSouth and certain other communications from the Company
and AmSouth to their respective shareholders; (iv) certain internal financial
analyses and forecasts for the Company and AmSouth prepared by its management
or consultants retained by its management. We also have held discussions with
members of the senior management of the Company and AmSouth regarding their
respective past and current business operations, financial condition and future
prospects. In addition, we have reviewed the reported price and trading
activity for the Common Shares and AmSouth common stock, compared certain
financial and stock market information for the Company and AmSouth with similar
information for certain other companies, the securities of which are publicly
traded, reviewed the financial terms of certain recent business combinations in
the thrift and commercial banking industries and performed such other studies
and analyses we considered relevant.
We have relied without independent verification upon the accuracy and
completeness of all the financial and other information reviewed by us for the
purposes of this opinion. In this regard, we have assumed that the financial
forecasts have been reasonably prepared on a basis reflecting the best
currently available
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<PAGE>
[LETTERHEAD OF DILLON, READ & CO. INC. APPEARS HERE]
judgments and estimates of the management of the Company and AmSouth and such
forecasts will be realized in the amounts and at the time contemplated thereby.
We are not experts in the evaluation of loan portfolios or the allowance for
loan losses with respect thereto and have assumed the allowance for the Company
and AmSouth are adequate to cover such losses. In addition, we have not
reviewed individual credit files nor have we made an independent evaluation or
appraisal of the assets and liabilities of the Company or AmSouth or any of
their subsidiaries and we have not been furnished with any such evaluation or
appraisal.
Based upon and subject to the foregoing and other such matters we consider
relevant, it is our opinion that, as of the date hereof, the Consideration
offered in the Merger is fair, from a financial point of view, to the holders
of the Common Shares and to the holders of the Preferred Shares of the Company.
Very truly yours,
/s/ Dillon, Read & Co. Inc.
DILLON, READ & CO. INC.
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