<PAGE> 1
As filed with the Securities and Exchange Commission on June 12, 1996
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------------------
Regions Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
-----------------------------
<TABLE>
<S> <C> <C>
Delaware 6711 63-0589368
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
417 North 20th Street
Birmingham, AL 35203
(205) 326-7100
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
----------------------------
Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
417 North 20th Street
Birmingham, AL 35203
(205) 326-7860
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
----------------------------
Copies to:
<TABLE>
<S> <C> <C>
CHARLES C. PINCKNEY FRANK M. CONNER III ANTHONY J. CORRERO III
LANGE, SIMPSON, ROBINSON & ALSTON & BIRD CORRERO, FISHMAN & CASTEIX, LLP
SOMERVILLE 601 PENNSYLVANIA AVENUE, N.W. 201 ST. CHARLES AVENUE, 47TH FLOOR
417 NORTH 20TH STREET, SUITE 1700 NORTH BUILDING, SUITE 250 NEW ORLEANS, LA 70170
BIRMINGHAM, AL 35203 WASHINGTON, D.C. 20004 (504) 586-5253
(205) 250-5000 (202) 508-3303
</TABLE>
----------------------------
Approximate date of commencement of proposed sale of securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
----------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
Title of each Proposed maximum Proposed maximum
class of securities Amount to be offering price aggregate Amount of
to be registered registered per unit* offering price* registration fee
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock $ 381,077 $ 23.1029 $ 8,804,000 $ 3,035.86
================================================================================================================================
</TABLE>
*Calculated in accordance with Rule 457(f).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a),
shall determine.
- --------------------------------------------------------------------------------
<PAGE> 2
REGIONS FINANCIAL CORPORATION
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
CAPTION OR LOCATION IN
FORM S-4 ITEM PROXY STATEMENT/PROSPECTUS
- ---------------------------------------------------------- ------------------------------------------
<S> <C>
1. Forepart of registration statement and outside front
cover page of prospectus.............................. Outside Front Cover of Proxy
Statement/Prospectus; Facing Page of
Registration Statement; Cross-Reference Sheet.
2. Inside front and outside back cover of prospectus..... Available Information; Documents
Incorporated by Reference; Table of
Contents.
3. Risk factors, ratio of earnings to fixed charges and
other information..................................... Summary; Comparative Market Prices and Dividends.
4. Terms of the transaction.............................. Summary; Description of the Transaction;
Effect of the Merger on Rights of
Stockholders; Description of Regions
Common Stock.
5. Pro forma financial information....................... Summary.
6. Material contacts with the company being acquired..... Summary; Description of the Transaction.
7. Additional information required for re-offering by
persons and parties deemed to be underwriters......... Not applicable.
8. Interest of named experts and counsel................. Opinions.
9. Disclosure of Commission position on indemnification
for Securities Act liabilities........................ Not Applicable (See Part II, Item 20).
10. Information with respect to S-3 registrants........... Documents Incorporated by Reference;
Summary; Business of Regions.
11. Incorporation of certain information by reference..... Documents Incorporated by Reference.
12. Information with respect to S-2 or S-3 registrants.... Not Applicable.
13. Incorporation of certain information by reference..... Not Applicable.
14. Information with respect to registrants other than S-2
or S-3 registrants.................................... Not Applicable.
15. Information with respect to S-3 companies............. Not Applicable.
16. Information with respect to S-2 or S-3 companies...... Summary; Documents Incorporated by Reference; Business of ABH;
Voting Securities and Principal Stockholders of ABH;
17. Information with respect to companies other than S-2
or S-3 companies...................................... Not Applicable.
18. Information if proxies, consents, or authorizations
are to be solicited................................... Documents Incorporated by Reference; Summary;
The Special Meeting; Description of the Transaction;
Description of Regions Common Stock.
19. Information if proxies, consents, or authorizations
are not to be solicited or in an exchange offer....... Not Applicable.
</TABLE>
2
<PAGE> 3
Dear American Bancshares of Houma, Inc. Stockholder:
You are cordially invited to attend the Special Meeting of Stockholders of
American Bancshares of Houma, Inc. ("ABH") to be held at ABH's main office,
801 Barrow Street, Houma, Louisiana, 70360 on ________, 1996, at 3:00 p.m.,
local time, notice of which is enclosed.
At the Special Meeting, you will be asked to consider and vote on a
proposal to approve an Agreement and Plan of Merger (the "Agreement"), entered
into with Regions Financial Corporation ("Regions") pursuant to which ABH will
merge (the "Merger") with and into Regions, and American Bank & Trust Company
of Houma (the "Bank"), a wholly owned subsidiary of ABH, will become a wholly
owned subsidiary of Regions until combined with Regions Bank of Louisiana. Upon
consummation of the Merger, each share of ABH common stock issued and
outstanding (except for certain shares held by ABH or Regions or their
respective subsidiaries and shares held by stockholders who perfect their
dissenters' rights of appraisal) will be converted into 1.66 shares of Regions
common stock.
The accompanying Proxy Statement/Prospectus includes a description of the
proposed Merger and provides other specific information concerning the Special
Meeting. Please read these materials carefully and consider thoughtfully the
information set forth in them. In view of the merger proposal, we have
postponed the annual meeting indefinitely. If the proposal is consummated, an
annual meeting will not be necessary. If it is not consummated, the annual
meeting will be called and held as soon as possible.
The Merger has been approved unanimously by your Board of Directors and is
recommended by the Board to you for approval. Each member of the Board of
Directors of ABH has agreed to vote those ABH shares beneficially owned by such
member in favor of the Merger. Consummation of the Merger is subject to certain
conditions, including approval of the Agreement by ABH stockholders and
approval of the Merger by various regulatory agencies.
Stockholders of ABH who perfect their dissenters' rights of appraisal prior
to the proposed Merger and comply with applicable law will be entitled to
receive the fair value of their ABH shares in cash, as provided by applicable
law.
It is important to understand that approval of the Agreement requires the
affirmative vote of a majority of the shares present in person or by proxy at
the Special Meeting. Accordingly, whether or not you plan to attend the Special
Meeting, you are urged to complete, sign, and return promptly the enclosed
proxy card. If you attend the Special Meeting, you may vote in person if you
wish, even if you previously have returned your proxy card. The proposed Merger
with Regions is a significant step for ABH, and your vote on this matter is of
great importance. On behalf of the Board of Directors, I urge you to vote for
approval of the Merger by marking the enclosed proxy card "FOR" Item One.
Sincerely,
Robert W. Boquet
President and Chief
Executive Officer
<PAGE> 4
AMERICAN BANCSHARES OF HOUMA, INC.
801 BARROW STREET, HOUMA, LOUISIANA 70360
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ________, 1996
Notice is hereby given that a Special Meeting of Stockholders (the "Special
Meeting") of American Bancshares of Houma, Inc. ("ABH"), a bank holding
company, will be held at ABH's main office, 801 Barrow Street, Houma,
Louisiana, 70360 on ________, 1996, at 3:00 p.m., local time, for the following
purposes:
1. Merger. To consider and vote on the Agreement and Plan of Merger, dated
as of February 29, 1996 (the "Agreement"), by and between ABH and Regions
Financial Corporation ("Regions") pursuant to which (i) Regions will acquire
all of the issued and outstanding common stock of ABH through the merger of ABH
with and into Regions (the "Merger"), (ii) each share of ABH common stock
(except for certain shares held by ABH or Regions and shares held by
stockholders who perfect their dissenters' rights of appraisal) will be
converted into 1.66 shares of Regions common stock, and (iii) each ABH
stockholder will receive cash in lieu of any remaining fractional share
interest, all as described more fully in the accompanying Proxy
Statement/Prospectus; and
2. Other Business. To transact such other business as may properly come
before the Special Meeting, including adjourning the Special Meeting to permit,
if necessary, further solicitation of proxies.
Only stockholders of record at the close of business on ________, 1996, are
entitled to receive notice of and to vote at the Special Meeting or any
adjournment or postponement thereof.
Stockholders of ABH have a right to dissent from the Merger and obtain
payment of the fair value of their shares in cash by complying with the
applicable provisions of applicable law, which are attached to the accompanying
Proxy Statement/Prospectus as Appendix B. DISSENTING SHAREHOLDERS WHO COMPLY
WITH THE PROCEDURAL REQUIREMENTS OF THE BUSINESS CORPORATION LAW OF LOUISIANA
WILL BE ENTITLED TO RECEIVE PAYMENT OF THE FAIR CASH VALUE OF THEIR SHARES IF
THE TRANSACTION IS EFFECTED UPON APPROVAL BY LESS THAN 80% OF THE CORPORATION'S
TOTAL VOTING POWER.
The Board of Directors of ABH unanimously recommends that holders of ABH
common stock vote to approve the Agreement.
We urge you to sign and return the enclosed proxy as promptly as possible,
whether or not you plan to attend the Special Meeting in person. The proxy may
be revoked by the person executing the proxy by filing with the Secretary of
ABH an instrument of revocation or a duly executed proxy bearing a later date
or by electing to vote in person at the Special Meeting.
By Order of the Board of Directors
Russel J. Brien
Corporate Secretary
________, 1996
<PAGE> 5
AMERICAN BANCSHARES OF HOUMA, INC. REGIONS FINANCIAL CORPORATION
PROXY STATEMENT PROSPECTUS
FOR SPECIAL MEETING OF STOCKHOLDERS COMMON STOCK
TO BE HELD ________ (PAR VALUE $.625)
--------------------------------------------
This Prospectus of Regions Financial Corporation, a regional bank holding
company organized and existing under the laws of the state of Delaware
("Regions"), relates to the shares of its common stock, par value $.625 per
share ("Regions Common Stock"), which are issuable to the stockholders of
American Bancshares of Houma, Inc. ("ABH") upon consummation of the proposed
merger (the "Merger") described herein, by which ABH will merge with and into
Regions pursuant to the terms of an Agreement and Plan of Merger, dated as of
February 29, 1996, by and between Regions and ABH (the "Agreement").
On the effective date of the Merger (the "Effective Date"), except as
otherwise described herein, (i) ABH will merge with and into Regions, (ii) each
outstanding share of the $3.00 par value common stock of ABH ("ABH Common
Stock") will be converted into 1.66 shares of Regions Common Stock, and (iii)
each ABH stockholder will receive cash in lieu of any remaining fractional
share interest. A copy of the Agreement is attached to this Proxy
Statement/Prospectus as Appendix A.
As a result of the Merger, the separate existence of ABH will cease, and
American Bank & Trust Company of Houma, a wholly owned subsidiary of ABH (the
"Bank"), will become a wholly owned subsidiary of Regions. Regions anticipates
merging the Bank into Regions Bank of Louisiana, its commercial banking
subsidiary in Louisiana, as soon as practical following the Merger. For a
further description of the terms of the Merger, see "Description of the
Transaction."
This Prospectus also constitutes a Proxy Statement of ABH and is being
furnished to the stockholders of ABH in connection with the solicitation of
proxies by the Board of Directors of ABH for use at its special meeting of
stockholders, including any adjournment or postponement thereof (the "Special
Meeting"), to be held on ________, 1996, to consider and vote on the proposed
Merger and related matters. This Proxy Statement/Prospectus and the
accompanying proxy card are first being mailed to stockholders of ABH on or
about ________, 1996.
THE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS, SAVINGS ACCOUNTS OR OTHER
OBLIGATIONS OF A DEPOSITORY INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY OR INSTRUMENTALITY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is ________, 1996.
<PAGE> 6
AVAILABLE INFORMATION
Regions and ABH are subject to the reporting 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 "SEC"). Copies of such reports, proxy
statements, and other information can be obtained, at prescribed rates, from
the SEC by addressing written requests for such copies to the Public Reference
Section at the SEC at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C.
20549. In addition, such reports, proxy statements, and other information can
be inspected at the public reference facilities referred to above and at the
regional offices of the SEC at 7 World Trade Center, 13th Floor, New York, New
York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661.
This Proxy Statement/Prospectus constitutes part of the Registration
Statement on Form S-4 of Regions (including any exhibits and amendments
thereto, the "Registration Statement") filed with the SEC under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the securities
offered hereby. This Proxy Statement/Prospectus does not include all of the
information in the Registration Statement, certain portions of which have been
omitted pursuant to the rules and regulations of the SEC. For further
information about Regions and the securities offered hereby, reference is made
to the Registration Statement. The Registration Statement may be inspected and
copied, at prescribed rates, at the SEC's public reference facilities at the
addresses set forth above. Regions Common Stock is traded in the Nasdaq
National Market. Reports, proxy statements, and other information concerning
Regions may be inspected at the offices of the National Association of
Securities Dealers, Inc. (the "NASD"), 1735 K Street, N.W., Washington, D.C.
20006.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE INCLUDED IN THIS PROXY STATEMENT/PROSPECTUS,
AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY REGIONS OR ABH. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO OR FROM
ANY PERSON TO OR FROM WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR
SOLICITATION. NEITHER THE DELIVERY OF THIS PROXY STATEMENT/PROSPECTUS NOR ANY
DISTRIBUTION OF SECURITIES MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF REGIONS OR ABH
SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
All information included or incorporated by reference in this Proxy
Statement/Prospectus with respect to Regions was supplied by Regions, and all
information included or incorporated by reference herein with respect to ABH
was supplied by ABH.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the SEC by Regions pursuant
to the Exchange Act are hereby incorporated by reference herein:
1. Regions' Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (which includes supplemental consolidated
financial statements of Regions, giving effect to the March 31,
1996 combination of First National Bancorp with Regions,
accounted for as a pooling of interests);
2. Regions' Quarterly Report on Form 10-Q for the three months ended
March 31, 1996;
3. Regions' Current Report on Form 8-K dated as of March 1, 1996,
and amendment no. 1 thereto filed March 28, 1996;
4. Regions' Current Report on Form 8-K filed June 4, 1996 (which
includes management's discussion and analysis of financial
condition and results of operations of Regions, giving effect to
the
2
<PAGE> 7
combination of First National Bancorp with Regions, accounted for as a
pooling of interests);
5. Regions' report on Form 10-C filed March 11, 1996; and
6. The description of Regions Common Stock under the heading "Item 1.
Capital Stock to be Registered" in the registration statement on Form 8-A
of Regions relating to Regions Common Stock and in any amendment or report
filed for the purpose of updating such description.
Regions' Annual Report on Form 10-K for the year ended December 31, 1995,
incorporates by reference specific portions of Regions' Annual Report to
Stockholders for that year (the "Regions Annual Report to Stockholders"), but
does not incorporate other portions of the Regions Annual Report to
Stockholders. Only those portions of the Regions Annual Report to Stockholders
captioned "Financial Summary & Review 1995," "Financial Statements and Notes,"
and "Historical Financial Summary" are incorporated herein. Other portions of
the Annual Report to Stockholders are NOT incorporated herein and are not a
part of the Registration Statement.
The following documents previously filed with the SEC by ABH pursuant to
the Exchange Act are hereby incorporated by reference herein:
1. ABH's Annual Report on Form 10-KSB for the fiscal year ended December
31, 1995; and
2. ABH's Quarterly Report on Form 10-QSB for the three months ended March
31, 1996.
All documents filed by Regions pursuant to Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Proxy Statement/Prospectus and
prior to the date of the Special Meeting shall be deemed to be incorporated by
reference in this Proxy Statement/Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein or in any subsequently filed document which 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 to constitute a part hereof, except as so modified or superseded. In
particular, reference is made to the Regions' Annual Report on Form 10-K, for
the year ended December 31, 1995, and Regions' Current Report on Form 8-K dated
June 4, 1996, which include supplemental consolidated financial statements and
the related management's discussion and analysis of financial condition and
results of operations of Regions giving effect to the combination of First
National Bancorp with Regions, effected March 1, 1996, and accounted for as a
pooling of interests. See "Summary" and "Business of Regions--Recent
Developments."
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THOSE DOCUMENTS ARE AVAILABLE
UPON REQUEST, WITHOUT CHARGE (EXCEPT FOR THE EXHIBITS THERETO), IF FILED BY
REGIONS, FROM RONALD C. JACKSON, STOCKHOLDER ASSISTANCE, REGIONS FINANCIAL
CORPORATION, P.O. BOX 1448, MONTGOMERY, ALABAMA 36102 (TELEPHONE (334)
832-8401), AND IF FILED BY ABH, FROM BENJAMIN D. BORNE, 801 BARROW STREET,
HOUMA, LOUISIANA 70360 (TELEPHONE (504) 872-1434. IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY ________, 1996.
3
<PAGE> 8
<TABLE>
TABLE OF CONTENTS
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DOCUMENTS INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Meeting of ABH Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record Date; Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Merger; Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dissenting Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reasons for the Merger; Recommendation of ABH's Board
of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory Approvals and Other Conditions . . . . . . . . . . . . . . . . . . . . . . . . . .
Waiver, Amendment, and Termination of the Agreement . . . . . . . . . . . . . . . . . . . . .
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences of the Merger . . . . . . . . . . . . . . . . . . . .
Certain Differences in Stockholders' Rights . . . . . . . . . . . . . . . . . . . . . . . . .
Comparative Market Prices of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . .
Comparative Per Share Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Record Date; Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF THE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Background of and Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective Date of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Distribution of Regions Stock Certificates and
Payment for Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conditions to Consummation of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Waiver, Amendment, and Termination of the Agreement . . . . . . . . . . . . . . . . . . . . .
Conduct of Business Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management Following the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . .
Dissenting Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences of the Merger . . . . . . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Resales of the Regions Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . .
Antitakeover Provisions Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Authorized Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amendment of Certificate of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . .
Classified Board of Directors and Absence of Cumulative Voting . . . . . . . . . . . . . . . .
Removal of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Limitations on Director Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Special Meetings of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actions by Stockholders Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholder Nominations and Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . .
</TABLE>
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<PAGE> 9
<TABLE>
<S> <C>
Business Combinations with Certain Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mergers, Consolidations, and Sales of Assets Generally . . . . . . . . . . . . . . . . . . . . . .
Dissenters' Rights of Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stockholders' Rights to Examine Books and Records . . . . . . . . . . . . . . . . . . . . . . . .
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COMPARATIVE MARKET PRICES AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS OF ABH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS OF ABH . . . . . . . . . . . . . . . . . . . . . . .
BUSINESS OF REGIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN REGULATORY CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Support of Subsidiary Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prompt Corrective Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FDIC Insurance Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DESCRIPTION OF REGIONS COMMON STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPENDIX A--Agreement and Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B--Copy of Section 131 of the Louisiana Business Corporation Act . . . . . . . . . . . . . . . B-1
APPENDIX C--Opinion of National Capital Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
5
<PAGE> 10
SUMMARY
The following is a summary of certain information relating to the Special
Meeting, the proposed Merger, and the offering of shares of Regions Common
Stock to be issued upon consummation thereof. This summary does not purport to
be complete and is qualified in its entirety by the more detailed information
appearing elsewhere or incorporated by reference in this Proxy
Statement/Prospectus. Stockholders are urged to read carefully the entire Proxy
Statement/Prospectus, including the Appendices. As used in this Proxy
Statement/Prospectus, the terms "Regions" and "ABH" refer to those entities,
respectively, and, where the context requires, to those entities and their
respective subsidiaries.
THE PARTIES
ABH. ABH is a bank holding company organized and existing under the laws
of the state of Louisiana, with its principal executive office located in
Houma, Louisiana. ABH operates principally through the Bank, which is a wholly
owned subsidiary of ABH and a state-chartered commercial bank and which
provides a range of retail banking services through six offices in Terrebonne
Parish, Louisiana. At March 31, 1996, ABH had total consolidated assets of
approximately $89.3 million, total consolidated deposits of approximately $79.3
million, and total consolidated stockholders' equity of approximately $8.8
million. ABH's principal executive office is located at 801 Barrow Street,
Houma, Louisiana, 70360 and its telephone number at such address is (504)
872-1434.
Regions. Regions is a regional bank holding company organized and existing
under the laws of the state of Delaware and headquartered in Birmingham,
Alabama, with approximately 353 banking offices located in Alabama, Florida,
Georgia, Louisiana, and Tennessee as of March 31, 1996. At that date, Regions
had total consolidated assets of approximately $17.5 billion, total
consolidated deposits of approximately $14.2 billion, and total consolidated
stockholders' equity of approximately $1.5 billion. Regions is the third
largest bank holding company headquartered in Alabama in terms of assets, based
on March 31, 1996 information. Regions operates banking subsidiaries in
Alabama, Florida, Georgia, Louisiana, and Tennessee and banking-related
subsidiaries engaged in mortgage banking, credit life insurance, leasing, and
securities brokerage activities with offices in various Southeastern states.
Through its subsidiaries, Regions offers a broad range of banking and
banking-related services.
Since March 31, 1996, Regions has completed the acquisition of one
financial institution in Georgia. Regions also has entered into definitive
agreements to acquire, in addition to ABH, three financial institutions, two of
which are located in Georgia and one of which is located in Louisiana (the
"Other Pending Acquisitions"). For information with respect to the Other
Pending Acquisitions see "Documents Incorporated by Reference" and "Business of
Regions--Recent Developments."
Regions commenced operations in 1971 as a registered bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC Act").
Regions' principal executive offices are located at 417 North 20th Street,
Birmingham, Alabama 35203, and its telephone number at such address is (205)
326-7100.
Additional information with respect to Regions and its subsidiaries is
included in documents incorporated by reference in this Proxy
Statement/Prospectus. See "Available Information," "Documents Incorporated by
Reference," and "Business of Regions."
SPECIAL MEETING OF ABH STOCKHOLDERS
The Special Meeting will be held at 3:00 p.m., local time, on
____________, 1996, at ABH's main office, 801 Barrow Street, Houma, Louisiana
70360, for the purpose of considering and voting on approval of the Agreement.
See "The Special Meeting."
6
<PAGE> 11
RECORD DATE; VOTE REQUIRED
Only holders of record of ABH Common Stock at the close of business on
__________, 1996 (the "Record Date"), will be entitled to vote at the Special
Meeting. The affirmative vote of holders of at least a majority of the ABH
Common Stock present in person or by proxy at the Special Meeting will be
required to approve the Agreement. As of the Record Date, there were 229,564
shares of ABH Common Stock outstanding and entitled to be voted.
The directors and executive officers of ABH and their affiliates
beneficially owned, as of the Record Date, 82,385 shares (or approximately 36%
of the outstanding shares) of ABH Common Stock. Each member of the Board of
Directors of ABH has agreed to vote those ABH shares beneficially owned by such
member in favor of the Merger. The directors and executive officers of Regions
and their affiliates beneficially owned, as of the Record Date, no shares of
ABH Common Stock. As of that date, neither ABH nor Regions held any shares of
ABH Common Stock in a fiduciary capacity for others. See "The Special
Meeting--Record Date; Vote Required."
THE MERGER; EXCHANGE RATIO
The Agreement provides for the acquisition of ABH by Regions pursuant to
the Merger of ABH with and into Regions. On the Effective Date, each share of
ABH Common Stock then issued and outstanding (excluding any shares held by
stockholders who perfect their dissenters' rights of appraisal and shares held
by ABH, Regions, or their respective subsidiaries, other than shares held in a
fiduciary capacity or as a result of debts previously contracted) will be
converted into 1.66 shares of Regions Common Stock (the "Exchange Ratio"). No
fractional shares of Regions Common Stock will be issued. Rather, cash will be
paid in lieu of any fractional share interest to which any ABH stockholder
would be entitled upon consummation of the Merger, based on the closing price
of Regions Common Stock on the Nasdaq National Market (as reported by The Wall
Street Journal, or, if not reported thereby, by another authoritative source
selected by Regions) on the last full trading day immediately preceding the
Effective Date. See "Description of the Transaction--General."
DISSENTING STOCKHOLDERS
Unless the Agreement is approved by 80% or more of the total voting power
of ABH, holders of ABH Common Stock entitled to vote on approval of the
Agreement have the right to dissent from the Merger and, upon consummation of
the Merger and the satisfaction of certain specified procedures and conditions,
to receive the fair value of such holders' shares of ABH Common Stock in cash
in accordance with the applicable provisions of the Louisiana Business
Corporation Law (the "Louisiana Act"). The procedures to be followed by
dissenting stockholders are summarized under "Description of the
Transaction--Dissenters' Rights," and the applicable provisions of the
Louisiana Act are reproduced as Appendix B.
REASONS FOR THE MERGER; RECOMMENDATION OF ABH'S BOARD OF DIRECTORS
ABH's Board of Directors has unanimously approved the Merger and the
Agreement and has determined that the Merger is fair to, and in the best
interests of, ABH and its stockholders. Accordingly, ABH's Board unanimously
recommends that ABH's stockholders vote FOR approval of the Agreement. EACH
MEMBER OF THE BOARD OF DIRECTORS OF ABH HAS AGREED TO VOTE SHARES OF ABH COMMON
STOCK BENEFICIALLY OWNED BY SUCH MEMBER IN FAVOR OF THE AGREEMENT. In approving
the Merger, ABH's directors considered ABH's financial condition, the financial
terms and the income tax consequences of the Merger, the likelihood of the
Merger being approved by regulatory authorities without undue conditions or
delay, and legal and financial advice concerning the proposed Merger. See
"Description of the Transaction--Background of and Reasons for the Merger."
7
<PAGE> 12
OPINION OF ABH'S FINANCIAL ADVISOR
National Capital Corporation ("National Capital") has rendered an opinion
to ABH that, based on and subject to the procedures, matters, and limitations
described in its opinion and such other matters as it considered relevant, as
of the date of its opinion, the consideration to be received in the Merger is
fair, from a financial point of view, to the stockholders of ABH. The opinion
of National Capital is attached as Appendix B to this Proxy Statement/
Prospectus. ABH stockholders are urged to read the opinion in its entirety for
a description of the procedures followed, matters considered, and limitations
on the reviews undertaken in connection therewith. See "Description of the
Transaction--Opinion of ABH's Financial Advisor."
EFFECTIVE DATE
Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Date will occur on the date and at the time that the
Delaware Certificate of Merger and the Louisiana Certificate of Merger are
filed and become effective with, respectively, the Delaware Secretary of State
and the Louisiana Secretary of State. Unless otherwise agreed upon by Regions
and ABH, and subject to the conditions to the obligations of the parties to
effect the Merger, the parties will use their reasonable efforts to cause the
Effective Date to occur by the last business day of the month in which the last
of the following events occurs: (i) the effective date (including the
expiration of any applicable waiting period) of the last federal or state
regulatory approval required for the Merger and (ii) the date on which the
Agreement is approved by the requisite vote of ABH stockholders; or such later
date within 30 days thereof as specified by Regions. The parties expect that
all conditions to consummation of the Merger will be satisfied so that the
Merger can be consummated during the third quarter of 1996, although there can
be no assurance as to whether or when the Merger will occur. See "Description
of the Transaction-- Effective Date of the Merger," "--Conditions to
Consummation of the Merger," and "--Waiver, Amendment, and Termination of the
Agreement."
EXCHANGE OF STOCK CERTIFICATES
Promptly after the Effective Date, Regions will cause an exchange agent
selected by Regions (the "Exchange Agent"), to mail to the former stockholders
of ABH a form letter of transmittal, together with instructions for the
exchange of such stockholders' certificates representing shares of ABH Common
Stock for certificates representing shares of Regions Common Stock. ABH
STOCKHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES UNTIL THEY RECEIVE THE
FORM LETTER OF TRANSMITTAL AND INSTRUCTIONS. See "Description of the
Transaction--Distribution of Regions Stock Certificates and Payment for
Fractional Shares."
REGULATORY APPROVALS AND OTHER CONDITIONS
The Merger is subject to approval by the Board of Governors of the Federal
Reserve System (the "Federal Reserve") and the Commissioner of Financial
Institutions of the state of Louisiana (the "Louisiana Commissioner").
Applications for the requisite approvals have been filed with these agencies
each of which has yet to issue its approval of the Merger. There can be no
assurance that the approvals of the Louisiana Commissioner and the Federal
Reserve will be given or as to the timing or conditions of such approval.
Consummation of the Merger is subject to various other conditions,
including receipt of the required approval of ABH stockholders, receipt of an
opinion of counsel as to the tax-free nature of certain aspects of the Merger,
and certain other customary conditions. See "Description of the Transaction--
Conditions to Consummation of the Merger."
WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT
The Agreement may be terminated, and the Merger abandoned, at any time
prior to the Effective Date by mutual action of the Boards of Directors of both
ABH and Regions, or by action of the Board of Directors of either company under
certain circumstances, including if the Merger is not consummated by October
15, 1996, unless the failure to consummate by such time is due to a breach of
the Agreement by the party seeking to terminate. If for any reason the Merger
is not consummated, ABH will continue to operate as a bank holding company
under its present management. See "Description of the Transaction--Waiver,
Amendment, and Termination of the Agreement."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of ABH's management and Board of Directors have interests
in the Merger in addition to their interests as stockholders of ABH generally.
Those interests relate to, among other things, provisions in the Agreement
regarding indemnification and eligibility for certain Regions employee
benefits. See
8
<PAGE> 13
"Description of the Transaction--Interests of Certain Persons in the Merger."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
Consummation of the Merger is conditioned on the receipt of an opinion of
counsel to the effect that, among other things, the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and the exchange in the Merger of ABH
Common Stock for Regions Common Stock will not give rise to gain or loss to ABH
stockholders with respect to such exchange, except to the extent of any cash
received in lieu of fractional share interests. Gain recognition, if any, will
not be in excess of the amount of cash received. Subject to the provisions and
limitations of Section 302(a) of the Code, gain or loss will be recognized upon
the receipt of cash in lieu of fractional share interests. See "Description of
the Transaction--Certain Federal Income Tax Consequences of the Merger."
DUE TO THE INDIVIDUAL NATURE OF THE TAX CONSEQUENCES OF THE MERGER, ABH
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
SPECIFIC EFFECT OF THE MERGER ON THEM UNDER FEDERAL, STATE, LOCAL, AND FOREIGN
TAX LAWS.
CERTAIN DIFFERENCES IN STOCKHOLDERS' RIGHTS
On the Effective Date, ABH stockholders, whose rights are governed by the
Louisiana Act and by ABH's Articles of Incorporation and Bylaws, will
automatically become Regions stockholders, and their rights as Regions
stockholders will be determined by the Delaware General Corporation Law (the
"Delaware GCL") and by Regions' Certificate of Incorporation and Bylaws.
The rights of Regions stockholders differ from the rights of ABH
stockholders in certain important respects, some of which constitute additional
antitakeover provisions provided for in Regions' governing documents. See
"Effect of the Merger on Rights of Stockholders."
COMPARATIVE MARKET PRICES OF COMMON STOCK
Regions Common Stock is traded in the over-the-counter market and quoted on
the Nasdaq National Market. ABH Common Stock is not traded in any established
market. The following table sets forth, as of the indicated dates, (i) the last
sale price of Regions Common Stock, (ii) the sale price in the last known
transaction of purchase and sale of ABH Common Stock, which occurred in
________, and (iii) the equivalent per share price (as explained below) of ABH
Common Stock. The indicated dates of February 29, 1996, and ________, 1996
represent, respectively, the last trading day immediately preceding public
announcement of the proposed acquisition of ABH by Regions and the latest
practicable date prior to the mailing of this Proxy Statement/Prospectus.
<TABLE>
<CAPTION>
EQUIVALENT
PER
SHARE PRICE
REGIONS ABH OF ABH
MARKET PRICE PER SHARE AT: COMMON STOCK COMMON STOCK COMMON STOCK
- -------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
February 29, 1996 $45.88 $ 30.50 $ 76.16
, 1996
</TABLE>
The equivalent per share price of ABH Common Stock at each specified date
represents the last sale price of a share of Regions Common Stock on such date
multiplied by the Exchange Ratio of 1.66. Stockholders are advised to obtain
current market quotations for Regions Common Stock and ABH Common Stock. No
assurance can be given as to the market price of Regions Common Stock at or
after the Effective Date.
9
<PAGE> 14
COMPARATIVE PER SHARE DATA
The following table sets forth certain comparative per share data relating
to net income, cash dividends, and book value on (i) an historical basis for
Regions and ABH, (ii) a pro forma combined basis per share of Regions Common
Stock, giving effect to the Merger, and (iii) an equivalent pro forma basis per
share of ABH Common Stock, giving effect to the Merger. The Regions and ABH pro
forma combined information and the ABH pro forma Merger equivalent information
give effect to the Merger on a purchase accounting basis and assume an Exchange
Ratio of 1.66. See "Description of the Transaction--Accounting Treatment."
The pro forma data are presented for information purposes only and are not
necessarily indicative of the results of operations or combined financial
position that would have resulted had the Merger been consummated at the dates
or during the periods indicated, nor are they necessarily indicative of future
results of operations or combined financial position.
The information shown below should be read in conjunction with, and is
qualified in its entirety by, the historical financial statements of Regions
and ABH, including the respective notes thereto. Regions' historical
information has been restated to give effect to the combination of First
National Bancorp with Regions, effected March 1, 1996, and accounted for as a
pooling of interests. See "--Documents Incorporated by Reference," and
"--Selected Financial Data."
10
<PAGE> 15
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------ ---------------------------------
1996 1995 1995 1994 1993
---- ---- ---- ---- ----
(Unaudited) (Unaudited except Regions and
ABH historical)
<S> <C> <C> <C> <C> <C>
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE PER COMMON SHARE
Regions historical . . . . . . . . . . . . . . $ .85 $ .81 $ 3.21 $ 3.10 $ 2.81
ABH historical . . . . . . . . . . . . . . . . 1.69 .99 4.48 4.41 4.66
Regions and ABH pro forma combined(1) . . . . . .85 3.20
ABH pro forma Merger equivalent(2) . . . . . . 1.41 5.31
DIVIDENDS DECLARED PER COMMON
SHARE
Regions historical . . . . . . . . . . . . . . $ .35 $ .33 $ 1.32 $ 1.20 $ 1.04
ABH historical . . . . . . . . . . . . . . . . .32 -- 1.15 1.00 .50
ABH pro forma Merger equivalent(3) . . . . . . .58 .55 2.19 1.99 1.73
BOOK VALUE PER COMMON SHARE
(PERIOD END)
Regions historical . . . . . . . . . . . . . . $23.84 $ 21.92 $ 23.38 $ 21.26 $ 19.85
ABH historical. . . . . . . . . . . . . . . . . 38.35 34.34 37.81 32.78 31.43
Regions and ABH pro forma combined(4) . . . . . 23.85
ABH pro forma Merger equivalent(2) . . . . . . 39.59
</TABLE>
- ---------------------
(1) Represents the combined results of Regions and ABH as if the Merger were
consummated on January 1, 1995, and were accounted for as a purchase.
(2) Represents pro forma combined information multiplied by the Exchange Ratio
of 1.66 shares of Regions Common Stock for each share of ABH Common Stock.
(3) Represents historical dividends declared per share by Regions multiplied by
the Exchange Ratio of 1.66 shares of Regions Common Stock for each share
of ABH Common Stock.
(4) Represents the combined information of Regions and ABH as if the Merger
were consummated on March 31, 1996, and were accounted for as a purchase.
SELECTED FINANCIAL DATA
The following tables present certain selected historical financial
information for Regions and ABH. The data for Regions have been restated to
give effect to the combination with First National Bancorp consummated on March
1, 1996, which was accounted for as a pooling of interests. The data should be
read in conjunction with the historical financial statements, related notes,
and other financial information concerning Regions and ABH incorporated by
reference or included herein. Interim unaudited data for the three months ended
March 31, 1996 and 1995 of Regions and ABH reflect, in the opinion of the
respective managements of Regions and ABH, all adjustments (consisting only of
normal recurring adjustments) necessary for a fair presentation of such data.
Results for the three months ended March 31, 1996, are not necessarily
indicative of results which may be expected for any other interim period or for
the year as a whole. See "Documents Incorporated by Reference."
11
<PAGE> 16
Selected Historical Financial Data of Regions
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
----------------- ------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(Unaudited)
(In thousands except per share data and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income . . . . $ 329,005 $ 299,945 $ 1,259,600 $ 991,693 $ 746,544 $ 737,094 $ 778,848
Total interest expense . . . 165,119 147,415 635,336 436,157 296,195 324,420 428,083
Net interest income . . . . . 163,886 152,530 624,264 555,536 450,349 412,674 350,765
Provision for loan losses . . 6,874 5,050 30,271 20,580 24,695 39,367 34,879
Net interest income after
loan loss provision . . 157,012 147,480 593,993 534,956 425,654 373,307 315,886
Total noninterest income
excluding security
gains (losses) . . . . . 55,551 43,912 187,830 171,705 169,318 148,007 129,232
Security gains (losses) . . . 131 7 (424) 344 831 2,353 (89)
Total noninterest expense . . 135,008 116,229 487,461 442,376 383,130 343,279 302,795
Income tax expense . . . . . 24,892 24,920 96,109 84,109 66,169 56,405 41,502
Net income . . . . . . . . . $ 52,794 $ 50,250 $ 197,829 $ 180,520 $ 146,504 $ 123,983 $ 100,732
PER SHARE DATA:
Net income . . . . . . . . . $ .85 $ .81 $ 3.21 $ 3.10 $ 2.81 $ 2.42 $ 2.01
Cash dividends . . . . . . . .35 .33 1.32 1.20 1.04 .91 .87
Book value . . . . . . . . . 23.84 21.92 23.38 21.26 19.85 17.13 15.47
OTHER INFORMATION:
Average number of shares
outstanding 61,985 61,907 61,670 58,206 52,153 51,192 50,192
STATEMENT OF CONDITION DATA
(PERIOD END):
Total assets . . . . . . . . $17,531,422 $16,200,279 $16,851,774 $15,810,076 $13,163,161 $10,457,676 $9,188,048
Securities . . . . . . . . . 4,120,997 3,296,536 3,863,781 3,346,291 2,993,417 2,255,732 2,076,199
Loans, net of unearned
income . . . . . . . . . 11,864,356 11,412,740 11,542,311 10,855,195 8,430,931 6,657,557 5,726,818
Total deposits . . . . . . . 14,182,607 13,121,692 13,497,612 12,575,593 11,025,376 8,923,801 8,047,731
Long-term debt . . . . . . . 501,520 606,662 632,019 599,476 525,820 151,460 24,461
Stockholders' equity . . . . 1,482,790 1,358,964 1,429,253 1,286,322 1,106,361 886,116 779,002
PERFORMANCE RATIOS:
Return on average assets (1). 1.24% 1.28% 1.21% 1.27% 1.38% 1.29% 1.15%
Return on average stockholders'
equity (1) . . . . . . . 14.51 15.38 14.29 15.26 15.76 15.04 13.58
Net interest margin (1) . . . 4.22 4.31 4.21 4.37 4.77 4.85 4.58
Efficiency (2) . . . . . . . 60.49 57.94 58.79 59.44 60.23 59.62 60.92
Dividend payout . . . . . . . 41.18 40.74 41.12 38.71 37.01 37.60 43.28
ASSET QUALITY RATIOS:
Net charge-offs to average
loans, net of unearned
income (1) . . . . . . . .06% .03% .17% .19% .23% .36% .45%
Problem assets to net loans
and other real estate
(3) . . . . . . . . . . .61 .71 .59 .75 1.12 1.29 1.62
Nonperforming assets to net
loans and other real
estate (4) . . . . . . . .70 .76 .68 .80 1.28 1.39 1.74
Allowance for loan losses to
loans, net of unearned
income . . . . . . . . . 1.41 1.34 1.38 1.32 1.48 1.51 1.34
Allowance for loan losses to
nonperforming assets
(4) . . . . . . . . . 200.73 175.18 202.55 164.48 115.88 107.97 76.76
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets . . . . . 8.56% 8.31% 8.44% 8.35% 8.76% 8.60% 8.49%
Average loans to average
deposits . . . . . . . . 84.75 86.68 86.12 79.90 76.41 71.59 72.34
Tier 1 risk-based capital (5). 11.34 10.66 11.14 10.69 11.13 11.68 11.85
Total risk-based capital (5). 14.30 14.23 14.61 14.29 13.48 14.44 13.19
Tier 1 leverage (5) . . . . . 7.81 7.43 7.49 8.21 10.11 8.44 8.40
</TABLE>
- --------------------
(1) Interim period ratios are annualized.
(2) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains (losses) from
security transactions.
(3) Problem assets include loans on a nonaccrual basis, restructured
loans, and foreclosed properties.
(4) Nonperforming assets include loans on a nonaccrual basis,
restructured loans, loans 90 days or more past due, and foreclosed
properties.
(5) The required minimum Tier 1 and total risk-based capital ratios are
4.0% and 8.0%, respectively. The minimum leverage ratio of Tier 1 capital to
total adjusted assets is 3.0% to 5.0%, depending on the risk profile of the
institution and other factors.
<PAGE> 17
Selected Historical Financial Data of ABH
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------- -----------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(Unaudited)
(In thousands except per share data and ratios)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Total interest income . . . . . . . . . . $ 1,625 $ 1,467 $ 6,128 $ 5,401 $ 5,164 $ 5,282 $ 5,562
Total interest expense . . . . . . . . . 615 568 2,426 1,746 1,592 2,083 2,950
Net interest income . . . . . . . . . . . 1,010 899 3,702 3,655 3,572 3,199 2,612
Provision for loan losses . . . . . . . . -- -- -- 5 460 93 165
Net interest income after
loan loss provision . . . . . . . . 1,010 899 3,702 3,650 3,112 3,106 2,447
Total noninterest income
excluding security gains (losses). . 351 299 1,285 1,295 1,364 1,225 1,090
Security gains (losses) . . . . . . . . . -- (1) (1) 32 246 154 --
Total noninterest expense . . . . . . . . 776 882 3,487 3,473 3,180 3,075 2,764
Income tax expense (credit) . . . . . . . 197 88 470 491 (329) 5 (9)
Net income . . . . . . . . . . . . . . . $ 388 $ 227 $ 1,029 $ 1,013 $ 1,871(5) $ 1,405 $ 782
PER SHARE DATA:
Net income . . . . . . . . . . . . . . . $ 1.69 $ .99 $ 4.48 $ 4.41 $ 8.15 $ 6.12 $ 3.41
Cash dividends . . . . . . . . . . . . . .32 -- 1.15 1.00 .50 -- --
Book value . . . . . . . . . . . . . . . 38.35 34.34 37.81 32.78 31.43 22.51 16.39
OTHER INFORMATION:
Average number of shares outstanding. . . 230 230 230 230 230 230 230
STATEMENT OF CONDITION DATA
(PERIOD END):
Total assets . . . . . . . . . . . . . . $ 89,310 $ 82,607 $ 88,210 $ 82,348 $ 72,577 $ 73,665 $ 69,247
Securities . . . . . . . . . . . . . . . 28,378 22,040 26,752 17,988 23,876 28,855 26,736
Loans, net of unearned income . . . . . . 53,520 50,818 50,813 51,491 39,398 34,967 33,476
Total deposits . . . . . . . . . . . . . 79,294 74,107 78,708 74,261 64,914 68,073 64,918
Long-term debt . . . . . . . . . . . . . -- -- -- -- -- -- --
Stockholders' equity . . . . . . . . . . 8,804 7,884 8,680 7,524 7,215 5,167 3,762
PERFORMANCE RATIOS:
Return on average assets (1). . . . . . . 1.76% 1.13% 1.22% 1.31% 2.55% 2.01% 1.18%
Return on average stockholders'
equity (1) . . . . . . . . . . . . . 17.64 11.97 12.57 13.62 30.80 31.46 23.19
Net interest margin (1) . . . . . . . . . 5.13 4.94 4.89 5.22 5.40 5.13 4.42
Efficiency (2) . . . . . . . . . . . . . 56.35 73.26 69.35 69.38 61.32 67.13 74.61
Dividend payout . . . . . . . . . . . . . 18.93 -- 25.67 22.68 6.13 -- --
ASSET QUALITY RATIOS:
Net charge-offs (recoveries) to average
loans, net of unearned income (1). . (.18)% .10% .28% .07% (.02)% .08% 1.31%
Nonperforming assets to net loans
and other real estate (3). . . . . . 2.28 3.22 2.82 2.77 4.00 6.39 8.43
Allowance for loan losses to loans,
net of unearned income . . . . . . . 2.03 2.13 1.95 2.20 2.95 1.98 1.87
Allowance for loan losses to
nonperforming assets (3) . . . . . . 89.12 65.59 68.86 78.79 72.90 30.38 21.39
LIQUIDITY AND CAPITAL RATIOS:
Average stockholders' equity to
average assets . . . . . . . . . . . 9.98% 9.48% 9.74% 9.61% 8.27% 6.40% 5.07%
Average loans to average deposits . . . . 66.47 70.35 67.86 66.93 54.58 51.62 51.99
Tier 1 risk-based capital (4) . . . . . . 17.58 16.54 17.31 15.53 18.84 15.06 11.04
Total risk-based capital (4). . . . . . . 18.84 17.80 18.57 16.80 20.13 16.32 12.55
Tier 1 leverage (4) . . . . . . . . . . . 9.60 9.34 9.36 9.05 9.29 6.70 5.09
</TABLE>
- --------------------------
(1) Interim period ratios are annualized.
(2) Noninterest expense divided by the sum of net interest income
(taxable-equivalent basis) and noninterest income net of gains
(losses) from security transactions.
(3) Nonperforming assets include loans on a nonaccrual basis, restructured
loans, loans 90 days or more past due, and foreclosed properties.
(4) The required minimum Tier 1 and total risk-based capital ratios are
4.0% and 8.0%, respectively. The minimum leverage ratio of Tier 1
capital to total adjusted assets is 3.0% to 5.0%, depending on the
risk profile of the institution and other factors.
(5) 1993 income before cumulative effect of a change in accounting
principle is $1,070,000 or $4.66 per share.
<PAGE> 18
THE SPECIAL MEETING
GENERAL
This Proxy Statement/Prospectus is being furnished to the holders of ABH
Common Stock in connection with the solicitation by the ABH Board of Directors
of proxies for use at the Special Meeting, at which ABH stockholders will be
asked to vote upon a proposal to approve the Agreement. The Special Meeting
will be held at 3:00 p.m., local time, on , 1996, at the main offices of ABH,
located at 801 Barrow Street, Houma, Louisiana, 70360.
ABH stockholders are requested to sign, date, and promptly return the
accompanying proxy card to ABH in the enclosed postage-paid, addressed
envelope.
Any ABH stockholder who has delivered a proxy may revoke it at any time
before it is voted either (i) by giving notice of revocation in writing or
submitting to ABH a signed proxy card bearing a later date, provided that such
notice or proxy card is actually received by ABH before the vote of
stockholders or (ii) in open meeting prior to the taking of the stockholder
vote at the Special Meeting. Any notice of revocation should be sent to
American Bancshares of Houma, Inc., 801 Barrow Street, Houma, Louisiana 70360,
Attention: Russel J. Brien, Corporate Secretary. A proxy will not be revoked by
death or supervening incapacity of the stockholder executing the proxy unless,
before the vote, notice of such death or incapacity is filed with the Corporate
Secretary of ABH. The shares of ABH Common Stock represented by properly
executed proxies received at or prior to the Special Meeting and not
subsequently revoked will be voted as directed in such proxies. IF INSTRUCTIONS
ARE NOT GIVEN, SHARES REPRESENTED BY PROXIES RECEIVED WILL BE VOTED FOR
APPROVAL OF THE AGREEMENT AND IN THE DISCRETION OF THE PROXY HOLDER AS TO ANY
OTHER MATTERS THAT PROPERLY MAY COME BEFORE THE SPECIAL MEETING. IF NECESSARY,
AND UNLESS CONTRARY INSTRUCTIONS ARE GIVEN, THE PROXY HOLDER ALSO MAY VOTE IN
FAVOR OF A PROPOSAL TO ADJOURN THE SPECIAL MEETING TO PERMIT FURTHER
SOLICITATION OF PROXIES IN ORDER TO OBTAIN SUFFICIENT VOTES TO APPROVE THE
AGREEMENT. As of the date of this Proxy Statement/Prospectus, ABH is unaware of
any other matter to be presented at the Special Meeting.
Solicitation of proxies will be made by mail but also may be made by
telephone or telegram or in person by the directors, officers, and employees of
ABH, who will receive no additional compensation for such solicitation but may
be reimbursed for out-of-pocket expenses. Brokerage houses, nominees,
fiduciaries, and other custodians will be requested to forward solicitation
materials to beneficial owners and will be reimbursed for their reasonable
out-of-pocket expenses.
ABH stockholders should not forward any stock certificates with their
proxy cards.
RECORD DATE; VOTE REQUIRED
ABH's Board of Directors has established the close of business on
________, 1996, as the Record Date for determining the ABH stockholders
entitled to notice of and to vote at the Special Meeting. Only ABH stockholders
of record as of the Record Date will be entitled to vote at the Special
Meeting. The affirmative vote of the holders of at least a majority of the ABH
Common Stock present in person or by proxy at the Special Meeting is required
in order to approve the Agreement. As of the Record Date, there were
approximately 730 holders of 229,564 shares of ABH Common Stock outstanding and
entitled to vote at the Special Meeting, with each share entitled to one vote.
For information as to persons known by ABH to beneficially own more than 5.0%
of the outstanding shares of ABH Common Stock as of the Record Date, see
"Voting Securities and Principal Stockholders of ABH."
The presence, in person or by proxy, of a majority of the outstanding
shares of ABH Common Stock is necessary to constitute a quorum of the
stockholders in order to take action at the Special Meeting. For these
14
<PAGE> 19
purposes, shares of ABH Common Stock that are present, or represented by proxy,
at the Special Meeting will be counted for quorum purposes regardless of
whether the holder of the shares or proxy fails to vote on the Agreement or
whether a broker with discretionary authority fails to exercise its
discretionary voting authority with respect to the Agreement. Once a quorum is
established, approval of the Agreement requires the affirmative vote of the
holders of at least a majority of the ABH Common Stock present in person or by
proxy at the Special Meeting.
The directors and executive officers of ABH and their affiliates
beneficially owned, as of the Record Date, 82,385 shares (or approximately 36%
of the outstanding shares) of ABH Common Stock. The directors and executive
officers of Regions and their affiliates beneficially owned, as of the Record
Date, no shares of ABH Common Stock. As of that date, no subsidiary of either
ABH or Regions held any shares of ABH Common Stock in a fiduciary capacity for
others.
DESCRIPTION OF THE TRANSACTION
The following material describes certain aspects of the Merger. This
description does not purport to be complete and is qualified in its entirety by
reference to the Appendices hereto, including the Agreement, which is attached
as Appendix A to this Proxy Statement/Prospectus and incorporated herein by
reference. All stockholders are urged to read the Appendices in their entirety.
GENERAL
Each share of ABH Common Stock (excluding any shares held by ABH, Regions,
or their respective subsidiaries, other than shares held in a fiduciary
capacity or as a result of debts previously contracted, and shares held by
stockholders who perfect their dissenters' rights of appraisal) issued and
outstanding at the Effective Date will be converted into 1.66 shares of Regions
Common Stock. Each share of Regions Common Stock outstanding immediately prior
to the Effective Date will remain outstanding and unchanged as a result of the
Merger.
No fractional shares of Regions Common Stock will be issued in connection
with the Merger. In lieu of issuing fractional shares, Regions will make a cash
payment equal to the fractional part of a share which a ABH stockholder would
otherwise receive multiplied by the closing price of Regions Common Stock on
the Nasdaq National Market (as reported by The Wall Street Journal, or, if not
reported thereby, by another authoritative source selected by Regions), on the
last full trading day prior to the Effective Date.
BACKGROUND OF AND REASONS FOR THE MERGER
BACKGROUND OF THE MERGER. During the last several years, there have been
significant developments in the banking and financial services industry. These
developments have included the increased emphasis and dependence on automation,
specialization of products and services, increased competition from other
financial institutions, and a trend toward consolidation and geographic
expansion, coupled with a relaxation of regulatory restrictions on interstate
conduct of business of financial institutions.
ABH and its Board of Directors concluded that it could best serve its
stockholders, employees, customers and community by combining with a regional
banking organization, provided that ABH could obtain a fair price for its
stockholders.
In October 1994, ABH engaged American Planning Corporation to assist the
Strategic Planning Committee to develop all of ABH's strategic options
available to ABH, including developing a plan to remain independent. The Board
of Directors appointed a Strategic Planning Committee consisting of directors
Philip E. Henderson (Chairman), Robert W. Boquet, A.M. Cook and William C.
Smith and authorized it to consider all of ABH's options. American Planning
Corporation with the guidance of the Strategic Planning Committee developed a
Strategic Plan based on the assumption that ABH would remain independent.
15
<PAGE> 20
In early 1995, ABH was approached by a publicly held bank holding company
(the "First Suitor") about the possibility of a merger transaction. After
receiving authorization from the Board of Directors to do so, the Committee
proceeded to retain National Capital as its financial advisor and the law firm
of Correro, Fishman and Casteix ("CFC") as its legal advisor, in each case
because of these firms' experience and reputation with respect to bank
acquisitions and mergers.
The First Suitor's proposal was viewed favorably by the Committee and
National Capital, which believed the consideration offered to be in the range
of what other potential suitor's would be willing to offer. Consequently, after
appropriate report to and authorization from the Board of Directors, the
Committee proceeded to negotiate further with the First Suitor in an effort to
increase the amount offered and to achieve more favorable terms with respect to
other aspects of the First Suitor's proposal. After further negotiations,
however, it became clear that the consideration originally proposed by the
First Suitor would be subject to reduction to the extent of any unfavorable
outcome of certain litigation against the Bank by an instrumentality of the
State of Louisiana involving a defaulted loan of approximately $3 million of
which the instrumentality was the guarantor (the "Litigation"). While the
Committee was confident that the ultimate outcome of the Litigation would not
materially adversely affect ABH, in the Committee's opinion the consideration
proposed by the First Suitor did not justify placing ABH's stockholders at any
risk that the total consideration might not be received. Accordingly, after
report to and concurrence from the Board of Directors, negotiations with the
First Suitor were terminated.
The Committee next entered into brief discussions with a second financial
institution (the "Second Suitor") but, as with the First Suitor, the Second
Suitor was only interested in a transaction if ABH's stockholders bore the risk
of the Litigation. Accordingly, discussions with the Second Suitor were
terminated, and ABH began to explore other means to achieve stockholder value
and liquidity.
In late 1995, ABH began discussions with Regions. At the outset of these
discussions, however, the Committee advised Regions that it would consider a
proposal from Regions only if Regions accepted the risk of the outcome of the
Litigation. To enable Regions to determine if it were willing to accept such a
risk, ABH provided Regions with full access to its counsel and its records in
the Litigation and Regions conducted an analysis of the Litigation and its
likely outcome. Following such review, Regions advised the Committee that it
would accept the risk of the Litigation in a transaction pursuant to which ABH
would be acquired by Regions and, in the discussions that followed Regions
suggested a range of value of ABH that Regions believed to be an appropriate
basis for a merger.
After receiving Regions' proposal the Committee conferred with National
Capital and considered, among other things, the current and historical market
prices of Regions common stock, the business, prospects and soundness of
Regions, and the proposed assumption of the risk of the Litigation by Regions.
Based on those considerations, the Committee concluded that Regions' proposal
offered potential consideration to ABH's stockholders that represented both
fair value and the best potentially available transaction for its stockholders,
and that a fixed exchange ratio offered a better opportunity for stockholders
to receive higher value than other alternatives, such as a ratio based on fixed
dollar value or one in which a minimum and maximum number of Regions shares
would be provided for. Accordingly, after report to and concurrence by the
Board of Directors, the Committee proceeded to negotiate, subject to final
approval by the Board of Directors, the complete terms of a proposed definitive
agreement with Regions.
Over the course of the next several weeks, representatives of ABH and
Regions negotiated an agreement, subject to final approval by the Board of
Directors, with Regions that provided for an exchange ratio of 1.66 shares of
Regions Common Stock for each share of Company Common Stock. The Committee
then recommended the Agreement for approval by the Board of Directors of ABH.
On February 28, 1996, the Board of Directors met and received a presentation
from the Committee, National Capital and CFC concerning the background of the
negotiations, the terms and conditions of the proposed definitive agreement and
related documents, the proposed exchange ratio and the business, prospects and
soundness of Regions. At the meeting, National Capital also provided its
verbal opinion that the terms of the definitive agreement, which
16
<PAGE> 21
was accomplished on February 29, 1996.
Subsequent to the execution of the Agreement, National Capital delivered
its formal written opinion that, as of the date thereof, the consideration to
be received by the stockholders of ABH pursuant to the Agreement, when taken as
a whole, is fair to ABH on National Capital with respect to the investigations
made or the procedures followed in rendering its opinions. The full text of
National Capital's written opinion, which sets forth the assumptions made,
matters considered, and limitations of the review by National Capital, is
attached hereto as Appendix C and is incorporated herein by reference and
should be read carefully and in its entirety in connection with this Proxy
Statement. National Capital's opinion does not constitute a recommendation to
any stockholder as to how such stockholders should vote at the Special Meeting.
As described above, National Capital's opinion and presentation to the
Board of Directors were among the many factors taken into consideration by the
Board in making its determination to approve the agreement.
ABH'S REASONS FOR THE MERGER. In approving the Merger, the directors of
ABH considered a number of factors. Without assigning any relative or specific
weights to the factors, the ABH Board of Directors considered the following
material factors:
(a) the information presented to the directors by the management of ABH
concerning the business, operations, earnings, dividends, asset
quality, and financial condition of ABH and Regions, including
compliance with regulatory capital requirements on an historical and
prospective basis;
(b) the financial terms of the Merger, including the relationship of the
merger price to the market value, tangible book value, and
earnings per share of ABH Common Stock, and the participation in any
appreciation in value of Regions Common Stock;
(c) the nonfinancial terms of the Merger, including the treatment of the
Merger as a tax-free exchange of ABH Common Stock for Regions
Common Stock for federal and state income tax purposes;
(d) the likelihood of the Merger being approved by applicable regulatory
authorities without undue conditions or delay; and
(e) the advice of National Capital.
The terms of the Merger were the result of arms-length negotiations between
representatives of ABH and representatives of Regions. Based upon the
consideration of the foregoing factors, the Board of Directors of ABH
unanimously approved the Merger as being in the best interests of ABH and its
stockholders. Each member of the Board of Directors of ABH has agreed to vote
such member's shares in favor of the Merger.
ABH's Board of Directors unanimously recommends that ABH stockholders vote
for approval of the Agreement.
REGIONS' REASONS FOR THE MERGER. The Regions Board of Directors has
approved the Agreement and determined that the Merger is in the best interests
of Regions and its stockholders. In approving the Agreement, the Regions Board
considered a number of factors. Without assigning any relative or specific
weights to the factors, the Regions Board of Directors considered the following
material factors:
(a) a review, based in part on a presentation by Regions management, of (i)
the business, operations, earnings, and financial condition, including the
capital levels and asset quality, of ABH on an historical, prospective, and pro
forma basis and in comparison to other financial institutions in the area, (ii)
the demographic, economic, and financial characteristics of the markets in
which ABH operates, including existing competition, history of the market areas
with respect to financial institutions, and average demand for credit, on an
historical and prospective basis, and (iii) the results of Regions' due
diligence review of ABH; and
17
<PAGE> 22
(b) a variety of factors affecting and relating to the overall strategic
focus of Regions, including Regions' desire to expand into markets in the
general vicinity of its core markets.
OPINION OF ABH'S FINANCIAL ADVISOR
The following is a summary of the analyses performed by National Capital in
preparation for its verbal opinion rendered to the Board of Directors of ABH on
February 28, 1996, and its written fairness opinion on June 6, 1996.
Analysis of Selected Bank Merger Transactions
National Capital reviewed the consideration paid in recently announced
transactions whereby certain banks were acquired. Specifically, National
Capital reviewed transactions involving acquisitions of banks in the United
States with total assets between $25 and $150 million, announced and
consummated in such transactions during 1995 (the "National Acquisitions") and
acquisitions of selected Louisiana banks announced and consummated in such
transactions during 1995 (the "Louisiana Acquisitions"). National Capital
compiled figures illustrating, among other things, the ratio of the premium
(i.e. purchase price in excess of book value) to core deposits, purchase price
to deposits, purchase price to book value and purchase price to last
twelve-months ("LTM") earnings.
The figures for the National Acquisitions and the Louisiana Acquisitions
produced: (i) median percentage of premium (purchase price in excess of book
value) to core deposits of 7.56% and 8.62%, respectively; (ii) median purchase
price to deposits of 16.92% and 18.63%, respectively; (iii) median ratio of
purchase price to book value of 1.65x and 2.04x, respectively; and (iv) median
ratio of purchase price to LTM earnings of 15.59x and 11.58x, respectively.
In comparison, assuming the value of Regions' stock at closing is $46.00
per share (the closing price on February 27, 1996), National Capital determined
that the consideration to be received by the holders of ABH Common Stock in the
Mergers represented a percentage of premium to core deposits of 13.02%, a
percentage of price to deposits of 22.26%, a ratio of price to book value of
2.08x and a ratio of price to ABH's earnings for the twelve months ended
December 31, 1995, of 16.71x.
In comparison, assuming the value of Regions' stock at closing is $48.0625
per share (the closing price on June 5, 1996), National Capital determined that
the consideration to be received by the holders of ABH Common Stock in the
Mergers represented a percentage of premium to core deposits of 14.26%, a
percentage of price to deposits of 23.25%, a ratio of price to book value of
2.17x and a ratio of price to ABH's earnings for the twelve months ended
December 31, 1995, of 17.46x.
Dividend Discount Analysis
National Capital performed dividend discount analyses to determine a range
of present values per share of ABH assuming ABH continued to operate as an
independent bank. This range was determined by adding (i) the present value of
the estimated future dividend stream that ABH could generate over the period
beginning January 1995 and ending in December 2004, and (ii) the present value
of the "terminal value" of ABH common stock at the end of the year 2004. The
earnings and dividend used in these estimates were contained in the strategic
plan developed by the Strategic Planning Committee assuming continued
operations as an independent bank. The "terminal value" of ABH's stock was
determined by applying three price-to-earnings multiples (10.0x, 12.0x, and
14.0x). The dividend stream and the terminal values were discounted to present
values using a discount rate of 10%. Applying the above multiples and discount
rate, the stand-alone
18
<PAGE> 23
value of ABH's common stock ranged from $42.85 to $68.07.
No other company or transaction used in the above analyses as a comparison
is identical to ABH. Accordingly, an analysis of the results of the foregoing
is not mathematical; rather, it involves complex considerations and judgments
concerning the differences in financial and operating characteristics of the
companies and other factors that could affect the public trading value of the
companies to which ABH is being compared.
The summary set forth above does not purport to be a complete description
of the analyses performed by National Capital. The preparation of a fairness
opinion necessarily is not susceptible to partial analysis or summary
description. National Capital believes that its analyses and the summary set
forth above must be considered as a whole, and that selecting a portion of its
analyses and factors would create an incomplete view of the process underlying
the analyses set forth in its presentation to ABH's Board of Directors. In
addition, National Capital may have given certain analyses more or less weight
that other analyses, and may have deemed various assumptions more or less
probably than other assumptions, so that the ranges of valuations resulting
from any particular analysis described above should not be taken to be National
Capital's view of the actual value of ABH or the combined companies. The fact
that any specific analysis has been referred to in the summary above is not
meant to indicate that such analysis was given greater weight than any other
analysis.
In performing its analyses, National Capital made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of ABH or Regions. The
analyses performed by National Capital are not necessarily indicative of actual
values or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely
as part of National Capital's analysis of the fairness of the consideration to
be received by the ABH's stockholders in the Merger and were provided to ABH's
Board of Directors in connection with the delivery of National Capital's
opinion. The analyses do not purport to be appraisals or to reflect the prices
at which a company might actually be sold or the prices at which any securities
may trade at the present time or any time in the future. National Capital used
in its analyses various projections of future performance prepared by the
management of ABH. The projections are based on numerous variables and
assumptions which are inherently unpredictable and must be considered not
certain of occurrence as projected. Accordingly, actual results could vary
significantly from those set forth in such projections.
As described above, National Capital's opinion and presentation to ABH's
Board of Directors were among the many factors taken into consideration by the
Board in making its determination to approve the Agreement.
Compensation of National Capital. Pursuant to a letter agreement dated as
of February 20, 1995, ABH engaged National Capital to act as financial advisor
to assist the Board in determining whether a sale of ABH was in the best
interests of ABH and its stockholders. According to the terms of such
engagement letter, ABH has agreed to pay to National Capital a fee of 0.50% of
the transaction value on the date of the consummation of the Merger. Assuming a
transaction value of $18.0 million, such fee would be $90,000.00. In addition
ABH will pay National Capital $6,250 for its fairness opinion and reimburse
National Capital for its reasonable out-of-pocket expenses. ABH has also agreed
to indemnify National Capital, any affiliate of National Capital and each
director, officer, stockholder, partner, employee, agent, or counsel against
certain liabilities. An affiliate of National Capital, American Planning
Corporation, has provided strategic planning services to ABH. The revenues
received from ABH by American Planning Corporation are not significant in
relation to total gross revenues. Neither National Capital nor American
Planning Corporation has performed services for Regions and has not received
any fees from Regions.
EFFECTIVE DATE OF THE MERGER
19
<PAGE> 24
Subject to the conditions to the obligations of the parties to effect the
Merger, the Effective Date will occur on the date and at the time that the
Delaware Certificate of Merger and the Louisiana Certificate of Merger relating
to the Merger are filed and declared effective with, respectively, the Delaware
Secretary of State and the Louisiana Secretary of State. Unless otherwise
agreed upon by Regions and ABH, and subject to the conditions to the
obligations of the parties to effect the Merger, the parties will use their
reasonable efforts to cause the Effective Date to occur on the last business
day of the month in which the last of the following events occur: (i) the
effective date (including the expiration of any applicable waiting period) of
the last federal or state regulatory approval required for the Merger and (ii)
the date on which the Agreement is approved by the requisite vote of ABH
stockholders; or such later date within 30 days thereof as specified by
Regions.
No assurance can be provided that the necessary stockholder and regulatory
approvals can be obtained or that other conditions precedent to the Merger can
or will be satisfied. Regions and ABH anticipate that all conditions to
consummation of the Merger will be satisfied so that the Merger can be
consummated during the third quarter of 1996. However, delays in the
consummation of the Merger could occur.
The Board of Directors of either Regions or ABH generally may terminate the
Agreement if the Merger is not consummated by October 15, 1996, unless the
failure to consummate by that date is the result of a breach of the Agreement
by the party seeking termination. See "--Conditions to Consummation of the
Merger" and "--Waiver, Amendment, and Termination of the Agreement."
DISTRIBUTION OF REGIONS STOCK CERTIFICATES AND PAYMENT FOR FRACTIONAL SHARES
Promptly after the Effective Date, Regions will cause an exchange agent
selected by Regions to mail to the former stockholders of ABH a form letter of
transmittal, together with instructions for the exchange of such stockholders'
certificates representing shares of ABH Common Stock for certificates
representing shares of Regions Common Stock.
ABH STOCKHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY RECEIVE
THE FORM LETTER OF TRANSMITTAL AND INSTRUCTIONS. Upon surrender to the Exchange
Agent of certificates for ABH Common Stock, together with a properly completed
letter of transmittal, there will be issued and mailed to each holder of ABH
Common Stock surrendering such items a certificate or certificates representing
the number of shares of Regions Common Stock to which such holder is entitled,
if any, and a check for the amount to be paid in lieu of any fractional share
interest, without interest. After the Effective Date, to the extent permitted
by law, ABH stockholders of record as of the Effective Date will be entitled to
vote at any meeting of holders of Regions Common Stock the number of whole
shares of Regions Common Stock into which their ABH Common Stock has been
converted, regardless of whether such stockholders have surrendered their ABH
Common Stock certificates. No dividend or other distribution payable after the
Effective Date with respect to Regions Common Stock, however, will be paid to
the holder of any unsurrendered ABH certificate until the holder duly
surrenders such certificate. Upon such surrender, all undelivered dividends and
other distributions and, if applicable, a check for the amount to be paid in
lieu of any fractional share interest will be delivered to such stockholder, in
each case without interest.
After the Effective Date, there will be no transfers of shares of ABH
Common Stock on ABH's stock transfer books. If certificates representing shares
of ABH Common Stock are presented for transfer after the Effective Date, they
will be canceled and exchanged for the shares of Regions Common Stock and a
check for the amount due in lieu of fractional shares, if any, deliverable in
respect thereof.
CONDITIONS TO CONSUMMATION OF THE MERGER
Consummation of the Merger is subject to a number of conditions, including,
but not limited to:
(a) approval of the Merger from the Federal Reserve and the Louisiana
Commissioner without any
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conditions or restrictions that would, in the reasonable judgment of Regions'
Board of Directors, so materially adversely impact the economic benefits of the
transactions contemplated by the Agreement as to render inadvisable the
consummation of the Merger, and the expiration of all applicable waiting
periods;
(b) the approval of the Agreement by the holders of the requisite number of
the shares of ABH Common Stock;
(c) the absence of any action by any court or governmental authority
restraining or prohibiting the Merger;
(d) the receipt of a reasonably satisfactory opinion of counsel that the
Merger qualifies for federal income tax treatment as a reorganization under
Section 368(a) of the Code and that the exchange of ABH Common Stock for
Regions Common Stock will not give rise to recognition of gain or loss to ABH
stockholders with respect to such exchange, except to the extent of any cash
received; and
(e) notification for listing on the Nasdaq National Market of the shares of
Regions Common Stock to be issued in the Merger.
Consummation of the Merger also is subject to the satisfaction or waiver of
various other conditions specified in the Agreement, including, among others,
the delivery by Regions and ABH of opinions of their respective counsel and
certificates executed by their respective Chief Executive Officers and Chief
Financial Officers as to compliance with the Agreement, and, as of the
Effective Date, the accuracy of certain representations and warranties and the
compliance in all material respects with the agreements and covenants of each
party.
REGULATORY APPROVALS
The Merger may not proceed in the absence of receipt of the requisite
regulatory approvals. There can be no assurance that such regulatory approvals
will be obtained or as to the timing of such approvals. There also can be no
assurance that such approvals will not be accompanied by a conditional
requirement which causes such approvals to fail to satisfy the conditions set
forth in the Agreement. Applications for the approvals described below have
been submitted to the appropriate regulatory agencies.
Regions and ABH are not aware of any material governmental approvals or
actions that are required for consummation of the Merger, except as described
below. Should any other approval or action be required, it presently is
contemplated that such approval or action would be sought.
The Merger requires the prior approval of the Federal Reserve. The Federal
Reserve must take into consideration, among other factors, the financial and
managerial resources and future prospects of the institutions and the
convenience and needs of the communities to be served. The relevant statutes
prohibit the Federal Reserve from approving the Merger (i) if it would result
in a monopoly or be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the business of banking in any part of the
United States or (ii) if its effect in any section of the country may be to
substantially lessen competition or to tend to create a monopoly, or if it
would be a restraint of trade in any other manner, unless the Federal Reserve
finds that any anticompetitive effects are outweighed clearly by the public
interest and the probable effect of the transaction in meeting the convenience
and needs of the communities to be served. Under the BHC Act, the Merger may
not be consummated until the 30th day following the date of Federal Reserve
approval, which may be shortened by the Federal Reserve to the 15th day, during
which time the United States Department of Justice may challenge the
transaction on antitrust grounds. The commencement of any antitrust action
would stay the effectiveness of the Federal Reserve's approval, unless a court
specifically orders otherwise.
The Merger also is subject to the approval of the Louisiana Commissioner.
In evaluating the Merger, the Louisiana Commissioner will take into account
considerations similar to those applied by the Federal Reserve.
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WAIVER, AMENDMENT, AND TERMINATION OF THE AGREEMENT
Prior to the Effective Date, and to the extent permitted by law, any
provision of the Agreement generally may be (i) waived by the party benefitted
by the provision or (ii) amended by a written agreement between Regions and ABH
approved by their respective Boards of Directors; provided, however, that after
approval by the ABH stockholders, no amendment decreasing the consideration to
be received by ABH stockholders may be made without the further approval of
such stockholders.
The Agreement may be terminated, and the Merger abandoned, at any time
prior to the Effective Date, either before or after approval by ABH
stockholders, under certain circumstances, including:
(a) by the Board of Directors of either party upon final denial of any
required regulatory approval, or by the Board of Directors of Regions if any
required regulatory approval is conditioned or restricted in the manner
described under " -- Conditions to Consummation of the Merger" above;
(b) by the Board of Directors of either party, if the holders of at least
a majority of the ABH Common Stock present in person or by proxy at the Special
Meeting shall not have approved the Agreement;
(c) by mutual agreement of the Boards of Directors of Regions and ABH;
(d) by the Board of Directors of either party, in the event of a breach of
any provision of the Agreement which meets certain standards specified in the
Agreement; or
(e) by the Board of Directors of either party if the Merger shall not have
been consummated by October 15, 1996.
If the Agreement is terminated, the parties will have no further
obligations, except with respect to certain provisions, including those
providing for payment of expenses, certain indemnification provisions, Regions'
indemnification of ABH for Securities Act liability, and restricting disclosure
of confidential information. Further, termination will not relieve the parties
from the consequences of any uncured willful breach of the Agreement giving
rise to such termination.
CONDUCT OF BUSINESS PENDING THE MERGER
Each of ABH and Regions generally has agreed, unless the prior consent of
the other party is obtained, and except as otherwise contemplated by the
Agreement, to operate its business only in the ordinary course, preserve intact
its business organizations and assets, maintain its rights and franchises, and
take no action that would affect, adversely and materially, the ability of
either party to perform its covenants and agreements under the Agreement or to
obtain any consent or approval required for the consummation of the
transactions contemplated by the Agreement. In addition, the Agreement contains
certain other restrictions applicable to the conduct of the business of either
ABH or Regions prior to consummation of the Merger, as described below.
ABH. ABH has agreed not to take certain action relating to the operation
of its business pending consummation of the Merger without the prior approval
of Regions. Those actions generally include, without limitation: (i) amending
the Articles of Incorporation or Bylaws of ABH or any of its subsidiaries; (ii)
becoming responsible for any obligation for borrowed money in excess of an
aggregate of $150,000 (except in the ordinary course of business consistent
with past practices); (iii) acquiring or exchanging any shares of ABH capital
stock or any capital stock of its subsidiaries or paying any dividend or other
distribution in respect of its capital stock, except that ABH may, but shall
not be legally obligated to, declare and pay quarterly cash dividends at a rate
not in excess of $.32 per share; (iv) issuing or selling any additional shares
of any ABH capital stock, any rights to acquire any such stock or the capital
stock of any ABH subsidiary, or any security convertible into such stock; (v)
adjusting, splitting, combining, or reclassifying any of its
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<PAGE> 27
capital stock or issuing or authorizing the issuance of any other securities in
respect of or in substitution for shares of ABH Common Stock or selling,
leasing, mortgaging, or otherwise disposing of or encumbering any shares of
capital stock of any ABH subsidiary or any Asset having a book value of in
excess of $100,000, other than in the ordinary course of business for
reasonable and adequate consideration and other than dispositions of certain
other assets in the ordinary course of business; (vi) making any material
investment in or acquiring control over any other entity; (vii) granting any
increase in compensation or benefits to employees or officers (except as
previously disclosed to Regions or as required by law), paying any bonus
(except as previously disclosed to Regions or in accordance with any existing
program or plan), entering into or amending any severance agreements with
officers (except as previously disclosed to Regions), or granting any increase
in compensation or other benefits to directors (except as previously
disclosed); (viii) entering into or amending any employment contract that it
does not have the unconditional right to terminate or amend, without liability
except for any amendment required by law); (ix) adopting any new employee
benefit plan or program, or materially changing any existing plan or program
(except for any change required by law or advisable to maintain the tax
qualified status of any such plan); (x) making any significant change in any
tax or accounting methods or systems of internal accounting controls (except in
conformity to changes in tax laws or regulatory accounting requirements or
generally accepted accounting principles ("GAAP")); (xi) commencing any
litigation (except in accordance with past practices) or settling any
litigation for money damages in excess of $100,000 or which imposes material
restrictions upon the operations of ABH or any of its subsidiaries; or (xii)
modifying or terminating any material contract.
In addition, ABH has agreed not to solicit, directly or indirectly, any
acquisition proposal from any other person or entity, and not to negotiate with
respect to any such proposal, provide nonpublic information to any party making
such a proposal, or enter into any agreement with respect to any such proposal,
except to the extent necessary, as advised by counsel, to comply with the
fiduciary obligations of its Board of Directors. In addition, ABH has agreed to
use reasonable efforts to cause its advisors and other representatives not to
engage in any of the foregoing activities.
REGIONS. The Agreement prohibits Regions, prior to the earlier of the
Effective Date or the termination of the Agreement, from taking any action that
would materially adversely affect the ability of either party to obtain the
requisite governmental approvals or to perform its covenants and agreements
under the Agreement.
MANAGEMENT FOLLOWING THE MERGER
Consummation of the Merger will not alter the present officers and
directors of Regions. Information concerning the management of Regions is
included in the documents incorporated herein by reference. See "Documents
Incorporated by Reference."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The Agreement provides that Regions, with certain exceptions, will
indemnify the present and former directors, officers, employees, and agents of
ABH or any of its subsidiaries to the full extent permitted under Louisiana law
and by the Articles of Incorporation or Bylaws of ABH or its subsidiaries, as
the case may be, as in effect on the date of the Agreement. Regions'
obligations to provide such indemnification will not apply in the case of any
claim against an indemnified party who knew of the existence of the claim and
did not make a good faith effort to require ABH to notify its director and
officer liability insurance carrier prior to the Effective Date.
ABH has entered into an agreement with Robert W. Boquet, President and Chief
Executive Officer of ABH, which provides certain benefits to Mr. Boquet in the
event of a "change in control" of ABH. Upon consummation of the Merger, which
would constitute a change in control for purposes of this agreement, Mr. Boquet
will be entitled to a one-time cash bonus of $65,000 if he remains an employee
of ABH through the Effective Date. In addition, Mr. Boquet would be entitled to
continuation of his annual base salary for up to three years following the
Effective Date, if, following the Merger, Mr. Boquet's employment is terminated
under certain circumstances.
As of the Record Date, directors and executive officers of ABH owned no
shares of Regions Common Stock.
DISSENTING STOCKHOLDERS
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General. Each ABH stockholder who objects to the Merger shall be entitled
to the rights and remedies of dissenting stockholders provided in Section 131
of the Louisiana Act, a copy of which is included as Appendix B to this Proxy
Statement/Prospectus.
Statutory Requirements. The following is a summary of the steps to be taken
by an ABH stockholder who is interested in perfecting such holder's dissenters'
rights and should be read in conjunction with the full text of Section 131
of the Louisiana Act. Each of the steps enumerated below must be taken in
strict compliance with the applicable provisions of the statute in order for
holders of ABH Common Stock to perfect their dissenters' rights. If the Merger
is approved by 80% or more of the total voting power of ABH, then dissenters'
rights of appraisal, in accordance with the Louisiana Act, will not be
available.
Any written objection, demand, or notice required by the Louisiana Act in
connection with the exercise of dissenters' rights should be sent to ABH at 801
Barrow Street, Houma, Louisiana, 70360, Attention: Russel J. Brien, Corporate
Secretary. It is recommended that all required documents to be delivered by
mail be sent by registered or certified mail with return receipt requested.
Any holder of ABH Common Stock who disapproves of or objects to the
proposed Merger and who wishes to receive in cash the "fair value" of such
shares (determined as of the day before the Agreement is approved) may elect to
do so by taking all of the following steps:
(a) Such stockholder must file with ABH, prior to or at the Special
Meeting, a written objection to the proposed Merger.
(b) Such stockholder must also vote such holder's shares of ABH Common
Stock against the Merger. If the Merger is approved by the required vote, but
by less than 80% of the total voting power, and the Merger authorized thereby
is effected, Regions Bank promptly thereafter shall give written notice
thereof, by registered mail, to each stockholder who both filed such written
objection to, and voted such holder's shares against, the Merger, at such
stockholder's last address on ABH's records.
(c) Each such stockholder, within 20 days after the mailing of such notice
to such holder, but not thereafter, must file with Regions Bank a demand in
writing for the fair cash value of such holder's shares of ABH Common Stock as
of the day before such vote was taken, and such holder must state in such
demand the value demanded and a post office address to which the reply of
Regions Bank may be sent.
(d) At the same time, such stockholder must deposit in escrow in a
chartered bank or trust company located in Terrebonne Parish the certificates
representing such holder's shares of ABH Common Stock, duly endorsed and
transferred to Regions Bank upon the sole condition that such certificates
shall be delivered to Regions Bank upon payment of the value of the shares
determined in accordance with the provisions of Section 131 of the Louisiana
Act.
(e) With the demand, the stockholder must deliver to Regions Bank the
written acknowledgment of such bank or trust company that it so holds such
holder's certificates of ABH Common Stock.
Unless the objection, demand, and acknowledgment are made and delivered by
the stockholder within the required time period, such holder conclusively shall
be presumed to have acquiesced in the Merger. If Regions Bank does not agree to
the value so stated and demanded, or does not agree that a payment is due,
within 20 days after receipt of such demand and acknowledgment, it shall notify
the stockholder in writing, at the designated post office address, of its
disagreement and shall state in such notice the value it will agree to pay if
any payment should be held to be due; otherwise it shall be liable for, and
shall pay to the dissatisfied stockholder, the value demanded.
In case of disagreement as to such fair cash value, or as to whether any
payment is due, after compliance by the parties with the provisions described
above, the dissatisfied stockholder, within 60 days after receipt
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of notice in writing of Regions Bank's disagreement, but not thereafter, may
file suit against Regions Bank, in the district court of Terrebonne Parish
praying the court to fix and decree the fair cash value of the dissatisfied
stockholder's shares of ABH Common Stock as of the day before the vote on the
Agreement was taken, and the court, on such evidence as may be adduced in
relation thereto, shall determine whether any payment is due and, if so, such
cash value and render judgment accordingly. Any stockholder entitled to file
such suit, within such 60-day period, but not thereafter, may intervene as a
plaintiff in such suit filed by another stockholder and recover therein
judgment against Regions Bank for the fair cash value of such holder's shares
of ABH Common Stock. Failure of the stockholder to bring suit, or to intervene
in such a suit, within 60 days after receipt of notice of disagreement by
Regions Bank conclusively shall bind the stockholder (i) by Regions Bank's
statement that no payment is due or (ii) if Regions Bank does not contend that
no payment is due, to accept the value of such holder's shares of ABH Common
Stock as fixed by Regions Bank in its notice of disagreement.
Any stockholder who fails to take each of the required actions outlined
above in a timely manner will not be entitled to exercise the rights of a
dissenting stockholder.
A stockholder, upon filing a demand for the value of such holder's shares,
shall cease to have any of the rights of a stockholder, except the rights
accorded by Section 131 of the Louisiana Act. Such a demand may be withdrawn by
the stockholder at any time before Regions Bank gives notice of disagreement,
as provided by the Louisiana Act. After such notice of disagreement is given,
withdrawal of the demand shall require the consent of Regions Bank. If a demand
is withdrawn, or the Merger is rescinded, or a court shall determine that the
stockholder is not entitled to receive payment for such holder's shares of ABH
Common Stock, or the stockholder shall otherwise lose such holder's dissenters'
rights, such holder shall not have the right to receive a cash payment for such
holder's shares of Regions Bank Common Stock, such holder's share certificates
shall be returned (and, on such holder's request, new certificates shall be
issued in exchange for the old ones endorsed to Regions Bank), and such holder
shall be reinstated to all rights as a stockholder as of the filing of such
holder's demand for value, including any intervening preemptive rights, and the
right to payment of any intervening dividend or other distribution, or if any
such rights have expired or any such dividend or distribution other than in
cash has been completed, in lieu thereof, at the election of Regions Bank, the
fair value thereof in cash as determined by the Regions Board, but without
prejudice otherwise to any corporate proceedings that may have been taken in
the interim.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
THE FOLLOWING IS A SUMMARY OF CERTAIN ANTICIPATED FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER. THIS SUMMARY IS BASED ON THE FEDERAL INCOME TAX
LAWS NOW IN EFFECT AND AS CURRENTLY INTERPRETED; IT DOES NOT TAKE INTO ACCOUNT
POSSIBLE CHANGES IN SUCH LAWS OR INTERPRETATIONS, INCLUDING AMENDMENTS TO
APPLICABLE STATUTES OR REGULATIONS OR CHANGES IN JUDICIAL OR ADMINISTRATIVE
RULINGS, SOME OF WHICH MAY HAVE RETROACTIVE EFFECT. THIS SUMMARY DOES NOT
PURPORT TO ADDRESS ALL ASPECTS OF THE POSSIBLE FEDERAL INCOME TAX CONSEQUENCES
OF THE MERGER AND IS NOT INTENDED AS TAX ADVICE TO ANY PERSON. IN PARTICULAR,
AND WITHOUT LIMITING THE FOREGOING, THIS SUMMARY DOES NOT ADDRESS THE FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER TO STOCKHOLDERS IN LIGHT OF THEIR
PARTICULAR CIRCUMSTANCES OR STATUS (FOR EXAMPLE, AS FOREIGN PERSONS, TAX-EXEMPT
ENTITIES, DEALERS IN SECURITIES, INSURANCE COMPANIES, AND CORPORATIONS, AMONG
OTHERS). NOR DOES THIS SUMMARY ADDRESS ANY CONSEQUENCES OF THE MERGER UNDER ANY
STATE, LOCAL, ESTATE, OR FOREIGN TAX LAWS. STOCKHOLDERS, THEREFORE, ARE URGED
TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM
OF THE MERGER, INCLUDING TAX RETURN REPORTING REQUIREMENTS, THE APPLICATION AND
EFFECT OF FEDERAL, FOREIGN, STATE, LOCAL, AND OTHER TAX LAWS, AND THE
IMPLICATIONS OF ANY PROPOSED CHANGES IN THE TAX LAWS.
A federal income tax ruling with respect to this transaction was not
requested from the Internal Revenue Service. Instead, Alston & Bird, special
counsel to Regions, has rendered an opinion to Regions and ABH concerning
certain federal income tax consequences of the proposed Merger under federal
income tax law. It is such firm's opinion that:
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(a) Provided the Merger qualifies as a statutory merger under applicable
law, the Merger will be a reorganization within the meaning of Section 368(a).
ABH and Regions will each be "a party to a reorganization" within the meaning of
Section 368(b).
(b) The stockholders of ABH will recognize no gain or loss upon the exchange
of their ABH Common Stock solely for shares of Regions Common Stock.
(c) The basis of the Regions Common Stock received by the ABH stockholders
in the proposed transaction will, in each instance, be the same as the basis of
the ABH Common Stock surrendered in exchange therefor.
(d) The holding period of the Regions Common Stock received by the ABH
stockholders will, in each instance, include the period during which the ABH
Common Stock surrendered in exchange therefor was held, provided that the ABH
Common Stock was held as a capital asset on the date of the exchange.
(e) The payment of cash to ABH stockholders in lieu of fractional share
interests of Regions Common Stock will be treated for federal income tax
purposes as if the fractional shares were distributed as part of the exchange
and then were redeemed by Regions. These cash payments will be treated as having
been received as distributions in full payment in exchange for the shares
redeemed. Generally, any gain or loss recognized upon such exchange will be
capital gain or loss, provided the fractional share would constitute a capital
asset in the hands of the exchanging stockholder.
(f) Where solely cash is received by any ABH stockholder in exchange for
his ABH Common Stock pursuant to the exercise of dissenters' rights of
appraisal, such cash will be treated as having been received in redemption of
his ABH Common Stock, subject to the provisions and limitations of Section 302.
THE TAX OPINION DOES NOT ADDRESS ANY STATE, LOCAL, OR OTHER TAX
CONSEQUENCES OF THE MERGER. ABH STOCKHOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED TRANSACTION TO
THEM INDIVIDUALLY, INCLUDING TAX CONSEQUENCES UNDER STATE OR LOCAL LAW.
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for as a "purchase," as
that term is used pursuant to GAAP, for accounting and financial reporting
purposes. Under the purchase method of accounting, the assets and liabilities
of ABH as of the Effective Date will be recorded at their estimated respective
fair values and added to those of Regions. Financial statements of Regions
issued after the Effective Date will reflect such values and will not be
restated retroactively to reflect the historical financial position or results
of operations of ABH.
EXPENSES AND FEES
The Agreement provides, in general, that each of the parties will bear and
pay its own expenses in connection with the transactions contemplated by the
Agreement, including fees and expenses of its own financial or other
consultants, investment bankers, accountants, and counsel, except that Regions
will bear and pay the filing fees and printing costs in connection with this
Proxy Statement/Prospectus.
RESALES OF THE REGIONS COMMON STOCK
The Regions Common Stock to be issued to ABH stockholders in the Merger has
been registered under the Securities Act, but that registration does not cover
resales of those shares by persons who control, are controlled by, or are under
common control with, ABH (such persons are referred to hereinafter as
"affiliates" and generally include executive officers, directors, and 10%
stockholders) at the time of the Special Meeting. Affiliates may not sell
shares of Regions Common Stock acquired in connection with the Merger, except
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pursuant to an effective registration statement under the Securities Act or in
compliance with SEC Rule 145 or another applicable exemption from the
Securities Act registration requirements.
Each person who ABH reasonably believes will be an affiliate of ABH has
delivered to Regions a written agreement providing that such person generally
will not sell, pledge, transfer, or otherwise dispose of any Regions Common
Stock to be received by such person upon consummation of the Merger, except in
compliance with the Securities Act and the rules and regulations of the SEC
promulgated thereunder.
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EFFECT OF THE MERGER ON RIGHTS OF STOCKHOLDERS
As a result of the Merger, holders of ABH Common Stock will be exchanging
their shares of a Louisiana corporation governed by the Louisiana Act and ABH's
Articles of Incorporation, as amended (the "Articles"), and Bylaws, for shares
of Regions, a Delaware corporation governed by the Delaware GCL and Regions'
Certificate of Incorporation (the "Certificate") and Bylaws. Certain
significant differences exist between the rights of ABH stockholders and those
of Regions stockholders. The differences deemed material by Regions are
summarized below. In particular, Regions' Certificate and Bylaws contain
several provisions that may be deemed to have an antitakeover effect in that
they could impede or prevent an acquisition of Regions unless the potential
acquirer has obtained the approval of Regions' Board of Directors. The
following discussion is necessarily general; it is not intended to be a
complete statement of all differences affecting the rights of stockholders and
their respective entities, and it is qualified in its entirety by reference to
the Louisiana Act and the Delaware GCL as well as to Regions' Certificate and
Bylaws and ABH's Articles and Bylaws.
ANTITAKEOVER PROVISIONS GENERALLY
The provisions of Regions' Certificate and Bylaws described below under the
headings, "--Authorized Capital Stock," "--Amendment of Certificate of
Incorporation and Bylaws," "--Classified Board of Directors and Absence of
Cumulative Voting," "--Removal of Directors," "--Limitations on Director
Liability," "--Special Meetings of Stockholders," "-- Actions by Stockholders
Without a Meeting," "--Stockholder Nominations and Proposals," and "--Mergers,
Consolidations, and Sales of Assets Generally," and the provisions of the
Delaware GCL described under the heading "--Business Combinations With Certain
Persons," are referred to herein as the "Protective Provisions." In general,
one purpose of the Protective Provisions is to assist Regions' Board of
Directors in playing a role in connection with attempts to acquire control of
Regions, so that the Board can further and protect the interests of Regions and
its stockholders as appropriate under the circumstances, including, if the
Board determines that a sale of control is in their best interests, by
enhancing the Board's ability to maximize the value to be received by the
stockholders upon such a sale.
Although Regions' management believes the Protective Provisions are,
therefore, beneficial to Regions' stockholders, the Protective Provisions also
may tend to discourage some takeover bids. As a result, Regions' stockholders
may be deprived of opportunities to sell some or all of their shares at prices
that represent a premium over prevailing market prices. On the other hand,
defeating undesirable acquisition offers can be a very expensive and
time-consuming process. To the extent that the Protective Provisions
discourage undesirable proposals, Regions may be able to avoid those
expenditures of time and money.
The Protective Provisions also may discourage open market purchases by a
potential acquirer. Such purchases may increase the market price of Regions
Common Stock temporarily, enabling stockholders to sell their shares at a price
higher than that which otherwise would prevail. In addition, the Protective
Provisions may decrease the market price of Regions Common Stock by making the
stock less attractive to persons who invest in securities in anticipation of
price increases from potential acquisition attempts. The Protective Provisions
also may make it more difficult and time consuming for a potential acquirer to
obtain control of Regions through replacing the Board of Directors and
management. Furthermore, the Protective Provisions may make it more difficult
for Regions' stockholders to replace the Board of Directors or management, even
if a majority of the stockholders believes such replacement is in the best
interests of Regions. As a result, the Protective Provisions may tend to
perpetuate the incumbent Board of Directors and management.
AUTHORIZED CAPITAL STOCK
Regions. The Certificate authorizes the issuance of up to 120,000,000
shares of Regions Common Stock, of which 62,185,402 shares were issued as of
March 31, 1996, none of which were held as treasury shares. Regions' Board of
Directors may authorize the issuance of additional shares of Regions Common
Stock without further action by Regions' stockholders, unless such action is
required in a particular case by
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applicable laws or regulations or by any stock exchange upon which Regions'
capital stock may be listed. The Certificate does not provide preemptive rights
to Regions stockholders.
The authority to issue additional shares of Regions Common Stock provides
Regions with the flexibility necessary to meet its future needs without the
delay resulting from seeking stockholder approval. The authorized but unissued
shares of Regions Common Stock will be issuable from time to time for any
corporate purpose, including, without limitation, stock splits, stock
dividends, employee benefit and compensation plans, acquisitions, and public or
private sales for cash as a means of raising capital. Such shares could be used
to dilute the stock ownership of persons seeking to obtain control of Regions.
In addition, the sale of a substantial number of shares of Regions Common Stock
to persons who have an understanding with Regions concerning the voting of such
shares, or the distribution or declaration of a dividend of shares of Regions
Common Stock (or the right to receive Regions Common Stock) to Regions
stockholders, may have the effect of discouraging or increasing the cost of
unsolicited attempts to acquire control of Regions.
ABH. ABH's authorized capital stock consists of 1,000,000 shares of ABH
Common Stock, of which 229,564 shares were issued and outstanding as of the
Record Date, and 2,000,000 shares of ABH Preferred Stock, none of which are
issued or outstanding.
Pursuant to the Louisiana Act, ABH's Board of Directors may authorize the
issuance of additional shares of ABH Common Stock or ABH Preferred Stock
without further action by ABH's stockholders. ABH's Articles, as amended,
provide the stockholders of ABH with preemptive rights to purchase or subscribe
to any unissued authorized shares of ABH Common Stock.
AMENDMENT OF CERTIFICATE OR ARTICLES OF INCORPORATION AND BYLAWS
Regions. The Delaware GCL generally provides that the approval of a
corporation's board of directors and the affirmative vote of a majority of (i)
all shares entitled to vote thereon and (ii) the shares of each class of stock
entitled to vote thereon as a class is required to amend a corporation's
certificate of incorporation, unless the certificate specifies a greater voting
requirement. The Certificate states that its provisions regarding authorized
capital stock, election, classification, and removal of directors, the approval
required for certain business combinations, meetings of stockholders, and
amendment of the Certificate and Bylaws may be amended or repealed only by the
affirmative vote of the holders of at least 75% of the outstanding shares of
Regions Common Stock.
The Certificate also provides that the Board of Directors has the power to
adopt, amend, or repeal the Bylaws. Any action taken by the stockholders with
respect to adopting, amending, or repealing any Bylaws may be taken only upon
the affirmative vote of the holders of at least 75% of the outstanding shares
of Regions Common Stock.
ABH. The Louisiana Act generally provides that a Louisiana corporation's
articles of incorporation may be amended by the affirmative vote of two-thirds
of the voting power present at a meeting, unless the articles of incorporation
provide for a higher or lower voting requirement. ABH's Articles provide that
the affirmative vote of a majority of the voting power present at a meeting is
required to amend the Articles.
The Articles also provide that the Board of Directors has the power to
adopt, amend, or repeal the Bylaws, subject to the right of the shareholders to
amend any Bylaws made by the Board.
CLASSIFIED BOARD OF DIRECTORS AND ABSENCE OF CUMULATIVE VOTING
Regions. The Certificate provides that Regions' Board of Directors is
divided into three classes, with each class to be as nearly equal in number as
possible. The directors in each class serve three-year terms of office.
The effect of Regions' having a classified Board of Directors is that only
approximately one-third of the
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<PAGE> 34
members of the Board are elected each year; consequently, two annual meetings
are effectively required for Regions' stockholders to change a majority of the
members of the Board.
Pursuant to the Certificate, each stockholder generally is entitled to one
vote for each share of Regions stock held and is not entitled to cumulative
voting rights in the election of directors. With cumulative voting, a
stockholder has the right to cast a number of votes equal to the total number
of such holder's shares multiplied by the number of directors to be elected.
The stockholder has the right to cast all of such holder's votes in favor of
one candidate or to distribute such holder's votes in any manner among any
number of candidates. Directors are elected by a plurality of the total votes
cast by all stockholders. With cumulative voting, it may be possible for
minority stockholders to obtain representation on the Board of Directors.
Without cumulative voting, the holders of more than 50% of the shares of
Regions Common Stock generally have the ability to elect 100% of the directors.
As a result, the holders of the remaining Regions Common Stock effectively may
not be able to elect any person to the Board of Directors. The absence of
cumulative voting, therefore, could make it more difficult for a stockholder
who acquires less than a majority of the shares of Regions Common Stock to
obtain representation on Regions' Board of Directors.
ABH. ABH's Articles do not provide for a classified board of directors, and
provide that voting stock does not have cumulative voting rights.
REMOVAL OF DIRECTORS
Regions. Under the Certificate, any director or the entire Board of
Directors may be removed only for cause and only by the affirmative vote of the
holders of at least 75% of Regions' voting stock.
ABH. Pursuant to the Louisiana Act, a director of ABH may be removed with
or without cause at a meeting of stockholders with respect to which notice of
the purpose to remove one or more directors has been given, by the affirmative
vote of the holders of at least a majority of the outstanding shares of ABH
voting stock.
LIMITATIONS ON DIRECTOR LIABILITY
Regions. The Certificate provides that a director of Regions will have no
personal liability to Regions or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability for (i) any breach
of the director's duty of loyalty to the corporation or its stockholders, (ii)
acts or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) the payment of certain unlawful dividends and
the making of certain unlawful stock purchases or redemptions, or (iv) any
transaction from which the director derived an improper personal benefit.
Although this provision does not affect the availability of injunctive or
other equitable relief as a remedy for a breach of duty by a director, it does
limit the remedies available to a stockholder who has a valid claim that a
director acted in violation of such director's duties, if the action is among
those as to which liability is limited. This provision may reduce the
likelihood of stockholder derivative litigation against directors and may
discourage or deter stockholders or management from bringing a lawsuit against
directors for breach of their duties, even though such action, if successful,
might have benefitted Regions and its stockholders. The SEC has taken the
position that similar provisions added to other corporations' certificates of
incorporation would not protect those corporations' directors from liability
for violations of the federal securities laws.
ABH. The Louisiana Act generally permits a corporation's articles of
incorporation to relieve directors and officers of liability for money damages
for good faith conduct. The Articles of ABH do not contain limitations on
director or officer liability.
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<PAGE> 35
INDEMNIFICATION
Regions. The Certificate provides that Regions will indemnify its officers,
directors, employees, and agents to the full extent permitted by the Delaware
GCL. Under Section 145 of the Delaware GCL as currently in effect, other than
in actions brought by or in the right of Regions, such indemnification would
apply if it were determined in the specific case that the proposed indemnitee
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of Regions and, with respect to any criminal
proceeding, if such person had no reasonable cause to believe that the conduct
was unlawful. In actions brought by or in the right of Regions, such
indemnification probably would be limited to reasonable expenses (including
attorneys' fees) and would apply if it were determined in the specific case
that the proposed indemnitee acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of Regions,
except that no indemnification may be made with respect to any matter as to
which such person is adjudged liable to Regions, unless, and only to the extent
that, the court determines upon application that, in view of all the
circumstances of the case, the proposed indemnitee is fairly and reasonably
entitled to indemnification for such expenses as the court deems proper. To the
extent that any director, officer, employee, or agent of Regions has been
successful on the merits or otherwise in defense of any action, suit, or
proceeding, as discussed herein, whether civil, criminal, administrative, or
investigative, such person must be indemnified against reasonable expenses
incurred by such person in connection therewith.
ABH. ABH's Bylaws provide for indemnification of its directors, officers,
employees, and agents in substantially the same manner and with substantially
the same effect as in the case of Regions.
SPECIAL MEETINGS OF STOCKHOLDERS
Regions. Regions' Certificate and Bylaws provide that special meetings of
stockholders may be called at any time, but only by the chief executive
officer, the secretary, or the Board of Directors of Regions. Regions
stockholders do not have the right to call a special meeting or to require that
Regions' Board of Directors call such a meeting. This provision, combined with
other provisions of the Certificate and the restriction on the removal of
directors, would prevent a substantial stockholder from compelling stockholder
consideration of any proposal (such as a proposal for a business combination)
over the opposition of Regions' Board of Directors by calling a special meeting
of stockholders at which such stockholder could replace the entire Board with
nominees who were in favor of such proposal.
ABH. Under the Louisiana Act and the ABH Bylaws, a special meeting of
ABH stockholders may be called by its Board of Directors, the President, or
shareholders holding a majority of the voting power.
ACTIONS BY STOCKHOLDERS WITHOUT A MEETING
Regions. The Certificate provides that any action required or permitted to
be taken by Regions stockholders must be effected at a duly called meeting of
stockholders and may not be effected by any written consent by the
stockholders. These provisions would prevent stockholders from taking action,
including action on a business combination, except at an annual meeting or
special meeting called by the Board of Directors, chief executive officer, or
secretary, even if a majority of the stockholders were in favor of such action.
ABH. Under the Articles any action requiring stockholder approval may be
approved by written consent of stockholders holding sufficient voting power to
determine the matter.
STOCKHOLDER NOMINATIONS
Regions. Regions' Certificate and Bylaws provide that any nomination by
stockholders of individuals for election to the Board of Directors must be made
by delivering written notice of such nomination (the "Nomination Notice") to
the Secretary of Regions not less than 14 days nor more than 50 days before any
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<PAGE> 36
meeting of the stockholders called for the election of directors; provided,
however, that if less than 21 days notice of the meeting is given to
stockholders, the Nomination Notice must be delivered to the Secretary of
Regions not later than the seventh day following the day on which notice of the
meeting was mailed to stockholders. The Nomination Notice must set forth
certain background information about the persons to be nominated, including
information concerning (i) the name, age, business, and, if known, residential
address of each nominee, (ii) the principal occupation or employment of each
such nominee, and (iii) the number of shares of Regions capital stock
beneficially owned by each such nominee. The Board of Directors is not required
to nominate in the annual proxy statement any person so proposed; however,
compliance with this procedure would permit a stockholder to nominate the
individual at the stockholders' meeting, and any stockholder may vote such
holder's shares in person or by proxy for any individual such holder desires.
ABH. ABH's Articles and Bylaws do not provide for advance notice of director
nominations.
BUSINESS COMBINATIONS WITH CERTAIN PERSONS
Regions. Section 203 of the Delaware GCL ("Section 203") places certain
restrictions on "business combinations" (as defined in Section 203 to include,
generally, mergers, sales and leases of assets, issuances of securities, and
similar transactions) by Delaware corporations with an "interested stockholder"
(as defined in Section 203 to include, generally, the beneficial owner of 15%
or more of the corporation's outstanding voting stock). Section 203 generally
applies to Delaware corporations, such as Regions, that have a class of voting
stock listed on a national securities exchange, authorized for quotation on an
interdealer quotation system of a registered national securities association,
or held of record by more than 2,000 stockholders, unless the corporation
expressly elects in its certificate of incorporation or bylaws not to be
governed by Section 203.
Regions has not specifically elected to avoid the application of Section
203. As a result, Section 203 generally would prohibit a business combination
by Regions or a subsidiary with an interested stockholder within three years
after the person or entity becomes an interested stockholder, unless (i) prior
to the time when the person or entity becomes an interested stockholder,
Regions' Board of Directors approved either the business combination or the
transaction pursuant to which such person or entity became an interested
stockholder, (ii) upon consummation of the transaction in which the person or
entity became an interested stockholder, the interested stockholder held at
least 85% of the outstanding Regions voting stock (excluding shares held by
persons who are both officers and directors and shares held by certain employee
benefit plans), or (iii) once the person or entity becomes an interested
stockholder, the business combination is approved by Regions' Board of
Directors and by the holders of at least two-thirds of the outstanding Regions
voting stock, excluding shares owned by the interested stockholder.
ABH. Section 133 of the Louisiana Act ("Section 133") places similar
restrictions on "business combinations" (as defined in Section 132(4) of the
Louisiana Act, generally including mergers, consolidations, share exchanges,
sales and leases of assets, issuances of securities, and similar transactions)
by Louisiana corporations with an "interested stockholder" (as defined in
Section 132(9) of the Louisiana Act, generally the beneficial owner of 10%
or more of the voting power of the then outstanding voting stock). Section
133 generally applies to business combinations of Louisiana corporations having
greater than 100 beneficial owners of its stock or which did not have an
interested stockholder on January 1, 1985, unless the articles of incorporation
expressly provide otherwise. Section 133 generally does not apply provided the
stockholders receive in the business combination substantially similar
consideration for their shares of stock in the corporation in terms of price
and method of payment, as determined in accordance with Section 134B of the
Louisiana Act, as the interested stockholder received for its shares of stock
in the corporation acquired by such interested stockholder within two years of
such business combination.
As ABH has not specifically elected to avoid the application of Section
133, Section 133 generally would prohibit a business combination by ABH
with an interested stockholder unless the business combination is recommended
by ABH's Board and approved by the affirmative vote of at least each of the
following: (i) 80% of the votes entitled to be cast by outstanding shares of
ABH voting stock voting together as a single voting group and (ii) two-thirds
of the votes entitled to be cast by holders of ABH voting stock, other than
voting stock held by the interested stockholder who is a party to the business
combination with ABH, voting together as a single voting group. As Regions is
not an "interested stockholder" with respect to ABH, Section 133 does not
apply to the Merger.
Under Sections 135 through 140.2 of the Louisiana Act (the "Control Share
Law"), a person who acquires shares in certain Louisiana corporations
(including ABH) and as a result increases such person's voting power in the
corporation to or above any of the three threshold levels (i.e., 20%, 33 1/3%,
and 50%), acquires the voting rights with respect to such shares only to the
extent granted by a majority of the pre-existing, disinterested stockholders of
the corporation. Certain acquisitions of shares are exempted from the
provisions of the Control Share Law, including acquisitions pursuant to a
merger, consolidation, or share exchange agreement to which the issuing public
corporation is a party. Since Regions' acquisition of ABH Common Stock is to
be made pursuant to a merger and ABH and Regions are parties to the Agreement
with respect thereto, the Control Share Law does not apply to the Merger.
MERGERS, CONSOLIDATIONS, AND SALES OF ASSETS GENERALLY
Regions. The Certificate generally requires the affirmative vote of the
holders of at least 75% of the
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<PAGE> 37
outstanding voting stock of Regions to effect (i) any merger or consolidation
with or into any other corporation, or (ii) any sale or lease of any
substantial part of the assets of Regions to any party that beneficially owns
5.0% or more of the outstanding shares of Regions voting stock, unless the
transaction was approved by Regions' Board of Directors before the other party
became a 5.0% beneficial owner or is approved by 75% or more of the Board of
Directors after the party becomes such a 5.0% beneficial owner. In addition,
the Delaware GCL generally requires the approval of a majority of the
outstanding voting stock of Regions to effect (i) any merger or consolidation
with or into any other corporation, (ii) any sale, lease, or exchange of all or
substantially all of Regions property and assets, or (iii) the dissolution of
Regions. However, pursuant to the Delaware GCL, Regions may enter into a merger
transaction without stockholder approval if (i) Regions is the surviving
corporation, (ii) the agreement of merger does not amend in any respect
Regions' Certificate, (iii) each share of Regions stock outstanding immediately
prior to the effective date of the merger is to be an identical outstanding or
treasury share of Regions after the effective date of the merger, and (iv)
either no shares of Regions Common Stock and no shares, securities, or
obligations convertible into such stock are to be issued or delivered under the
plan of merger, or the authorized unissued shares or the treasury shares of
Regions Common Stock to be issued or delivered under the plan of merger plus
those initially issuable upon conversion of any other shares, securities, or
obligations to be issued or delivered under such plan do not exceed 20% of the
shares of Regions Common Stock outstanding immediately prior to the effective
date of the merger.
ABH. The Lousiana Act generally requires the affirmative vote of at least
two-thirds of the voting power present, or by such larger or smaller vote, but
not less than a majority, of the voting power present or of the total voting
power, as the articles of incorporation may prescribe to effect (i) any merger
or consolidation with or into any other corporation, or (ii) any sale or lease
of any substantial part of the assets of the corporation if the corporation is
not insolvent. ABH's Articles provide that such actions may be effected upon
approval by a majority of shares of ABH Common Stock present in person or by
proxy at a meeting of stockholders.
DISSENTERS' RIGHTS OF APPRAISAL
Regions. The rights of appraisal of dissenting stockholders of Regions are
governed by the Delaware GCL. Pursuant thereto, except as described below, any
stockholder has the right to dissent from any merger of which Regions could be
a constituent corporation. No appraisal rights are available, however, for (i)
the shares of any class or series of stock that is either listed on a national
securities exchange, quoted on the Nasdaq National Market, or held of record by
more than 2,000 stockholders or (ii) any shares of stock of the constituent
corporation surviving a merger if the merger did not require the approval of
the surviving corporation's stockholders, unless, in either case, the holders
of such stock are required by an agreement of merger or consolidation to accept
for that stock something other than: (a) shares of stock of the corporation
surviving or resulting from the merger or consolidation; (b) shares of stock of
any other corporation that will be listed at the effective date of the merger
on a national securities exchange, quoted on the Nasdaq National Market, or
held of record by more than 2,000 stockholders; (c) cash in lieu of fractional
shares of stock described in clause (a) or (b) immediately above; or (d) any
combination of the shares of stock and cash in lieu of fractional shares
described in clauses (a) through (c) immediately above. Because Regions Common
Stock is quoted on the Nasdaq National Market and is held of record by more
than 2,000 stockholders, unless the exception described immediately above
applies, holders of Regions Common Stock do not have dissenters' rights of
appraisal.
ABH. The rights of appraisal of dissenting stockholders under Louisiana law
are generally similar to those afforded under the Delaware GCL. See
"Description of the Transaction--Dissenting Stockholders."
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<PAGE> 38
STOCKHOLDERS' RIGHTS TO EXAMINE BOOKS AND RECORDS
Regions. The Delaware GCL provides that a stockholder may inspect books and
records upon written demand under oath stating the purpose of the inspection,
if such purpose is reasonably related to such person's interest as a
stockholder.
ABH. Pursuant to the Louisiana Act, upon written notice of a demand to
inspect corporate records, a stockholder who owns at least 2% of the
outstanding stock (25% in the case of a business competitor) is entitled to
inspect specified corporate records.
DIVIDENDS
Regions. The Delaware GCL provides that, subject to any restrictions in the
corporation's certificate of incorporation, dividends may be declared from the
corporation's surplus, or, if there is no surplus, from its net profits for the
fiscal year in which the dividend is declared and the preceding fiscal year.
Dividends may not be declared, however, if the corporation's capital has been
diminished to an amount less than the aggregate amount of all capital
represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets. Substantially all of the funds
available for the payment of dividends by Regions are derived from its
subsidiary depository institutions. There are various statutory limitations on
the ability of Regions' subsidiary depository institutions to pay dividends to
Regions. See "Certain Regulatory Considerations--Payment of Dividends."
ABH. Pursuant to the Louisiana Act, a board of directors may from time to
time make distributions out of surplus, as defined in the Louisiana Act, to its
stockholders, subject to restrictions in its articles of incorporation, except
(i) when the corporation is insolvent, or (ii) at a time when the corporation's
assets are exceeded by its liabilities, or when the net assets are less than
the aggregate amount payable on liquidation to any shares of ABH common stock
which have preferential rights in the event of liquidation.
COMPARATIVE MARKET PRICES AND DIVIDENDS
Regions Common Stock is quoted on the Nasdaq National Market under the
symbol "RGBK." ABH Common Stock is not traded in any established market. The
following table sets forth, for the indicated periods, the high and low closing
sale prices for Regions Common Stock as reported on the Nasdaq National Market,
the high and low prices for ABH Common Stock and the cash dividends declared
per share of Regions Common Stock and ABH Common Stock for the indicated
periods. The prices indicated for ABH are based on actual transactions in ABH
Common Stock of which ABH management is aware; however, for the indicated
period there has been only a very limited number of transactions and all such
transactions have involved limited numbers of shares of ABH Common Stock in the
indicated periods, and no assurance can be given that the indicated prices
represent the actual market value of the ABH Common Stock.
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<PAGE> 39
<TABLE>
<CAPTION>
REGIONS ABH
PRICE RANGE CASH DIVIDENDS PRICE RANGE CASH DIVIDENDS
----------- DECLARED ----------- DECLARED
HIGH LOW PER SHARE HIGH LOW PER SHARE
---- --- --------- ---- --- ---------
<S> <C> <C> <C> <C> <C> <C>
1994
First Quarter . . . . . . $ 33.50 $ 30.13 $ .30 $22.00 $17.00 $ --
Second Quarter . . . . . . 36.13 30.50 .30 22.00 20.00 --
Third Quarter . . . . . . 36.75 34.63 .30 22.00 22.00 .25
Fourth Quarter . . . . . . 35.00 29.75 .30 22.00 22.00 .35
1995
First Quarter . . . . . . 36.50 31.63 .33 28.00 22.00 --
Second Quarter . . . . . . 37.44 34.50 .33 28.00 25.00 .40
Third Quarter . . . . . . . 41.25 37.00 .33 26.00 25.00 --
Fourth Quarter . . . . . . 44.88 39.63 .33 26.00 26.00 .75
1996
First Quarter . . . . . . 48.00 40.75 .35 30.50 N/A .32
Second Quarter
(through 5/23/96) . . . . 59.00 59.00
</TABLE>
On ________, 1996, the last reported sale price of Regions Common Stock as
reported on the Nasdaq National Market, and the price of ABH Common Stock in
the last known transaction, which occurred in ________, were $________ and
$________, respectively. On February 29, 1996, the last business day prior to
public announcement of the proposed Merger, the last reported sale price of
Regions Common Stock as reported on the Nasdaq National Market, and the last
known price of ABH Common Stock, were $45.88 and $30.50, respectively.
The holders of Regions Common Stock are entitled to receive dividends when
and if declared by the Board of Directors out of funds legally available
therefor. Regions has paid regular quarterly cash dividends since 1971.
Although Regions currently intends to continue to pay quarterly cash dividends
on the Regions Common Stock, there can be no assurance that Regions' dividend
policy will remain unchanged after completion of the Merger. The declaration
and payment of dividends thereafter will depend upon business conditions,
operating results, capital and reserve requirements, and the Board of
Directors' consideration of other relevant factors.
Regions is a legal entity separate and distinct from its subsidiaries and
its revenues depend in significant part on the payment of dividends from its
subsidiary financial institutions, particularly First Alabama Bank. Regions'
subsidiary depository institutions are subject to certain legal restrictions on
the amount of dividends they are permitted to pay. See "Certain Regulatory
Considerations--Payment of Dividends."
BUSINESS OF ABH
ABH is a bank holding company organized under the laws of the state of
Louisiana with its principal executive office located in Houma, Louisiana. ABH
operates principally through the Bank, which is a state-chartered commercial
bank and which provides a range of retail banking services through 6 offices in
Terrebonne Parish. At March 31, 1996, ABH had total consolidated assets of
approximately $89.3 million, total consolidated deposits of approximately $79.3
million, and total consolidated stockholders' equity of approximately $8.8
million. ABH's principal executive office is located at 801 Barrow Street,
Houma, Louisiana, 70360 and its telephone number at such address is (504)
872-1434.
Additional information with respect to ABH and its subsidiaries is included
in documents incorporated by reference in this Proxy Statement/Prospectus.
Copies of such documents, including ABH's Annual Report on
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<PAGE> 40
Form 10-KSB for the fiscal year ended December 31, 1995, the ABH Annual Report
to Stockholders, and ABH's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1996, accompany this Proxy Statement/Prospectus.
VOTING SECURITIES AND PRINCIPAL STOCKHOLDERS OF ABH
The following table sets forth certain information concerning the
beneficial owners of more than 5.0% of ABH Common Stock, as of the Record Date.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS (1)
- -------------- ------------------- -------------------- ----------
Sole Shared Total
------ ------ -------
<S> <C> <C> <C> <C> <C>
Common Stock A. Moore Cook 12,808 1,411 14,219 6.2%
P.O. Box 4173
Houma, LA 70361
Common Stock Conrad J. Lirette 1,159 11,028 12,187 5.3%
P.O. Box 371
Houma, LA 70361
Common Stock Wm. Clifford Smith 466 28,800 29,266 12.7%
P.O. Box 2266
Houma, LA 70361
</TABLE>
BUSINESS OF REGIONS
GENERAL
Regions is a regional bank holding company organized and existing under the
laws of the state of Delaware and headquartered in Birmingham, Alabama, with
approximately 353 banking offices located in Alabama, Florida, Georgia,
Louisiana, and Tennessee as of March 31, 1996. At that date, Regions had total
consolidated assets of approximately $17.5 billion, total consolidated deposits
of approximately $14.2 billion, and total consolidated stockholders' equity of
approximately $1.5 billion. Regions operates banking subsidiaries in Alabama,
Florida, Georgia, Louisiana, and Tennessee and banking-related subsidiaries
engaged in mortgage banking, credit life insurance, and investment brokerage
activities with offices in various Southeastern states. Through its
subsidiaries, Regions offers a broad range of banking and banking-related
services.
The following table presents information about Regions' banking operations
in the states in which its subsidiary depository institutions are located,
based on March 31, 1996 information:
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<PAGE> 41
<TABLE>
<CAPTION>
NUMBER OF TOTAL TOTAL
BANKING OFFICES ASSETS DEPOSITS
--------------- ------ --------
(In thousands)
<S> <C> <C> <C>
Alabama . . . . . . 181 $10,717,943 $8,330,187
Florida . . . . . . 36 1,225,590 1,102,605
Georgia . . . . . . 71 3,569,536 2,995,178
Louisiana . . . . . 41 2,049,759 1,626,968
Tennessee . . . . . 24 485,584 433,493
</TABLE>
Regions was organized under the laws of the state of Delaware and commenced
operations in 1971 under the name First Alabama Bancshares, Inc. On May 2,
1994, the name of First Alabama Bancshares, Inc. was changed to Regions
Financial Corporation. Regions' principal executive offices are located at 417
North 20th Street, Birmingham, Alabama 35203, and its telephone number at such
address is (205) 326-7100.
Regions 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 Regions
might undertake may be material, in terms of assets acquired or liabilities
assumed, to Regions' financial condition. Recent business combinations in the
banking industry have typically involved the payment of a premium over book and
market values. This practice could result in dilution of book value and net
income per share for the acquirer.
Additional information about Regions and its subsidiaries is included in
documents incorporated by reference in this Proxy Statement/Prospectus. See
"Available Information" and "Documents Incorporated by Reference."
RECENT DEVELOPMENTS
Recent Acquisition. Since March 31, 1996, Regions has completed the
acquisition of First Federal Bank of Northwest Georgia, Federal Savings Bank,
located in Cedartown, Georgia, with total assets of approximately $90 million.
The consideration for this acquisition, which was accounted for as a pooling of
interests, consisted of Regions Common Stock having an approximate value on the
date of acquisition of $17.1 million.
Other Pending Acquisitions. As of the date of this Proxy
Statement/Prospectus, Regions has pending three acquisitions in addition to
ABH, certain aspects of which transactions are set forth below:
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<PAGE> 42
<TABLE>
<CAPTION>
CONSIDERATION
---------------------
APPROXIMATE
-------------------- ACCOUNTING
INSTITUTION ASSET SIZE VALUE TYPE TREATMENT
----------- ---------- ----- ---- ---------
(In millions)
<S> <C> <C> <C> <C>
First Gwinnett Bancshares, Inc., located in Regions Purchase
Norcross, Georgia (the "First Gwinnett Acquisition") $ 68 $ 13 Common
Stock
Delta Bank & Trust Company, located in Belle 206 34 Regions Purchase
Chasse, Louisiana (the "Delta Acquisition") Common
Stock
Rockdale Community Bank, located in Conyers, Regions Purchase
Georgia (the "Rockdale Acquisition") 46 13 Common
Stock
-------- -------
Totals $ 320 $ 60
======== =======
</TABLE>
The First Gwinnett Acquisition, the Delta Acquisition, and the Rockdale
Acquisition are referred to in this Proxy Statement/Prospectus as the "Other
Pending Acquisitions." Consummation of the Other Pending Acquisitions is
subject to the approval of certain regulatory agencies, and of the stockholders
of the institutions to be acquired. Moreover, the closing of each transaction
is subject to various contractual conditions precedent. No assurance can be
given that the conditions precedent to consummating the transactions will be
satisfied in a manner that will result in their consummation.
Pro forma information giving effect to the Recent Acquisition described
above and the Other Pending Acquisitions are not considered material in
relation to Regions' financial condition and results of operations.
In connection with the Merger and the Other Pending Acquisitions, Regions
has announced that it may purchase, in the open market, some or all of the
shares of Regions Common Stock to be issued in such transactions. Regions
anticipates that it may purchase in the open market as much as approximately
1.8 million shares of Regions Common Stock. The timing and amount of such
possible purchases will be determined based on the Regions Common Stock price,
capital needs and other factors. As of , 1996, Regions had purchased, in
the open market, approximately shares of Regions Common Stock for an
aggregate purchase price of approximately $ to be issued in the Merger
and the Other Pending Acquisitions.
CERTAIN REGULATORY CONSIDERATIONS
The following discussion sets forth certain of the material elements of the
regulatory framework applicable to banks and bank holding companies and
provides certain specific information related to Regions and ABH. Additional
information is available in Regions' Annual Report on Form 10-K for the fiscal
year ended December 31, 1995. See "Documents Incorporated by Reference."
GENERAL
Regions and ABH are both bank holding companies registered with the Federal
Reserve under the BHC
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Act. As such, Regions and ABH and their non-bank subsidiaries are subject to
the supervision, examination, and reporting requirements of the BHC Act and the
regulations of the Federal Reserve. In addition, as a savings and loan holding
company, Regions is also registered with the OTS and is subject to the
regulation, supervision, examination, and reporting requirements of the OTS.
The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before: (i) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or
control more than 5.0% of the voting shares of the bank; (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all of the
assets of any bank; or (iii) it may merge or consolidate with any other bank
holding company. Similar federal statutes require savings and loan holding
companies and other companies to obtain the prior approval of the OTS before
acquiring direct or indirect ownership or control of a savings association.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business
of banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to consider
the financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy, and consideration of convenience and needs issues includes the
parties' performance under the Community Reinvestment Act of 1977.
The BHC Act, as amended by the interstate banking provisions of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the
"Interstate Banking Act"), which became effective in September 1995, repealed
the prior statutory restrictions on interstate acquisitions of banks by bank
holding companies, such that Regions, and any other bank holding company
located in Alabama may now acquire a bank located in any other state, and any
bank holding company located outside Alabama may lawfully acquire any
Alabama-based bank, regardless of state law to the contrary, in either case
subject to certain deposit-percentage, aging requirements, and other
restrictions. The Interstate Banking Act also generally provides that, after
June 1, 1997, national and state-chartered banks may branch interstate through
acquisitions of banks in other states. By adopting legislation prior to that
date, a state has the ability either to "opt in" and accelerate the date after
which interstate branching is permissible or "opt out" and prohibit interstate
branching altogether. As of the date of this Proxy Statement/Prospectus, none
of the states in which the banking subsidiaries of Regions or ABH are located
has either moved up the date after which interstate branching will be
permissible or "opted out." Assuming no state action prior to June 1, 1997,
Regions would be able to consolidate all of its bank subsidiaries into a single
bank with interstate branches following that date.
The BHC Act generally prohibits Regions and ABH from engaging in activities
other than banking or managing or controlling banks or other permissible
subsidiaries and from acquiring or retaining direct or indirect control of any
company engaged in any activities other than those activities determined by the
Federal Reserve to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. In determining whether a particular
activity is permissible, the Federal Reserve must consider whether the
performance of such an activity reasonably can be expected to produce benefits
to the public, such as greater convenience, increased competition, or gains in
efficiency, that outweigh possible adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of interest, or
unsound banking practices. For example, factoring accounts receivable,
acquiring or servicing loans, leasing personal property, conducting discount
securities brokerage activities, performing certain data processing services,
acting as agent or broker in selling credit life insurance and certain other
types of insurance in connection with credit transactions, and performing
certain insurance underwriting activities all have been determined by the
Federal Reserve to be permissible activities of bank holding companies. The BHC
Act does not place territorial
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limitations on permissible nonbanking activities of bank holding companies.
Despite prior approval, the Federal Reserve has the power to order a bank
holding company or its subsidiaries to terminate any activity or to terminate
its ownership or control of any subsidiary when it has reasonable cause to
believe that continuation of such activity or such ownership or control
constitutes a serious risk to the financial safety, soundness, or stability of
any bank subsidiary of that bank holding company.
Each of the subsidiary depository institutions of Regions and ABH is a
member of the Federal Deposit Insurance Corporation (the "FDIC"), and as such,
its deposits are insured by the FDIC to the extent provided by law. Each such
subsidiary is also subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations, and each is
supervised and examined by one or more state or federal bank regulatory
agencies.
The regulatory agencies having supervisory jurisdiction over the
respective subsidiary institutions of Regions and ABH (the FDIC and the
applicable state authority in the case of state-chartered nonmember banks, the
OTS in the case of federally chartered thrift institutions, the Federal Reserve
in the case of state-chartered member banks, and the Comptroller of the
Currency (the "OCC") in the case of national banks) regularly examine the
operations of such institutions and have authority to approve or disapprove
mergers, consolidations, the establishment of branches, and similar corporate
actions. The federal and state banking regulators also have the power to
prevent the continuance or development of unsafe or unsound banking practices
or other violations of law.
PAYMENT OF DIVIDENDS
Regions and ABH are legal entities separate and distinct from their
banking, thrift, and other subsidiaries. The principal sources of cash flow of
both Regions and ABH, including cash flow to pay dividends to their respective
stockholders, are dividends from their subsidiary depository institutions.
There are statutory and regulatory limitations on the payment of dividends by
these subsidiary depository institutions to Regions and ABH, as well as by
Regions and ABH to their stockholders.
As to the payment of dividends, the Bank and all of Regions'
state-chartered banking subsidiaries are subject to the respective laws and
regulations of the state in which the bank is located, and to the regulations
of the bank's primary federal regulator. Regions' subsidiaries that are thrift
institutions are subject to the OTS' capital distributions regulation, and
those that are national banks are subject to the regulations of the OCC.
If, in the opinion of the federal banking regulatory agency, a depository
institution under its jurisdiction is engaged in or is about to engage in an
unsafe or unsound practice (which, depending on the financial condition of the
depository institution, could include the payment of dividends), such agency
may require, after notice and hearing, that such institution cease and desist
from such practice. The federal banking agencies have indicated that paying
dividends that deplete a depository institution's capital base to an inadequate
level would be an unsafe and unsound banking practice. Under the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), an insured
institution may not pay any dividend if payment would cause it to become
undercapitalized or if it already is undercapitalized. See "--Prompt Corrective
Action." Moreover, the federal agencies have issued policy statements which
provide that bank holding companies and insured banks should generally pay
dividends only out of current operating earnings.
At March 31, 1996, under dividend restrictions imposed under federal and
state laws, the subsidiary depository institutions of Regions and ABH, without
obtaining governmental approvals, could declare aggregate dividends to Regions
and ABH of approximately $205 million and $1.1 million, respectively.
The payment of dividends by Regions and ABH and their subsidiary depository
institutions may also be affected or limited by other factors, such as the
requirement to maintain adequate capital above regulatory guidelines.
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CAPITAL ADEQUACY
Regions, ABH, and their respective subsidiary depository institutions are
required to comply with the capital adequacy standards established by the
Federal Reserve in the case of Regions and ABH and the appropriate federal
banking regulator in the case of each of their subsidiary depository
institutions. There are two basic measures of capital adequacy for bank holding
companies that have been promulgated by the Federal Reserve: a risk-based
measure and a leverage measure. All applicable capital standards must be
satisfied for a bank holding company to be considered in compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items are
assigned to broad risk categories, each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.
The minimum guideline for the ratio (the "Total Capital Ratio") of total
capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8.0%. At least
half of Total Capital must be composed of common equity, undivided profits,
minority interests in the equity accounts of consolidated subsidiaries,
noncumulative perpetual preferred stock, and a limited amount of cumulative
perpetual preferred stock, less goodwill and certain other intangible assets
("Tier 1 Capital"). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves ("Tier 2 Capital").
At March 31, 1996, Regions' consolidated Total Capital Ratio and its Tier 1
Capital Ratio (i.e., the ratio of Tier 1 Capital to risk-weighted assets) were
14.30% and 11.34%, respectively, and ABH's consolidated Total Capital and Tier
1 Capital Ratios were 18.84% and 17.58%, respectively.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets (the "Leverage Ratio"), of 3.0% for bank holding companies
that meet certain specified criteria, including having the highest regulatory
rating. All other bank holding companies generally are required to maintain a
Leverage Ratio of at least 3.0%, plus an additional cushion of 100 to 200 basis
points. Regions' and ABH's respective Leverage Ratios at March 31, 1996, were
7.81% and 9.60%. The guidelines also provide that bank holding companies
experiencing internal growth or making acquisitions will be expected to
maintain strong capital positions substantially above the minimum supervisory
levels without significant reliance on intangible assets. Furthermore, the
Federal Reserve has indicated that it will consider a "tangible Tier 1 Capital
leverage ratio" (deducting all intangibles) and other indicators of capital
strength in evaluating proposals for expansion or new activities.
Each of Regions' and ABH's subsidiary depository institutions is subject to
risk-based and leverage capital requirements adopted by its federal banking
regulator, which are substantially similar to those adopted by the Federal
Reserve. Each of the subsidiary depository institutions was in compliance with
applicable minimum capital requirements as of March 31, 1996. Neither Regions,
ABH, nor any of their subsidiary depository institutions has been advised by
any federal banking agency of any specific minimum capital ratio requirement
applicable to it.
Failure to meet capital guidelines could subject a bank or thrift
institution to a variety of enforcement remedies, including issuance of a
capital directive, the termination of deposit insurance by the FDIC, a
prohibition on the taking of brokered deposits, and to certain other
restrictions on its business. As described below, substantial additional
restrictions can be imposed upon FDIC-insured depository institutions that fail
to meet applicable capital requirements. See "--Prompt Corrective Action."
The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve, the OCC, and the FDIC have,
pursuant to FDICIA, proposed an amendment to the risk-based capital standards
that would calculate
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the change in an institution's net economic value attributable to increases and
decreases in market interest rates and would require banks with excessive
interest rate risk exposure to hold additional amounts of capital against such
exposures. The OTS has already included an interest-rate risk component in its
risk-based capital guidelines for savings associations that it regulates.
SUPPORT OF SUBSIDIARY INSTITUTIONS
Under Federal Reserve policy, Regions and ABH are expected to act as
sources of financial strength for, and to commit resources to support, each of
their respective banking subsidiaries. This support may be required at times
when, absent such Federal Reserve policy, Regions or ABH may not be inclined to
provide it. In addition, any capital loans by a bank holding company to any of
its banking subsidiaries are subordinate in right of payment to deposits and to
certain other indebtedness of such banks. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal
bank regulatory agency to maintain the capital of a banking subsidiary will be
assumed by the bankruptcy trustee and entitled to a priority of payment.
Under the Federal Deposit Insurance Act ("FDIA"), a depository institution
insured by the FDIC can be held liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989, in connection with
(i) the default of a commonly controlled FDIC-insured depository institution or
(ii) any assistance provided by the FDIC to any commonly controlled
FDIC-insured depository institution "in danger of default." "Default" is
defined generally as the appointment of a conservator or receiver, and "in
danger of default" is defined generally as the existence of certain conditions
indicating that a default is likely to occur in the absence of regulatory
assistance. The FDIC's claim for damages is superior to claims of stockholders
of the insured depository institution or its holding company, but is
subordinate to claims of depositors, secured creditors, and holders of
subordinated debt (other than affiliates) of the commonly controlled insured
depository institution. The subsidiary depository institutions of Regions are
subject to these cross-guarantee provisions. As a result, any loss suffered by
the FDIC in respect of any of these subsidiaries would likely result in
assertion of the cross-guarantee provisions, the assessment of such estimated
losses against the depository institution's banking or thrift affiliates, and a
potential loss of Regions' respective investments in such other subsidiary
depository institutions.
PROMPT CORRECTIVE ACTION
FDICIA establishes a system of prompt corrective action to resolve the
problems of undercapitalized institutions. Under this system, which became
effective in December 1992, the federal banking regulators are required to
establish five capital categories ("well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized," and
"critically undercapitalized") and to take certain mandatory supervisory
actions, and are authorized to take other discretionary actions, with respect
to institutions in the three undercapitalized categories, the severity of which
will depend upon the capital category in which the institution is placed.
Generally, subject to a narrow exception, FDICIA requires the banking regulator
to appoint a receiver or conservator for an institution that is critically
undercapitalized. The federal banking agencies have specified by regulation the
relevant capital level for each category.
Under the final agency rules implementing the prompt corrective action
provisions, an institution that (i) has a Total Capital Ratio of 10% or
greater, a Tier 1 Capital Ratio of 6.0% or greater, and a Leverage Ratio of
5.0% or greater and (ii) is not subject to any written agreement, order,
capital directive, or prompt corrective action directive issued by the
appropriate federal banking agency is deemed to be "well capitalized." An
institution with a Total Capital Ratio of 8.0% or greater, a Tier 1 Capital
Ratio of 4.0% or greater, and a Leverage Ratio of 4.0% or greater is considered
to be "adequately capitalized." A depository institution that has a Total
Capital Ratio of less than 8.0%, a Tier 1 Capital Ratio of less than 4.0%, or a
Leverage Ratio of less than 4.0% is considered to be "undercapitalized." A
depository institution that has a Total Capital Ratio of less than 6.0%, a Tier
1 Capital Ratio of less than 3.0%, or a Leverage Ratio of less than 3.0% is
considered to be "significantly undercapitalized," and an institution that has
a tangible equity capital to assets
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ratio equal to or less than 2.0% is deemed to be "critically undercapitalized."
For purposes of the regulation, the term "tangible equity" includes core
capital elements counted as Tier 1 Capital for purposes of the risk-based
capital standards plus the amount of outstanding cumulative perpetual preferred
stock (including related surplus), minus all intangible assets with certain
exceptions. A depository institution may be deemed to be in a capitalization
category that is lower than is indicated by its actual capital position if it
receives an unsatisfactory examination rating.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary
depository institution meet its capital restoration plan, subject to certain
limitations. The obligation of a controlling bank holding company under FDICIA
to fund a capital restoration plan is limited to the lesser of 5.0% of an
undercapitalized subsidiary's assets or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also generally
prohibited from increasing its average total assets, making acquisitions,
establishing any branches, or engaging in any new line of business, except in
accordance with an accepted capital restoration plan or with the approval of
the FDIC. In addition, the appropriate federal banking agency is given
authority with respect to any undercapitalized depository institution to take
any of the actions it is required to or may take with respect to a
significantly undercapitalized institution as described below if it determines
"that those actions are necessary to carry out the purpose" of FDICIA.
For those institutions that are significantly undercapitalized or
undercapitalized and either fail to submit an acceptable capital restoration
plan or fail to implement an approved capital restoration plan, the appropriate
federal banking agency must require the institution to take one or more of the
following actions: (i) sell enough shares, including voting shares, to become
adequately capitalized; (ii) merge with (or be sold to) another institution (or
holding company), but only if grounds exist for appointing a conservator or
receiver; (iii) restrict certain transactions with banking affiliates as if the
"sister bank" exception to the requirements of Section 23A of the Federal
Reserve Act did not exist; (iv) otherwise restrict transactions with bank or
nonbank affiliates; (v) restrict interest rates that the institution pays on
deposits to "prevailing rates" in the institution's "region"; (vi) restrict
asset growth or reduce total assets; (vii) alter, reduce, or terminate
activities; (viii) hold a new election of directors; (ix) dismiss any director
or senior executive officer who held office for more than 180 days immediately
before the institution became undercapitalized, provided that in requiring
dismissal of a director or senior officer, the agency must comply with certain
procedural requirements, including the opportunity for an appeal in which the
director or officer will have the burden of proving his or her value to the
institution; (x) employ "qualified" senior executive officers; (xi) cease
accepting deposits from correspondent depository institutions; (xii) divest
certain nondepository affiliates which pose a danger to the institution; or
(xiii) be divested by a parent holding company. In addition, without the prior
approval of the appropriate federal banking agency, a significantly
undercapitalized institution may not pay any bonus to any senior executive
officer or increase the rate of compensation for such an officer without
regulatory approval.
At March 31, 1996, all of the subsidiary depository institutions of Regions
and ABH had the requisite capital levels to qualify as well capitalized.
FDIC INSURANCE ASSESSMENTS
Pursuant to FDICIA, the FDIC adopted a new risk-based assessment system for
insured depository institutions that takes into account the risks attributable
to different categories and concentrations of assets and liabilities. The new
system, which went into effect on January 1, 1994, and replaced a transitional
system that the FDIC had utilized for the 1993 calendar year, assigns an
institution to one of three capital categories: (i) well capitalized; (ii)
adequately capitalized; and (iii) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of
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three supervisory subgroups within each capital group. The supervisory subgroup
to which an institution is assigned is based on a supervisory evaluation
provided to the FDIC by the institution's primary federal regulator and
information which the FDIC determines to be relevant to the institution's
financial condition and the risk posed to the deposit insurance funds (which
may include, if applicable, information provided by the institution's state
supervisor). An institution's insurance assessment rate is then determined
based on the capital category and supervisory category to which it is assigned.
Under the final risk-based assessment system, as well as the prior transitional
system, there are nine assessment risk classifications (i.e., combinations of
capital groups and supervisory subgroups) to which different assessment rates
are applied. Assessment rates for members of both the Bank Insurance Fund
("BIF") and the Savings Association Insurance Fund ("SAIF") for the first half
of 1995, as they had been during 1994, ranged from 23 basis points (0.23% of
deposits) for an institution in the highest category (i.e., "well capitalized"
and "healthy") to 31 basis points (0.31% of deposits) for an institution in the
lowest category (i.e., "undercapitalized" and "substantial supervisory
concern"). These rates were established for both funds to achieve a designated
ratio of reserves to insured deposits (i.e., 1.25%) within a specified period
of time.
Once the designated ratio for the BIF was reached in May 1995, the FDIC was
authorized to reduce the minimum assessment rate below the 23 basis points and
to set future assessment rates at such levels that would maintain the fund's
reserve ratio at the designated level. In August 1995, the FDIC adopted final
regulations reducing the assessment rates for BIF-member banks. Under the
revised schedule, BIF-member banks, starting with the second half of 1995, will
pay assessments ranging from 4.0 basis points to 31 basis points, with an
average assessment rate of 4.5 basis points. Refunds with interest were paid
for assessments for the month(s) after the month in which the designated
reserve ratio for the BIF was reached. Subsequently, on November 14, 1995, the
FDIC announced that, beginning in 1996, it would further reduce the deposit
insurance premiums for 92% of all BIF members that are in the highest capital
and supervisory categories to $2,000 per year, regardless of deposit size. At
the same time, the FDIC elected to retain the existing assessment rate range of
23 to 31 basis points for SAIF members for the foreseeable future given the
undercapitalized nature of that insurance fund.
By virtue of the BIF assessments being reduced, Regions' subsidiary banks
realized savings of approximately $7.9 million pre-tax, during the second half
of 1995, and anticipate annual savings of approximately $16.3 million pre-tax,
with respect to their deposits that are assessed at BIF rates. However, given
that approximately 28% of the total deposits of the Regions subsidiary banks as
of December 31, 1995 were (and are now being) assessed at the much higher SAIF
premium rates, Regions' subsidiary banks are now paying substantially more in
insurance premium costs than they would be if they did not hold any
SAIF-assessed deposits.
Recognizing that the disparity between the SAIF and BIF premium rates have
adverse consequences for SAIF-insured institutions and other banks with SAIF
assessed deposits, including reduced earnings and an impaired ability to raise
funds in capital markets and to attract deposits, on July 28, 1995, the FDIC,
the Treasury Department, and the OTS released statements outlining a proposed
plan (the "Proposed Plan") to recapitalize the SAIF, certain features of which
were subsequently approved by the Banking Committees of the House of
Representatives and the Senate of the United States in bills that provided for
different resolutions of the BIF-SAIF disparity. Under the Proposed Plan, as
approved by the members of the Banking Committees of the House and Senate, all
SAIF-member institutions were to pay a special assessment to recapitalize the
SAIF, and the assessment base for the payments on the FICO bonds would have
been expanded to include the deposits of both BIF- and SAIF-insured
institutions. As a result of the SAIF becoming fully capitalized, it was
anticipated that insurance premium rates for SAIF members shortly thereafter
would have been reduced to the same levels as those currently paid by BIF
members.
The amount of the special assessment required to recapitalize the SAIF was
estimated to be approximately 78 to 85 basis points. Under the latest version
of the Proposed Plan, banks that had acquired SAIF-insured deposits would have
paid a special assessment of approximately 64 basis points - 20% less than
SAIF-member institutions. The special assessment would have been payable some
time in 1996 based on deposits held on
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March 31, 1995. If the applicable 85 and 64 point assessments had been assessed
against the Subsidiary Banks' deposits as of March 31, 1995, the Subsidiary
Banks would have been required to pay an aggregate special assessment of $26.0
million pre-tax. However, the special assessments paid by the Subsidiary Banks
would have been at least partially offset by a reduction in insurance premiums
paid if, as expected, the FDIC were to have reduced SAIF premiums to BIF levels
following payment of the special assessment and recapitalization of the SAIF.
Congress adopted the Proposed Plan as part of a budget bill. However, in
December 1995, the President vetoed the balanced budget legislation passed by
Congress which included the proposed provisions of the Proposed Plan. With no
prospect of a budget agreement between the Administration and Congress, as well
as significant opposition to the Proposed Plan now coming from many BIF-insured
banks, the fate of the SAIF special assessment provisions of the legislation is
uncertain, and it now appears possible that a significant disparity between
SAIF and BIF insurance premium rates could continue to exist for some time.
In view of the legislative uncertainty that currently exist, it cannot be
predicted whether the Proposed Plan or any other legislative proposal will be
enacted as described above or, if enacted, the amount of any special SAIF
assessment, whether ongoing SAIF premiums will be reduced to a level equal to
that of BIF premiums, or whether such legislation, if enacted, may contain
other provisions, for example, requiring all federally-chartered thrifts to
convert to bank charters. A significant increase in SAIF insurance premiums,
either absolutely relative to BIF premiums, a significant one-time fee to
recapitalize the SAIF, or a significant tax liability associated with the
recapture of the bad debt reserve could have a potentially adverse effect on
the operating expenses and results of operations of the Registrant.
Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order, or condition imposed by the FDIC.
SAFETY AND SOUNDNESS STANDARDS
The FDIA, as amended by the FDICIA and the Riegle Community Development and
Regulatory Improvement Act of 1994, requires the federal bank regulatory
agencies to prescribe standards, by regulations or guidelines, relating to
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate risk exposure, asset growth,
asset quality, earnings, stock valuation and compensation, fees and benefits,
and such other operational and managerial standards as the agencies deem
appropriate. The federal bank regulatory agencies have adopted, effective
August 9, 1995, a set of guidelines prescribing safety and soundness standards
pursuant to FDICIA, as amended. The guidelines establish general standards
relating to internal controls and information systems, internal audit systems,
loan documentation, credit underwriting, interest rate exposure, asset growth
and compensation, and fees and benefits. In general, the guidelines require,
among other things, appropriate systems and practices to identify and manage
the risks and exposures specified in the guidelines. The guidelines prohibit
excessive compensation as an unsafe and unsound practice and describe
compensation as excessive when the amounts paid are unreasonable or
disproportionate to the services performed by an executive officer, employee,
director, or principal stockholder. The federal banking agencies determined
that stock valuation standards were not appropriate. In addition, the agencies
adopted regulations that authorize, but do not require, an agency to order an
institution that has been given notice by an agency that it is not satisfying
any of such safety and soundness standards to submit a compliance plan. If,
after being so notified, an institution fails to submit an acceptable
compliance plan or fails in any material respect to implement an acceptable
compliance plan, the agency must issue an order directing action to correct the
deficiency and may issue an order directing other actions of the types to which
an undercapitalized institution is subject under the "prompt corrective action"
provisions of FDICIA. See "--Prompt Corrective Action." If an institution
fails to comply with such an order, the agency may seek to enforce such order
in judicial proceedings and to impose civil money penalties. The federal bank
regulatory agencies also proposed guidelines for asset quality and earnings
standards.
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DEPOSITOR PREFERENCE
The Omnibus Budget Reconciliation Act of 1993 provides that deposits and
certain claims for administrative expenses and employee compensation against an
insured depository institution would be afforded a priority over other general
unsecured claims against such an institution in the "liquidation or other
resolution" of such an institution by any receiver.
DESCRIPTION OF REGIONS COMMON STOCK
Regions is authorized to issue 120,000,000 shares of Regions Common Stock,
of which 62,185,402 shares were issued at March 31, 1996, none of which were
held as treasury shares. No other class of stock is authorized.
Holders of Regions Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors out of funds legally available
therefor. The ability of Regions to pay dividends is affected by the ability of
its subsidiary institutions to pay dividends, which is limited by applicable
regulatory requirements and capital guidelines. At March 31, 1996, under such
requirements and guidelines, Regions' subsidiary institutions had $205 million
of undivided profits legally available for the payment of dividends. See
"Certain Regulatory Considerations--Payment of Dividends."
For a further description of Regions Common Stock, see "Effect of the
Merger on Rights of Stockholders."
STOCKHOLDER PROPOSALS
Regions expects to hold its next annual meeting of stockholders after the
Merger during May 1997. Under SEC rules, proposals of Regions stockholders
intended to be presented at that meeting must be received by Regions at its
principal executive offices no later than December 2, 1996, for consideration
by Regions for possible inclusion in such proxy materials.
EXPERTS
The consolidated financial statements and the supplemental consolidated
financial statements of Regions incorporated by reference in or appearing as an
exhibit to Regions' Annual Report (Form 10-K) for the year ended December
31, 1995, have been audited by Ernst & Young LLP, independent auditors, for the
periods indicated in their reports thereon incorporated by reference or
included therein and incorporated herein by reference. Such consolidated
financial statements and supplemental consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
The consolidated financial statements incorporated in this Registration
Statement by reference from ABH's Annual Report on Form 10-KSB for the year
ended December 31, 1995 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is incorporated herein
by reference, and have been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
OPINIONS
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The legality of the shares of Regions Common Stock to be issued in the
Merger will be passed upon by Lange, Simpson, Robinson & Somerville,
Birmingham, Alabama. Henry E. Simpson, partner in the law firm of Lange,
Simpson, Robinson & Somerville, is a member of the Board of Directors of
Regions. As of June 3, 1996, attorneys in the law firm of Lange, Simpson,
Robinson & Somerville owned an aggregate of 118,845 shares of Regions Common
Stock.
Certain tax consequences of the transaction have been passed upon by Alston
& Bird, Atlanta, Georgia.
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<PAGE> 52
APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
AMERICAN BANCSHARES OF HOUMA, INC.
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF FEBRUARY 29, 1996
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Parties............................................................................. A-5
Preamble............................................................................ A-5
ARTICLE 1 -- TRANSACTIONS AND TERMS OF MERGER....................................... A-5
1.1 Merger...................................................................... A-5
1.2 Time and Place of Closing................................................... A-5
1.3 Effective Time.............................................................. A-5
ARTICLE 2 -- TERMS OF MERGER........................................................ A-6
2.1 Certificate of Incorporation................................................ A-6
2.2 Bylaws...................................................................... A-6
2.3 Directors and Officers...................................................... A-6
ARTICLE 3 -- MANNER OF CONVERTING SHARES............................................ A-6
3.1 Conversion of Shares........................................................ A-6
3.2 Anti-Dilution Provisions.................................................... A-6
3.3 Shares Held by American Bancshares or Regions............................... A-6
3.4 Dissenting Stockholders..................................................... A-6
3.5 Fractional Shares........................................................... A-7
ARTICLE 4 -- EXCHANGE OF SHARES..................................................... A-7
4.1 Exchange Procedures......................................................... A-7
4.2 Rights of Former American Bancshares Stockholders........................... A-8
ARTICLE 5 -- REPRESENTATIONS AND WARRANTIES OF AMERICAN BANCSHARES.................. A-8
5.1 Organization, Standing, and Power........................................... A-8
5.2 Authority; No Breach By Agreement........................................... A-8
5.3 Capital Stock............................................................... A-9
5.4 American Bancshares Subsidiaries............................................ A-9
5.5 Financial Statements........................................................ A-10
5.6 Absence of Undisclosed Liabilities.......................................... A-10
5.7 Absence of Certain Changes or Events........................................ A-10
5.8 Tax Matters................................................................. A-10
5.9 Assets...................................................................... A-11
5.10 Environmental Matters....................................................... A-12
5.11 Compliance With Laws........................................................ A-12
5.12 Employee Benefit Plans...................................................... A-12
5.13 Material Contracts.......................................................... A-14
5.14 Legal Proceedings........................................................... A-14
5.15 Statements True and Correct................................................. A-15
5.16 Accounting, Tax, and Regulatory Matters..................................... A-15
5.17 State Takeover Laws......................................................... A-15
5.18 Directors' Agreements....................................................... A-16
5.19 Charter Provisions.......................................................... A-16
5.20 Derivatives Contracts....................................................... A-16
ARTICLE 6 -- REPRESENTATIONS AND WARRANTIES OF REGIONS.......................... A-16
6.1 Organization, Standing, and Power........................................... A-16
6.2 Authority; No Breach By Agreement........................................... A-16
6.3 Capital Stock............................................................... A-17
6.4 Regions Subsidiaries........................................................ A-17
6.5 SEC Filings; Financial Statements........................................... A-17
6.6 Absence of Undisclosed Liabilities.......................................... A-18
</TABLE>
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<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
6.7 Absence of Certain Changes or Events........................................ A-18
6.8 Compliance With Laws........................................................ A-18
6.9 Legal Proceedings........................................................... A-18
6.10 Statements True and Correct................................................. A-19
6.11 Accounting, Tax, and Regulatory Matters..................................... A-19
ARTICLE 7 -- CONDUCT OF BUSINESS PENDING CONSUMMATION............................... A-19
7.1 Affirmative Covenants of American Bancshares................................ A-19
7.2 Negative Covenants of American Bancshares................................... A-20
7.3 Covenants of Regions........................................................ A-22
7.4 Adverse Changes in Condition................................................ A-22
7.5 Reports..................................................................... A-22
ARTICLE 8 -- ADDITIONAL AGREEMENTS.................................................. A-22
8.1 Registration Statement; Proxy Statement; Stockholder Approval............... A-22
8.2 Exchange Listing............................................................ A-23
8.3 Applications................................................................ A-23
8.4 Filings with State Offices.................................................. A-23
8.5 Agreement as to Efforts to Consummate....................................... A-24
8.6 Investigation and Confidentiality........................................... A-24
8.7 Press Releases.............................................................. A-24
8.8 Certain Actions............................................................. A-25
8.9 Accounting and Tax Treatment................................................ A-25
8.10 State Takeover Laws......................................................... A-25
8.11 Charter Provisions.......................................................... A-25
8.12 Agreement of Affiliates..................................................... A-25
8.13 Indemnification............................................................. A-25
ARTICLE 9 -- CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE...................... A-26
9.1 Conditions to Obligations of Each Party..................................... A-26
9.2 Conditions to Obligations of Regions........................................ A-27
9.3 Conditions to Obligations of American Bancshares............................ A-28
ARTICLE 10 -- TERMINATION........................................................... A-29
10.1 Termination................................................................. A-29
10.2 Effect of Termination....................................................... A-29
10.3 Non-Survival of Representations and Covenants............................... A-30
ARTICLE 11 -- MISCELLANEOUS......................................................... A-30
11.1 Definitions................................................................. A-30
11.2 Expenses.................................................................... A-35
11.3 Brokers and Finders......................................................... A-35
11.4 Entire Agreement............................................................ A-35
11.5 Amendments.................................................................. A-35
11.6 Waivers..................................................................... A-36
11.7 Assignment.................................................................. A-36
11.8 Notices..................................................................... A-36
11.9 Governing Law............................................................... A-37
11.10 Counterparts................................................................ A-37
11.11 Captions.................................................................... A-37
11.12 Interpretations............................................................. A-37
11.13 Enforcement of Agreement.................................................... A-37
11.14 Severability................................................................ A-37
Signatures.......................................................................... A-38
</TABLE>
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LIST OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S> <C>
0. -- Form of Directors' Agreement. (sec. 5.8).
2. -- Form of agreement of affiliates of American Bancshares. (sec. 8.12, 9.2(e)).
3. -- Matters as to which Correro, Fishman & Casteix, L.L.P. will opine. (sec. 9.2(d)).
4. -- Form of Claims Letter (sec. 9.2(f)).
5. -- Matters as to which Lange, Simpson, Robinson & Somerville will opine. (sec. 9.3(d)).
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of February 29, 1996, by and between AMERICAN BANCSHARES OF
HOUMA, INC. ("American Bancshares"), a corporation organized and existing under
the laws of the State of Louisiana, with its principal office located in Houma,
Louisiana; and REGIONS FINANCIAL CORPORATION ("Regions"), a corporation
organized and existing under the laws of the State of Delaware, with its
principal office located in Birmingham, Alabama.
PREAMBLE
The Boards of Directors of American Bancshares and Regions are of the
opinion that the transactions described herein are in the best interests of the
parties and their respective stockholders. This Agreement provides for the
acquisition of American Bancshares by Regions pursuant to the merger of American
Bancshares into and with Regions. At the effective time of such merger, the
outstanding shares of the capital stock of American Bancshares shall be
converted into shares of the common stock of Regions (except as provided
herein). As a result, stockholders of American Bancshares shall become
stockholders of Regions and each of the subsidiaries of American Bancshares
shall continue to conduct its business and operations as a wholly owned
subsidiary of Regions. The transactions described in this Agreement are subject
to the approvals of the stockholders of American Bancshares, the Board of
Governors of the Federal Reserve System, and the appropriate state regulatory
authorities and the satisfaction of certain other conditions described in this
Agreement. It is the intention of the parties to this Agreement that the merger
(i) for federal income tax purposes shall qualify as a "reorganization" within
the meaning of Section 368(a) of the Internal Revenue Code and (ii) for
accounting purposes shall be accounted for as a "pooling of interests."
Certain terms used in this Agreement are defined in Section 11.1 of this
Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, the parties agree
as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, American Bancshares shall be merged into and with Regions in
accordance with the provisions of Sections 12:115 of the LBCL and of Section 258
of the DGCL and with the effect provided in Section 259 of the DGCL (the
"Merger"). Regions shall be the Surviving Corporation of the Merger and shall
continue to be governed by the Laws of the State of Delaware. The Merger shall
be consummated pursuant to the terms of this Agreement, which has been approved
and adopted by the Boards of Directors of American Bancshares and Regions.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 9:00 A.M.), or at such other time as the Parties,
acting through their chief executive officers or chief financial officers, may
mutually agree. The place of Closing shall be at the offices of Regions, in
Birmingham, Alabama, or such other place as may be mutually agreed upon by the
Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions contemplated by this
Agreement shall become effective on the date and at the time the Louisiana
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Louisiana and the Delaware Certificate of
Merger reflecting the Merger shall become effective with the Secretary of State
of the State of Delaware (the "Effective Time"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon in writing by the chief
executive officers or chief financial officers of each Party, the Parties shall
use their reasonable efforts to cause the Effective Time to occur on the last
business day of the month in which occurs the last to occur of (i) the effective
date (including expiration of any applicable waiting period) of the last
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required Consent of any Regulatory Authority having authority over and approving
or exempting the Merger, and (ii) the date on which the stockholders of American
Bancshares approve this Agreement to the extent such approval is required by
applicable Law; or such later date within 30 days thereof as may be specified by
Regions.
ARTICLE 2
TERMS OF MERGER
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Regions in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time until otherwise amended or repealed.
2.2 BYLAWS. The Bylaws of Regions in effect immediately prior to the
Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 DIRECTORS AND OFFICERS. The directors of Regions in office immediately
prior to the Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of the Surviving Corporation
from and after the Effective Time in accordance with the Bylaws of the Surviving
Corporation. The officers of Regions in office immediately prior to the
Effective Time, together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving Corporation from and after
the Effective Time in accordance with the Bylaws of the Surviving Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3, at
the Effective Time, by virtue of the Merger and without any action on the part
of the holders thereof, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(b) Each share of American Bancshares Common Stock (excluding shares
held by American Bancshares or any of its Subsidiaries or by Regions or any
of its Subsidiaries, in each case other than in a fiduciary capacity or as
a result of debts previously contracted) issued and outstanding at the
Effective Time shall be converted into 1.66 shares of Regions Common Stock
(the "Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event American Bancshares changes the
number of shares of American Bancshares Common Stock issued and outstanding
prior to the Effective Time as a result of a stock split, stock dividend, or
similar recapitalization with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. In the event Regions changes the number of shares of
Regions Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted.
3.3 SHARES HELD BY AMERICAN BANCSHARES OR REGIONS. Each of the shares of
American Bancshares Common Stock held by any American Bancshares Company or by
any Regions Company, in each case other than in a fiduciary capacity or as a
result of debts previously contracted, shall be canceled and retired at the
Effective Time and no consideration shall be issued in exchange therefor.
3.4 DISSENTING STOCKHOLDERS. Any holder of shares of American Bancshares
Common Stock who perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Part XIII of the LBCL shall be entitled
to receive the value of such shares in cash as determined pursuant to such
provision of Law; provided, that no such payment shall be made to any dissenting
stockholder unless and until
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such dissenting stockholder has complied with the applicable provisions of the
LBCL, including the provisions of Section 131 thereof relating to the deposit in
escrow, endorsement, and transfer of the certificate or certificates
representing the shares for which payment is being made. In the event that a
dissenting stockholder of American Bancshares fails to perfect, or effectively
withdraws or loses, his right to appraisal and of payment for his shares, such
Person shall not have the right to receive payment in cash for his shares and,
instead, as of the Effective Time the shares of American Bancshares Common Stock
held by such Person shall be converted into and exchanged for that number of
shares of Regions Common Stock determined under Section 3.1 of this Agreement
and the delivery of certificates representing such Regions Common Stock and any
dividends or other distributions in respect thereof to which such holder may be
entitled shall be governed by Section 4.1 of this Agreement.
3.5 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of American Bancshares Common Stock exchanged
pursuant to the Merger, who would otherwise have been entitled to receive a
fraction of a share of Regions Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of
Regions Common Stock multiplied by the market value of one share of Regions
Common Stock at the Effective Time. The market value of one share of Regions
Common Stock at the Effective Time shall be the closing price of such common
stock on the Nasdaq NMS (as reported by The Wall Street Journal or, if not
reported thereby, any other authoritative source selected by Regions) on the
last trading day preceding the Effective Time. No such holder will be entitled
to dividends, voting rights, or any other rights as a stockholder in respect of
any fractional shares.
ARTICLE 4
EXCHANGE OF SHARES
4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Regions and
the Surviving Corporation shall cause the exchange agent selected by Regions
(the "Exchange Agent") to mail to the former stockholders of American Bancshares
appropriate transmittal materials (which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of American Bancshares Common Stock shall pass, only upon
proper delivery of such certificates to the Exchange Agent). After the Effective
Time, each holder of shares of American Bancshares Common Stock (other than
shares to be canceled pursuant to Section 3.3 of this Agreement or as to which
dissenters' rights of appraisal have been perfected and not withdrawn or
forfeited under Section 131 of the LBCL) issued and outstanding at the Effective
Time, promptly upon the surrender of the certificate or certificates
representing such shares to the Exchange Agent, shall receive in exchange
therefor the consideration provided in Section 3.1 of this Agreement, together
with all undelivered dividends and other distributions in respect of such shares
(without interest thereon) pursuant to Section 4.2 of this Agreement and, to the
extent required by Section 3.5 of this Agreement, cash in lieu of any fractional
share of Regions Common Stock to which such holder otherwise would be entitled
(without interest). Until so surrendered, each outstanding certificate of
American Bancshares Common Stock shall be deemed for all purposes, other than as
provided below with respect to the payment of dividends or other distributions
payable to the holders of shares of Regions Common Stock, to represent the
consideration into which the number of shares of American Bancshares Common
Stock represented thereby prior to the Effective Time shall have been converted.
Regions shall not be obligated to deliver the certificate or certificates
representing the shares of Regions Common Stock or any cash payments to which
any former holder of American Bancshares Common Stock is entitled as a result of
the Merger, or any dividends or distributions in respect of shares of Regions
Common Stock, until such holder surrenders such holder's certificate or
certificates representing the shares of American Bancshares Common Stock for
exchange as provided in this Section 4.1, or otherwise complies with the
procedures of the Exchange Agent with respect to lost, stolen, or destroyed
certificates. The certificate or certificates of American Bancshares Common
Stock so surrendered shall be duly endorsed as the Exchange Agent may require.
Any other provision of this Agreement notwithstanding, neither Regions, American
Bancshares, nor the Exchange Agent shall be liable to a holder of American
Bancshares Common Stock for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property Law.
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4.2 RIGHTS OF FORMER AMERICAN BANCSHARES STOCKHOLDERS. At the Effective
Time, the stock transfer books of American Bancshares shall be closed as to
holders of American Bancshares Common Stock immediately prior to the Effective
Time and no transfer of American Bancshares Common Stock by any such holder
shall thereafter be made or recognized. Until surrendered for exchange in
accordance with the provisions of Section 4.1 of this Agreement, each
certificate theretofore representing shares of American Bancshares Common Stock
(other than shares to be canceled pursuant to Sections 3.3 and 3.4 of this
Agreement) shall from and after the Effective Time represent for all purposes
only the right to receive the consideration provided in Sections 3.1 and 3.4 of
this Agreement in exchange therefor, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been declared or made
by American Bancshares in respect of such shares of American Bancshares Common
Stock in accordance with the terms of this Agreement and which remain unpaid at
the Effective Time. To the extent permitted by Law, former stockholders of
record of American Bancshares shall be entitled to vote after the Effective Time
at any meeting of Regions stockholders the number of whole shares of Regions
Common Stock into which their respective shares of American Bancshares Common
Stock are converted, regardless of whether such holders have exchanged their
certificates representing American Bancshares Common Stock for certificates
representing Regions Common Stock in accordance with the provisions of this
Agreement. Whenever a dividend or other distribution is declared by Regions on
the Regions Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares issuable pursuant to this Agreement, but no dividend or other
distribution payable to the holders of record of Regions Common Stock as of any
time subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of American Bancshares Common Stock issued and
outstanding at the Effective Time until such holder surrenders such certificate
for exchange as provided in Section 4.1 of this Agreement. However, upon
surrender of such American Bancshares Common Stock certificate, both the Regions
Common Stock certificate (together with all such undelivered dividends or other
distributions without interest), and any undelivered dividends and cash payments
to be paid for fractional share interests (without interest) shall be delivered
and paid with respect to each share represented by such certificate.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF AMERICAN BANCSHARES
American Bancshares hereby represents and warrants to Regions that, except
as set forth in the corresponding section of the American Bancshares Disclosure
Memorandum:
5.1 ORGANIZATION, STANDING, AND POWER. American Bancshares is a
corporation duly organized and validly existing, and in good standing under
the Laws of the State of Louisiana, and has the corporate power and
authority to carry on its business as now conducted and to own, lease, and
operate its material Assets. American Bancshares is duly qualified or
licensed to transact business as a foreign corporation in good standing in
the States of the United States and foreign jurisdictions where the
character of its Assets or the nature or conduct of its business requires
it to be so qualified or licensed, except for such jurisdictions in which
the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
American Bancshares.
5.2 AUTHORITY; NO BREACH BY AGREEMENT. (a) American Bancshares has
the corporate power and authority necessary to execute, deliver, and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery, and performance
of this Agreement and the consummation of the transactions contemplated
herein, including the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of American
Bancshares, subject to the approval of this Agreement by the required vote
of the outstanding shares of American Bancshares Common Stock, which is the
only stockholder vote required for approval of this Agreement and
consummation of the Merger by American Bancshares. Subject to such
requisite stockholder approval, this Agreement represents a legal, valid,
and binding obligation of American Bancshares, enforceable against American
Bancshares in accordance with its terms (except in all cases as
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such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and (ii) application of, and
limitations on the application of, equitable principles and remedies,
including limitations on the availability of the equitable remedy of
specific performance or injunctive relief).
(b) Neither the execution and delivery of this Agreement by American
Bancshares, nor the consummation by American Bancshares of the transactions
contemplated hereby, nor compliance by American Bancshares with any of the
provisions hereof, will (i) conflict with or result in a breach of any
provision of American Bancshares' Charter or Bylaws, or (ii) constitute or
result in a Default under, or require any Consent pursuant to, or result in
the creation of any Lien on any Asset of any American Bancshares Company
under, any Contract or Permit of any American Bancshares Company, where
such Default or Lien, or any failure to obtain such Consent, is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on American Bancshares, or (iii) subject to receipt of the requisite
approvals referred to in Section 9.1(b) of this Agreement, violate any Law
or Order applicable to any American Bancshares Company or any of their
respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules
of the NASD, and other than Consents required from Regulatory Authorities,
and other than notices to or filings with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or both with respect to any
employee benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on American Bancshares, no notice to, filing with, or
Consent of, any public body or authority is necessary for the consummation
by American Bancshares of the Merger and the other transactions
contemplated in this Agreement.
5.3 CAPITAL STOCK. The authorized capital stock of American Bancshares
consists of 1,000,000 shares of American Bancshares Common Stock, of which
229,564 shares are issued and outstanding as of the date of this Agreement
and not more than 229,564 shares will be issued and outstanding at the
Effective Time. All of the issued and outstanding shares of capital stock
of American Bancshares are duly and validly issued and outstanding and are
fully paid and nonassessable under the LBCL. To the Knowledge of American
Bancshares, none of the outstanding shares of capital stock of American
Bancshares has been issued in violation of any preemptive rights of the
current or past stockholders of American Bancshares. Except as set forth
above or as disclosed in Section 5.3 of the American Bancshares Disclosure
Memorandum, there are no shares of capital stock or other equity securities
of American Bancshares outstanding and no outstanding Rights relating to
the capital stock of American Bancshares.
5.4 AMERICAN BANCSHARES SUBSIDIARIES. American Bancshares has
disclosed in Section 5.4 of the American Bancshares Disclosure Memorandum
all of the American Bancshares Subsidiaries as of the date of this
Agreement. American Bancshares or one of its Subsidiaries owns all of the
issued and outstanding shares of capital stock of each American Bancshares
Subsidiary. No equity securities of any American Bancshares Subsidiary are
or may become required to be issued (other than to another American
Bancshares Company) by reason of any Rights, and there are no Contracts by
which any American Bancshares Subsidiary is bound to issue (other than to
another American Bancshares Company) additional shares of its capital stock
or Rights or by which any American Bancshares Company is or may be bound to
transfer any shares of the capital stock of any American Bancshares
Subsidiary (other than to another American Bancshares Company). There are
no Contracts relating to the rights of any American Bancshares Company to
vote or to dispose of any shares of the capital stock of any American
Bancshares Subsidiary. Except as provided in LBCL Section 6:262, all of the
shares of capital stock of each American Bancshares Subsidiary held by a
American Bancshares Company are fully paid and nonassessable under the
applicable corporation or banking Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the American
Bancshares Company free and clear of any Lien. Each American Bancshares
Subsidiary is either a bank, savings association or a corporation, and is
duly organized, validly existing, and (as to corporations) in good standing
under the
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Laws of the jurisdiction in which it is incorporated or organized, and has
the corporate power and authority necessary for it to own, lease, and
operate its Assets and to carry on its business as now conducted. Each
American Bancshares Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the
United States and foreign jurisdictions where the character of its Assets
or the nature or conduct of its business requires it to be so qualified or
licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on American Bancshares. Each
American Bancshares Subsidiary that is a depository institution is an
"insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by
the Bank Insurance Fund or the Savings Association Insurance Fund, as
appropriate.
5.5 FINANCIAL STATEMENTS. American Bancshares has included in Section
5.5 of the American Bancshares Disclosure Memorandum copies of all American
Bancshares Financial Statements for periods ended prior to the date hereof
and will deliver to Regions copies of all American Bancshares Financial
Statements prepared subsequent to the date hereof. The American Bancshares
Financial Statements (as of the dates thereof and for the periods covered
thereby) present or will present, as the case may be, fairly the
consolidated financial position of the American Bancshares Companies as of
the dates indicated and the consolidated results of operations, changes in
stockholders' equity, and cash flows of the American Bancshares Companies
for the periods indicated, in accordance with GAAP (subject to any
exceptions as to consistency specified therein or as may be indicated in
the notes thereto or, in the case of interim financial statements, to
normal recurring year-end adjustments that are not material in amount or
effect and to the absence from interim financial statements of any footnote
disclosures).
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. No American Bancshares
Company has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on American
Bancshares, except Liabilities which are accrued or reserved against in the
consolidated balance sheets of American Bancshares as of December 31, 1995
included in the American Bancshares Financial Statements or reflected in
the notes thereto. No American Bancshares Company has incurred or paid any
Liability since December 31, 1995, except for such Liabilities incurred or
paid in the ordinary course of business consistent with past business
practice or incurred in connection with the process leading up to the
execution and consummation of this Agreement and which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on American Bancshares.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1995,
except as disclosed in the American Bancshares Financial Statements
delivered prior to the date of this Agreement, to the Knowledge of American
Bancshares, (i) there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on American Bancshares, and (ii) the
American Bancshares Companies have not taken any action, or failed to take
any action, prior to the date of this Agreement, which action or failure,
if taken after the date of this Agreement, would represent or result in a
material breach or violation of any of the covenants and agreements of
American Bancshares provided in Article 7 of this Agreement, other than
conducting the process that has led up to the execution and consummation of
this Agreement.
5.8 TAX MATTERS. (a) All Tax returns required to be filed by or on
behalf of any of the American Bancshares Companies have been timely filed
or requests for extensions have been timely filed, granted, and have not
expired for periods ended on or before December 31, 1994, and on or before
the date of the most recent fiscal year end immediately preceding the
Effective Time, except to the extent that all such failures to file or
untimely filings, individually or in the aggregate, are not reasonably
likely to have a Material Adverse Effect on American Bancshares and all
returns filed are complete and accurate in all material respects to the
Knowledge of American Bancshares. All Taxes shown on filed returns have
been paid. There is no audit examination, deficiency, refund Litigation, or
penalties due or owed with respect to any Taxes that is reasonably likely
to result in a determination that would have a Material Adverse Effect on
American Bancshares, except as reserved against in the American Bancshares
Financial Statements delivered prior to the date of this Agreement. All
Taxes and other Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
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(b) None of the American Bancshares Companies has executed an
extension or waiver of any statute of limitations on the assessment or
collection of any Tax due that is currently in effect.
(c) To the Knowledge of American Bancshares, adequate provision for
any Taxes due or to become due for any of the American Bancshares Companies
for the period or periods through and including the date of the respective
American Bancshares Financial Statements has been made and is reflected on
such American Bancshares Financial Statements.
(d) Each of the American Bancshares Companies is in compliance with,
and its records contain the information and documents (including properly
completed IRS Forms W-9) necessary to comply with, in all material
respects, applicable information reporting and Tax withholding requirements
under federal, state, and local Tax Laws, and such records identify the
accounts subject to backup withholding under Section 3406 of the Internal
Revenue Code.
(e) None of the American Bancshares Companies has made any payments,
is obligated to make any payments, or is a party to any contract,
agreement, or other arrangement that could obligate it to make any payments
that would be disallowed as a deduction under Section 280G or 162(m) of the
Internal Revenue Code.
(f) There are no Liens with respect to Taxes upon any of the assets of
the American Bancshares Companies.
(g) There has not been an ownership change, as defined in Internal
Revenue Code Section 382(g), of the American Bancshares Companies that
occurred during or after any Taxable Period in which the American
Bancshares Companies incurred a net operating loss that carries over to any
Taxable Period ending after December 31, 1994.
(h) No American Bancshares Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
(i) All material elections with respect to Taxes affecting the
American Bancshares Companies as of the date of this Agreement have been or
will be timely made as set forth in Section 5.8 of the American Bancshares
Disclosure Memorandum. After the date hereof, no election with respect to
Taxes will be made without the prior written consent of Regions, which
consent will not be unreasonably withheld.
(j) No American Bancshares Company has or has had a permanent
establishment in any foreign country, as defined in any applicable tax
treaty or convention between the United States and such foreign country.
5.9 ASSETS. The American Bancshares Companies have good and
marketable title, free and clear of all Liens, to all of their respective
owned Assets. All material tangible properties used in the businesses of
the American Bancshares Companies are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business
consistent with American Bancshares' past practices. All Assets which are
material to American Bancshares' business on a consolidated basis, held
under leases or subleases by any of the American Bancshares Companies, are
held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceedings may be
brought), and each such Contract is in full force and effect. The American
Bancshares Companies currently maintain insurance similar in amounts,
scope, and coverage to that maintained by other peer banking organizations.
None of the American Bancshares Companies has received notice from any
insurance carrier that (i) such insurance will be canceled or that coverage
thereunder will be reduced or eliminated, or (ii) premium costs with
respect to such policies of insurance will be substantially increased.
There are presently no claims pending under such policies of insurance and
no notices have been given by any American Bancshares Company under such
policies. The Assets of the American Bancshares Companies
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include all Assets required to operate the business of the American
Bancshares Companies as presently conducted.
5.10 ENVIRONMENTAL MATTERS. (a) To the Knowledge of American
Bancshares, each American Bancshares Company, its Participation Facilities,
and its Loan Properties are, and have been, in compliance with all
Environmental Laws, except for such instances of non-compliance that are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on American Bancshares.
(b) To the Knowledge of American Bancshares, there is no Litigation
pending or threatened before any court, governmental agency, or authority
or other forum in which any American Bancshares Company or any of its Loan
Properties or Participation Facilities (or any American Bancshares Company
in respect of any such Loan Property or Participation Facility) has been
or, with respect to threatened Litigation, may be named as a defendant or
potentially responsible party (i) for alleged noncompliance (including by
any predecessor) with any Environmental Law or (ii) relating to the release
into the environment of any Hazardous Material, whether or not occurring
at, on, under, or involving a site owned, leased, or operated by any
American Bancshares Company or any of its Loan Properties or Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on American Bancshares, and to the Knowledge of American
Bancshares, there is no reasonable basis for any such Litigation.
(c) To the Knowledge of American Bancshares, there have been no
releases of Hazardous Material in, on, under, or affecting any
Participation Facility, or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on American Bancshares.
5.11 COMPLIANCE WITH LAWS. Each American Bancshares Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, and there has
occurred no Default under any such Permit other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on American Bancshares. None of the American Bancshares
Companies:
(a) is in violation of any Laws, Orders, or Permits applicable to
its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on American Bancshares; and
(b) has received any notification or communication from any agency
or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any American
Bancshares Company is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on American Bancshares, (ii)
threatening to revoke any Permits, the revocation of which is reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on American Bancshares, or (iii) requiring any American
Bancshares Company to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment, or memorandum
of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business, or
in any material manner relates to its capital adequacy, its credit or
reserve policies, its management, or the payment of dividends.
5.12 EMPLOYEE BENEFIT PLANS. (a) American Bancshares has disclosed in
Section 5.12 of the American Bancshares Disclosure Memorandum, and has
delivered or made available to Regions prior to the execution of this
Agreement, copies in each case of all written pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock
ownership, severance pay, vacation, bonus, or other incentive plan, all
other written employee programs, arrangements, or agreements, all medical,
vision, dental, or other written health plans, all life insurance plans,
and all other written employee benefit plans or fringe benefit plans,
including written "employee benefit plans" as that term is defined in
Section 3(3) of ERISA, currently adopted, maintained by, sponsored in whole
or in part by, or contributed to, by any
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American Bancshares Company or Affiliate thereof for the benefit of
employees, retirees, dependents, spouses, directors, independent
contractors, or other beneficiaries and under which employees, retirees,
dependents, spouses, directors, independent contractors, or other
beneficiaries are eligible to participate (collectively, the "American
Bancshares Benefit Plans"). Any of the American Bancshares Benefit Plans
which is an "employee pension benefit plan," as that term is defined in
Section 3(2) of ERISA, is referred to herein as a "American Bancshares
ERISA Plan." Each American Bancshares ERISA Plan which is also a "defined
benefit plan" (as defined in Section 414(j) of the Internal Revenue Code)
is referred to herein as a "American Bancshares Pension Plan." No American
Bancshares Pension Plan is or has been a multiemployer plan within the
meaning of Section 3(37) of ERISA.
(b) All American Bancshares Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other
applicable Laws the breach or violation of which are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
American Bancshares. Each American Bancshares ERISA Plan which is intended
to be qualified under Section 401(a) of the Internal Revenue Code has
received a favorable determination letter from the Internal Revenue
Service, and American Bancshares is not aware of any circumstances likely
to result in revocation of any such favorable determination letter. No
American Bancshares Company has engaged in a transaction with respect to
any American Bancshares Benefit Plan that, assuming the taxable period of
such transaction expired as of the date hereof, would subject any American
Bancshares Company to a tax or penalty imposed by either Section 4975 of
the Internal Revenue Code or Section 502(i) of ERISA that, individually or
in the aggregate, is reasonably likely to have a Material Adverse Effect on
American Bancshares.
(c) No American Bancshares Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of ERISA, and
the fair market value of the assets of any such plan equals or exceeds the
plan's "benefit liabilities," as that term is defined in Section
4001(a)(16) of ERISA, when determined under actuarial factors that would
apply if the plan terminated in accordance with all applicable legal
requirements. Since the date of the most recent actuarial valuation, there
has been (i) no material change in the financial position of any American
Bancshares Pension Plan, (ii) no change in the actuarial assumptions with
respect to any American Bancshares Pension Plan, and (iii) no increase in
benefits under any American Bancshares Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on American
Bancshares or materially adversely affect the funding status of any such
plan. Neither any American Bancshares Pension Plan nor any "single-employer
plan," within the meaning of Section 4001(a)(15) of ERISA, currently or
formerly maintained by any American Bancshares Company, or the
single-employer plan of any entity which is considered one employer with
American Bancshares under Section 4001 of ERISA or Section 414 of the
Internal Revenue Code or Section 302 of ERISA (whether or not waived) (an
"ERISA Affiliate") has an "accumulated funding deficiency" within the
meaning of Section 412 of the Internal Revenue Code or Section 302 of
ERISA. No American Bancshares Company has provided, or is required to
provide, security to an American Bancshares Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29)
of the Code.
(d) No Liability under Subtitle C or D of Title IV of ERISA has been
or is expected to be incurred by any American Bancshares Company with
respect to any ongoing, frozen, or terminated single-employer plan or the
single-employer plan of any ERISA Affiliate. No American Bancshares Company
has incurred any withdrawal Liability with respect to a multiemployer plan
under Subtitle B of Title IV of ERISA (regardless of whether based on
contributions of an ERISA Affiliate). No notice of a "reportable event,"
within the meaning of Section 4043 of ERISA for which the 30-day reporting
requirement has not been waived, has been required to be filed for any
American Bancshares Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(e) No American Bancshares Company has any Liability for retiree
health and life benefits under any of the American Bancshares Benefit Plans
and, to the Knowledge of American Bancshares, there are
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no restrictions on the rights of such American Bancshares Company to amend
or terminate any such Plan without incurring any Liability thereunder.
(f) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (i) result in any
payment (including severance, unemployment compensation, golden parachute,
or otherwise) becoming due to any director or any employee of any American
Bancshares Company from any American Bancshares Company under any American
Bancshares Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any American Bancshares Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit.
(g) The actuarial present values of all accrued deferred compensation
entitlements (including entitlements under any executive compensation,
supplemental retirement, or employment agreement) of employees and former
employees of any American Bancshares Company and their respective
beneficiaries, other than entitlements accrued pursuant to funded
retirement plans subject to the provisions of Section 412 of the Internal
Revenue Code or Section 302 of ERISA, have been fully reflected on the
American Bancshares Financial Statements to the extent required by and in
accordance with GAAP.
5.13 MATERIAL CONTRACTS. Except as reflected in the American
Bancshares Financial Statements, none of the American Bancshares Companies,
nor any of their respective Assets, businesses, or operations, is a party
to, or is bound or affected by, or receives benefits under, (i) any
employment, severance, termination, consulting, or retirement Contract
providing for aggregate payments to any Person in any calendar year in
excess of $100,000, (ii) any Contract relating to the borrowing of money by
any American Bancshares Company or the guarantee by any American Bancshares
Company of any such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured repurchase
agreements, and Federal Home Loan Bank advances of depository institution
Subsidiaries, trade payables, and Contracts relating to borrowings or
guarantees made in the ordinary course of business), and (iii) any other
Contract or amendment thereto that would be required to be filed as an
exhibit to a Form 10-K filed by American Bancshares with the SEC as of the
date of this Agreement that has not been filed as an exhibit to American
Bancshares' Form 10-K filed for the fiscal year ended December 31, 1994, or
in another SEC Document and identified to Regions (together with all
Contracts referred to in Sections 5.8 and 5.13(a) of this Agreement, the
"American Bancshares Contracts"). With respect to each American Bancshares
Contract: (i) the Contract is in full force and effect; (ii) no American
Bancshares Company is in Default thereunder, other than Defaults which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on American Bancshares; (iii) no American Bancshares Company
has repudiated or waived any material provision of any such Contract; and
(iv) no other party to any such Contract is, to the Knowledge of American
Bancshares, in Default in any respect, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on American Bancshares, or has repudiated or waived any
material provision thereunder. Except as disclosed in Section 5.13 of the
American Bancshares Disclosure Memorandum, all of the indebtedness of any
American Bancshares Company for money borrowed is prepayable at any time by
such American Bancshares Company without penalty or premium.
5.14 LEGAL PROCEEDINGS. Except as disclosed in Section 5.14 of the
American Bancshares Disclosure Memorandum, there is no Litigation
instituted or pending, or, to the Knowledge of American Bancshares,
threatened (or unasserted but considered probable of assertion and which if
asserted would have at least a reasonable probability of an unfavorable
outcome) against any American Bancshares Company, or against any Asset,
interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on American
Bancshares, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any American
Bancshares Company that is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on American Bancshares. Section
5.14 of the American Bancshares Disclosure Memorandum includes a summary
report of all Litigation as of the date of this Agreement to which any
American Bancshares Company is a party as a defendant or cross-defendant.
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5.15 STATEMENTS TRUE AND CORRECT. Since January 1, 1992, or the date
of organization if later, each American Bancshares Company has timely filed
all reports and statements, together with any amendments required to be
made with respect thereto, that it was required to file with any Regulatory
Authorities (except, in the case of state securities authorities, failures
to file which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on American Bancshares). At the time
of filing (or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing): (i) each report and other
document, including financial statements, exhibits, and schedules thereto,
filed by an American Bancshares Company with any Regulatory Authority
complied in all material respects with all applicable Laws, and (ii) each
such report and document did not, in all material respects, contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. The statements, certificates, instruments, or other writings,
taken as a whole, furnished or to be furnished by any American Bancshares
Company or any Affiliate thereof to Regions pursuant to this Agreement or
any other document, agreement, or instrument referred to herein, do not and
will not contain any untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the
information supplied or to be supplied by any American Bancshares Company
or any Affiliate thereof for inclusion in the Registration Statement to be
filed by Regions with the SEC will, when the Registration Statement becomes
effective, be false or misleading with respect to any material fact, or
contain any untrue statement of a material fact, or omit to state any
material fact required to be stated thereunder or necessary to make the
statements therein not misleading. None of the information supplied or to
be supplied by any American Bancshares Company or any Affiliate thereof for
inclusion in the Proxy Statement to be mailed to American Bancshares
stockholders in connection with the Stockholders' Meeting, and any other
documents to be filed by an American Bancshares Company or any Affiliate
thereof with the SEC or any other Regulatory Authority in connection with
the transactions contemplated hereby, will, at the respective time such
documents are filed, and with respect to the Proxy Statement, when first
mailed to the stockholders of American Bancshares, be false or misleading
with respect to any material fact, or contain any misstatement of material
fact, or omit to state any material fact required to be stated thereunder
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at the time of
the Stockholders' Meeting, be false or misleading with respect to any
material fact, or omit to state any material fact required to be stated
thereunder or necessary to correct any material statement in any earlier
communication with respect to the solicitation of any proxy for the
Stockholders' Meeting. All documents that any American Bancshares Company
or any Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated hereby will
comply as to form in all material respects with the provisions of
applicable Law.
5.16 ACCOUNTING, TAX, AND REGULATORY MATTERS. Except as specifically
contemplated by this Agreement, no American Bancshares Company or any
Affiliate thereof has taken any action, or agreed to take any action, or
has any Knowledge of any fact or circumstance that is reasonably likely to
(i) prevent the transactions contemplated hereby, including the Merger,
from qualifying for pooling-of-interests accounting treatment or treatment
as a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement. To
the Knowledge of American Bancshares there exists no fact, circumstance, or
reason why the requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner without imposition of any
condition of the type described in the last sentence of such Section
9.1(b).
5.17 STATE TAKEOVER LAWS. To the extent applicable, each American
Bancshares Company has taken all necessary action to exempt the
transactions contemplated by this Agreement from Sections 132 et. seq. and
135 et. seq. of the LBCL and any comparable provisions of the Articles of
Incorporation of American Bancshares.
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5.18 DIRECTORS' AGREEMENTS. Each of the directors of American
Bancshares has executed and delivered to Regions an agreement in
substantially the form of Exhibit 1.
5.19 CHARTER PROVISIONS. Each American Bancshares Company has taken
all action so that the entering into of this Agreement and the consummation
of the Merger and the other transactions contemplated by this Agreement do
not and will not result in the grant of any rights to any Person under the
Articles of Incorporation, Bylaws, or other governing instruments of any
American Bancshares Company or restrict or impair the ability of Regions or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any American Bancshares Company that
may be directly or indirectly acquired or controlled by it.
5.20 DERIVATIVES CONTRACTS. Neither American Bancshares nor any of
its Subsidiaries is a party to or has agreed to enter into an
exchange-traded or over-the-counter swap, forward, future, option, cap,
floor, or collar financial contract, or any other interest rate or foreign
currency protection contract not included on its balance sheet which is a
financial derivative contract (including various combinations thereof) and
which might reasonably be expected to have a Material Adverse Effect on
American Bancshares.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF REGIONS
Regions hereby represents and warrants to American Bancshares as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Regions is a corporation duly
organized, validly existing, and in good standing under the Laws of the
State of Delaware, and has the corporate power and authority to carry on
its business as now conducted and to own, lease, and operate its material
Assets. Regions is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except
for such jurisdictions in which the failure to be so qualified or licensed
is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.
6.2 AUTHORITY; NO BREACH BY AGREEMENT. (a) Regions has the corporate
power and authority necessary to execute, deliver, and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated herein,
including the Merger, have been duly and validly authorized by all
necessary corporate action in respect thereof on the part of Regions. This
Agreement represents a legal, valid, and binding obligation of Regions,
enforceable against Regions in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may be
brought).
(b) Neither the execution and delivery of this Agreement by Regions,
nor the consummation by Regions of the transactions contemplated hereby,
nor compliance by Regions with any of the provisions hereof, will (i)
conflict with or result in a breach of any provision of Regions'
Certificate of Incorporation or Bylaws, or (ii) constitute or result in a
Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any Regions Company under, any
Contract or Permit of any Regions Company, where such Default or Lien, or
any failure to obtain such Consent, is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions, or
(iii) subject to receipt of the requisite approvals referred to in Section
9.1(b) of this Agreement, violate any Law or Order applicable to any
Regions Company or any of their respective material Assets.
(c) Other than in connection or compliance with the provisions of the
Securities Laws, applicable state corporate and securities Laws, and rules
of the NYSE and the NASD, and other than Consents
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required from Regulatory Authorities, and other than notices to or filings
with the Internal Revenue Service or the Pension Benefit Guaranty
Corporation, or both, with respect to any employee benefit plans, or under
the HSR Act, and other than Consents, filings, or notifications which, if
not obtained or made, are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Regions, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by Regions of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of Regions consists
of 120,000,000 shares of Regions Common Stock, of which 46,052,128 shares
were issued and outstanding and 1,474,579 shares were held as treasury
shares as of September 30, 1995. All of the issued and outstanding shares
of Regions Common Stock are, and all of the shares of Regions Common Stock
to be issued in exchange for shares of American Bancshares Common Stock
upon consummation of the Merger, when issued in accordance with the terms
of this Agreement, will be, duly and validly issued and outstanding, and
fully paid and nonassessable under the DGCL. None of the outstanding shares
of Regions Common Stock has been, and none of the shares of Regions Common
Stock to be issued in exchange for shares of American Bancshares Common
Stock upon consummation of the Merger will be, issued in violation of any
preemptive rights of the current or past stockholders of Regions.
6.4 REGIONS SUBSIDIARIES. Regions has disclosed in Exhibit 21 of its
Annual Report on Form 10-K for the fiscal year ended December 31, 1994, all
of the material Regions Subsidiaries as of the date of such report. Except
as disclosed in such report, Regions or one of its Subsidiaries owns all of
the issued and outstanding shares of capital stock of each material Regions
Subsidiary. All of the shares of capital stock of each material Regions
Subsidiary held by a Regions Company are fully paid and (except pursuant to
12 USC Section 55 in the case of national banks and comparable, applicable
state Law, if any, in the case of state depository institutions)
nonassessable under the applicable corporation Law of the jurisdiction in
which such Subsidiary is incorporated or organized and are owned by the
Regions Company free and clear of any Lien. Each material Regions
Subsidiary is either a bank, a savings association, or a corporation, and
is duly organized, validly existing, and (as to corporations) in good
standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the corporate power and authority necessary for it to
own, lease, and operate its Assets and to carry on its business as now
conducted. Each material Regions Subsidiary is duly qualified or licensed
to transact business as a foreign corporation in good standing in the
States of the United States and foreign jurisdictions where the character
of its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions.
Each material Regions Subsidiary that is a depository institution is an
"insured institution" as defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits in which are insured by
the Bank Insurance Fund or the Savings Association Insurance Fund, as
appropriate, to the extent provided by applicable law.
6.5 SEC FILINGS; FINANCIAL STATEMENTS. (a) Regions has filed and made
available to American Bancshares all forms, reports, and documents required
to be filed by Regions with the SEC since December 31, 1991, other than
registration statements on Forms S-4 and S-8 (collectively, the "Regions
SEC Reports"). The Regions SEC Reports (i) at the time filed, complied in
all material respects with the applicable requirements of the Securities
Act and the Exchange Act, as the case may be, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue
statement of a material fact or omit to state a material fact required to
be stated in such Regions SEC Reports or necessary in order to make the
statements in such Regions SEC Reports, in light of the circumstances under
which they were made, not misleading.
(b) Each of the Regions Financial Statements (including, in each case,
any related notes) contained in the Regions SEC Reports, including any
Regions SEC Reports filed after the date of this Agreement until the
Effective Time, complied or will comply as to form in all material respects
with the applicable published rules and regulations of the SEC with respect
thereto, was or will be prepared in
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accordance with GAAP applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes to such financial
statements or, in the case of unaudited statements, as permitted by Form
10-Q of the SEC), and fairly presented or will fairly present the
consolidated financial position of Regions and its Subsidiaries as at the
respective dates and the consolidated results of its operations and cash
flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material in amount.
6.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
Section 6.6 of the Regions Disclosure Memorandum, and to the Knowledge of
Regions, no Regions Company has any Liabilities that are reasonably likely
to have, individually or in the aggregate, a Material Adverse Effect on
Regions, except Liabilities which are accrued or reserved against in the
consolidated balance sheets of Regions as of September 30, 1995, included
in the Regions Financial Statements or reflected in the notes thereto.
Except as disclosed in Section 6.6 of the Regions Disclosure Memorandum, no
Regions Company has incurred or paid any Liability since September 30,
1995, except for such Liabilities incurred or paid in the ordinary course
of business consistent with past business practice and which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions.
6.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since September 30, 1995,
except as disclosed in the Regions Financial Statements delivered prior to
the date of this Agreement, or in Section 6.7 of the Regions Disclosure
Memorandum, (i) there have been no events, changes, or occurrences which
have had, or are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, and (ii) the Regions
Companies have not taken any action, or failed to take any action, prior to
the date of this Agreement, which action or failure, if taken after the
date of this Agreement would represent or result in a material breach or
violation of any of the covenants and agreements of Regions provided in
Article 7 of this Agreement.
6.8 COMPLIANCE WITH LAWS. Regions is duly registered as a bank
holding company under the BHC Act. Each Regions Company has in effect all
Permits necessary for it to own, lease, or operate its material Assets and
to carry on its business as now conducted, and there has occurred no
Default under any such Permit, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect
on Regions. No Regions Company:
(a) is in violation of any Laws, Orders, or Permits applicable to
its business or employees conducting its business, except for violations
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions; and
(b) has received any notification or communication from any agency
or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Regions Company is
not in compliance with any of the Laws or Orders which such governmental
authority or Regulatory Authority enforces, where such noncompliance is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, (ii) threatening to revoke any Permits, the
revocation of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions, or (iii) requiring any
Regions Company to enter into or consent to the issuance of a cease and
desist order, formal agreement, directive, commitment or memorandum of
understanding, or to adopt any Board resolution or similar undertaking,
which restricts materially the conduct of its business, or in any
material manner relates to its capital adequacy, its credit or reserve
policies, its management, or the payment of dividends.
6.9 LEGAL PROCEEDINGS. There is no Litigation instituted or pending,
or, to the Knowledge of Regions, threatened (or unasserted but considered
probable of assertion and which if asserted would have at least a
reasonable probability of an unfavorable outcome) against any Regions
Company, or against any Asset, interest, or right of any of them, that is
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators outstanding
against any Regions Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Regions.
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6.10 STATEMENTS TRUE AND CORRECT. Since January 1, 1992, or the date
of organization if later, each Regions Company has filed all reports and
statements, together with any amendments required to be made with respect
thereto, that it was required to file with Regulatory Authorities (except,
in the case of state securities authorities, failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions). At the time of filing (or if amended or
superseded by a filing prior to the date of this Agreement, then on the
date of such filing): (i) each report and other document, including
financial statements, exhibits, and schedules thereto, filed by a Regions
Company with any Regulatory Authority complied in all material respects
with all applicable Laws, and (ii) each such report and document did not,
in all material respects, contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The statements, certificates,
instruments, or other writings, taken as a whole, furnished or to be
furnished by any Regions Company or any Affiliate thereof to American
Bancshares pursuant to this Agreement or any other document, agreement, or
instrument referred to herein, do not and will not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the information supplied or to be
supplied by any Regions Company or any Affiliate thereof for inclusion in
the Registration Statement to be filed by Regions with the SEC, will, when
the Registration Statement becomes effective, be false or misleading with
respect to any material fact, or contain any untrue statement of a material
fact, or omit to state any material fact required to be stated thereunder
or necessary to make the statements therein not misleading. None of the
information supplied or to be supplied by any Regions Company or any
Affiliate thereof for inclusion in the Proxy Statement to be mailed to
American Bancshares stockholders in connection with the Stockholders'
Meeting, and any other documents to be filed by any Regions Company or any
Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the
respective time such documents are filed, and with respect to the Proxy
Statement, when first mailed to the stockholders of American Bancshares, be
false or misleading with respect to any material fact, or contain any
misstatement of a material fact or, omit to state any material fact
required to be stated thereunder or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, in the case of the Proxy Statement, or any amendment
thereof or supplement thereto, at the time of the Stockholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact required to be stated thereunder or necessary to correct any
statement in any earlier communication with respect to the solicitation of
any proxy for the Stockholders' Meeting. All documents that any Regions
Company or any Affiliate thereof is responsible for filing with any
Regulatory Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with the provisions
of applicable Law.
6.11 ACCOUNTING, TAX, AND REGULATORY MATTERS. Except as specifically
contemplated by this Agreement, no Regions Company or any Affiliate thereof
has taken any action, or agreed to take any action, or has any Knowledge of
any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or treatment as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement. To the
Knowledge of Regions, there exists no fact, circumstance, or reason why the
requisite Consents referred to in Section 9.1(b) of this Agreement cannot
be received in a timely manner without imposition of any condition of the
type described in the last sentence of such Section 9.1(b).
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF AMERICAN BANCSHARES. Unless the prior written
consent of the chief executive officer, vice chairman, or appropriate regional
president, of Regions shall have been obtained, and except as otherwise
expressly contemplated herein or disclosed in Section 7.1 of the American
Bancshares
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Disclosure Memorandum, American Bancshares shall and shall cause each of its
Subsidiaries to, from the date of this Agreement until the Effective Time or
termination of this Agreement, (i) operate its business only in the usual,
regular, and ordinary course, (ii) preserve intact in all material respects its
business organization and Assets and maintain its rights and franchises, and
(iii) take no action which would (x) materially adversely affect the ability of
any Party to obtain any Consents required for the transactions contemplated
hereby without imposition of a condition or restriction of the type referred to
in the last sentences of Sections 9.1(b) and 9.1(c) of this Agreement, or (y)
materially adversely affect the ability of any Party to perform its covenants
and agreements under this Agreement.
7.2 NEGATIVE COVENANTS OF AMERICAN BANCSHARES. Except as disclosed in
Section 7.2 of the American Bancshares Disclosure Memorandum for the applicable
paragraphs indicated below, from the date of this Agreement until the earlier of
the Effective Time or the termination of this Agreement, American Bancshares
covenants and agrees that it will not do or agree or commit to do, or permit any
of its Subsidiaries to do or agree or commit to do, any of the following without
the prior written consent of the chief executive officer, vice chairman, or
appropriate regional president of Regions, which consent shall not be
unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or other governing
instruments of any American Bancshares Company; or
(b) incur any additional debt obligation or other obligation for
borrowed money (other than indebtedness of an American Bancshares Company
to another American Bancshares Company) in excess of an aggregate amount
outstanding at any time of $150,000 (for the American Bancshares Companies
on a consolidated basis) except in the ordinary course of the business of
American Bancshares, or such Subsidiary, consistent with past practices
(which shall include, for American Bancshares, creation of deposit
liabilities, purchases of federal funds, advances from the Federal Reserve
Bank or Federal Home Loan Bank, whether or not American Bancshares has
previously received any such advances, overnight borrowings to meet
temporary liquidity needs, and entry into repurchase agreements fully
secured by U.S. Government or agency securities), or impose, or suffer the
imposition on any Asset of any American Bancshares Company of any Lien or
permit any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax and loan"
accounts established in the ordinary course of business, the satisfaction
of legal requirements in the exercise of trust powers, Liens to secure debt
obligations or other obligations for borrowed money permitted under this
paragraph (b), and Liens in effect as of the date hereof that are disclosed
in the American Bancshares Disclosure Memorandum); or
(c) repurchase, redeem, or otherwise acquire or exchange (other than
exchanges in the ordinary course under employee benefit plans), directly or
indirectly, any shares, or any securities convertible into any shares, of
the capital stock of any American Bancshares Company, or declare or pay any
dividend or make any other distribution in respect of American Bancshares'
capital stock, provided that American Bancshares may (to the extent legally
and contractually permitted to do so), but shall not be obligated to,
declare and pay quarterly cash dividends on the shares of American
Bancshares Common Stock at a rate not in excess of $.32 per share with
record and payment dates the same as the record and payment dates declared
by Regions for cash dividends on the Regions Common Stock during 1995;
provided that the Parties shall cooperate in selecting the record date of
American Bancshares' cash dividend for the quarter in which the Effective
Time is to occur to ensure that, with respect to such quarterly period, the
holders of American Bancshares Common Stock do not receive both a dividend
in respect of their American Bancshares Common Stock and a dividend in
respect of Regions Common Stock or fail to receive any dividend and if
Regions has delayed the Effective Time pursuant to the last clause of
Section 1.3 of the Agreement such that the Effective Time could have
occurred at a time and date prior to the record date for payment of a
dividend to holders of Regions Common Stock but for such delay, American
Bancshares may declare and pay on American Bancshares Common Stock a
dividend equal to the aggregate of the amount stockholders of American
Bancshares would have received but for such delay; or
(d) except for this Agreement, or pursuant to the exercise of stock
options outstanding as of the date hereof and pursuant to the terms thereof
in existence on the date hereof, or as disclosed in
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Section 7.2(d) of the American Bancshares Disclosure Memorandum, issue,
sell, pledge, encumber, authorize the issuance of, enter into any Contract
to issue, sell, pledge, encumber, or authorize the issuance of, or
otherwise permit to become outstanding, any additional shares of American
Bancshares Common Stock or any other capital stock of any American
Bancshares Company, or any Rights to acquire such stock; or
(e) adjust, split, combine, or reclassify any capital stock of any
American Bancshares Company or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of American
Bancshares Common Stock, or sell, lease, mortgage, or otherwise dispose of
or otherwise encumber any shares of capital stock of any American
Bancshares Subsidiary (unless any such shares of stock are sold or
otherwise transferred to another American Bancshares Company) or any Asset
having a book value in excess of $100,000 other than in the ordinary course
of business for reasonable and adequate consideration and other than
dispositions in the ordinary course of business of (i) investment
securities, (ii) loans, including dispositions thereof through loan
participation agreements, and (iii) other real estate owned by any American
Bancshares Company; or
(f) except for purchases of U.S. Treasury securities, U.S. Government
agency securities and mortgage backed balloon loans, which in each case
have maturities of five years or less, purchase any securities or make any
material investment, either by purchase of stock or securities,
contributions to capital, Asset transfers, or purchase of any Assets, in
any Person other than a wholly owned American Bancshares Subsidiary, or
otherwise acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, or
(ii) acquisitions of control by a depository institution Subsidiary in its
fiduciary capacity; or
(g) grant any increase in compensation or benefits to the employees or
officers of any American Bancshares Company, except in accordance with past
practice or previously approved by the Board of Directors of American
Bancshares, in each case as disclosed in Section 7.2(g) of the American
Bancshares Disclosure Memorandum or as required by Law; except as disclosed
in Section 7.2(g) of the American Bancshares Disclosure Memorandum, pay any
severance or termination pay or any bonus other than pursuant to written
policies or written Contracts in effect on the date of this Agreement and
disclosed in Section 7.2(g) of the American Bancshares Disclosure
Memorandum; and enter into or amend any severance agreements with officers
of any American Bancshares Company; grant any increase in fees or other
increases in compensation or other benefits to directors of any American
Bancshares Company except in accordance with past practice disclosed in
Section 7.2(g) of the American Bancshares Disclosure Memorandum; or
voluntarily accelerate the vesting of any stock options or other
stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between any American
Bancshares Company and any Person (unless such amendment is required by
Law) that the American Bancshares Company does not have the unconditional
right to terminate without Liability (other than Liability for services
already rendered) at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any American Bancshares
Company or make any material change in or to any existing employee benefit
plans of any American Bancshares Company other than any such change that is
required by Law or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan; or
(j) make any significant change in any Tax or accounting methods or
systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or
GAAP; or
(k) commence any material Litigation other than in accordance with
past practice, settle any Litigation involving any Liability of any
American Bancshares Company for money damages in excess of $100,000 or
imposing material restrictions upon the operations of any American
Bancshares Company; or
(l) modify, amend, or terminate any material Contract (other than any
loan Contract, the modification, amendment, or termination of which does
not result in the American Bancshares
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Companies recognizing a loss that exceeds $300,000) or waive, release,
compromise, or assign any material rights or claims, other than in
connection with the modification, amendment, or termination of a loan
Contract permitted under the preceding clause of this paragraph (1).
7.3 COVENANTS OF REGIONS. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, Regions
covenants and agrees that, except as disclosed in Section 7.3 of the Regions
Disclosure Memorandum, it shall and shall cause each of its Subsidiaries to (x)
continue to conduct its business and the business of its Subsidiaries in a
manner designed in its reasonable judgment to enhance the long-term value of the
Regions Common Stock and the business prospects of the Regions Companies and to
the extent consistent therewith use all reasonable efforts to preserve intact
the Regions Companies' core businesses and goodwill with their respective
employees and the communities they serve, (y) take no action which would (i)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentences of
Sections 9.1(b) and 9.1(c) of this Agreement, or (ii) materially adversely
affect the ability of any Party to perform its covenants and agreements under
this Agreement; provided, that the foregoing shall not prevent any Regions
Company from discontinuing or disposing of any of its Assets or business if such
action is, in the judgment of Regions, desirable in the conduct of the business
of Regions and its Subsidiaries, and (z) amend the Certificate of Incorporation
or Bylaws of Regions, in each case, in any manner which is adverse to, and
discriminates against, the holders of American Bancshares Common Stock. Regions
further agrees that it shall not, directly or indirectly, acquire or enter into
any agreement in principle or definitive agreement to acquire, any financial or
other institution or business if such acquisition would be reasonably likely to
cause any Consent of any Regulatory Authority which is necessary to consummate
the transactions contemplated hereby to be conditioned or restricted in any
manner that would cause the condition set forth in the second sentence of
Section 9.1(b) not to be satisfied, unless Regions waives such condition in
writing in advance of the earliest of such acquisition, agreement and agreement
in principle.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable efforts to prevent or promptly to
remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all reports
required to be filed by it with Regulatory Authorities between the date of this
Agreement and the Effective Time and shall deliver to the other Party copies of
all such reports promptly after the same are filed. If financial statements are
contained in any such reports filed with the SEC, such financial statements will
fairly present the consolidated financial position of the entity filing such
statements as of the dates indicated and the consolidated results of operations,
changes in stockholders' equity, and cash flow for the periods then ended in
accordance with GAAP (subject in the case of interim financial statements to
normal recurring year-end adjustments that are not material and to the absence
from interim financial statements of any (in the case of American Bancshares) or
complete (in the case of Regions) footnote disclosures). As of the respective
dates, such reports filed with the SEC will comply in all material respects with
the Securities Laws and will not contain any untrue statement of material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; STOCKHOLDER APPROVAL. (a) As
soon as reasonably practicable after execution of this Agreement, Regions shall
prepare and file the Registration Statement with the SEC, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
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the 1933 Act and take any action required to be taken under the applicable state
Blue Sky or securities Laws in connection with the issuance of the shares of
Regions Common Stock upon consummation of the Merger. American Bancshares shall
furnish all information concerning it and the holders of its capital stock as
Regions may reasonably request in connection with such action. American
Bancshares shall call a Stockholders' Meeting for the purpose of voting upon
approval of this Agreement and such other related matters as it deems
appropriate. In connection with the Stockholders' Meeting, (i) American
Bancshares shall mail the Proxy Statement to its stockholders, (ii) the Parties
shall furnish to each other all information concerning them that they may
reasonably request in connection with such Proxy Statement, (iii) the Board of
Directors of American Bancshares shall recommend (subject to compliance with
their fiduciary duties as advised by counsel) to its stockholders the approval
of this Agreement, and (iv) the Board of Directors and officers of American
Bancshares shall (subject to compliance with their fiduciary duties as advised
by counsel) use their reasonable efforts to obtain such stockholders' approval.
(b) Regions shall indemnify and hold harmless American Bancshares, each of
its directors and officers, and each Person, if any, who controls American
Bancshares within the meaning of the 1933 Act against any losses, claims,
damages, or Liabilities, joint, several, or solidary, to which they or any of
them may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages, or Liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of
material fact contained in the Registration Statement or the Proxy Statement, or
arising out of or based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each such Person for any legal or
other expenses reasonably incurred by such person in connection with
investigating or defending any such action or claim; provided, however, that
Regions shall not be liable in any such case to the extent that any such loss,
claim, damage, or Liability (or action in respect thereof) arises out of or is
based upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or the Proxy Statement in
reliance upon and in conformity with information furnished to Regions by the
indemnified Person. Promptly after receipt by an indemnified Person of notice of
the commencement of any action, such indemnified Person shall, if a claim in
respect thereof is to be made against Regions under this Section 8.1(b), notify
Regions in writing of the commencement thereof, but failure to give prompt
notice shall deprive the indemnified Person of his or her right to be
indemnified only to the extent that Regions is thereby prejudiced. In case any
such action shall be brought against any indemnified Person and it shall notify
Regions of the commencement thereof, Regions shall be entitled to participate
therein, and to the extent that it shall wish, to assume the defense thereof,
with counsel satisfactory to such indemnified Person, and, after notice from
Regions to such indemnified Person of its election to so assume the defense
thereof, Regions shall not be liable to such indemnified party under this
Section 8.1(b) for any legal expenses of other counsel or any other expenses
subsequently incurred by such indemnified Person, except that if Regions elects
not to assume such defense or counsel for an indemnified Person or Persons
advises in writing that there are material substantive issues which raise
conflicts of interests between Regions and one or more indemnified Persons, such
indemnified Person or Persons may retain counsel satisfactory to them, and
Regions shall pay all reasonable fees and expenses of such counsel for the
indemnified Persons, promptly as statements therefor are received; provided that
(i) Regions shall be obligated pursuant to this Section 8.1(b) to pay for only
one firm of counsel for all indemnified Persons in any jurisdiction and (ii)
Regions shall not be liable for any settlement effected without its prior
written consent.
8.2 EXCHANGE LISTING. Regions shall use its reasonable efforts to list,
prior to the Effective Time, on the Nasdaq NMS, subject to official notice of
issuance, the shares of Regions Common Stock to be issued to the holders of
American Bancshares Common Stock pursuant to the Merger.
8.3 APPLICATIONS. Regions shall promptly prepare and file, and American
Bancshares shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 FILINGS WITH STATE OFFICES. Upon the terms and subject to the
conditions of this Agreement, Regions shall execute and file the Louisiana
Certificate of Merger with the Secretary of State of the State of
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Louisiana and Regions shall execute and file the Delaware Certificate of Merger
with the Secretary of State of the State of Delaware in connection with the
Closing.
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms and
conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, its reasonable efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper, or
advisable under applicable Laws to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions contemplated by
this Agreement, including using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate the transactions
contemplated herein and to cause to be satisfied the conditions referred to in
Article 9 of this Agreement; provided, that nothing herein shall preclude either
Party from exercising its rights under this Agreement. Each Party shall use, and
shall cause each of its Subsidiaries to use, its reasonable efforts to obtain
all Consents necessary or desirable for the consummation of the transactions
contemplated by this Agreement.
8.6 INVESTIGATION AND CONFIDENTIALITY. (a) Prior to the Effective Time,
each Party shall keep the other Party advised of all material developments
relevant to its business and to consummation of the Merger and shall permit the
other Party to make or cause to be made such investigation of the business and
properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. American
Bancshares shall cooperate with Regions in obtaining, at Regions' election and
expense, environmental audits of any or all of the properties owned or occupied
by American Bancshares. No investigation by a Party shall affect the
representations and warranties of the other Party.
(b) Each Party shall, and shall cause its Representatives to, maintain the
confidentiality of all written, oral, and other confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions ("Confidential Information") and
shall not use such information for any purpose except in furtherance of the
transactions contemplated by this Agreement. Each Party shall maintain the
confidentiality of all Confidential Information obtained in connection with this
Agreement or the transactions contemplated hereby unless (i) such information
becomes publicly available through no fault of such Party, or was, is, or
becomes available to that Party from a source other than the other Party or its
Representatives, which source was itself not bound by a confidentiality
agreement with, or other contractual, legal, or fiduciary obligation of
confidentiality with respect to that information, or (ii) the furnishing or use
of such information is required by proper judicial, administrative, or other
legal proceeding, provided that the other Party is promptly notified in writing
of such request, unless such notification is not, in the opinion of counsel,
permitted by Law. Each Party and its Representatives will hold and maintain all
Confidential Information in confidence and will not disclose to any third party
or permit any third party access to any Confidential Information or the
substance thereof provided that a Party may disclose Confidential Information to
such of its Representatives who need to know such information in connection with
the transactions contemplated hereby. If this Agreement is terminated prior to
the Effective Time, each Party shall promptly return or certify the destruction
of all documents and copies thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice as soon as practicable
after any determination by it of any fact or occurrence relating to the other
Party which it has discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a material breach of
any representation, warranty, covenant, or agreement of the other Party or which
has had or is reasonably likely to have a Material Adverse Effect on the other
Party.
8.7 PRESS RELEASES. Prior to the Effective Time, American Bancshares and
Regions shall consult with each other as to the form and substance of any press
release or other public disclosure materially related to this Agreement or any
other transaction contemplated hereby; provided, that nothing in this Section
8.7 shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's disclosure
obligations imposed by Law.
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8.8 CERTAIN ACTIONS. Except to the extent necessary to comply with the
fiduciary duties as advised by counsel of American Bancshares' Board of
Directors, no American Bancshares Company nor any Affiliate thereof nor any
Representative retained by any American Bancshares Company shall (i) directly or
indirectly solicit any Acquisition Proposal by any Person. (ii) furnish any
non-public information that it is not legally obligated to furnish, (iii)
negotiate with respect to, or (iv) enter into any Contract with respect to, any
Acquisition Proposal, but American Bancshares may communicate information about
such an Acquisition Proposal to its stockholders if and to the extent that it or
its directors are required to do so in order to comply with its or their
fiduciary duties as advised by counsel. American Bancshares shall promptly
notify Regions orally and in writing in the event that it receives any inquiry
or proposal relating to any such transaction. American Bancshares shall (i)
immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) direct and use its reasonable efforts to cause
all of its Representatives not to engage in any of the foregoing subject to
fiduciary duties as aforesaid.
8.9 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
agrees to use its reasonable efforts to cause the Merger, and to take no action
which would cause the Merger not, to qualify for treatment as a pooling of
interests or as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code for federal income tax purposes.
8.10 STATE TAKEOVER LAWS. Each American Bancshares Company shall take all
necessary steps to exempt the transactions contemplated by this Agreement from,
or if necessary challenge the validity or applicability of Sections 132 et seq.
of the LBCL.
8.11 CHARTER PROVISIONS. Each American Bancshares Company shall take all
necessary action to ensure that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby or
thereby do not and will not result in the grant of any rights to any Person
under the Articles of Incorporation, Bylaws, or other governing instruments of
any American Bancshares Company or restrict or impair the ability of Regions or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of any American Bancshares Company that may
be directly or indirectly acquired or controlled by it.
8.12 AGREEMENT OF AFFILIATES. American Bancshares has disclosed in Section
8.12 of the American Bancshares Disclosure Memorandum each Person whom it
reasonably believes is an "affiliate" of American Bancshares for purposes of
Rule 145 under the 1933 Act. American Bancshares shall use its reasonable
efforts to cause each such Person to deliver to Regions not later than 30 days
prior to the Effective Time a written agreement, substantially in the form of
Exhibit 2, providing that such Person will not sell, pledge, transfer, or
otherwise dispose of the shares of American Bancshares Common Stock held by such
Person except as contemplated by such agreement or by this Agreement and will
not sell, pledge, transfer, or otherwise dispose of the shares of Regions Common
Stock to be received by such Person upon consummation of the Merger except in
compliance with applicable provisions of the 1933 Act and the rules and
regulations thereunder and until such time as financial results covering at
least 30 days of combined operations of Regions and American Bancshares have
been published within the meaning of Section 201.01 of the SEC's Codification of
Financial Reporting Policies. Shares of Regions Common Stock issued to such
affiliates of American Bancshares in exchange for shares of American Bancshares
Common Stock shall not be transferable until such time as financial results
covering at least 30 days of combined operations of Regions and American
Bancshares have been published within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies, regardless of whether each such
affiliate has provided the written agreement referred to in this Section 8.12
(and Regions shall be entitled to place restrictive legends upon certificates
for shares of Regions Common Stock issued to affiliates of American Bancshares
pursuant to this Agreement to enforce the provisions of this Section 8.12).
Regions shall not be required to maintain the effectiveness of the Registration
Statement under the 1933 Act for the purposes of resale of Regions Common Stock
by such affiliates.
8.13 INDEMNIFICATION. (a) For a period of ten years after the Effective
Time, Regions shall, and shall cause the Surviving Corporation to, indemnify,
defend, and hold harmless the present and former directors, officers, employees,
and agents of each of the American Bancshares Companies (each, an "Indemnified
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Party") against all Liabilities arising out of actions or omissions occurring at
or prior to the Effective Time (including the transactions contemplated by this
Agreement) to the full extent permitted under Louisiana Law and by American
Bancshares' Articles of Incorporation and Bylaws as in effect on the date
hereof, including provisions relating to advances of expenses incurred in the
defense of any Litigation, provided, however, that the indemnification provided
by this Section 8.13(a) shall not apply to any claim against an Indemnified
Party if such Indemnified Party knew of the existence of the claim and failed to
make a good faith effort to require American Bancshares to notify its director
and officer liability insurance carrier of the existence of such claim prior to
the Effective Time. Without limiting the foregoing, in any case in which
approval is required to effectuate any indemnification, the determination of any
such approval shall be made, at the election of the Indemnified Party, by
independent counsel mutually agreed upon between Regions and the Indemnified
Party.
(b) Any Indemnified Party wishing to claim indemnification under paragraph
(a) of this Section 8.13, upon learning of any such Liability or Litigation,
shall promptly notify Regions thereof. In the event of any such Litigation
(whether arising before or after the Effective Time), (i) Regions or American
Bancshares shall have the right to assume the defense thereof and Regions shall
not be liable to such Indemnified Parties for any legal expenses of other
counsel or any other expenses subsequently incurred by such Indemnified Parties
in connection with the defense thereof, except that if Regions or American
Bancshares elects not to assume such defense or counsel for the Indemnified
Parties advises in writing that there are material substantive issues which
raise conflicts of interest between Regions or American Bancshares and the
Indemnified Parties, the Indemnified Parties may retain counsel satisfactory to
them, and Regions or American Bancshares shall pay all reasonable fees and
expenses of such counsel for the Indemnified Parties promptly as statements
therefor are received; provided, that (i) Regions shall be obligated pursuant to
this paragraph (b) to pay for only one firm of counsel for all Indemnified
Parties in any jurisdiction, (ii) the Indemnified Parties will cooperate (to the
extent reasonably appropriate under the circumstances) in the defense of any
such Litigation, and (iii) Regions shall not be liable for any settlement
effected without its prior written consent; and provided further that Regions
shall not have any obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall determine, and such determination shall
have become final, that the indemnification of such Indemnified Party in the
manner contemplated hereby is prohibited by applicable Law.
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations of
each Party to consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following conditions, unless
waived by both Parties pursuant to Section 11.6 of this Agreement:
(a) STOCKHOLDER APPROVAL. The stockholders of American Bancshares
shall have approved this Agreement, and the consummation of the
transactions contemplated hereby and thereby, including the Merger, as and
to the extent required by Law or by the provisions of any governing
instruments.
(b) REGULATORY APPROVALS. All Consents of, filings and registrations
with, and notifications to, all Regulatory Authorities required for
consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner (including requirements relating to
the raising of additional capital or the disposition of Assets) which in
the reasonable judgment of the Board of Directors of Regions would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement that, had such condition or
requirement been known, Regions would not, in its reasonable judgment, have
entered into this Agreement.
(c) CONSENTS AND APPROVALS. Each Party shall have obtained any and
all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for
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the preventing of any Default under any Contract or Permit of such Party
which, if not obtained or made, is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on such Party. No Consent so
obtained which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner which in the
reasonable judgment of the Board of Directors of Regions would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger.
(d) LEGAL PROCEEDINGS. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions contemplated
by this Agreement.
(e) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness
of the Registration Statement shall have been issued, no action, suit,
proceeding, or investigation by the SEC to suspend the effectiveness
thereof shall have been initiated and be continuing, and all necessary
approvals under state securities Laws or the 1933 Act or 1934 Act relating
to the issuance or trading of the shares of Regions Common Stock issuable
pursuant to the Merger shall have been received.
(f) EXCHANGE LISTING. The shares of Regions Common Stock issuable
pursuant to the Merger shall have been approved for listing on the Nasdaq
NMS subject to official notice of issuance.
(g) TAX MATTERS. Each Party shall have received a written opinion
dated the Effective Date of Alston & Bird, special counsel to Regions, in
form reasonably satisfactory to the Parties (the "Tax Opinion"), to the
effect that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, and (ii) the
exchange in the Merger of American Bancshares Common Stock for Regions
Common Stock will not give rise to gain or loss to the stockholders of
American Bancshares with respect to such exchange (except to the extent of
any cash received). In rendering such Tax Opinion, counsel for Regions
shall be entitled to rely upon representations of officers of American
Bancshares and Regions reasonably satisfactory in form and substance to
such counsel.
9.2 CONDITIONS TO OBLIGATIONS OF REGIONS. The obligations of Regions to
consummate the Merger and the other transactions contemplated hereby are subject
to the satisfaction of the following conditions, unless waived by Regions
pursuant to Section 11.6(a) of this Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.2(a), the accuracy of the representations and warranties of American
Bancshares set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though
all such representations and warranties had been made on and as of the
Effective Time (provided that representations and warranties which are
confined to a specified date shall speak only as of such date). The
representations and warranties of American Bancshares set forth in Section
5.3 of this Agreement shall be true and correct (except for inaccuracies
which are de minimus in amount). The representations and warranties of
American Bancshares set forth in Sections 5.16, 5.17, and 5.19 of this
Agreement shall be true and correct in all material respects. There shall
not exist inaccuracies in the representations and warranties of American
Bancshares set forth in this Agreement (including the representations and
warranties set forth in Sections 5.3, 5.16, 5.17, and 5.19) such that the
aggregate effect of such inaccuracies has, or is reasonably likely to have,
a Material Adverse Effect on American Bancshares; provided that, for
purposes of this sentence only, those representations and warranties which
are qualified by references to "material" or "Material Adverse Effect" or
to the "Knowledge" of American Bancshares or to a matter being "known" by
American Bancshares shall be deemed not to include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of American Bancshares to be performed and
complied with pursuant to this Agreement and the other
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agreements contemplated hereby prior to the Effective Time shall have been
duly performed and complied with in all material respects.
(c) CERTIFICATES. American Bancshares shall have delivered to Regions
(i) a certificate, dated as of the Effective Time and signed on its behalf
by its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Sections 9.2(a)
and 9.2(b) of this Agreement have been satisfied, and (ii) certified copies
of resolutions duly adopted by American Bancshares' Board of Directors and
stockholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement, and
the consummation of the transactions contemplated hereby, all in such
reasonable detail as Regions and its counsel shall request.
(d) OPINION OF COUNSEL. Regions shall have received an opinion of
Correro, Fishman & Casteix, L.L.P., counsel to American Bancshares, dated
as of the Effective Time, in form reasonably satisfactory to Regions, as to
the matters set forth in Exhibit 3.
(e) AFFILIATES AGREEMENTS. Regions shall have received from each
affiliate of American Bancshares the affiliate letter referred to in
Section 8.12 of this Agreement.
(f) CLAIMS LETTERS. Each of the directors and officers of American
Bancshares shall have executed and delivered to Regions letters in
substantially the form of Exhibit 4.
(g) POOLING LETTER. Regions shall have received a letter from Ernst &
Young LLP, dated as of the Effective Time, to the effect that the Merger
will qualify for pooling-of-interests accounting treatment under Accounting
Principles Board Opinion No. 16 if closed and consummated in accordance
with this Agreement.
9.3 CONDITIONS TO OBLIGATIONS OF AMERICAN BANCSHARES. The obligations of
American Bancshares to consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by American Bancshares pursuant to Section 11.6(b) of this
Agreement:
(a) REPRESENTATIONS AND WARRANTIES. For purposes of this Section
9.3(a), the accuracy of the representations and warranties of Regions set
forth in this Agreement shall be assessed as of the date of this Agreement
and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of Regions set forth in Section 6.3 of this Agreement shall be
true and correct (except for inaccuracies which are de minimus in amount).
The representations and warranties of Regions set forth in Section 6.11 of
this Agreement shall be true and correct in all material respects. There
shall not exist inaccuracies in the representations and warranties of
Regions set forth in this Agreement (including the representations and
warranties set forth in Sections 6.3 and 6.11) such that the aggregate
effect of such inaccuracies has, or is reasonably likely to have, a
Material Adverse Effect on Regions; provided that, for purposes of this
sentence only, those representations and warranties which are qualified by
references to "material" or "Material Adverse Effect" or to the "Knowledge"
of Regions or to a matter being "known" by Regions shall be deemed not to
include such qualifications.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of the
agreements and covenants of Regions to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied
with in all material respects.
(c) CERTIFICATES. Regions shall have delivered to American Bancshares
(i) a certificate, dated as of the Effective Time and signed on its behalf
by its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Sections 9.3(a)
and 9.3(b) of this Agreement have been satisfied, and (ii) certified copies
of resolutions duly adopted by Regions' Board of Directors evidencing the
taking of all corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as American
Bancshares and its counsel shall request.
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(d) OPINION OF COUNSEL. American Bancshares shall have received an
opinion of Lange, Simpson, Robinson & Somerville, counsel to Regions, dated
as of the Effective Time, in form reasonably acceptable to American
Bancshares, as to the matters set forth in Exhibit 5.
(E) FAIRNESS OPINION. American Bancshares shall have received a
letter from National Capital Corporation or another financial adviser
selected by American Bancshares dated not more than five days subsequent to
the date of this Agreement, to the effect that in the opinion of such firm,
the consideration to be received in the Merger by the stockholders of
American Bancshares is fair to the stockholders of American Bancshares from
a financial point of view.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
and notwithstanding the approval of this Agreement by the stockholders of
American Bancshares, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of Regions and the
Board of Directors of American Bancshares; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in breach of any representation or warranty
contained in this Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of American Bancshares and
Section 9.3(a) of this Agreement in the case of Regions or in material
breach of any covenant or other agreement contained in this Agreement) in
the event of an inaccuracy of any representation or warranty of the other
Party contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching Party of
such inaccuracy and which inaccuracy would provide the terminating Party
the ability to refuse to consummate the Merger under the applicable
standard set forth in Section 9.2(a) of this Agreement in the case of
American Bancshares and Section 9.3(a) of this Agreement in the case of
Regions; or
(c) By the Board of Directors of either Party in the event of a
material breach by the other Party of any covenant or agreement contained
in this Agreement which cannot be or has not been cured within 30 days
after the giving of written notice to the breaching Party of such breach;
or
(d) By the Board of Directors of either Party in the event (i) any
Consent of any Regulatory Authority required for consummation of the Merger
and the other transactions contemplated hereby shall have been denied by
final nonappealable action of such authority or if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) the
stockholders of American Bancshares fail to vote their approval of this
Agreement and the Joint Agreement of Merger and the transactions
contemplated hereby as required by the LBCL at the Stockholders' Meeting or
any adjournment or postponement thereof where the transactions were
presented to such stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the event that the
Merger shall not have been consummated by October 15, 1996, except that a
Party that has breached the obligation to consummate the Closing and has
failed to cure such breach may not terminate under this subsection; or
(f) By the Board of Directors of either Party in the event that any of
the conditions precedent to the obligations of such Party to consummate the
Merger, other than the conditions in Section 9.2(a) in the case of American
Bancshares or 9.3(a) in the case of Regions, cannot be satisfied or
fulfilled by the date specified in Section 10.1(e) of this Agreement.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, and neither Party shall have any
claim or legal right to redress, whether for breach of contract or otherwise, as
a result of a
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breach of any representation, warranty, covenant, or condition of this
Agreement, except that (i) the provisions of this Section 10.2 and Article 11
and Section 8.1(b) and 8.6(b) of this Agreement shall survive any such
termination and abandonment, and (ii) a termination pursuant to Section 10.1(b),
10.1(c), or 10.1(f) of this Agreement shall not relieve the breaching Party from
Liability for an uncured willful and knowing breach of a representation,
warranty, material covenant, or material agreement giving rise to such
termination.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The respective
representations, warranties, obligations, covenants, and agreements of the
Parties shall not survive the Effective Time except this Section 10.3 and
Articles 2, 3, 4, and 11 of this Agreement and Sections 8.1(b), 8.12 and 8.13 of
this Agreement.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS. Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any tender
offer or exchange offer or any proposal for a merger, acquisition of all of
the stock or assets of, or other business combination involving such Party
or any of its Subsidiaries or the acquisition of a substantial equity
interest in, or a substantial portion of the assets of, such Party or any
of its Subsidiaries.
"AFFILIATE" of a Person shall mean any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by,
or under common control with such Person.
"AGREEMENT" shall mean this Agreement and Plan of Reorganization,
including the Exhibits delivered pursuant hereto and incorporated herein by
reference.
"AMERICAN BANCSHARES BENEFIT PLANS" shall have the meaning set forth
in Section 5.11 of this Agreement.
"AMERICAN BANCSHARES COMMON STOCK" shall mean the $3.00 par value
common stock of American Bancshares.
"AMERICAN BANCSHARES COMPANIES" shall mean, collectively, American
Bancshares and all American Bancshares Subsidiaries.
"AMERICAN BANCSHARES DISCLOSURE MEMORANDUM" shall mean the written
information entitled "American Bancshares of Houma, Inc. Disclosure
Memorandum" delivered prior to the 7th day after the date of this Agreement
to Regions describing in reasonable detail the matters contained therein
and, with respect to each disclosure made therein, specifically referencing
each Section of this Agreement under which such disclosure is being made.
Information disclosed with respect to one Section shall not be deemed to be
disclosed for purposes of any other Section not specifically referenced
with respect thereto.
"AMERICAN BANCSHARES FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if any)
of American Bancshares as of September 30, 1995, and as of December 31,
1994 and 1993, and the related consolidated statements of income, changes
in stockholders' equity, and cash flows (including related notes and
schedules, if any) for the nine months ended September 30, 1995, and for
each of the three years ended December 31, 1994, 1993, and 1992, included
in the American Bancshares Disclosure Memorandum, and (ii) the consolidated
balance sheets of American Bancshares (including related notes and
schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) with respect to periods ended subsequent to September
30, 1995.
"AMERICAN BANCSHARES SUBSIDIARIES" shall mean the Subsidiaries of
American Bancshares, which shall include the American Bancshares
Subsidiaries described in Section 5.4 of this Agreement and any
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corporation, bank, savings association, or other organization acquired as a
Subsidiary of American Bancshares in the future and owned by American
Bancshares at the Effective Time.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature, character, and
description, whether real, personal or mixed, tangible or intangible,
accrued or contingent, or otherwise relating to or utilized in such
Person's business, directly or indirectly, in whole or in part, whether or
not carried on the books and records of such Person, and whether or not
owned in the name of such Person or any Affiliate of such Person and
wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CLOSING" shall mean the closing of the transactions contemplated
hereby, as described in Section 1.2 of this Agreement.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease,
obligation, plan, practice, restriction, understanding or undertaking of
any kind or character, or other document to which any Person is a party or
that is binding on any Person or its capital stock, Assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default under
any Contract, Order, or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of control or both would constitute a
breach or violation of or default under any Contract, Order, or Permit, or
(iii) any occurrence of any event that with or without the passage of time
or the giving of notice would give rise to a right to terminate or revoke,
change the current terms of, or renegotiate, or to accelerate, increase, or
impose any Liability under, any Contract, Order, or Permit where, in any
such event, such Default is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on a Party.
"DGCL" shall mean the General Corporation Law of Delaware.
"EFFECTIVE TIME" shall mean the date and time at which the Merger
becomes effective as defined in Section 1.3 of this Agreement.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common law in respect of, pollution or
protection of the environment, including the Comprehensive Environmental
Response Compensation and Liability Act, as amended, 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act, as amended, 42
U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases, or threatened releases of any Hazardous Material, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of any Hazardous
Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall have the meaning provided in Section 5.8 of
this Agreement.
"ERISA PLAN" shall have the meaning provided in Section 5.8 of this
Agreement.
"EXCHANGE AGENT" shall have the meaning provided in Section 4.1 of
this Agreement.
"EXCHANGE RATIO" shall have the meaning provided in Section 3.1(b) of
this Agreement.
"EXHIBITS" 1 through 5, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof,
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and may be referred to in this Agreement and any other related instrument
or document without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance, hazardous
material, hazardous waste, regulated substance, or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil
(and specifically shall include asbestos requiring abatement, removal, or
encapsulation pursuant to the requirements of governmental authorities and
any polychlorinated biphenyls).
"HOLA" shall mean the Home Owners' Loan Act of 1933, as amended.
"HSR ACT" shall mean Section 7A of the Clayton Act, as added by Title
II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person shall mean the actual
knowledge of the chairman, president, chief financial officer, chief
accounting officer, chief credit officer, general counsel, any assistant or
deputy general counsel, or any senior or executive vice president of such
Person.
"LBCL" shall mean the Louisiana Business Corporation Law.
"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities, or business, including those promulgated, interpreted,
or enforced by any of the Regulatory Authorities.
"LIABILITY" shall mean any direct or indirect, primary or secondary
liability, indebtedness, obligation, penalty, cost, or expense (including
costs of investigation, collection, and defense), claim, deficiency,
guaranty, or endorsement of or by any Person (other than endorsements of
notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute, or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of title,
easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title
retention, or other security arrangement, or any adverse right or interest,
charge, or claim of any nature whatsoever of, on, or with respect to any
property or property interest, other than (i) Liens for current property or
other Taxes not yet due and payable, (ii) such imperfections of title and
encumbrances, if any, as do not materially detract from the value or
interfere with the present use of any of such Party's Assets, (iii) for
depository institution Subsidiaries of a Party, pledges to secure deposits,
and other Liens incurred in the ordinary course of the banking business,
and (iv) Liens that arise by operation of Law with respect to Liabilities
that are not delinquent or are being contested in good faith.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative, or
other proceeding, or notice (written or oral) by any Person alleging
potential Liability or requesting information about a potential claim
relating to or affecting a Party, its business, its Assets (including
Contracts related to it), or the transactions contemplated by this
Agreement, but shall not include regular, periodic examinations of
depository institutions and their Affiliates by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in question
or by any of its Subsidiaries or in which such Party or Subsidiary holds a
security interest, and, where required by the context, includes the owner
or operator of such property, but only with respect to such property.
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"MATERIAL" for purposes of this Agreement shall be determined in light
of the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine
materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change, or
occurrence which, together with any other event, change, or occurrence, has
a material adverse impact on (i) the financial position, business, or
results of operations of such Party and its Subsidiaries, taken as a whole,
or (ii) the ability of such Party to perform its obligations under this
Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "material adverse impact"
shall not be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations thereof by courts
or governmental authorities, (b) changes in GAAP or regulatory accounting
principles generally applicable to banks and savings associations and their
holding companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed consent of the other Party in
contemplation of the transactions contemplated hereby, (d) circumstances
affecting regional bank holding companies generally, (e) the Merger and
compliance with the provisions of this Agreement on the operating
performance of the Parties, and (f) and any adverse change in the status or
estimated outcome of the matters described in Section 5.14 of the American
Bancshares Disclosure Memorandum, nor shall any such change provide the
basis for a termination of this Agreement nor the non-fulfillment of any
condition of the obligations of Regions.
"MERGER" shall mean the merger of American Bancshares into and with
Regions Bank referred to in Section 1.1 of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ NMS" shall mean the National Market Service of Nasdaq or other
principal exchange on which Regions Common Stock is listed or quoted at the
relevant time.
"1933 ACT" shall mean the Securities Act of 1933, as amended. "1934
Act" shall mean the Securities Exchange Act of 1934, as amended. "NYSE"
shall mean the New York Stock Exchange, Inc.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which
the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such
facility or property.
"PARTY" shall mean either American Bancshares or Regions, and
"PARTIES" shall mean both American Bancshares and Regions.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a party
or that is or may be binding upon or inure to the benefit of any Person or
its securities, Assets, or business.
"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting
in a representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by American
Bancshares to solicit the approval of its stockholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
Regions relating to the issuance of the Regions Common Stock to holders of
American Bancshares Common Stock.
"REGIONS COMMON STOCK" shall mean the $0.625 par value common stock of
Regions.
"REGIONS COMPANIES" shall mean, collectively, Regions and all Regions
Subsidiaries.
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"REGIONS DISCLOSURE MEMORANDUM" shall mean the written information
entitled "Regions Financial Corporation Disclosure Memorandum" delivered
prior to the date of this Agreement to American Bancshares describing in
reasonable detail the matters contained therein and, with respect to each
disclosure made therein, specifically referencing each Section of this
Agreement under which such disclosure is being made. Information disclosed
with respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect
thereto.
"REGIONS FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Regions as of September 30, 1995, and as of December 31, 1994 and 1993, and
the related statements of income, changes in stockholders' equity, and cash
flows (including related notes and schedules, if any) for the nine months
ended September 30, 1995, and for each of the three years ended December
31, 1994, 1993, and 1992, as filed by Regions in SEC Documents and (ii) the
consolidated statements of condition of Regions (including related notes
and schedules, if any) and related statements of income, changes in
stockholders' equity, and cash flows (including related notes and
schedules, if any) included in SEC Documents filed with respect to periods
ended subsequent to September 30, 1995.
"REGIONS SUBSIDIARIES" shall mean the Subsidiaries of Regions, which
shall include the Regions Subsidiaries described in Section 6.4 of this
Agreement and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Regions in the future and owned by
Regions at the Effective Time.
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form
S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Regions under the 1933 Act with respect to the shares of Regions Common
Stock to be issued to the stockholders of American Bancshares in connection
with the transactions contemplated by this Agreement and which shall
include the Proxy Statement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal Trade
Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of Thrift Supervision
(including its predecessor, the Federal Home Loan Bank Board), the Office
of the Comptroller of the Currency, Federal Deposit Insurance Corporation,
all state regulatory agencies having jurisdiction over the Parties and
their respective Subsidiaries, the NYSE, the NASD, and the SEC.
"REPRESENTATIVES" means with respect to any Party its directors,
officers, employees, agents, advisors, attorneys, accountants, and other
representatives.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants, or other
binding obligations of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, shares of the capital stock
of a Person or by which a Person is or may be bound to issue additional
shares of its capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements, registration
statements, reports, schedules, and other documents filed, or required to
be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the
rules and regulations of any Regulatory Authority promulgated thereunder.
"STOCKHOLDERS' MEETING" shall mean the meeting of the stockholders of
American Bancshares to be held pursuant to Section 8.1 of this Agreement,
including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, banks, associations,
or other entities of which the entity in question owns or controls 50% or
more of the outstanding equity securities either directly or through an
unbroken chain of entities as to each of which 50% or more of the
outstanding equity
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securities is owned directly or indirectly by its parent; provided, there
shall not be included any such entity acquired through foreclosure or any
such entity the equity securities of which are owned or controlled in a
fiduciary capacity.
"SURVIVING CORPORATION" shall mean Regions as the Surviving
Corporation resulting from the Merger.
"TAX" or "TAXES" shall mean all federal, state, local, and foreign
taxes, charges, fees, levies, imposts, duties, or other assessments,
including income, gross receipts, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall
profits, environmental, federal highway use, commercial rent, customs
duties, capital stock, paid-up capital, profits, withholding, Social
Security, single business and unemployment, disability, real property,
personal property, registration, ad valorem, value added, alternative or
add-on minimum, estimated, or other tax or governmental fee of any kind
whatsoever, imposed or required to be withheld by the United States or any
state, local, foreign government or subdivision or agency thereof,
including any interest, penalties or additions thereto.
Any singular term in this Agreement shall be deemed to include the plural,
and any plural term the singular. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed followed by the
words "without limitation."
11.2 EXPENSES. (a) Except as otherwise provided in this Section 11.2, each
of the Parties shall bear and pay all direct costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated hereunder,
including filing, registration, and application fees, printing fees, and fees
and expenses of its own financial or other consultants, investment bankers,
accountants, and counsel, except that Regions shall bear and pay the filing fees
payable in connection with the Registration Statement and the Proxy Statement
and printing costs incurred in connection with the printing of the Registration
Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 shall constitute or shall be
deemed to constitute liquidated damages for the willful and knowing breach by a
Party of the terms of this Agreement or otherwise limit the rights of the
nonbreaching Party.
11.3 BROKERS AND FINDERS. Each of the Parties represents and warrants
that, except as set forth in its Disclosure Memorandum, neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder or incurred any Liability for any financial advisory fees, investment
bankers' fees, brokerage fees, commissions, or finders' fees in connection with
this Agreement or the transactions contemplated hereby. In the event of a claim
by any broker or finder based upon his or its representing or being retained by
or allegedly representing or being retained by American Bancshares or Regions,
each of American Bancshares and Regions, as the case may be, agrees to indemnify
and hold the other Party harmless of and from any Liability in respect of any
such claim.
11.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this
Agreement (including the documents and instruments referred to herein)
constitutes the entire agreement between the Parties with respect to the
transactions contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral, other than the
confidentiality agreement between the Parties, which shall remain in effect.
Except as contemplated by Articles 3 and 4 of this Agreement and Sections
8.1(b), 8.12 and 8.13 of this Agreement, nothing in this Agreement expressed or
implied, is intended to confer upon any Person, other than the Parties or their
respective successors, any rights, remedies, obligations, or liabilities under
or by reason of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement may be
amended by a subsequent writing signed by each of the Parties upon the approval
of the Boards of Directors of each of the Parties; provided, that after any
approval by the holders of American Bancshares Common Stock, there shall be made
no amendment that pursuant to the LBCL requires further approval by such
stockholders without the further approval of such stockholders.
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11.6 WAIVERS. (a) Prior to or at the Effective Time, Regions, acting
through its Board of Directors, chief executive officer, vice chairman, or other
authorized officer, shall have the right to waive any Default in the performance
of any term of this Agreement by American Bancshares, to waive or extend the
time for the compliance or fulfillment by American Bancshares of any and all of
its obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Regions under this Agreement, except any
condition which, if not satisfied, would result in the violation of any Law. No
such waiver shall be effective unless in writing signed by a duly authorized
officer of Regions except that any unfulfilled conditions shall be deemed to
have been waived at the Effective Time.
(b) Prior to or at the Effective Time, American Bancshares, acting through
its Board of Directors, chief executive officer, or other authorized officer,
shall have the right to waive any Default in the performance of any term of this
Agreement by Regions, to waive or extend the time for the compliance or
fulfillment by Regions of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
American Bancshares under this Agreement, except any condition which, if not
satisfied, would result in the violation of any Law. No such waiver shall be
effective unless in writing signed by a duly authorized officer of American
Bancshares except that any unfulfilled conditions shall be deemed to have been
waived at the Effective Time.
(c) The failure of any Party at any time or times to require performance of
any provision hereof shall in no manner affect the right of such Party at a
later time to enforce the same or any other provision of this Agreement. No
waiver of any condition or of the breach of any term contained in this Agreement
in one or more instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other condition
or of the breach of any other term of this Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party hereto (whether by operation of Law or otherwise) without
the prior written consent of the other Party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the Parties and their respective successors and assigns.
11.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
American Bancshares: American Bancshares of Houma, Inc.
801 Barrow Street
Houma, Louisiana 70360
Telecopy Number: (504) 857-0405
Attention: Robert W. Boquet
President and Chief Executive Officer
Copy to Counsel: Correro, Fishman & Casteix, L.L.P.
201 St. Charles Avenue -- 47th Floor
New Orleans, Louisiana 70170-4700
Telecopy Number: (504) 586-5250
Attention: Anthony J. Correro III
Regions: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive Financial
Officer
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Copy to Counsel: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7099
Attention: Samuel E. Upchurch, Jr.
General Counsel and Corporate Secretary
11.9 GOVERNING LAW. Except to the extent the laws of the State of
Louisiana apply to the Merger, this Agreement shall be governed by and construed
in accordance with the Laws of the State of Delaware, without regard to any
applicable conflicts of Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No Party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement was
not performed in accordance with its specific terms or was otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions hereof in any court of the United States or any state
having jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
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IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
<TABLE>
<S> <C>
ATTEST: AMERICAN BANCSHARES OF HOUMA, INC.
By: /s/ Russel J. Brien By: /s/ Robert W. Boquet
------------------------------------------- -------------------------------------------
Russell J. Brien Robert W. Boquet
Secretary President and Chief Executive Officer
[CORPORATE SEAL]
REGIONS FINANCIAL CORPORATION
By: /s/ Samuel E. Upchurch, Jr. By: /s/ Richard D. Horsley
------------------------------------------- -------------------------------------------
Samuel E. Upchurch, Jr. Richard D. Horsley
General Counsel and Corporate Secretary Vice Chairman and Executive
Financial Officer
</TABLE>
[CORPORATE SEAL]
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<PAGE> 90
APPENDIX B
LOUISIANA STATUTES ANNOTATED-REVISED STATUTES 12:131
SEC. 131. RIGHTS OF A SHAREHOLDER DISSENTING FROM CERTAIN CORPORATE ACTIONS
A. Except as provided in subsection B of this section, if a corporation
has, by vote of its shareholders, authorized a sale, lease or exchange of all of
its assets, or has, by vote of its shareholders, become a party to a merger or
consolidation, then, unless such authorization or action shall have been given
or approved by at least eighty per cent of the total voting power, a shareholder
who voted against such corporate action shall have the right to dissent. If a
corporation has become a party to a merger pursuant to R.S. 12:112(H), the
shareholders of any subsidiaries party to the merger shall have the right to
dissent without regard to the proportion of the voting power which approved the
merger and despite the fact that the merger was not approved by vote of the
shareholders of any of the corporations involved.
B. The right to dissent provided by this Section shall not exist in the
case of:
(1) A sale pursuant to an order of a court having jurisdiction in the
premises.
(2) A sale for cash on terms requiring distribution of all or
substantially all of the net proceeds to the shareholders in accordance
with their respective interests within one year after the date of the sale.
(3) Shareholders holding shares of any class of stock which, at the
record date fixed to determine shareholders entitled to receive notice of
and to vote at the meeting of shareholders at which a merger or
consolidation was acted on, were listed on a national securities exchange,
unless the articles of the corporation issuing such stock provide otherwise
or the shares of such shareholders were not converted by the merger or
consolidation solely into shares of the surviving or new corporation.
C. Except as provided in the last sentence of this subsection, any
shareholder electing to exercise such right of dissent shall file with the
corporation, prior to or at the meeting of shareholders at which such proposed
corporate action is submitted to a vote, a written objection to such proposed
corporate action, and shall vote his shares against such action. If such
proposed corporate action be taken by the required vote, but by less than eighty
per cent of the total voting power, and the merger, consolidation or sale, lease
or exchange of assets authorized thereby be effected, the corporation shall
promptly thereafter give written notice thereof, by registered mail, to each
shareholder who filed such written objection to, and voted his shares against,
such action, at such shareholder's last address on the corporation's records.
Each such shareholder may, within twenty days after the mailing of such notice
to him, but not thereafter, file with the corporation a demand in writing for
the fair cash value of his shares as of the day before such vote was taken;
provided that he state in such demand the value demanded, and a post office
address to which the reply of the corporation may be sent, and at the same time
deposit in escrow in a chartered bank or trust company located in the parish of
the registered office of the corporation, the certificates representing his
shares, duly endorsed and transferred to the corporation upon the sole condition
that said certificates shall be delivered to the corporation upon payment of the
value of the shares determined in accordance with the provisions of this
section. With his demand the shareholder shall deliver to the corporation, the
written acknowledgment of such bank or trust company that it so holds his
certificates of stock. Unless the objection, demand and acknowledgment aforesaid
be made and delivered by the shareholder within the period above limited, he
shall conclusively be presumed to have acquiesced in the corporate action
proposed or taken. In the case of a merger pursuant to R.S. 12:112(H), the
dissenting shareholder need not file an objection with the corporation nor vote
against the merger, but need only file with the corporation, within twenty days
after a copy of the merger certificate was mailed to him, a demand in writing
for the cash value of his shares as of the day before the certificate was filed
with the secretary of state, state in such demand the value demanded and a post
office address to which the corporation's reply may be sent, deposit the
certificates representing his shares in escrow as hereinabove provided, and
deliver to the corporation with his demand the acknowledgment of the escrow bank
or trust company as hereinabove prescribed.
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D. If the corporation does not agree to the value so stated and demanded,
or does not agree that a payment is due, it shall, within twenty days after
receipt of such demand and acknowledgment, notify in writing the shareholder, at
the designated post office address, of its disagreement, and shall state in such
notice the value it will agree to pay if any payment should be held to be due;
otherwise it shall be liable for, and shall pay to the dissatisfied shareholder,
the value demanded by him for his shares.
E. In case of disagreement as to such fair cash value, or as to whether any
payment is due, after compliance by the parties with the provisions of
subsections C and D of this section, the dissatisfied shareholder, within sixty
days after receipt of notice in writing of the corporation's disagreement, but
not thereafter, may file suit against the corporation, or the merged or
consolidated corporation, as the case may be, in the district court of the
parish in which the corporation or the merged or consolidated corporation, as
the case may be, has its registered office, praying the court to fix and decree
the fair cash value of the dissatisfied shareholder's shares as of the day
before such corporate action complained of was taken, and the court shall, on
such evidence as may be adduced in relation thereto, determine summarily whether
any payment is due, and, if so, such cash value, and render judgment
accordingly. Any shareholder entitled to file such suit may, within such
sixty-day period but not thereafter, intervene as a plaintiff in such suit filed
by another shareholder, and recover therein judgment against the corporation for
the fair cash value of his shares. No order or decree shall be made by the court
staying the proposed corporate action, and any such corporate action may be
carried to completion notwithstanding any such suit. Failure of the shareholder
to bring suit, or to intervene in such a suit, within sixty days after receipt
of notice of disagreement by the corporation shall conclusively bind the
shareholder (1) by the corporation's statement that no payment is due, or (2) if
the corporation does not contend that no payment is due, to accept the value of
his shares as fixed by the corporation in its notice of disagreement.
F. When the fair value of the shares has been agreed upon between the
shareholder and the corporation, or when the corporation has become liable for
the value demanded by the shareholder because of failure to give notice of
disagreement and of the value it will pay, or when the shareholder has become
bound to accept the value the corporation agrees is due because of his failure
to bring suit within sixty days after receipt of notice of the corporation's
disagreement, the action of the shareholder to recover such value must be
brought within five years from the date the value was agreed upon, or the
liability of the corporation became fixed.
G. If the corporation or the merged or consolidated corporation, as the
case may be, shall, in its notice of disagreement, have offered to pay to the
dissatisfied shareholder on demand an amount in cash deemed by it to be the fair
cash value of his shares, and if, on the institution of a suit by the
dissatisfied shareholder claiming an amount in excess of the amount so offered,
the corporation, or the merged or consolidated corporation, as the case may be,
shall deposit in the registry of the court, there to remain until the final
determination of the cause, the amount so offered, then, if the amount finally
awarded such shareholder, exclusive of interest and costs, be more than the
amount offered and deposited as aforesaid, the costs of the proceeding shall be
taxed against the corporation, or the merged or consolidated corporation, as the
case may be; otherwise the costs of the proceeding shall be taxed against such
shareholder.
H. Upon filing a demand for the value of his shares, the shareholder shall
cease to have any of the rights of a shareholder except the rights accorded by
this section. Such a demand may be withdrawn by the shareholder at any time
before the corporation gives notice of disagreement, as provided in subsection D
of this section. After such notice of disagreement is given, withdrawal of a
notice of election shall require the written consent of the corporation. If a
notice of election is withdrawn, or the proposed corporate action is abandoned
or rescinded, or a court shall determine that the shareholder is not entitled to
receive payment for his shares, or the shareholder shall otherwise lose his
dissenter's rights, he shall not have the right to receive payment for his
shares, his share certificates shall be returned to him (and, on his request,
new certificates shall be issued to him in exchange for the old ones endorsed to
the corporation), and he shall be reinstated to all his rights as a shareholder
as of the filing of his demand for value, including any intervening preemptive
rights, and the right to payment of any intervening dividend or other
distribution, or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim.
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APPENDIX C
[LETTERHEAD OF NATIONAL CAPITAL CORPORATION]
June 6, 1996
The Board of Directors
American Bancshares of Houma, Inc.
801 Barrow Street
Houma, LA 70361-0110
Gentlemen:
We understand that American Bancshares of Houma, Inc. ("American") and
Regions Financial Corporation ("Regions") have entered into an Agreement and
Plan of Reorganization, dated as of February 29, 1996 ("Agreement"), pursuant to
which American will be merged into a newly created, wholly owned subsidiary of
Regions ("Regions Merger Subsidiary") with the new subsidiary as the surviving
entity resulting from the merger (the "Merger"). Upon consummation of the
Merger, each share of common stock of American will be converted into 1.66
shares of Regions common stock. You have provided us with the proxy
statement/prospectus, which includes the Agreement, in substantially the form to
be sent to the stockholders of Regions and American (the "Proxy Statement").
National Capital Corporation ("NCC") has extensive experience in investment
analysis and the valuation of bank and bank holding company securities in
connection with acquisitions and mergers. Neither NCC, nor any of its officers,
directors, or employees has an interest in the common stock of American. NCC has
performed no services for American at any time prior to the present engagement,
although an affiliate of NCC, American Planning Corporation, has provided
strategic planning advisory services to American and its subsidiary bank. The
revenues derived from such services are insignificant when compared to the
affiliate's total gross revenues. NCC is currently acting as financial advisor
to the Board of Directors of American in connection with the Merger and will
receive a fee for such services, payment of a portion of which is contingent
upon consummation of the Merger. In addition, NCC will receive a fee for
rendering this opinion.
You have asked us to render our opinion as to whether the Exchange Ratio is
fair, from a financial point of view, to the stockholders of American.
In the course of our analysis for rendering this opinion, we have:
a) reviewed the Proxy Statement;
b) reviewed Regions' Annual Report to Stockholders, Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, and the materials
incorporated by reference in the Proxy Statement;
c) reviewed American's Annual Report to Stockholders and Annual Report
on Form 10-K for the fiscal year ended December 31, 1995, its Quarterly
Reports on Form 10-Q for the periods ended March 31, June 30, and September
30, 1995 and March 31, 1996;
d) reviewed certain operating and financial information provided to us
by Regions' management related to its business and prospects and reviewed
certain operating and financial information, including projections,
provided to us by American's management relating to its business and
prospects;
e) met with certain members of American's senior management to discuss
their operations, historical financial statements, and future prospects;
f) reviewed the historical prices and trading volumes of the shares of
Regions Common Stock and American Common Stock;
C-1
<PAGE> 93
g) reviewed publicly available financial data and stock market
performance data of companies which we deemed generally comparable to
Regions and American;
h) reviewed the terms of recent acquisitions of companies which we
deemed generally comparable to the Merger; and
i) conducted such other studies, analyses, inquiries, and
investigations as we deemed appropriate.
In the course of our review, we have relied upon and assumed the accuracy
and completeness of the financial and other information provided to us by
Regions and American. With respect to Regions' and American's projected
financial results, we have assumed that they have been reasonably prepared on
bases reflecting the best currently available estimates and judgments of the
management of Regions and American as to the expected future performance of
Regions and American, respectively. We have not assumed any responsibility for
the information or projections provided to us and we have further relied upon
the assurances of the management of Regions and American that they are unaware
of any facts that would make the information or projections provided to us
incomplete or misleading. In arriving at our opinion, we have not performed or
obtained any independent appraisal of the assets of Regions and American. Our
opinion is necessarily based on economic, market, and other conditions, and the
information made available to us, as of the date hereof.
Based on the foregoing, it is our opinion that the Exchange Ratio is fair,
from a financial point of view, to the stockholders of American.
Yours very truly,
NATIONAL CAPITAL CORPORATION
By: /s/ J. KEN WALTERS
-----------------------------------
J. Ken Walters
President
C-2
<PAGE> 94
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article Tenth of the Certificate of Incorporation of the Registrant
provides:
"(a) The corporation shall indemnify its officers, directors,
employees, and agents to the full extent permitted by the General
Corporation Law of Delaware. (b) No director of the corporation shall be
personally liable to the corporation or its stockholders for monetary
damages, for breach of fiduciary duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the corporation or
its stockholders; (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (iii) under
Section 174 of the Delaware General Corporation Law; or (iv) for any
transaction from which the director derived an improper personal benefit."
Section 145 of the Delaware General Corporation law empowers the Company
to indemnify its officers and directors under certain circumstances. The
pertinent provisions of that statute read as follows:
"(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be
in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
"(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
"(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this
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<PAGE> 95
section, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
"(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or (2) if
there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (3) by the
stockholders.
"(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of
an undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such
expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board
of directors deems appropriate.
"(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.
"(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
"(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent corporation, or is or was
serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
"(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
II-2
<PAGE> 96
"(j) The indemnification and advancement of expenses provided by, or
granted pursuant to, this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
"(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court
of Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees)."
The Company has purchased a directors' and officers' liability insurance
contract which provides, within stated limits, reimbursement either to a
director or officer whose actions in his capacity result in liability, or to
the Registrant, in the event it has indemnified the director or officer. Major
exclusions from coverage include libel, slander, personal profit based on
inside information, illegal payments, dishonesty, accounting of securities
profits in violation of Section 16(b) of the Securities Exchange Act of 1934
and acts within the scope of the Pension Reform Act of 1974.
ITEM 21. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
2.1 -- Agreement and Plan of Merger, dated as of February 29, 1996 by and between American Bancshares of Houma, Inc.
and Regions Financial Corporation -- included as Appendix A to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation -- incorporated by reference from S-4
Registration Statement of Regions Financial Corporation, file no. 33-54231.
4.2 -- By-laws of Regions Financial Corporation -- incorporated by reference from S-4 Registration Statement of
Regions Financial Corporation, file no. 33-54231.
5. -- Opinion re: legality.
8. -- Opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP
23.3 -- Consent of Lange, Simpson, Robinson & Somerville -- included in Exhibit 5.
23.4 -- Consent of Alston & Bird -- included in Exhibit 8.
23.5 -- Consent of National Capital Corporation -- to be filed by amendment.
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page of the
registration statement.
</TABLE>
ITEM 22. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 97
B. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
C.(1) The undersigned Registrant hereby undertakes as follows: that prior
to any public reoffering of the securities registered hereunder through use of
a prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
D. The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
E. The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-4
<PAGE> 98
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Birmingham, State of
Alabama on this the 7th day of June, 1996.
REGISTRANT:
REGIONS FINANCIAL CORPORATION
/s/ Richard D. Horsley
BY: -------------------------------
Richard D. Horsley
Vice Chairman of the Board and
Executive Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Richard D. Horsley and Samuel E. Upchurch, Jr.
and each of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
registration statement, and to file the same with all exhibits thereto, and all
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------- ------------------------------ ------------------
<S> <C> <C>
/s/ J. Stanley Mackin
- -------------------------- Chairman of the Board and June 7, 1996
J. Stanley Mackin Chief Executive Officer and
Director
/s/ Richard D. Horsley
- -------------------------- Vice Chairman of the Board and June 7, 1996
Richard D. Horsley Executive Financial Officer
and Director
/s/ Robert P. Houston
- -------------------------- Executive Vice President and June 7, 1996
Robert P. Houston Comptroller
/s/ Shelia S. Blair
- -------------------------- Director June 7, 1996
Sheila S. Blair
/s/ William B. Boles, Sr.
- -------------------------- Director June 7, 1996
William B. Boles, Sr.
/s/ James B. Boone, Jr.
- -------------------------- Director June 7, 1996
James B. Boone, Jr.
/s/ Albert P. Brewer
- -------------------------- Director June 7, 1996
Albert P. Brewer
</TABLE>
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<PAGE> 99
<TABLE>
<S> <C> <C>
/s/ James S.M. French
- -------------------------- Director June 7, 1996
James S.M. French
/s/ Catesby ap C. Jones
- -------------------------- Director June 7, 1996
Catesby ap C. Jones
/s/ Olin B. King
- -------------------------- Director June 7, 1996
Olin B. King
/s/ Henry E. Simpson
- -------------------------- Director June 7, 1996
Henry E. Simpson
/s/ Lee J. Styslinger, Jr.
- -------------------------- Director June 7, 1996
Lee J. Styslinger, Jr.
/s/ Robert J. Williams
- -------------------------- Director June 7, 1996
Robert J. Williams
</TABLE>
<PAGE> 100
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------- ------------------------------------------------- ------------
<S> <C> <C>
2.1 -- Agreement and Plan of Merger, dated as of February 29, 1996 by and between American Bancshares of Houma, Inc.
and Regions Financial Corporation -- included as Appendix A to the Proxy Statement/Prospectus.
4.1 -- Certificate of Incorporation of Regions Financial Corporation -- incorporated by reference from S-4
Registration Statement of Regions Financial Corporation, file no. 33-54231.
4.2 -- By-laws of Regions Financial Corporation -- incorporated by reference from S-4 Registration Statement of
Regions Financial Corporation, file no. 33-54231.
5. -- Opinion re: legality.
8. -- Opinion re: tax matters.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Deloitte & Touche LLP
23.3 -- Consent of Lange, Simpson, Robinson & Somerville -- included in Exhibit 5.
23.4 -- Consent of Alston & Bird -- included in Exhibit 8.
23.5 -- Consent of National Capital Corporation to be filed by amendment.
24. -- Power of Attorney -- the manually signed power of attorney is set forth in the signature page of the
registration statement.
</TABLE>
<PAGE> 1
EXHIBIT 5
LANGE, SIMPSON, ROBINSON & SOMERVILLE
ATTORNEYS & COUNSELORS
417 20TH STREET NORTH, SUITE 1700
BIRMINGHAM, ALABAMA 35203-3272
TELEPHONE (205) 250-5000
FACSIMILE (205) 250-5034
June 7, 1996
Regions Financial Corporation
417 North 20th Street
Birmingham, AL. 35203
Re: Regions Financial Corporation -- S-4 Registration
Statement, Merger of American Bancshares of Houma, Inc.
with and into Regions
Ladies and Gentlemen:
We have acted as counsel for Regions Financial Corporation, a Delaware
corporation, ("Regions") in connection with the merger between American
Bancshares of Houma, Inc. (ABH) and Regions (the "Merger") and in connection
with the registration of common stock of Regions on Form S-4 under the
Securities Act of 1933. The Merger provides for issuance of shares of common
stock of Regions, par value $.625 per share, issuable to the stockholders of ABH
upon consummation of the Merger. The maximum number of shares of Regions to
be issued in the Merger is 381,077.
<PAGE> 2
Regions Financial Corporation
June 4, 1996
Page 2
We have examined and are familiar with the registration statement on
Form S-4 filed with the Securities and Exchange Commission, as such
registration statement has been amended to date. We have examined and are
familiar with the records relating to the organization of Regions and the
proceedings taken by its directors to date, and we have examined such other
documents and records as we have deemed relevant for purposes of rendering this
opinion.
Based on the foregoing it is our opinion that upon satisfaction of the
conditions precedent to consummation of the Merger, or waiver of such
conditions capable of being waived, and upon consummation of the Merger, the
shares of stock of Regions issued pursuant to the Merger will be duly
authorized, validly issued and outstanding, fully paid and non-assessable, with
no personal liability attaching to the ownership thereof.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the reference to Lange, Simpson, Robinson &
Somerville under the caption "Opinions" in the proxy statement/prospectus
forming a part of the registration statement.
Very truly yours,
/s/ LANGE, SIMPSON, ROBINSON & SOMERVILLE
<PAGE> 1
EXHIBIT 8
[LETTERHEAD]
June 10, 1996
Regions Financial Corporation
417 N. 20th Street
Birmingham, Alabama 35203
American Bancshares of Houma, Inc.
801 Barrow Street
Houma, Louisiana 70360
Re: Proposed Merger of American Bancshares of Houma, Inc. with and into
Regions Financial Corporation
Ladies and Gentlemen:
We have acted as special tax counsel to Regions Financial Corporation
("Regions"), a corporation organized and existing under the laws of the State of
Delaware, in connection with the proposed merger of American Bancshares of
Houma, Inc. ("American Bancshares"), a corporation organized and existing under
the laws of the State of Louisiana, with and into Regions. The Merger will be
effected pursuant to the Agreement and Plan of Reorganization, dated as of
February 29, 1996, by and between American Bancshares and Regions (the
"Agreement"). In our capacity as counsel to Regions, our opinion has been
requested with respect to certain of the federal income tax consequences of the
proposed Merger.
In rendering this opinion, we have examined (i) the Internal Revenue Code
of 1986, as amended (the "Code") and Treasury Regulations, (ii) the legislative
history of applicable sections of the Code, and (iii) appropriate Internal
Revenue Service and court decisional authority. In addition, we have relied upon
certain information made known to us as more fully described below. All
capitalized terms used herein without definition shall have the respective
meanings specified in the Agreement, and unless otherwise specified, all section
references herein are to the Code.
INFORMATION RELIED UPON
In rendering the opinions expressed herein, we have examined such documents
as we have deemed appropriate, including:
(1) the Agreement;
(2) the Registration Statement on Form S-4 filed by Regions with the
Securities and Exchange Commission under the Securities Act of 1933, on
June , 1996, including the Proxy Statement/ Prospectus for the Special
Meeting of the stockholders of American Bancshares.
(3) such additional documents as we have considered relevant. In our
examination of such documents, we have assumed, with your consent, that all
documents submitted to us as photocopies faithfully reproduce the originals
thereof, that such originals are authentic, that all such documents have
<PAGE> 2
been or will be duly executed to the extent required, and that all
statements set forth in such documents are accurate.
We have also obtained such additional information and representations as we
have deemed relevant and necessary through consultation with various officers
and representatives of Regions and American Bancshares and through certificates
provided by the management of Regions and the management of American Bancshares.
You have advised us that the proposed transaction will enable the combined
organization to realize certain economies of scale, yield a wider array of
banking and banking related services to consumers and businesses, and provide
for a stronger market position and for greater financial resources to meet
competitive challenges within the Houma, Louisiana market area. To achieve these
goals, the following will occur pursuant to the Agreement:
(1) Subject to the terms and conditions of the Agreement, at the
Effective Time, American Bancshares shall be merged into and with Regions
in accordance with the provisions of Sections 12:115 of the Louisiana
Business Corporation Law ("LBCL") and of Section 258 of the General
Corporation Law of Delaware ("DGCL") and with the effect provided in
Section 259 of the DGCL (the "Merger"). Regions shall be the Surviving
Corporation of the Merger and shall continue to be governed by the Laws of
the State of Delaware. The Merger shall be consummated pursuant to the
terms of this Agreement, which has been approved and adopted by the Boards
of Directors of American Bancshares and Regions.
(2) Subject to the provisions of Article 3 of the Agreement, at the
Effective Time, by virtue of the Merger and without any action on the part
of the holders thereof, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of Regions Common Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.
(b) Each share of American Bancshares Common Stock (excluding
shares held by American Bancshares or any of its Subsidiaries or by
Regions or any of its Subsidiaries, in each case other than in a
fiduciary capacity or as a result of debts previously contracted) issued
and outstanding at the Effective Time shall be converted into 1.66
shares of Regions Common Stock (the "Exchange Ratio").
(3) In the event American Bancshares changes the number of shares of
American Bancshares Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock, the Exchange Ratio shall be
proportionately adjusted. In the event Regions changes the number of shares
of Regions Common Stock issued and outstanding prior to the Effective Time
as a result of a stock split, stock dividend, or similar recapitalization
with respect to such stock and the record date therefor (in the case of a
stock dividend) or the effective date thereof (in the case of a stock split
or similar recapitalization for which a record date is not established)
shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
(4) Each of the shares of American Bancshares Common Stock held by any
American Bancshares Company or by any Regions Company, in each case other
than in a fiduciary capacity or as a result of debts previously contracted,
shall be canceled and retired at the Effective Time and no consideration
shall be issued in exchange therefor.
(5) Notwithstanding any other provision of the Agreement, each holder
of shares of American Bancshares Common Stock exchanged pursuant to the
Merger, who would otherwise have been entitled to receive a fraction of a
share of Regions Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Regions
Common Stock multiplied by the market value of one share of Regions Common
Stock at the Effective Time. The market value of one share of Regions
Common Stock at the Effective Time shall be the closing price of such
common stock on the Nasdaq NMS (as reported
2
<PAGE> 3
by The Wall Street Journal or, if not reported thereby, any other
authoritative source selected by Regions) on the last trading day preceding
the Effective Time. No such holder will be entitled to dividends, voting
rights, or any other rights as a stockholder in respect of any fractional
shares.
(6) Any holder of shares of American Bancshares Common Stock who
perfects such holder's dissenters' rights of appraisal in accordance with
and as contemplated by Part XIII of the LBCL shall be entitled to receive
the value of such shares in cash as determined pursuant to such provision
of Law; provided, that no such payment shall be made to any dissenting
stockholder unless and until such dissenting stockholder has complied with
the applicable provisions of the LBCL, including the provisions of Section
131 thereof relating to the deposit in escrow, endorsement, and transfer of
the certificate or certificates representing the shares for which payment
is being made. In the event that a dissenting stockholder of American
Bancshares fails to perfect, or effectively withdraws or loses his right to
appraisal and of payment for his shares, such Person shall not have the
right to receive payment in cash for his shares and, instead, as of the
Effective Time the shares of American Bancshares Common Stock held by such
Person shall be converted into and exchanged for that number of shares of
Regions Common Stock determined under Section 3.1 of the Agreement and the
delivery of certificates representing such Regions Common Stock and any
dividends or other distributions in respect thereof to which such holder
may be entitled shall be governed by Section 4.1 of the Agreement.
With your consent, we have also assumed that the following statements are
true on the date hereof and will be true on the date the proposed transaction is
consummated:
(1) The fair market value of the Regions Common Stock and other
consideration received in the aggregate by the stockholders of American
Bancshares will be approximately equal to the fair market value of the
American Bancshares Common Stock surrendered in exchange therefor.
(2) There is no plan or intention on the part of the stockholders of
American Bancshares who own one percent (1%) or more of American Bancshares
Common Stock, and to the best of the knowledge of the management of
American Bancshares, there is no plan or intention on the part of the
remaining stockholders of American Bancshares to sell, exchange, or
otherwise dispose of a number of shares of Regions Common Stock to be
received in the proposed transaction that would reduce their holdings in
Regions Common Stock received to a number of shares having, in the
aggregate, a value as of the Effective Time of less than fifty percent
(50%) of the total value of all of the stock of American Bancshares
outstanding immediately prior to the Effective Time. For purposes of this
assumption, shares of American Bancshares Common Stock exchanged for cash
or other property, surrendered by dissenters or exchanged for cash in lieu
of fractional shares of Regions Common Stock will be treated as outstanding
American Bancshares Common Stock as of the Effective Time. Moreover, shares
of American Bancshares Common Stock and shares of Regions Common Stock held
by American Bancshares stockholders and otherwise sold, redeemed, or
disposed of prior or subsequent to the transaction will be considered in
making this assumption.
(3) Regions has no plan or intention to redeem or otherwise reacquire
any shares of Regions Common Stock issued in the Merger, except for
purchases of stock in the open market in the normal course of business
executed through an independent broker in which Regions is not aware of the
identity of any seller or in private placement transactions in which the
sellers are not former American Bancshares stockholders.
(4) Regions has no plan or intention to dispose of any of the assets
of American Bancshares acquired in the transaction, except for dispositions
made in the ordinary course of business or transfers described in Section
368(a)(2)(C).
(5) The liabilities of American Bancshares assumed by Regions and the
liabilities to which the transferred assets of American Bancshares are
subject were incurred by American Bancshares in the ordinary course of its
business.
(6) Following the transaction, Regions will continue the historic
business of American Bancshares or use a significant portion of American
Bancshares' historic business assets in a business.
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(7) Regions, American Bancshares, and the stockholders of American
Bancshares will pay their respective expenses, if any, incurred in
connection with the transaction, except that Regions shall bear and pay the
filing fees payable in connection with the Registration Statement and the
Proxy Statement and printing costs incurred in connection with the printing
of the Registration Statement and the Proxy Statement.
(8) There is no intercorporate indebtedness existing between American
Bancshares and Regions that was issued, acquired, or will be settled at a
discount.
(9) American Bancshares is not under the jurisdiction of a court in a
case under Title 11 of the United States Code or a receivership,
foreclosure, or similar proceeding in a federal or state court.
(10) Both the fair market value and the total adjusted basis of the
assets of American Bancshares transferred to Regions will equal or exceed
the sum of the liabilities assumed by Regions plus the amount of the
liabilities, if any, to which the transferred assets are subject.
(11) The payment of cash to American Bancshares stockholders in lieu
of fractional shares of Regions Common Stock is solely for the purpose of
avoiding the expense and inconvenience to Regions of issuing fractional
shares and does not represent separately bargained for consideration. The
total cash consideration that will be paid in the transaction to the
American Bancshares stockholders instead of issuing fractional shares of
Regions Common Stock will not exceed one percent (1%) of the total
consideration that will be issued in the transaction to the American
Bancshares stockholders in exchange for their shares of American Bancshares
Common Stock. The fractional share interests of each American Bancshares
stockholder will be aggregated, and no American Bancshares stockholder will
receive cash in an amount equal to or greater than the value of one full
share of Regions Common Stock.
(12) None of the compensation received by any stockholder-employees of
American Bancshares will be separate consideration for, or allocable to,
any of their shares of American Bancshares Common Stock; none of the shares
of Regions Common Stock received by any stockholder-employees will be
separate consideration for, or allocable to, any employment agreement; and
the compensation paid to any stockholder-employees will be for services
actually rendered and will be commensurate with amounts paid to third
parties bargaining at arm's length for similar services.
(13) At all times during the five-year period ending on the Effective
Date of the Merger, the fair market value of all of American Bancshares'
United States real property interests was and will have been less than
fifty percent (50%) of the fair market value of the total of (a) its United
States real property interests, (b) its interests in real property located
outside the United States, and (c) its other assets used or held for use in
a trade or business. For purposes of the preceding sentence, (i) United
States real property interests include all interests (other than an
interest solely as a creditor) in real property and associated personal
property (such as movable walls and furnishings) located in the United
States or the Virgin Islands and interests in any corporation (other than a
controlled corporation) owning any United States real property interest,
(ii) American Bancshares is treated as owning its proportionate share
(based on the relative fair market value of its ownership interest to all
ownership interests) of the assets owned by any controlled corporation or
any partnership, trust, or estate in which American Bancshares is a partner
or beneficiary, and (iii) any such entity in turn is treated as owning its
proportionate share of the assets owned by any controlled corporation or
any partnership, trust, or estate in which the entity is a partner or
beneficiary. As used in this paragraph, "controlled corporation" means any
corporation at least fifty percent (50%) of the fair market value of the
stock of which is owned by American Bancshares, in the case of a first-tier
subsidiary of American Bancshares or by a controlled corporation, in the
case of a lower-tier subsidiary.
(14) Neither Regions nor American Bancshares is an investment company
as defined in Code Section 368(a)(2)(F).
(15) The Agreement represents the entire understanding of American
Bancshares and Regions with respect to the Merger.
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OPINIONS
Based solely on the information submitted and the representations set forth
above and assuming that the Merger will take place as described in the Agreement
and that the representations made by Regions and American Bancshares (including
the representation that American Bancshares stockholders will maintain
sufficient equity ownership interests in Regions after the Merger) are true and
correct at the time of the consummation of the Merger, we are of the opinion
that:
(1) Provided the Merger qualifies as a statutory merger under the
General Corporation Law of Delaware and the Louisiana Business Corporation
Law, the Merger will be a reorganization within the meaning of Section
368(a). American Bancshares and Regions will each be "a party to a
reorganization" within the meaning of Section 368(b).
(2) The stockholders of American Bancshares will recognize no gain or
loss upon the exchange of their American Bancshares Common Stock solely for
shares of Regions Common Stock.
(3) The basis of the Regions Common Stock received by the American
Bancshares stockholders in the proposed transaction will, in each instance,
be the same as the basis of the American Bancshares Common Stock
surrendered in exchange therefor.
(4) The holding period of the Regions Common Stock received by the
American Bancshares stockholders will, in each instance, include the period
during which the American Bancshares Common Stock surrendered in exchange
therefor was held, provided that the American Bancshares Common Stock was
held as a capital asset on the date of the exchange.
(5) The payment of cash to American Bancshares stockholders in lieu of
fractional share interests of Regions Common Stock will be treated for
federal income tax purposes as if the fractional shares were distributed as
part of the exchange and then were redeemed by Regions. These cash payments
will be treated as having been received as distributions in full payment in
exchange for the stock redeemed. Generally any gain or loss recognized upon
such exchange will be capital gain or loss, provided the fractional share
would constitute a capital asset in the hands of the exchanging
stockholder.
(6) Where solely cash is received by any American Bancshares
stockholder in exchange for his American Bancshares Common Stock pursuant
to the exercise of dissenters' rights of appraisal, such cash will be
treated as having been received in redemption of his American Bancshares
Common Stock, subject to the provisions and limitations of Section 302.
The opinions expressed herein are based upon existing statutory,
regulatory, and judicial authority, any of which may be changed at any time with
retroactive effect. In addition, our opinions are based solely on the documents
that we have examined, the additional information that we have obtained, and the
statements set out herein, which we have assumed and you have confirmed to be
true on the date hereof and will be true on the date on which the proposed
transaction is consummated. Our opinions cannot be relied upon if any of the
facts contained in such documents or if such additional information is, or later
becomes, inaccurate, or if any of the statements set out herein is, or later
becomes, inaccurate. Finally, our opinions are limited to the tax matters
specifically covered thereby, and we have not been asked to address, nor have we
addressed, any other tax consequences of the proposed transaction, including for
example any issues related to intercompany transactions, accounting methods, or
changes in accounting methods resulting from the Merger.
This opinion is being provided solely for the benefit of Regions, American
Bancshares and their stockholders. No other person or party shall be entitled to
rely on this opinion.
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We consent to the use of this opinion and to the references made to the
firm under the captions "Summary -- Certain Federal Income Tax Consequences of
the Merger" and "Description of the Transaction -- Certain Federal Income Tax
Consequences of the Merger" in the Proxy Statement/Prospectus constituting part
of the Registration Statement on Form S-4 of Regions.
Very truly yours,
ALSTON & BIRD
By: /s/ Philip C. Cook
-----------------------------------
Philip C. Cook
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EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4) and related Prospectus of Regions Financial
Corporation for the registration of up to 381,077 shares of its common stock
and to the incorporation by reference therein of our reports dated February 2,
1996 (except for the last two paragraphs of Note Q as to which the date is
March 1, 1996) and March 25, 1996, with respect to the consolidated financial
statements and supplemental consolidated financial statements, respectively, of
Regions Financial Corporation included or incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
/s/ Ernst & Young LLP
Birmingham, Alabama
June 11, 1996
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EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Regions Financial Corporation on Form S-4 of our report dated
February 16, 1996, appearing in the Annual Report on Form 10-KSB of American
Bancshares of Houma, Inc. for the year ended December 31, 1995 and to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ DELOITTE & TOUCHE LLP
New Orleans, Louisiana
June 11, 1996
