As filed with the Securities and Exchange Commission on August 5, 1994
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
First Commerce Corporation
(Exact name of registrant as specified in its charter)
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Louisiana 6711 72-0701203
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of incorporation Classification Code Number) Identification Number)
or organization)
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210 Baronne Street
New Orleans, Louisiana 70112
(504) 561-1371
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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Copy to: DAVID B. KELSO Copy to:
ANTHONY J. CORRERO, III 210 Baronne Street JEFFREY C. GERRISH
Correro, Fishman & Casteix, L.L.P. New Orleans, Louisiana 70112 Gerrish & McCreary, P.C.
201 St. Charles Avenue, 47th Floor (504) 561-1371 700 Colonial Road, Suite 200
New Orleans, Louisiana 70170 (Name, address, including zip code, Memphis, Tennessee 38124
and telephone number,including area
code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
Upon the effective date of the mergers described in this registration statement.
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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, please check the following box.
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Maximum Maximum
Title of Each Number of Shares Offering Aggregate
Class of Securities to be Price Per Offering Amount of
to be Registered Registered<FN1> Share<FN2> Price<FN2> Registration Fee<FN2>
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_________________________________________________________________________________________________________________________
Common Stock
$5 Par value 1,540,000 $33.09 $16,545,000 $5,705
==========================================================================================================================
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<FN1> Based on the minimum closing sales price of a share of First Commerce
Corporation("FCC") Common Stock, $5 par value per share, of $24.00 that
may be applied pursuant to the pricing formula described herein.
<FN2> Calculated in accordance with Rule 457(f)(2), based on the aggregate
book value as of June 30, 1994 of the shares of common stock, $2.50
par value per share, of Lakeside Bancshares, Inc. ("Bancshares") to
be converted in connection with the mergers, all as described in the
registration statement, and computed by multiplying the book value per
share of Bancshares Common Stock on June 30, 1994 of $33.09 by 500,000,
representing the number of issued and outstanding shares of Bancshares
Common Stock on June 30, 1994.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this registration
statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
FIRST COMMERCE CORPORATION
CROSS REFERENCE SHEET
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A. Information About the Transaction
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1. Forepart of Registration Cover Page
Statement and Outside Front
Cover Page of Prospectus
2. Inside Front and Outside Back Inside Cover; Table of Contents
Cover Pages of Prospectus
3. Risk Factors, Ratio of *
Earnings to Fixed Charges and
Other Information
4. Terms of the Transaction Summary; The Plan
5. Pro Forma Financial Infor- First Commerce Corporation Pro Forma
mation Condensed Combined Financial
Statements (Unaudited)
6. Material Contacts with the *
Company Being Acquired
7. Additional Information *
Required for Reoffering by
Persons and Parties Deemed to
be Underwriters
8. Interests of Named Experts and *
Counsel
9. Disclosure of Commission *
Position on Indemnification
for Securities Act Liability
B. Information About the Registrant
10. Information with Respect to S- Information about FCC
3 Registrants
11. Incorporation of Certain Information about FCC
Information by Reference
12. Information with Respect to S- *
2 or S-3 Registrants
13. Incorporation of Certain *
Information by Reference
14. Information with Respect to *
Registrants other than S-2 or
S-3 Registrants
C. Information About the Company Being Acquired
15. Information with Respect to S- *
3 Companies
16. Information with Respect to S- Information about Bancshares
2 or S-3 Companies
17. Information with Respect to *
Companies other than S-2 or S-
3 Companies
D. Voting and Management Information
18. Information if Proxies,
Consents or Authorizations are
to be Solicited
(1) Date, Time and Place Introductory Statement-General
Information
(2) Revocability of Proxy Introductory Statement-Solicitation,
Voting and Revocation of Proxies
(3) Dissenters' Rights of Dissenters' Rights
Appraisal
(4) Persons Making Solici- Introductory Statement-General
tation
(5) Interests of Certain Summary-Interests of Certain Persons
Persons in Matters to be in the Merger; The Plan-Interests of
Acted upon; Voting Certain Persons in the Mergers; The
Securities and Principal Plan-Employee Benefits; Information
Holders Thereof About Bancshares
(6) Vote Required for Introductory Statement-Shares
Approval Entitled to Vote; Quorum; Vote
Required
(7) Directors and Executive Information About Bancshares;
Officers; Executive Information About FCC
Compensation; Certain
Relationships and Re-
lated Transactions
19. Information if Proxies, *
Consents or Authorizations are
not to be Solicited or in an
Exchange Offer
</TABLE>
_______________
* Not applicable or answer is in the negative.
<PAGE>
LAKESIDE BANCSHARES, INC.
One Lakeside Plaza
Box 1268
Lake Charles, Louisiana 70602
August [12], 1994
Dear Shareholder:
You are invited to attend a special meeting of shareholders of
Lakeside Bancshares, Inc. ("Bancshares") to be held on Tuesday,
September 20, 1994 at 3:00 p.m., local time in the lobby of the main
office of Lakeside National Bank of Lake Charles, One Lakeside Plaza,
Lake Charles, Louisiana.
At the meeting, you will be asked to approve an Agreement and Plan
of Merger and two related merger agreements (collectively, the "Plan")
pursuant to which, among other things, Lakeside National Bank of Lake
Charles ("LNB"), the wholly owned banking subsidiary of Bancshares, will
merge into The First National Bank of Lake Charles ("FNBLC"), a wholly
owned banking subsidiary of First Commerce Corporation ("FCC") (the
"Bank Merger"), and Bancshares will merge into FCC (the "Holding Company
Merger" which, together with the Bank Merger, are collectively called
the "Mergers"). The terms of the Plan provide that, on the effective
date of the Holding Company Merger, each outstanding share of common
stock of Bancshares will be converted into shares of FCC common stock as
more fully described in the attached Proxy Statement. You are urged to
read carefully the Proxy Statement in its entirety for a more complete
description of the terms of the Plan and the proposed Mergers.
The Plan has been approved by your Board of Directors. The Board
believes that the proposed Mergers are in the best interests of
Bancshares' shareholders. As a result of the proposed Mergers, you, as
a new shareholder of FCC, will own common stock in a bank holding
company whose stock is publicly traded on the Nasdaq National Market.
Through its wholly owned bank subsidiary FNBLC, FCC will be better able
to offer a broad range of banking services to Calcasieu and surrounding
Parishes and to compete more effectively with bank holding companies and
other financial institutions in the changing economic and legal
environment facing all financial institutions. The Board also believes
that the Plan provides fair financial terms to Bancshares' shareholders.
The Board of Directors recommends that you vote FOR the Plan and
urges you to execute the enclosed proxy and return it promptly in the
accompanying envelope.
Very truly yours,
Tom Flanagan, President
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LAKESIDE BANCSHARES, INC.
One Lakeside Plaza
Box 1268
Lake Charles, Louisiana 70602
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 20, 1994
Lake Charles, Louisiana
August [12], 1994
A special meeting of shareholders of Lakeside Bancshares, Inc.
("Bancshares") will be held on Tuesday, September 20, 1994 at 3:00 p.m.
local time in the lobby of the main branch of Lakeside National Bank of
Lake Charles, One Lakeside Plaza, Lake Charles, Louisiana, to vote upon
the following matters:
1. A proposal to approve an Agreement and Plan of Merger and
two related merger agreements (collectively, the "Plan") pursuant
to which, among other things: (a) Lakeside National Bank of Lake
Charles, the wholly owned bank subsidiary of Bancshares, will
merge into The First National Bank of Lake Charles, a wholly owned
bank subsidiary of First Commerce Corporation ("FCC") (the "Bank
Merger"), (b) Bancshares will merge into FCC (the "Holding Company
Merger"), and (c) on the effective date of the Holding Company
Merger, each outstanding share of common stock of Bancshares will
be converted into a number of shares of FCC common stock as
determined in accordance with the terms of the Plan.
2. Such other matters as may properly come before the meeting
or any adjournments thereof.
Only shareholders of record at the close of business on July 29,
1994 are entitled to notice of and to vote at the special meeting.
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 Holding Company Merger is effected upon approval by less than eighty
percent (80%) of the total voting power of Bancshares.
Your vote is important regardless of the number of shares you own.
Whether or not you plan to attend the special meeting, please mark, date
and sign the enclosed proxy and return it promptly in the enclosed
stamped envelope. Your proxy may be revoked by appropriate notice to
Bancshares' Secretary at any time prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Joseph W. Roberts, Jr.
Secretary
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FIRST COMMERCE CORPORATION
Common Stock, $5.00 par value
________________________________________
Lakeside Bancshares, Inc.
Special Meeting of Shareholders to be held September 20, 1994
First Commerce Corporation ("FCC") has filed a Registration
Statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), covering up to 1,540,000 shares of common stock, $5
par value, of FCC ("FCC Common Stock") which may be issued in connection
with a proposed merger of Lakeside Bancshares, Inc. ("Bancshares") into
FCC as determined on the basis of the operation of the pricing formula
described herein. This document constitutes a Proxy Statement of
Bancshares in connection with the transactions described herein and a
Prospectus of FCC with respect to the shares of FCC Common Stock to be
issued if the merger is consummated. The actual number of shares of FCC
Common Stock to be issued will be determined in accordance with the
terms of the agreements described herein.
________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROXY STATEMENT AND PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
________________________________________
No person has been authorized to give any information or to make
any representations other than those contained in this Proxy Statement
and Prospectus, and, if given or made, such information or representa-
tions must not be relied upon as having been authorized by FCC or
Bancshares. This Proxy Statement and Prospectus shall not constitute an
offer by FCC to sell or the solicitation of an offer by FCC to buy nor
shall there be any sale of the securities offered by this Proxy
Statement and Prospectus in any state in which, or to any person to
whom, it would be unlawful prior to registration or qualification under
the laws of such state for FCC to make such an offer or solicitation.
Neither the delivery of this Proxy Statement and Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of FCC or Bancshares since
the date hereof.
________________________________________
This Proxy Statement and Prospectus is dated August [12], 1994
<PAGE>
AVAILABLE INFORMATION
FCC and Bancshares are subject to the informational requirements
of the Securities Exchange Act of 1934 and in accordance therewith are
required to file reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, together with
proxy statements and other information filed by FCC and Bancshares, can
be inspected at, and copies thereof may be obtained at prescribed rates
from the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and from the
Commission's Regional Offices 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.
FCC has filed with the Commission a Registration Statement on Form
S-4 ("Registration Statement") under the Securities Act with respect to
the common stock offered by this Proxy Statement and Prospectus. This
Proxy Statement and Prospectus does not contain all of the information
set forth in the Registration Statement or the exhibits thereto.
Statements contained in this Proxy Statement and Prospectus as to the
contents of any documents are necessarily summaries of the documents,
and each statement is qualified in its entirety by reference to the copy
of the applicable document filed with the Commission. For further
information with respect to FCC, reference is made to the Registration
Statement, including the exhibits thereto.
As more fully set forth under the headings captioned "Information
about Bancshares" and "Information about FCC" elsewhere herein, certain
information with respect to Bancshares and FCC has been incorporated by
reference into this Proxy Statement and Prospectus. Bancshares and FCC
hereby undertake to provide without charge to each person to whom a copy
of this Proxy Statement and Prospectus has been delivered, upon the
written or oral request of such person, a copy of any or all of the
information or documents which have been incorporated by reference
herein, other than exhibits to such documents. Requests for such copies
should be directed, in the case of Bancshares, to Mr. Gerald W. Cox,
Lakeside Bancshares, Inc., One Lakeside Plaza, Box 1268, Lake Charles,
Louisiana 70602, telephone (318) 433-2265, and, in the case of FCC, to
Mr. Thomas L. Callicutt, Jr., Senior Vice President and Controller,
First Commerce Corporation, P. O. Box 60279, 925 Common Street, 7th
Floor, New Orleans, Louisiana 70160, telephone (504) 582-2900. In
order to ensure timely delivery of the documents, any request should be
made by August [31], 1994.
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TABLE OF CONTENTS
Page
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SUMMARY i
The Companies i
The Banks i
The Special Meeting i
Purpose of the Special Meeting ii
Vote Required ii
Reasons for the Plan, Recommendation of
Bancshares' Board of Directors ii
Opinion of Southard Financial ii
Conversion of Bancshares Common Stock ii
Exchange of Certificates iii
Conditions to Consummation of the Mergers iii
Waiver, Amendment and Termination iv
Interests of Certain Persons in the Mergers v
Joinder of Shareholders v
Employee Benefits v
Certain Federal Income Tax Consequences vi
Dissenters' Rights vi
Selected Financial Data of Bancshares vi
Selected Financial Data of FCC vii
Comparative Per Share Data (Unaudited) ix
Market Prices and Dividends x
Recent Operating Results of FCC xi
INTRODUCTORY STATEMENT 1
General 1
Purpose of the Special Meeting 1
Shares Entitled to Vote; Quorum; Vote Required 1
Solicitation, Voting and Revocation of Proxies 1
THE PLAN 2
General 2
Background of and Reasons for the Plan 2
Opinion of Southard Financial 4
Conversion of Bancshares Common Stock 5
Effective Date 6
Exchange of Certificates 6
Regulatory Approvals and Other Conditions of the Mergers 7
Conduct of Business Prior to the Effective Date 8
Waiver, Amendment and Termination 8
Interests of Certain Persons in the Mergers 9
Joinder of Shareholders 10
Employee Benefits 11
Expenses 12
Status Under Federal Securities Laws; Certain
Restrictions on Resales 12
Accounting Treatment 12
CERTAIN FEDERAL INCOME TAX CONSEQUENCES 12
DISSENTERS' RIGHTS 13
INFORMATION ABOUT BANCSHARES 15
INFORMATION ABOUT FCC 16
COMPARATIVE RIGHTS OF SHAREHOLDERS 16
Preferred Stock 16
Shareholders' Meetings 17
Preemptive Rights 17
Stock Dividends 17
Voting of Stock of Subsidiary 17
Board Nominations 17
Election of Directors 17
Limitation of Personal Liability of Directors
and Officers 17
Fair Price Protection Statute 18
LEGAL MATTERS 18
EXPERTS 18
OTHER MATTERS 19
FIRST COMMERCE CORPORATION PRO FORMA
CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED) F-1
Appendix A - Selected Portions of Agreement and
Plan of Merger A-1
Appendix B - Fairness Opinion of Southard Financial B-1
Appendix C - Excerpt from Section 131 of the
Louisiana Business Corporation Law C-1
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<PAGE>
SUMMARY
The following summary is necessarily incomplete and is qualified
in its entirety by the more detailed information appearing elsewhere
herein, the appendices hereto and the documents incorporated herein by
reference. Shareholders are urged to read carefully all such material.
The Companies
First Commerce Corporation, a Louisiana corporation ("FCC"), is a
multi-bank holding company with five wholly owned bank subsidiaries in
New Orleans, Baton Rouge, Alexandria, Lafayette and Lake Charles,
Louisiana. FCC and its subsidiaries are referred to collectively herein
as "FCC's consolidated group." At March 31, 1994, FCC had total
consolidated assets of approximately $6.4 billion and total consolidated
deposits of approximately $5.3 billion. FCC's principal executive
offices are at 210 Baronne Street, New Orleans, Louisiana 70112, and its
telephone number is (504) 561-1371. See "Information About FCC."
Lakeside Bancshares, Inc., a Louisiana corporation ("Bancshares"),
is a one bank holding company that owns all of the outstanding stock of
Lakeside National Bank of Lake Charles ("LNB"). At March 31, 1994,
Bancshares had total consolidated assets of approximately $190 million
and total consolidated deposits of approximately $172 million.
Bancshares' principal executive offices are at One Lakeside Plaza, Lake
Charles, Louisiana 70602, telephone (318) 433-2265. Bancshares and LNB
are referred to herein collectively as "Bancshares' consolidated group."
See "Information About Bancshares."
FCC and Bancshares are collectively referred to herein as the
"Companies."
The Banks
The First National Bank of Lake Charles ("FNBLC"), a national
banking association that is a wholly owned subsidiary of FCC, is a full
service commercial bank offering consumer and commercial banking
services in Calcasieu and Beauregard Parishes. At March 31, 1994, FNBLC
had total assets of approximately $326 million and total deposits of
approximately $281 million. In addition to its main banking facility in
Lake Charles, Louisiana, FNBLC operates 12 full service branches in Lake
Charles, Sulphur, Westlake, DeQuincy, DeRidder and Moss Bluff,
Louisiana.
LNB, a national banking association that is a wholly-owned
subsidiary of Bancshares, is a full service commercial bank offering
consumer and commercial banking services in Calcasieu Parish. At March
31, 1994, LNB had total assets of approximately $189.5 million and total
deposits of approximately $171.5 million. In addition to its main
banking facility in Lake Charles, Louisiana, LNB operates six full
service branches in Lake Charles, Sulphur, Moss Bluff and Westlake,
Louisiana.
FNBLC and LNB are collectively referred to herein as the "Banks."
The Special Meeting
A special meeting of the shareholders of Bancshares will be held
on September 20, 1994 at the time and place set forth in the
accompanying Notice of Special Meeting of Shareholders (the "Special
Meeting"). Only record holders of the common stock, $2.50 par value per
share, of Bancshares ("Bancshares Common Stock") on July 29, 1994 are
entitled to notice of and to vote at the Special Meeting. On that date,
there were 500,000 shares of Bancshares Common Stock outstanding each of
which is entitled to one vote on each matter properly to come before the
Special Meeting.
Purpose of the Special Meeting
The purpose of the Special Meeting is to vote upon a proposal to
approve an Agreement and Plan of Merger and two related merger
agreements (collectively, the "Plan") selected portions of which are
attached hereto as Appendix A, pursuant to which, among other things,
LNB will merge into FNBLC (the "Bank Merger"), and Bancshares will merge
into FCC (the "Holding Company Merger", which, together with the Bank
Merger, are collectively called the "Mergers"), with the result that the
business and properties of LNB will become the business and properties
of FNBLC, the business and properties of Bancshares will become the
business and properties of FCC and shareholders of Bancshares will
receive the consideration described below under "Conversion of
Bancshares Common Stock." See "Introductory Statement - Purpose of the
Special Meeting."
Vote Required
The Plan must be approved by the affirmative vote of two-thirds of
the voting power present, in person or by proxy, at the Special Meeting.
Directors, executive officers and certain principal shareholders of
Bancshares beneficially owning an aggregate of 274,678 shares, or
approximately 54.9% of the outstanding Bancshares Common Stock have
executed agreements pursuant to which they each agreed, subject to
certain conditions, to vote in favor of the Plan. Under Louisiana law,
shareholders of FCC are not required to approve the Plan. See
"Introductory Statement - Shares Entitled to Vote; Quorum; Vote
Required."
Reasons for the Plan; Recommendation of Bancshares' Board of Directors
Bancshares' Board of Directors believes the Plan is fair to, and
in the best interest of, Bancshares and its shareholders and recommends
that Bancshares' shareholders vote FOR approval of the Plan.
Bancshares' Board of Directors also believes that the Plan will provide
significant value to all shareholders of Bancshares and enable them to
participate in opportunities for growth that the Board believes the Plan
makes possible. See "The Plan - Background of and Reasons for the
Plan."
Opinion of Southard Financial
Southard Financial ("Southard"), Memphis, Tennessee, has delivered
its written opinion to Bancshares' Board of Directors to the effect
that, as of June 30, 1994, the terms of the Plan are fair to the holders
of Bancshares' Common Stock from a financial point of view. A copy of
the opinion of Southard dated as of August 3, 1994, is attached as
Appendix B. The opinion should be read in its entirety for a
description of the procedures followed, assumptions and qualifications
made, matters considered and the limitations undertaken by Southard.
See "The Plan - Opinion of Southard Financial Advisor."
Conversion of Bancshares Common Stock
Under the terms of the Plan, on the date the Holding Company
Merger becomes effective (the "Effective Date"), each outstanding share
of Bancshares Common Stock will be converted into a number of shares of
common stock, $5.00 par value per share, of FCC ("FCC Common Stock"),
equal to the quotient of (a) (i) $37 million less the Deductible Amount,
as defined below, divided by (ii) the Average Sales Price, as defined
below, of a share of FCC Common Stock; provided that if the Average
Sales Price is less than $24, then the divisor will be $24, and if the
Average Sales Price is greater than $33, then the divisor will be $33,
divided by (b) the number of shares of Bancshares Common Stock
outstanding on the Effective Date.
The "Deductible Amount" is defined in the Plan as the excess over
$200,000 which Bancshares had not accrued, or for which Bancshares had
not established a reserve, on its financial statements as of February
28, 1994, and which Bancshares or LNB pays or is or becomes obligated to
pay for (a) expenses, including legal fees and amounts paid in
settlement related to certain litigation in which Bancshares and LNB are
currently involved, (b) investment banking fees and expenses, (c)
expenses, including legal fees, related to the potential sale of
Bancshares and LNB and the negotiation and consummation of the
transactions contemplated by the Plan, (d) $413,000, which the parties
have agreed shall be reserved for payments to employees of Bancshares
and LNB under Bancshares' and LNB's severance benefits plan and (e)
$68,000, which the parties have agreed shall be reserved for the payment
of medical insurance premiums for a period of four years for four
employees of LNB if their employment is terminated as a result of, or
within one year following the Effective Date of, the Mergers. It is
Bancshares' estimate that the Deductible Amount will be approximately
$816,000.
The "Average Sales Price" is defined in the Plan as the average of
the closing sales prices of a share of FCC Common Stock for the 20
trading days ending on the fifth trading day prior to the closing date
for the Mergers, for which sales of FCC Common Stock were reported on
the National Association of Securities Dealers Automated Quotation
System for securities listed for trading by the Nasdaq National Market.
The following table sets forth examples of the number of shares of
FCC Common Stock into which each share of Bancshares Common Stock would
be converted on the Effective Date, assuming that on such date the
Average Sales Price for FCC Common Stock is as specified below, and
assuming a Deductible Amount of $816,000.
Assumed Average Number of FCC
Sales Price of FCC Common Stock Shares Per Bancshares Share
$ 24 3.02
26 2.78
28 2.58
30 2.41
32 2.26
34 2.13
On August 3, 1994, the actual closing sales price for a share of
FCC Common Stock was $26.75.
In lieu of the issuance of any fractional share of FCC Common
Stock to which a holder of Bancshares Common Stock may be entitled, each
shareholder of Bancshares, upon surrender of the certificate or
certificates which immediately prior to the Effective Date represented
Bancshares Common Stock held by such shareholder, shall be entitled to
receive a cash payment (without interest) equal to such fractional share
multiplied by the Average Sales Price. See "The Plan - Conversion of
Bancshares Common Stock."
Exchange of Certificates
Upon consummation of the Mergers, a letter of transmittal,
together with instructions for the exchange of certificates representing
shares of Bancshares Common Stock for certificates representing shares
of FCC Common Stock will be mailed to each person who was a shareholder
of record of Bancshares on the Effective Date of the Mergers.
Shareholders are requested not to send in their Bancshares Common Stock
certificates until they have received a letter of transmittal and
further written instructions.
Bancshares shareholders who cannot locate their certificates are
urged promptly to contact Andrew J. Betz, Lakeside Bancshares, Inc., One
Lakeside Plaza, Lake Charles, Louisiana 70602, telephone number (318)
433-2265. A new certificate will be issued to replace the lost
certificate(s) only upon execution by the shareholder of an affidavit
certifying that his certificate(s) cannot be located and an agreement to
indemnify Bancshares and FCC against any claim that may be made against
it or FCC by the owner of the certificate(s) alleged to have been lost
or destroyed. Bancshares or FCC may also require the shareholder to
post a bond in such sum as is sufficient to support the shareholder's
agreement to indemnify Bancshares and FCC. See "The Plan - Exchange of
Certificates."
Conditions to Consummation of the Mergers
In addition to approval by the shareholders of Bancshares, consum-
mation of the Mergers is conditioned upon, among other things, (i) the
accuracy on the date of closing of the representations and warranties,
and the compliance with covenants, made in the Plan by each party, and
the absence of any material adverse change in the financial condition,
results of operations, business or prospects of the other party's
consolidated group, (ii) receipt by FCC and FNBLC of required regulatory
approvals, (iii) receipt by FCC of assurances that the Mergers may be
accounted for as a pooling-of-interests, (iv) the receipt by FCC and
Bancshares of opinions as to the qualification of the Mergers as tax-
free reorganizations under applicable law, (v) resolution of all
existing disputes and litigation between the shareholders of Bancshares
and Bancshares or its management and Bancshares and all regulatory
authorities, (vi) that by the later of five days after the date of the
Special Meeting or September 4, 1994, unless extended by FCC, Messrs.
Martin, Roberts and Betz and Ms. Beasley shall have either left the
employment of Bancshares and LNB in all capacities other than as
directors of Bancshares or shall have executed non-competition
agreements with FCC and FNBLC, and (vii) certain other conditions. The
Companies intend to consummate the Mergers as soon as practicable after
all of the conditions to the Mergers have been met or waived.
FCC expects to file a notice seeking a waiver of the prior
approval of the Board of Governors of the Federal Reserve System (the
"Reserve Board") and an application for the approval of the Bank Merger
of the Office of the Comptroller of the Currency (the "Comptroller") by
mid-August. FCC expects to receive such waiver and approval by mid-
November; however, there can be no assurance that the waiver and
approval will be obtained, or that the other conditions to consummation
of the Mergers will be satisfied by such date or at all. If the
required waiver and approval are obtained, the Mergers are subject to
review by the U.S. Department of Justice, which may seek to enjoin the
Mergers or require divestitures of assets if it believes the Mergers
would have certain anti-competitive effects in the Lake Charles market.
Representatives of the Department of Justice have expressed concerns
about the effect of the Mergers, and as of the date of this Proxy
Statement and Prospectus representatives of FCC were engaged in
discussions with such officials to address those concerns. While FCC
believes that it should be able to satisfactorily address those concerns
in a manner that would permit the Mergers to proceed, there is no
assurance that it will be able to do so. See "The Plan - Regulatory
Approvals and Other Conditions of the Mergers."
Waiver, Amendment and Termination
The Plan provides that each of the parties to the Plan may waive
any of the conditions to its obligation to consummate the Mergers other
than the receipt of all necessary regulatory approvals, the approval of
the shareholders of Bancshares and the satisfaction of all requirements
prescribed by law for consummation of the Mergers.
The Plan may be amended, at any time before or after its approval
by the shareholders of Bancshares, by the mutual agreement of the Boards
of Directors of the parties to the Plan; provided that, any amendment
made subsequent to such shareholder approval may not alter the amount or
type of shares into which Bancshares Common Stock will be converted,
alter any term of the Articles of Incorporation of FCC, or alter any
term or condition of the Plan in a manner that would adversely affect
any shareholder of Bancshares.
The Plan may be terminated at any time prior to the Effective Date
of the Mergers by (i) the mutual consent of the parties, (ii) the Board
of Directors of either FCC or Bancshares in the event of a material
breach by any member of the consolidated group of the other of them of
any representation or warranty in the Plan which cannot be cured by the
earlier of 10 days after written notice of such breach or February 28,
1995, (iii) either FCC or Bancshares if by February 28, 1995 all the
conditions to closing required by the Plan have not been met or waived,
cannot be met, or the Mergers have not occurred, (iv) FCC or FNBLC if
the number of shares of Bancshares Common Stock as to which holders
thereof have perfected dissenters' rights together with the number of
such shares as to which the holders are entitled to receive cash
payments in lieu of fractional shares, exceeds, in the aggregate, 9.9%
of the total number of shares of Bancshares Common Stock outstanding on
the date of the closing, or (v) the Board of Directors of either FCC or
FNBLC if Bancshares' Board of Directors (A) withdraws, modifies or
changes its recommendation to its shareholders as contained herein or
resolves to do so, (B) recommends to its shareholders any other merger,
consolidation, share exchange, business combination or other similar
transaction, any sale, lease, transfer or other disposition of all or
substantially all of the assets of any member of Bancshares'
consolidated group or any acquisition of 15% or more of any class of
Bancshares' capital stock or (C) makes any announcement of an intention
or agreement to do any of the foregoing. See "The Plan - Waiver,
Amendment and Termination."
Interests of Certain Persons in the Merger
FCC and FNBLC have agreed that, following the Effective Date, they
will indemnify each person who served as an officer or director of
Bancshares or LNB on July 21, 1994 or has served as a director at any
time since January 1, 1990, against all damages, liabilities, judgments
and claims based upon or arising out of such person's service in such
capacity to the same extent as he would have been indemnified under the
applicable Articles of Incorporation or By-laws of Bancshares or LNB, as
appropriate, as they were in effect on the date the Plan was executed.
With certain exceptions, the aggregate amount of indemnification
payments required to be made by FCC and FNBLC to such persons is $5
million. See "The Plan - Interests of Certain Persons in the Merger."
Directors and officers who do not execute a Joinder of Shareholders as
required will not be entitled to such contractual indemnification.
LNB President and Chief Executive Officer Malcolm D. Martin,
Executive Vice President Joseph W. Roberts, Jr., Senior Vice President
and Trust Officer Andrew J. Betz, and Senior Vice President Deanna K.
Beasley are parties to separate employment contracts with LNB. The
contracts with Messrs. Martin, Roberts and Betz commenced on October 21,
1992 and expire on December 31, 1995. The contract with Ms. Beasley
commenced on July 6, 1993 and expires on June 30, 1996. The contracts
call for the employment of each of the specified persons for the
specified terms; however, LNB may in its discretion at any time during
the term of the contract terminate the employment of the affected
employee and pay that employee in a lump sum a separation payment of
(1) one-half of that employee's current annual salary, (2) other
benefits which have been vested during the course of employment and (3)
an amount equal to a six-month value of the perquisites furnished that
employee; provided however that no payment shall be made if the employee
is indicted for a criminal offense in connection with his or her conduct
at LNB. Messrs. Martin and Roberts are expected to receive separation
payments shortly following the Special Meeting of shareholders. Mr.
Betz and Ms. Beasley may also receive such payments. See "The Plan -
Interests of Certain Persons in the Merger."
Joinder of Shareholders
As a condition to consummation of the Mergers, each Bancshares'
director and executive officer and certain principal shareholders
(except as noted below), including without limitation each shareholder
beneficially owning 5% or more of Bancshares Common Stock and Mary Ellen
Chavanne, Hazel Prince Chavanne, Claire C. Turner, Harry J. Chavanne,
Jeanine C. McGann and David P. Chavanne, has executed an individual
agreement pursuant to which he or she has agreed (i) to vote as a
shareholder in favor of the Plan and against any other proposal relating
to the sale or disposition of LNB or Bancshares, (ii) not to transfer
any shares of Bancshares Common Stock, except under certain conditions,
(iii) not to trade in FCC Common Stock prior to the Effective Date, (iv)
to release FCC and FNBLC from any indemnification obligation that either
of them may have to indemnify him in his capacity as an officer,
director or employee of any member of Bancshares' consolidated group
except as set forth in the Plan and (v) that for a period of one year
following the Effective Date he or she will not assume a significant
proprietary or managerial position with a financial institution that
competes with the business of LNB as continued by FNBLC, except that
Messrs. Martin and Roberts have indicated that they do not intend to
execute a joinder agreement, Mr. Betz and Ms. Beasley have not yet
executed a joinder agreement, and Mr. Flanagan has executed a Commitment
and Non-Competition Agreement in lieu of a joinder agreement. See "The
Plan - Joinder of Shareholders."
Employee Benefits
Pursuant to the Plan, FCC has agreed that, from and after
the Effective Date, FCC or FNBLC will offer to all persons who
were employees of Bancshares or LNB immediately prior to the
Effective Date and who become employees of FNBLC following the
Mergers, the same employee benefits as are offered by FCC or
FNBLC to employees of FNBLC, except that there will not be a
waiting period for coverage under the First Commerce Corporation
Flexible Benefit Plan or any of its constituent plans, including
the First Commerce Corporation Medical and Dental Care Plan, and
no employee of LNB who is an active employee on the Effective
Date will be denied such benefits for a pre-existing condition.
Full credit will be given for prior service by such employees
with Bancshares or LNB for eligibility and vesting purposes under
all of FCC's benefit plans and policies, except that credit for
prior service will not be given for eligibility, vesting or
benefit accrual purposes under FCC's retirement plan. FCC has
also agreed to pay certain additional benefits accrued under
plans of Bancshares and LNB. See "The Plan - Employee Benefits."
Certain Federal Income Tax Consequences
Consummation of the Mergers is conditioned upon receipt by
the Companies of an opinion from Arthur Andersen & Co. to the
effect that, among other things, each of the Mergers will qualify
as a tax-free reorganization under applicable law, and that each
Bancshares shareholder who receives FCC Common Stock pursuant to
the Holding Company Merger will not recognize gain or loss except
with respect to the receipt of cash (i) in lieu of fractional
shares of FCC Common Stock, or (ii) pursuant to the exercise of
dissenters' rights. Because of the complexity of the tax laws,
each shareholder should consult his tax advisor concerning the
applicable federal, state and local income tax consequences of
the Mergers. See "Certain Federal Income Tax Consequences."
Dissenters' Rights
Under certain conditions, and by complying with the specific
procedures required by statute and described herein, shareholders
of Bancshares will have the right to dissent from the Holding
Company Merger, in which event, if the Holding Company Merger is
consummated, they may be entitled to receive in cash the fair
value of their shares of Bancshares Common Stock. See
"Dissenters' Rights."
Selected Financial Data of Bancshares
The following selected financial data of Bancshares with
respect to each of the fiscal years in the five-year period ended
December 31, 1993 and for the three-month periods ended March 31,
1994 and 1993, respectively, have been derived from the
consolidated financial statements of Bancshares' consolidated
group and should be read in conjunction with Bancshares' 1993
Annual Report on Form 10-K and Bancshares' Quarterly Report on
Form 10-Q for the quarter ended March 31, 1994, that have been
incorporated by reference in the Proxy Statement and Prospectus.
The selected financial data reflect all adjustments which are, in
the opinion of Bancshares' management, necessary for a fair
presentation of the results of operations for the interim periods
presented. The results of operations for the three-month period
ended March 31, 1994 are not necessarily indicative of the
results to be expected for the entire year.
<TABLE>
<CAPTION>
(In thousands of dollars, except per share data)
Three Months
Ended March 31, Years Ended December 31,
____________________ ______________________________________________________
1994 1993 1993 1992 1991 1990 1989
____ ____ ____ ____ ____ ____ ____
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Balance
Sheet Data:
Total assets $189,481 $ 196,308 $ 188,172 $ 196,439 $ 196,547 $188,437 $ 180,011
Earning assets 168,496 176,090 165,679 172,836 171,996 165,052 154,957
Loans and leases* 94,627 99,848 93,747 100,341 103,340 105,639 109,522
Securities 58,640 62,940 59,822 59,337 55,020 48,598 37,360
Deposits 171,463 179,210 170,899 179,991 181,327 172,905 161,115
Long-term debt - - - - - - 2,898
Stockholders'equity 16,415 15,434 15,575 14,892 13,336 12,833 13,628
</TABLE>
<TABLE>
<CAPTION>
Three Months
Ended March 31, Years Ended December 31,
________________ _______________________________________________________
1994 1993 1993 1992 1991 1990 1989
____ ____ ____ ____ ____ ____ ____
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement
Data:
Total interest income $ 2,901 $ 3,088 $ 11,999 $ 13,593 $ 16,779 $ 17,927 $ 17,457
Net interest income 2,185 2,199 8,792 8,795 8,793 8,614 8,536
Provision for
loan losses - 100 - 675 300 3,743 1,880
Other income
(exclusive of
securities
transactions) 823 799 3,256 3,216 2,758 2,892 2,592
Operating expense 2,319 2,584 9,764 10,383 10,005 8,768 7,833
Net income 462 238 1,331 1,215 1,661 (821) 991
Per Share Data:
Fully diluted
earnings
per share $ .92 $ .48 $ 2.92 $ 2.43 $ 3.32 $ (1.72) 2.01
Primary earnings
per share .92 .48 2.92 2.43 3.32 (1.72) 2.01
Cash dividends - - 1.10 .90 .60 - .60
Book value
(period - end) 32.97 30.89 31.97 31.73 29.63 26.62 27.99
High stock price 32.75 24.00 24.00 19.15 17.00 18.00 22.00
Low stock price 32.75 24.00 24.00 17.00 17.00 17.00 17.00
Key Ratios:
Net income as a
percent of
average assets .98% .48% .71% .62% .85% (.43%) .55%
Net income as a
percent of
average total
equity 11.26% 6.17% 8.55% 8.16% 12.46% (6.40%) 7.27%
Net interest
margin 4.76% 4.59% 4.76% 4.44% 4.22% 4.12% 4.36%
Allowance for loan
losses to loans
and leases* 3.11% 3.22% 3.07% 3.08% 2.75% 3.58% 1.54%
Leverage ratio 8.68% 7.85% 8.85% 7.85% 7.09% 6.69% 7.17%
Dividend payout
ratio - - 41.32% 37.04% 18.06% - 29.30%
</TABLE>
______________________
*Net of unearned income.
Selected Financial Data of FCC
The following selected financial data with respect to each of the
fiscal years in the five-year period ended December 31, 1993 and for the
three-month periods ended March 31, 1994 and 1993, respectively, have been
derived from the consolidated financial statements of FCC's consolidated
group and should be read in conjunction with FCC's 1993 Annual Report on
Form 10-K and FCC's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1994, that have been incorporated by reference in this Proxy
Statement and Prospectus. The selected financial data reflect all
adjustments which are, in the opinion of FCC's management, necessary for a
fair presentation of the results of operations for the interim periods
presented. The results of operations for the three-month period ended
March 31, 1994 are not necessarily indicative of the results to be expected
for the entire year.
<TABLE>
<CAPTION>
(In thousands of dollars, except per share data)
Three Months
Ended March 31, Years Ended December 31,
_______________________ __________________________________________________________
1994 1993 1993 1992 1991 1990 1989
____ ____ ____ ____ ____ ____ ____
(unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Average Balance
Sheet Data:
Total assets $6,597,863 $6,230,743 $6,335,669 $5,741,399 $4,671,478 $4,482,019 $4,202,912
Earning assets 6,011,953 5,715,968 5,812,761 5,280,347 4,257,388 4,035,104 3,719,972
Loans and leases* 2,633,335 2,294,602 2,407,231 2,184,584 2,323,018 2,402,541 2,232,213
Securities 3,287,273 3,067,975 3,110,544 2,734,925 1,515,299 1,290,487 1,061,206
Deposits 5,276,203 5,212,500 5,176,873 4,953,572 3,931,612 3,552,578 3,343,223
Long-term debt 89,694 95,636 95,238 97,154 101,246 103,033 104,863
Stockholders'
equity 518,026 439,743 469,694 355,716 235,385 239,011 231,097
Income Statement
Data:
Total interest
income $ 97,183 $ 99,061 $ 393,334 $ 398,701 $ 393,922 $ 408,996 $ 392,769
Net interest
income 62,746 63,092 250,010 235,353 191,862 168,021 156,005
Provision for
loan losses (3,832) 588 (4,504) 22,040 43,734 47,425 26,220
Other income
(exclusive of
securities
transactions) 27,379 24,589 102,844 96,369 83,419 73,213 64,215
Operating expense 56,472 52,536 221,080 203,781 185,963 165,325 155,397
Net income 26,132 23,127 95,214 72,475 34,029 22,038 28,197
Per Share Data:
Fully diluted
earnings
per share $ .86 $ .78 $ 3.18 $ 2.70 $ 1.56 $ .94 $ 1.20
Primary earnings
per share .95 .85 3.48 2.88 1.56 .94 1.20
Cash dividends<FN1> .25 .20 .85 .70 .64 .64 .64
Book value
(period - end) 17.14 15.22 17.28 14.57 11.38 10.45 10.14
High stock price 28.50 31.00 32.20 27.86 18.14 12.54 12.74
Low stock price 24.00 25.33 23.90 16.94 7.20 6.66 9.27
Key Ratios:
Net income as a
percent of
average assets 1.61% 1.51% 1.50% 1.26% .73% .49% .67%
Net income as a
percent of
average total
equity 20.46% 21.33% 20.27% 20.37% 14.46% 9.22% 12.20%
Net income as a
percent of
average common
equity 22.17% 23.54% 22.18% 22.85% 14.46% 9.11% 12.37%
Net interest
margin 4.30% 4.56% 4.40% 4.58% 4.69% 4.37% 4.42%
Allowance for loan
losses to loans
and leases* 2.40% 3.45% 2.55% 3.44% 3.11% 2.44% 1.91%
Leverage ratio 7.81% 7.00% 7.63% 6.76% 4.87% 4.66% 5.06%
Dividend payout
ratio 26.32% 23.53% 24.27% 25.78% 41.03% 68.09% 53.33%
</TABLE>
______________________
*Net of unearned income.
<FN1> On July 18, 1994, the Board of Directors declared its regular third
quarter dividend to be paid on October 3, 1994 to shareholders of
record on September 16, 1994, and increased the regular quarterly
dividend to $.30 per share.
Comparative Per Share Data (Unaudited)
The following table presents certain net income, cash
dividend and book value per common share information for FCC
and Bancshares on an historical, unaudited pro forma combined
and unaudited pro forma equivalent basis. The unaudited pro forma
combined information is based upon the historical financial
condition and results of operations of the Companies and
adjustments directly attributable to the proposed Holding
Company Merger based on estimates derived from information
currently available. They do not purport to be indicative of the
results that would actually have been obtained if the Holding
Company Merger had been in effect on the date or for the periods
indicated below, or the results that may be obtained in the future.
<TABLE>
<CAPTION>
Historical
__________________ Pro Forma Bancshares
FCC Bancshares Combined<FN1><FN2> Equivalent
_____ __________ ______________ __________
<S> <C> <C> <C> <C>
Primary earnings per
common share <FN3>:
Years ended:
December 31, 1993 $ 3.48 $ 2.92 $ 3.34 $ 10.29
December 31, 1992 2.88 2.43 2.75 8.47
December 31, 1991 1.56 3.32 1.53 4.71
Three months ended:
March 31, 1994 $ .95 $ .92 $ .92 $ 2.83
Dividends declared per
common share <FN4>:
Years ended:
December 31, 1993 $ .85 $ 1.10 $ .82 $ 2.62
December 31, 1992 .70 .90 .68 2.16
December 31, 1991 .64 .60 .61 1.97
Three months ended:
March 31, 1994 $ .25 $ - $ .24 $ .77
Book value per
common share <FN5>:
As of December 31, 1993 $17.28 $ 31.97 $ 16.89 $ 52.02
As of March 31, 1994 $17.14 $ 32.97 $ 16.78 $ 51.68
</TABLE>
____________
<FN1> In accordance with generally accepted accounting
principles, FCC will account for the Mergers using the
pooling-of-interests method.
<FN2> To calculate pro forma combined per share information,
it has been assumed that the number of outstanding
shares of FCC Common Stock includes shares to be issued
by FCC upon consummation of the Holding Company Merger.
Under the terms of the Plan, the number of shares of
FCC Common Stock to be delivered will be determined
at the time the Holding Company Merger is effected based
on the closing sales price of FCC Common Stock with a
maximum number of shares of 1,540,000. For purposes
of this table, it has been assumed that the maximum
number of shares issuable under the Holding Company
Merger will result in an assumed conversion rate of
3.08 (the "Assumed Conversion Rate").
<FN3> Pro forma primary earnings per common share was
calculated by dividing the combined net income,
adjusted for preferred stock dividends, of FCC and
Bancshares during the periods presented by the weighted
average outstanding shares of FCC Common Stock during
such periods, after adjustment for shares of FCC Common
Stock to be issued in connection with the Holding
Company Merger. Bancshares adopted Statement of
Financial Accounting Standards No. 109, "Accounting for
Income Taxes" in 1993 and reported the cumulative
effect of this accounting change in their 1993
consolidated statement of income. The effect of this
change was a $131,000 decrease in net income for
Bancshares. This amount is not considered to be a
component of ongoing results and accordingly has
not been included in the historical or pro forma
combined amounts presented. The Bancshares equivalent
data presented is the prod combined per share
information multiplied by the Assumed Conversion Rate.
<FN4> Pro forma dividends were calculated by multiplying
FCC's and Bancshares' dividend rates by the applicable
weighted average outstanding Common Stock. Pro forma
dividends per common share were
then calculated by dividing pro forma total dividends by
the weighted average outstanding shares of FCC
Common Stock during such periods, after adjustment for
shares of FCC Common Stock to be issued in connection
with the Holding Company Merger. The Bancshares
equivalent data presented was calculated by multiplying
the historical per share FCC Assumed Conversion Rate. On
July 18, 1994, the Board of Directors of FCC declared its
regular third quarter dividend to be paid on October 3,
1994 to shareholders of record on September 16, 1994,
and increased the regular quarterly dividend to $.30 per
share.
<FN5> Pro forma combined book value per common share was
calculated by dividing the total of FCC's and
Bancshares' common stockholders' equity by the total
shares of FCC Common Stock outstanding as of
December 31, 1993 and March 31, 1994, respectively,
after adjustment for unearned shares of FCC
restricted stock and for shares of FCC Common Stock
to be issued in connection with the Holding Company
Merger. The Bancshares equivalent data presented is
the product of the pro forma combined per share
information multiplied by the Assumed Conversion Rate.
Market Prices and Dividends
Market Prices. On July 20, 1994, the day preceding the date that
the Companies entered into the Plan, the closing sales price for a share
of FCC Common Stock, as quoted on Nasdaq National Market, was $27.00.
No assurance can be given as to the market price of FCC Common Stock on
the Effective Date. On August 3, 1994, the closing sales price for a
share of FCC Common Stock was $26.75 and, if such date had been the
Effective Date of the Mergers the Average Sales Price would have been
$27.38.
Bancshares Common Stock is not traded on any exchange, and there
is no established public trading market for the stock. There are no bid
or asked prices available for Bancshares Common Stock. There is,
however, limited and sporadic trading of Bancshares Common Stock in its
local area, principally through local brokers. Based on the limited
information available to management, sales were effected during the past
twelve months at approximately $24.00 per share, but there can be no
assurance that such trades were effected on an arm's-length basis.
See "Information About Bancshares."
Recent Operating Results of FCC
FCC reported its second quarter results on July 14, 1994. Net
income was $19.1 million, versus $25.4 million in 1993's second quarter.
The most significant factor affecting the results was a $4.3 million
after tax loss on securities transactions caused by sales of lower
yielding securities made to take advantage of opportunities to acquire
higher yielding securities as to which the losses would be recouped in
future periods.
Net interest income was $62.0 million in the second quarter,
compared to $62.9 million in the second quarter of 1993. The small
decrease was primarily attributable to the decline in the earning assets
yield related to lower rates on new loans and securities than on the
loans and securities which paid off or matured. The decrease was
partially offset by an improved earning assets mix resulting from loan
growth.
The provision for loan losses was a negative $4.8 million for the
second quarter compared to negative $2.3 million in 1993's second
quarter. Continued loan quality improvements resulted in the negative
provision again this quarter.
Other income, excluding securities transactions, was $27.2
million, compared to $27.0 million in 1993's second quarter. Credit
card income, trust fees and ATM fees were higher in the current quarter
than in the prior quarter. These increases were partially offset by
lower broker/dealer revenues.
Operating expense was $59.0 million in the second quarter, and
$54.6 million in 1993's second quarter. The increase was primarily due
to additional employees, merit raises for employees, depreciation of new
branch automation equipment, and increased professional fees principally
in connection with efforts to improve profitability.
<PAGE>
INTRODUCTORY STATEMENT
General
This Proxy Statement and Prospectus is furnished to the
shareholders of Lakeside Bancshares, Inc. ("Bancshares") in connection
with the solicitation of proxies on behalf of its Board of Directors for
use at a special meeting of shareholders of Bancshares (the "Special
Meeting") to be held on the date and at the time and place specified in
the accompanying Notice of Special Meeting of Shareholders, or any
adjournments thereof.
Bancshares and First Commerce Corporation (collectively, the
"Companies") have each supplied all information included herein with
respect to it and its consolidated subsidiaries. Bancshares and its
subsidiary are collectively referred to herein as "Bancshares'
consolidated group" and First Commerce Corporation ("FCC") and its
subsidiaries are collectively referred to herein as "FCC's consolidated
group."
This Proxy Statement and Prospectus was mailed to shareholders of
Bancshares on approximately August [12], 1994.
Purpose of the Special Meeting
The purpose of the Special Meeting is to consider and vote upon a
proposal to approve an Agreement and Plan of Merger between FCC and its
wholly owned subsidiary, The First National Bank of Lake Charles
("FNBLC"), on the one hand, and Bancshares, and its wholly owned
subsidiary, Lakeside National Bank of Lake Charles ("LNB"), on the
other, and a related Agreement of Merger between FNBLC and LNB (the
"Bank Merger Agreement") and Joint Agreement of Merger between FCC and
Bancshares (the "Company Merger Agreement" and, together with the Bank
Merger Agreement, the "Plan"). Pursuant to the Plan, LNB will merge
into FNBLC (the "Bank Merger") and Bancshares will merge into FCC (the
"Holding Company Merger" which, together with the Bank Merger, are
collectively called the "Mergers") and each outstanding share of common
stock, $2.50 par value per share, of Bancshares ("Bancshares Common
Stock") will be converted into a number of shares of common stock, $5.00
par value per share, of FCC ("FCC Common Stock") as described under the
heading captioned "The Plan - Conversion of Bancshares Common Stock."
Shares Entitled to Vote; Quorum; Vote Required
Only holders of record of Bancshares Common Stock at the close of
business on July 29, 1994 are entitled to notice of and to vote at the
Special Meeting. On that date, there were 500,000 shares of Bancshares
Common Stock outstanding, each of which is each entitled to one vote on
each matter to come properly before the Special Meeting.
With respect to consideration of the Plan and any other matter
properly brought before the Special Meeting, the presence at the Special
Meeting, in person or by proxy, of the holders of a majority of the
outstanding shares of Bancshares Common Stock is necessary to constitute
a quorum.
The Plan must be approved by the affirmative vote of two-thirds of
the voting power present, in person or by proxy, at the Special Meeting.
An abstention will have the effect of a vote against the Plan but will
cause a shareholder otherwise entitled to dissenters' rights to forfeit
any claim to such rights. Directors, executive officers and certain
principal shareholders of Bancshares beneficially owning an aggregate of
274,678 shares, or approximately 54.9% of the outstanding Bancshares
Common Stock have executed agreements pursuant to which they each
agreed, subject to certain conditions, to vote in favor of the Plan.
Louisiana law does not require that shareholders of FCC approve
the Plan.
Solicitation, Voting and Revocation of Proxies
In addition to soliciting proxies by mail, directors, officers and
employees of Bancshares, without receiving additional compensation
therefor, may solicit proxies by telephone and in person. Arrangements
will also be made with brokerage firms and other custodians, nominees
and fiduciaries to forward solicitation materials to the beneficial
owners of shares of Bancshares Common Stock, and Bancshares will
reimburse such parties for reasonable out-of-pocket expenses incurred in
connection therewith. The cost of soliciting proxies is being paid for
by Bancshares.
The proxies that accompany this Proxy Statement and Prospectus
permit each holder of record of Bancshares Common Stock on the record
date to vote on all matters that properly come before the Special
Meeting. Where a shareholder specifies his choice on the proxy with
respect to the proposal to approve the Plan, the shares represented by
the proxy will be voted in accordance with such specification. If no
such specification is made, the shares will be voted in favor of the
Plan. If a shareholder does not sign and return a proxy and specify on
the proxy an instruction to vote against the Plan, he will not be able
to exercise dissenters' rights with respect to the Holding Company
Merger unless he attends the Special Meeting in person and votes against
the Plan and gives written notice of his dissent from the Plan at or
prior to the Special Meeting. See "Dissenters' Rights." A proxy may be
revoked by (i) giving written notice of revocation at any time before
its exercise to Joseph W. (Bill) Roberts, Jr., Lakeside Bancshares,
Inc., One Lakeside Plaza, Lake Charles, Louisiana 70602, (ii) executing
and delivering to Mr. Roberts at any time before its exercise a later
dated proxy or (iii) attending the Special Meeting and voting in person.
THE PLAN
General
The transactions contemplated by the Plan are to be effected in
accordance with the terms and conditions set forth in the Plan, which is
incorporated herein by reference. The following brief description does
not purport to be complete and is qualified in its entirety by reference
to the Plan, a copy of selected portions of which is attached hereto as
Appendix A.
The ultimate result of the transactions contemplated by the Plan
will be that the business and properties of LNB will become the business
and properties of FNBLC, the business and properties of Bancshares will
become the business and properties of FCC and the shareholders of
Bancshares will become shareholders of FCC. The steps taken to achieve
this result involve the following transactions: (i) Bancshares will
merge into FCC and the separate existence of Bancshares will cease;
(ii) LNB will merge into FNBLC and the separate existence of LNB will
cease and (iii) shareholders of Bancshares will receive the
consideration described below under the heading captioned "The Plan -
Conversion of Bancshares Common Stock."
Background of and Reasons for the Plan
Background. In August 1993, Bancshares and the Chavanne family,
who collectively own over 40% of Bancshares Common Stock, entered into a
settlement agreement in response to long-standing litigation between the
Chavannes and Bancshares, LNB and their respective directors. The
settlement agreement called for a special committee of the Board to be
established to administer a process of exploring the marketability of
Bancshares and/or the shares of Bancshares held by the Chavanne family.
The Board appointed the Special Committee, which included the following
members: Ray Hines, George A. McElveen, Jr., Malcolm D. Martin and Wayne
Vincent (all Board members) and Tom McDade, a consultant who represented
the Chavannes.
On January 6, 1994, upon the recommendation of the Special
Committee, the Board of Directors of Bancshares retained the New Orleans
investment banking firm of Chaffe and Associates to conduct an
evaluation of Bancshares and test the market for Bancshares and the
Chavannes' stock by soliciting preliminary bids or indications of
interest in acquiring those shares. Working through the Special
Committee, Chaffe and Associates contacted a number of financial
institutions and by March 3, 1994 had received written offers from four
financial institutions that indicated a desire to acquire Bancshares,
one of which was from FCC.
On May 16, 1994, the Special Committee and Chaffe and Associates
presented to the Board of Directors the four offers, and after
discussion, the Board of Directors authorized the Special Committee to
commence negotiations of a definitive acquisition agreement with FCC.
On May 16, 1994, an agreement in principle was signed and on July 14,
1994, the definitive agreements constituting the Plan were presented to
the Board of Directors of Bancshares for approval, and it was approved.
All outside members of the Board of Directors (those persons who are not
members of management of Bancshares) voted in favor of the Plan and the
Mergers. Director Flanagan abstained from voting. Director and LNB
President Martin voted against the Plan and the Mergers. Director and
LNB Executive Vice President Roberts voted against the Plan but in favor
of the Mergers and indicated in a written statement delivered to the
Board of Directors that his decision to vote against the Plan was based
on his belief that the Plan fails to "address the proper compensation
provisions for staff and management needed to preserve the bid price of
$37.2 million." All the outside directors of Bancshares and all the
members of the Chavanne family have executed a joinder agreement
pursuant to which they agree, among other things, to vote their shares
of Bancshares Common Stock in favor of the Plan and not to compete with
FCC and FNBLC for a period of one year from the consummation date of the
Plan. See "- Joinder of Shareholders." Director Flanagan has executed
a Commitment and Non-Competition Agreement whereby he agrees to vote his
Bancshares Common Stock in favor of the Plan, promote approval of the
Plan among Bancshares' shareholders, and not to compete against FCC for
a period of six months. See "- Joinder of Shareholders."
Reasons for the Plan. In reaching its determination that the Plan
and the Mergers are fair to, and in the best interest of, Bancshares and
its shareholders, the Board of Directors consulted with its advisors, as
well as with Bancshares' management, and considered a number of factors,
including, without limitation, the following:
a. The Board's familiarity with, and review of,
Bancshares' business operations, earnings and financial condition;
b. The Board's conclusion that the only practical way to
resolve the seemingly intractable disputes between Bancshares and
the Chavanne family was to sell Bancshares, but only upon terms
fair to all shareholders of Bancshares;
c. The Board's belief that the terms of the Plan are
attractive and the Plan allows Bancshares' shareholders to become
shareholders of FCC, the largest financial institution
headquartered in Louisiana, whose stock is traded on the Nasdaq
National Market, and the recent earnings performance of FCC;
d. FCC's and FNBLC's wide range of banking products and
services offered and FCC's dividend payment history;
e. The Board's belief, based upon analysis of the
anticipated financial effects of the Mergers, that upon
consummation of the Mergers, FCC and its banking subsidiaries
would be well capitalized institutions, the financial positions of
which would be well in excess of all applicable regulatory capital
requirements;
f. The current and prospective economic and regulatory
environment and competitive constraints facing the banking
industry and financial institutions in Bancshares' market area;
g. The recent business combinations involving financial
institutions, either announced or completed, during the past
twelve months in the United States, the State of Louisiana and
nearby states;
h. The Board's belief that, in light of the reasons
discussed above, FCC's offer as embodied in the Plan was the most
attractive choice for Bancshares; and
i. The expectation that the Mergers will generally be
tax-free transactions to LNB, Bancshares and its shareholders.
See "Certain Federal Income Tax Consequences."
The Board of Directors of Bancshares did not assign any specific or
relative weight to the foregoing factors in their considerations.
Opinion of Southard Financial
Bancshares retained Southard Financial ("Southard") to render its
opinion as to the fairness, from a financial point of view, to the
holders of Bancshares Common Stock of the consideration to be paid
pursuant to the Plan. In connection with this engagement, Southard
evaluated the financial terms of the Plan, but was not asked to, and did
not, recommend the specific exchange ratio and did not assist in the
negotiations of the terms of the Plan. The exchange ratio was
determined by the board of directors of FCC and Bancshares after arm's-
length negotiations. Bancshares did not place any limitations of the
scope of Southard's investigation or review.
Southard is a financial valuation consulting firm, specializing in
the valuation of closely-held companies and financial institutions.
Since its founding in 1987, Southard has provided approximately 1,000
valuation opinions for clients in 40 states and provides valuation
services for approximately 100 financial institutions annually.
Southard provided Bancshares' Board with a fairness opinion letter
and supporting documentation. The full text of the opinion letter of
Southard, dated August 3, 1994, which sets forth certain assumptions
made, matters considered, and limitations on the review performed, is
attached hereto as Appendix "B" and is incorporated herein by reference.
The summary of the opinion of Southard set forth in this Proxy Statement
and Prospectus is qualified in its entirety by reference to the opinion.
In arriving at its opinion, Southard conducted interviews with
officers of FCC and Bancshares, and reviewed the documents indicated in
the fairness letter. Southard did not independently verify the accuracy
and/or the completeness of the financial and other information reviewed
in rendering its opinion. Southard did not, and was not requested to,
solicit third party indications of interest in acquiring any or all the
assets of Bancshares.
In connection with rendering its opinion, Southard performed a
variety of financial analyses, which are summarized below. Southard
believes that its analyses must be considered as a whole and that
considering only selected factors could create an incomplete view of the
analyses and the process underlying the opinion. The preparation of a
fairness opinion is a complex process involving subjective judgments and
is not susceptible to partial analyses or summary description. In its
analyses, Southard made numerous assumptions, many of which are beyond
the control of Bancshares and FCC. Any estimates contained in the
analyses prepared by Southard are not necessarily indicative of future
results or values, which may vary significantly from such estimates.
Estimates of the value of companies do not purport to be appraisals or
necessarily reflect the prices at which companies or their securities
may actually be sold. None of the analyses performed by Southard was
assigned a greater significance than any other.
Dividend Yield Analysis. In evaluating the impact of the proposed
Plan on the shareholders of Bancshares, Southard reviewed the dividend
paying histories of Bancshares and FCC. Based upon this review, it is
reasonable to expect that the shareholders of Bancshares, in total, will
receive dividends at or above the level currently paid by Bancshares,
after the Plan is completed (defined as post-Plan combined dividends per
share times the exchange ratio). Based upon 1993 dividend payments for
FCC and Bancshares and an exchange ratio of 2.79245 shares of FCC Common
Stock for each share of Bancshares Common Stock, the shareholders of
Bancshares will see an increase in dividends of 116%.
Earnings Yield Analysis. In evaluating the impact of the proposed
Plan on the shareholders of Bancshares, Southard determined that, based
upon exchange ratio of 2.79245 shares of FCC Common Stock for each share
of Bancshares Common Stock, the shareholders of Bancshares would have
seen an increase of 234% in their share of earnings based upon reported
1993 earnings of FCC and Bancshares. The analysis also suggests
expected higher earnings yields for Bancshares shareholders in
subsequent years if the Plan is consummated.
Book Value Analysis. In evaluating the impact of the proposed
Plan on the shareholders of Bancshares, Southard determined that the
shareholders of Bancshares would have seen an increase in the book value
of their investment had the Plan been consummated prior to March 31,
1994. Reported book value of Bancshares at June 30, 1994 was $33.09 per
share. Reported book value of FCC at March 31, 1994 was $17.14 per
share. Had the Plan been consummated prior to March 31, 1994, each
former Bancshares share would have book value of $47.86 (FCC March 31,
1994 book value of $17.14 per share times 2.79245). This represents
144.6% of Bancshares book value at June 30, 1994.
Analysis of Alternatives. In evaluating the fairness of the
proposed Merger to the shareholders of Bancshares, Southard reviewed
other offers received for the purchase/merger of Bancshares. Further,
Southard considered recent public market merger pricing information.
Analysis of Market Transactions. Based upon the Plan terms,
Bancshares shareholders will receive 225% of year-end June 30, 1994 book
value per share, and 27.80 times reported 1993 earnings. Based upon the
review conducted by Southard, the pricing for Bancshares in the Plan is
above the multiples seen in recent bank acquisitions.
Fundamental Analysis. Southard reviewed the financial
characteristics of Bancshares and FCC with respect to profitability,
capital ratios, liquidity, asset quality, and other factors. Southard
compared Bancshares and FCC to a universe of publicly traded banks and
bank holding companies and to peer groups prepared by the Federal
Financial Institutions Examination Council (FFIEC). Southard found that
the post-Plan combined entity will have capital ratios and profitability
ratios near those of the public peer group.
Liquidity. Unlike Bancshares stock, shares of FCC Common Stock to
be received in the Plan are actively traded on the Nasdaq National
Market. Further, except in the case of officers, directors, and certain
large shareholders of Bancshares ("affiliated parties"), FCC shares
received will be freely tradeable with no restrictions.
For rendering its opinion, Southard will receive a fee of $7,500,
plus reasonable out-of-pocket expenses. Southard has never been
previously engaged by Bancshares or FCC. Neither Southard nor its
principals owns an interest in the securities of Bancshares or FCC.
Conversion of Bancshares Common Stock
In consideration of the Mergers, each share of Bancshares Common
Stock outstanding on the date the Mergers become effective (the
"Effective Date") will be converted into a number of shares of FCC
Common Stock equal to the quotient of (a) (i) $37 million less the
Deductible Amount, as defined below, divided by (ii) the Average Sales
Price, as defined below, of a share of FCC Common Stock; provided, that
if the Average Sales Price is less than $24, then the divisor will be
$24, and if the Average Sales Price is greater than $33, then the
divisor will be $33, divided by (b) the number of shares of Bancshares
Common Stock outstanding on the Effective Date.
As defined in the Plan, the term "Deductible Amount" means the
excess over $200,000 which Bancshares had not accrued, or for which
Bancshares had not established a reserve, on its financial statements as
of February 28, 1994, and which Bancshares or LNB pays or is or becomes
obligated to pay for (a) expenses, including legal fees, and amounts
paid in settlement related to certain litigation in which Bancshares and
LNB are currently involved, (b) investment banking fees and expenses,
(c) expenses, including legal fees, related to the potential sale of
Bancshares and LNB and the negotiation and consummation of the
transactions contemplated by the Plan, (d) $413,000, which the parties
have agreed shall be reserved for payments to be made to employees of
Bancshares and LNB under Bancshares' and LNB's severance benefits plan
adopted in accordance with the requirements of the Plan; and (e)
$68,000, which the parties have agreed shall be reserved for the payment
of medical insurance premiums for a period of four years for four
employees of LNB if their employment is terminated as a result of, or
within one year following the Effective Date of, the Mergers. It is
Bancshares' estimate that the Deductible Amount will be approximately
$816,000.
As defined in the Plan, the "Average Sales Price" is the average
of the closing per share sales prices of FCC Common Stock for the 20
trading days ending on the fifth trading day immediately prior to the
closing date for the Mergers, for which sales of FCC Common Stock were
reported on the National Association of Securities Dealers Automated
Quotation System for securities listed for trading on the Nasdaq
National Market.
The following table sets forth examples of the number of shares of
FCC Common Stock into which each share of Bancshares Common Stock would
be converted on the Effective Date, assuming that on such date the
Average Sales Price for FCC Common Stock is as specified below and the
Deductible Amount is $816,000.
Assumed Average Number of FCC
Sales Price of FCC Common Stock Shares Per Bancshares Share
$ 24 3.02
26 2.78
28 2.58
30 2.41
32 2.26
34 2.13
On August 3, 1994, the actual closing sales price for a share of FCC
Common Stock was $26.75, and if such date had been the Effective Date of
the Mergers the Average Sales Price would have been $27.38.
Shareholders who perfect dissenters' rights will not receive FCC
Common Stock but instead will be entitled to receive the "fair cash
value" of their shares as determined under Section 131 of the Louisiana
Business Corporation Law (the "LBCL"). See "Dissenters' Rights."
In lieu of the issuance of any fractional share of FCC Common
Stock to which a holder of Bancshares Common Stock may be entitled, each
shareholder of Bancshares, upon surrender of the certificate or
certificates which immediately prior to the Effective Date represented
Bancshares Common Stock held by such shareholder, shall be entitled to
receive a cash payment (without interest) equal to such fractional share
multiplied by the Average Sales Price.
For information regarding restrictions on the transfer of
securities received pursuant to the Mergers applicable to certain
Bancshares shareholders, see "- Status under Federal Securities Laws;
Certain Restrictions on Resales."
Effective Date
The Company Merger Agreement and the Bank Merger Agreement have
been executed. The Bank Merger Agreement will be filed for recordation
with the Comptroller and the Bank Merger will be effective at the time
and date specified in a certificate or other written record issued by
the Comptroller. The Company Merger Agreement will be filed for
recordation with the Secretary of State of Louisiana as soon as
practicable after all conditions to the consummation of the Mergers have
been satisfied or waived and the Holding Company Merger will be
effective at the date and time specified in a certificate issued by the
Secretary of State. It is intended that the Holding Company Merger will
be consummated immediately prior to consummation of the Bank Merger.
FCC and Bancshares are not able to predict the effective date of the
Bank Merger or the Holding Company Merger and no assurance can be given
that the transactions contemplated by the Plan will be effected at any
time. See "- Regulatory Approvals and Other Conditions of the Mergers."
Exchange of Certificates
On the Effective Date, each Bancshares shareholder will cease to
have any rights as a shareholder of Bancshares and his sole rights will
pertain to the shares of FCC Common Stock into which his shares of
Bancshares Common Stock have been converted pursuant to the Holding
Company Merger, except for any such shareholder who exercises statutory
dissenters' rights and except for the right to receive cash for any
fractional shares. See "Dissenters' Rights."
Upon the consummation of the Mergers, a letter of transmittal,
together with instructions for the exchange of certificates representing
shares of Bancshares Common Stock for certificates representing shares
of FCC Common Stock will be mailed to each person who was a shareholder
of record of Bancshares on the Effective Date of the Mergers.
Shareholders are requested not to send in their Bancshares Common Stock
certificates until they have received a letter of transmittal and
further written instructions.
After the Effective Date and until surrendered, certificates
representing Bancshares Common Stock will be deemed for all purposes,
other than the payment of dividends or other distributions, if any, in
respect of FCC Common Stock, to represent the number of whole shares of
FCC Common Stock into which such shares of Bancshares Common Stock have
been converted. FCC, at its option, may decline to pay former
shareholders of Bancshares who become holders of FCC Common Stock
pursuant to the Holding Company Merger any dividends or other
distributions that may have become payable to holders of record of FCC
Common Stock following the Effective Date until they have surrendered
their certificates evidencing ownership of shares of Bancshares Common
Stock. Any dividends not paid after one year from the date of payment
will revert in ownership to FCC and FCC will have no further obligation
to pay such dividends.
Bancshares shareholders who cannot locate their certificates are
urged to contact promptly Andrew J. Betz, Lakeside Bancshares, Inc., One
Lakeside Plaza, Lake Charles, Louisiana 70602, telephone number (318)
433-2265. A new certificate will be issued to replace the lost
certificate(s) only upon execution by the shareholder of an affidavit
certifying that his or her certificate(s) cannot be located and an
agreement to indemnify Bancshares and FCC against any claim that may be
made against it or FCC by the owner of the certificate(s) alleged to
have been lost or destroyed. Bancshares or FCC may also require the
shareholder to post a bond in such sum as is sufficient to support the
shareholder's agreement to indemnify Bancshares and FCC.
Regulatory Approvals and Other Conditions of the Mergers
In addition to shareholder approval, consummation of the Mergers
will require the approvals of the Board of Governors of the Federal
Reserve System (the "Reserve Board") and the Comptroller. FCC expects
to file a request for waiver of the prior approval of the Reserve Board
with respect to the Holding Company Merger and an application seeking
the approval of the Bank Merger of the Comptroller by mid-August. FCC
expects to receive the waiver and approval by mid-November; however,
there can be no assurance that the waiver and approval will be obtained
by that time or at all.
If the required waiver and approval are obtained, the Mergers are
subject to review by the U.S. Department of Justice, which may seek to
enjoin the Mergers or require divestitures of assets if it believes the
Mergers would have certain anti-competitive effects in the Lake Charles
market. Representatives of the Department of Justice have expressed
concerns about the effect of the Mergers, and as of the date of this
Proxy Statement and Prospectus representatives of FCC were engaged in
discussions with such officials to address those concerns. While FCC
believes that it should be able to satisfactorily address those concerns
in a manner that would permit the Mergers to proceed, there is no
assurance that it will be able to do so.
The obligations of the parties to the Plan are also subject to
other conditions set forth in the Plan, including, among others: (i)
approval of the Plan by Bancshares' shareholders; (ii) the receipt of an
opinion of Arthur Andersen & Co. as to certain tax aspects of the
Mergers; (iii) the receipt of customary legal opinions; (iv) that prior
to the Effective Date there not have been a material adverse change in
the financial condition, results of operations, business or prospects of
the other party's consolidated group; and (v) that on the date of
closing the representations and warranties made in the Plan by each
party are true and correct in all material respects.
The obligation of FCC and FNBLC to consummate the Mergers is also
conditioned upon, among other things, (i) the receipt by FCC of
satisfactory assurance from its independent public accountants, Arthur
Andersen & Co., that FCC is permitted to account for the Mergers as a
pooling-of-interests; (ii) receipt of a comfort letter from Bancshares'
independent public accountants; (iii) confirmation from the directors,
executive officers and certain shareholders of Bancshares as to certain
representations and covenants previously made by them in certain
Joinders of Shareholders discussed further herein (see "The Plan -
Joinder of Shareholders"); (iv) resolution of all existing disputes and
litigation between the shareholders of Bancshares and Bancshares or its
management and Bancshares and all regulatory authorities; (v) that by
the later of five days after the date of the Special Meeting or
September 4, 1994, Messrs. Martin, Roberts and Betz and Ms. Beasley
shall have either left the employment of Bancshares and LNB or shall
have executed non-competition agreements with FCC and FNBLC, and (vi)
that the non-competition agreement executed by Mr. Flanagan shall be in
full force and effect and enforceable in accordance with its terms.
The Companies intend to consummate the Mergers as soon as
practicable after all of the conditions to the Mergers have been met or
waived; however, there can be no assurance that the conditions to the
Mergers will be satisfied.
Conduct of Business Prior to the Effective Date
Bancshares and LNB have agreed pursuant to the Plan that, prior to
the Effective Date, each will conduct its business only in the ordinary
course and that, without the prior written consent of the chief
executive officer of FCC or his duly authorized designee, and except as
otherwise provided in the Plan, each will not, among other things, (a)
declare or pay any dividend, other than its regular semi-annual
dividend, which will not exceed $0.55 per share, except as permitted by
FCC pursuant to the Plan, or change the number of outstanding shares of
its capital stock; (b) amend its articles of incorporation or bylaws or
adopt or amend any resolution or agreement concerning indemnification of
its directors and officers; (c) merge or consolidate with another
entity, or sell or dispose of a substantial part of its assets, or
except in the ordinary course of business, sell any of its assets; (d)
dispose of investment securities having an aggregate market value
greater than 2% of the aggregate value of its investment portfolio on
March 31, 1994 or make investments in noninvestment grade securities or
which are inconsistent with past investment practices; (e) charge off or
sell (except for a price not less than the book value thereof) any
loans, discounts or financing leases, unless required by law, regulatory
authorities or generally accepted accounting principles; (f) sell any
asset held by LNB as other real estate or other foreclosed assets for an
amount less than 100% of its book value as of March 31, 1994 or that as
of such date had a book value in excess of $25,000; (g) enter into or
modify any agreement pertaining to compensation arrangements with its
present or former directors, officers or employees or increase the
compensation of such persons; (h) except in the ordinary course of
business consistent with past practices, place any mortgage, pledge or
other encumbrance on any of its assets or cancel any material
indebtedness owing to it or any claims which it may possess, or waive
any right of substantial value or discharge or satisfy any material
noncurrent liability other than debts, claims, rights or liabilities not
exceeding in the aggregate $25,000; or (i) make any extension of credit
which, together with all other extensions of credit to the borrower and
its affiliates, would exceed $500,000, or, without reasonable prior
notice to FCC, commit to make any extensions of credit in excess of
$250,000; (j) fail to pay, or make adequate provision for the payment
of, all taxes, interest payments and penalties due and payable except
those being contested in good faith by appropriate proceedings and for
which sufficient reserves have been established; or (k) enter into any
new line of business.
In addition, Bancshares and LNB have agreed that, without the
prior approval of FCC, they will not solicit, initiate or encourage
inquiries or proposals with respect to, or furnish any information
relating to or participate in any negotiations or discussions regarding
any acquisition or purchase of all or a substantial portion of the
assets of, or a substantial equity interest in, or any business
combination with Bancshares or LNB, other than as contemplated by the
Plan; provided, that nothing will prohibit any officer or director of
Bancshares or LNB from taking any action that in the written opinion of
counsel to Bancshares or LNB is required to discharge such officer's or
director's fiduciary duties. Each of Bancshares and LNB has also agreed
to instruct its officers, directors, agents and affiliates to refrain
from doing any of the above and to notify FCC immediately if any such
inquiries or proposals are received by, any such information is
requested from, or any negotiations or discussions are sought to be
initiated with it or any of its officers, directors, agents and
affiliates.
Waiver, Amendment and Termination
The Plan provides that the parties thereto may waive any of the
conditions to their respective obligations to consummate the Mergers
other than the receipt of necessary regulatory approvals, the
effectiveness of the registration statement of which this Proxy
Statement and Prospectus is a part, and shareholder approval of the Plan
as prescribed by law. A waiver must be in writing and approved by the
Board of Directors of the waiving party.
The Plan, including all related agreements, may be amended or
modified at any time, before or after its approval by the shareholders
of Bancshares, by the mutual agreement in writing of the Boards of
Directors of the parties to the Plan; provided that, any amendment made
subsequent to such shareholder approval may not alter the amount or type
of shares into which Bancshares' stock will be converted, alter any term
of the Articles of Incorporation of FCC, or alter any term or condition
of the Plan in a manner that would adversely affect any shareholder of
Bancshares. Additionally, the Plan may be amended at any time by the
sole action of the chief executive officers of the respective parties to
the Plan to correct typographical errors or other misstatements that are
not material to the substance of the transaction contemplated by such
parties.
The Plan may be terminated at any time prior to the Effective Date
by (i) the mutual consent of the respective Boards of Directors of FCC
and Bancshares, (ii) by the Board of Directors of either FCC or
Bancshares in the event of a material breach by any member of the
consolidated group of the other of them of any representation, warranty
or covenant contained in the Plan which cannot be cured by the earlier
of 10 days after written notice of such breach or February 28, 1995,
(iii) either FCC or Bancshares if by February 28, 1995 all conditions to
consummating the Mergers required by the Plan have not been met or
waived, cannot be met, or the Mergers have not occurred, (iv) FCC or
FNBLC if the number of shares of Bancshares Common Stock as to which
holders thereof have perfected dissenters' rights, together with the
number of such shares as to which the holders are entitled to receive
cash payments in lieu of fractional shares exceeds, in the aggregate,
9.9% of the total number of outstanding shares of Bancshares Common
Stock on the date of the closing, or (v) the Board of Directors of
either FCC or FNBLC if the Board of Directors of Bancshares (A)
withdraws, modifies or changes its recommendation to its shareholders
regarding the Plan and the Mergers or shall have resolved or resolves to
do any of the foregoing, (B) recommends to its shareholders (a) any
merger, consolidation, share exchange, business combination or other
similar transaction (other than transactions contemplated by the Plan),
(b) any sale, lease, transfer or other disposition of all or
substantially all of the assets of any member of Bancshares'
consolidated group, or (c) any acquisition, by any person or group, of
beneficial ownership of 15% or more of any class of Bancshares capital
stock, or (C) makes any announcement of a proposal, plan or intention or
agreement to do any of the foregoing or agreement to engage in any of
the foregoing.
Interests of Certain Persons in the Merger
Pursuant to the Plan FCC and FNBLC have agreed that, following the
Effective Time, they will indemnify each person who as of July 21, 1994
served as an officer or director of Bancshares or LNB or has served as a
director at any time since January 1, 1990 (an "Indemnified Person")
from and against all damages, liabilities, judgments and claims, and
related expenses, based upon or arising out of such person's capacity as
an officer or director of Bancshares or LNB to the same extent as he
would have been indemnified under the Articles of Association (or
Articles of Incorporation) or By-laws of Bancshares or LNB, as
appropriate, as such Articles or By-laws were in effect on July 21,
1994.
The aggregate amount of indemnification payments required to be
made by FCC and FNBLC pursuant to the Plan is $5 million; however, this
limit does not apply to damages, liabilities, judgments and claims
arising out of or based upon (i) a misstatement by FCC or FNBLC of a
material fact in the registration statement of which this Proxy
Statement and Prospectus is a part; or (ii) any omission by FCC or FNBLC
of a material fact required to be stated in the registration statement
of which this Proxy Statement and Prospectus is a part or necessary in
order to make a statement therein not misleading. Indemnification
otherwise required to be paid by FCC or FNBLC will be reduced by any
amounts that the Indemnified Person recovers by virtue of the claim for
which indemnification is sought and no Indemnified Person is entitled to
indemnification for any claim made prior to the closing of the Mergers
of which the Indemnified Person, Bancshares or LNB was aware but did not
disclose FCC or FNBLC. Receipt of the indemnification benefits by
directors and officers of Bancshares and LNB is conditioned upon their
execution of the agreements described in more detail under the heading
captioned "The Plan - Joinder of Shareholders." Any claim for
indemnification pursuant to the Plan must be submitted in writing to
FCC's chief executive officer promptly upon such Indemnified Person
becoming aware of such claim.
LNB President and Chief Executive Officer Malcolm D. Martin,
Executive Vice President Joseph W. Roberts, Jr., Senior Vice President
and Trust Officer Andrew J. Betz, and Senior Vice President Deanna K.
Beasley are parties to separate employment contracts with LNB. The
contracts with Messrs. Martin, Roberts and Betz commenced on October 21,
1992 and expire on December 31, 1995. The contract with Ms. Beasley
commenced on July 6, 1993 and expires on June 30, 1996. The contracts
call for the employment of each of the specified persons for the
specified terms; however, LNB may in its discretion at any time during
the term of the contract terminate the employment of the affected
employee and pay that employee in a lump sum a separation payment equal
to (a) one-half of that employee's current annual salary, (b) other
benefits which have been vested during the course of employment and (c)
an amount equal to a six-month value of the perquisites furnished that
employee; provided however that no payment shall be made if the employee
is indicted for a criminal offense in connection with his or her conduct
at LNB. Messrs. Roberts and Martin are likely to receive severance
payments under their respective contracts after the Special Meeting.
Mr. Betz and Ms. Beasley may also receive severance payments.
It is a condition to FCC's obligation to consummate the Plan that
the four officers of LNB who are parties to the employment contracts
must have either executed a non-competition agreement with FCC or have
left the employment of Bancshares and LNB in all capacities other than
as directors of Bancshares within the earlier of five days after the
date of the Special Meeting or by September 4, 1994. FCC may extend the
September 4th date at its discretion if the Special Meeting does not
occur by August 29, 1994. Neither Mr. Roberts nor Mr. Martin has signed
such a non-competition agreement and neither is expected to do so.
Therefore, their terminations by the Board of Directors pursuant to its
discretion under the contracts are likely. Mr. Betz and Ms. Beasley
have yet to sign non-competition agreements and neither Mr. Betz nor Ms.
Beasley has determined whether he or she will sign such an agreement.
The Board of Directors is formulating a plan for addressing senior
management continuity between September 4, 1994 and the consummation
date of the Plan.
In the event of their terminations, Bancshares' Board or
management has determined that under the contracts Mr. Martin will
receive a lump-sum payment of approximately $89,000 and Mr. Roberts will
receive a lump-sum payment of approximately $65,000. If Mr. Betz does
not sign the non-competition agreement, his termination will result in a
separation payment of approximately $39,000, and if Ms. Beasley does not
sign the non-competition agreement, her termination will result in a
separation payment of approximately $36,000.
In a letter to the LNB Board dated July 13, 1994 from his
attorney, Mr. Malcolm Martin expressed the view that in light of his
performance and long and faithful service the Board should award him a
severance payment of three times his annual compensation rather than the
amount specified in his contract. The Board declined to amend his
contract in this respect and believes that Mr. Martin has no valid claim
to any amount other than as specified in the contract.
In a subsequent letter, Mr. Martin also stated among other things,
his belief that the severance "package" described in this Proxy
Statement and Prospectus for himself and Mr. Roberts as well as other
employees and staff of LNB is significantly less than the package
"earlier promised." The Board believes that Mr. Martin's
characterization is incorrect. Moreover, any additional payments beyond
what is set forth in the LNB severance plan and the employment contracts
would have been deducted from the value to be received by shareholders
of LNB in the Mergers, and representatives of the Chavanne group
indicated that they are unwilling to vote in favor of a transaction that
would so reduce shareholder value.
Mr. Martin has not to the Board's knowledge asserted any legal
entitlement to payments beyond those to which he would be entitled under
the contract. Should he or any other person make such assertions and
should the amounts claimed be material, FCC may have the right to
terminate the Plan.
Joinder of Shareholders
As a condition to consummation of the Mergers, each Bancshares'
director and executive officer and certain principal shareholders
(except as noted below), including without limitation shareholders
owning 5% or more of Bancshares Common Stock and Mary Ellen Chavanne,
Hazel Prince Chavanne, Claire C. Turner, Harry J. Chavanne, Jeanine C.
McGann and David P. Chavanne, has executed an individual agreement (the
"Joinder Agreement") pursuant to which he has agreed solely in his
capacity as a shareholder of Bancshares (i) to vote in favor of the Plan
and against any other proposal relating to the sale or disposition of
LNB or Bancshares unless FCC or FNBLC is in breach or default in any
material respect of any covenant, representation or warranty contained
in the Plan; (ii) not to transfer any of the shares of Bancshares Common
Stock over which he has dispositive power, or grant any proxy thereto
not approved by FCC, until the earlier of the Effective Date or the date
that the Plan has been terminated, except for transfers by operation of
law or transfers in connection with which the transferee agrees to be
bound by the Joinder of Shareholders; (iii) not to deal in FCC Common
Stock or other securities of FCC until the earlier of the Effective Date
or the date the Plan has been terminated; (iv) to release, as of the
Effective Date, FCC and FNBLC from any obligation that either of them
may have to indemnify such shareholder for acts taken as an officer,
director or employee of any member of Bancshares' consolidated group,
except to the extent set forth in the Plan; and (v) not to serve as a
director, officer, employee or advisor of, or have any investment in any
financial institution that competes with the business of LNB as
continued by FNBLC for a period of one year; however, such person may
continue to hold any investment that he held on the date of the Joinder
Agreement and may make an investment in any such financial institution
if the investment does not materially enhance the ability of the
financial institution to compete with FNBLC; except that Messrs. Martin
and Roberts have indicated that they do not intend to execute a Joinder
Agreement, Mr. Betz and Ms. Beasley have not yet executed a Joinder
Agreement, and Mr. Flanagan has executed a Commitment and Non-
Competition Agreement in lieu of a Joinder Agreement.
Employee Benefits
Pursuant to the Plan, FCC has agreed that, from and after the
Effective Date, FCC or FNBLC will offer to all persons who were
employees of Bancshares or LNB immediately prior to the Effective Date
and who become employees of FNBLC following the Mergers, the same
employee benefits as are offered by FCC or FNBLC to employees of FNBLC,
except that there will not be a waiting period for coverage under the
First Commerce Corporation Flexible Benefit Plan or any of its
constituent plans, including the First Commerce Corporation Medical and
Dental Care Plan, and no employee of LNB who is an active employee on
the Effective Date will be denied such benefits for a pre-existing
condition. Full credit shall be given for prior service by Bancshares
and LNB employees for eligibility vesting purposes under FCC's benefit
plans and policies, except that credit for prior service will not be
given for eligibility, vesting or benefit accrual purposes under FCC's
retirement plan. In addition, all benefits accrued through the
Effective Date under Bancshares' and LNB's benefit plans will be paid by
FCC or FNBLC to the extent such benefits are not otherwise provided to
such employees under the benefit plans of FCC or FNBLC.
Bancshares has amended its Employee Stock Ownership Plan ("ESOP")
and will amend its 401(k) Plan to provide that all participants in these
plans who are still employed by Bancshares or LNB on the date of the
Plan will be fully vested in their accounts in those plans as of the
Effective Date of the Mergers. FCC will take all reasonable actions
necessary after the Effective Date of the Mergers to maintain the
qualification and tax exempt status of the ESOP and the 401(k) Plan and
to meet all other requirements of applicable law and regulations and the
provisions of the plans until they are terminated or combined with FCC's
plans. Neither FCC nor FNBLC will otherwise be obligated to continue
any employee benefit plan maintained by Bancshares or LNB.
Bancshares and LNB have adopted a plan and set aside and reserved
$413,000 for potential severance payments to certain employees of LNB.
If the Plan is consummated, an employee covered by the Plan will be
entitled to a severance payment if any of the following occurs: (1) the
employee remains employed full-time by LNB until the Effective Date and
prior to the Effective Date the employee had not received an offer of
employment from FNBLC to begin immediately after the Effective Date as
other than a temporary employee at 100% of that employee's base rate of
pay in effect on June 30, 1994; (2) the employment of the employee is
terminated without cause by LNB prior to the Effective Date and FNBLC
notifies LNB in writing that it is satisfied that the termination was
not for the purpose of providing severance benefits; or (3) the
employment of an employee is terminated without cause within one year
after the Effective Date. Cause is defined generally to mean
misconduct, commission of a crime, poor job performance and the like.
The amount of severance to be received by an employee who is entitled to
severance will be based on a formula that takes into account that
employee's length of full-time employment with LNB and his or her
salary. Generally, an employee entitled to severance will receive one
week's pay for each year of full-time employment with LNB.
Other than as specified in the above described severance plan or
in certain employment contracts described elsewhere herein, employees of
Bancshares and LNB are not entitled to severance payments.
Expenses
The Plan provides that regardless of whether the Mergers are
consummated, expenses incurred in connection with the Plan and the
transactions contemplated thereby shall be borne by the party that has
incurred them, except for expenses that are included in the Deductible
Amount.
Status Under Federal Securities Laws; Certain Restrictions on Resales
The shares of FCC Common Stock to be issued to shareholders of
Bancshares pursuant to the Plan have been registered under the Secur-
ities Act of 1933 (the "Securities Act") thereby allowing such shares to
be freely traded without restriction by persons who will not be
"affiliates" of FCC or who were not "affiliates" of Bancshares, as that
term is defined in the Securities Act.
Directors and certain officers of Bancshares may be deemed to be
"affiliates" within the meaning of the Securities Act. Such persons
will not be able to resell the FCC Common Stock received by them
pursuant to the Holding Company Merger unless such stock is registered
for resale under the Securities Act or an exemption from the reg-
istration requirements of the Securities Act is available. All such
persons should carefully consider the limitations imposed by Rules 144
and 145 promulgated under the Securities Act prior to effecting any
resales of FCC Common Stock. Bancshares has agreed to use its best
efforts to cause all such affiliates to enter into agreements not to
sell shares of FCC Common Stock received by them in violation of the
Securities Act.
Further, in accordance with the requirements of the pooling-of-
interests method of accounting, Bancshares shareholders who are deemed
"affiliates" will not be permitted to sell the shares of FCC Common
Stock received by them in consideration of the Mergers until at least 30
days of combined earnings of FCC and Bancshares have been published by
FCC.
Accounting Treatment
It is a condition to FCC's obligation to consummate the Mergers
that it receive assurances that the Mergers may be accounted for as a
pooling-of-interests under the requirements of Opinion No. 16 of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and the published rules and regulations of the
Securities and Exchange Commission (the "Commission") for accounting and
financial reporting purposes. Under the pooling-of-interests method of
accounting, after certain adjustments necessary to conform the basis of
presentation of the FCC and Bancshares information, the recorded assets
and liabilities of FCC and Bancshares will be carried forward to FCC's
consolidated financial statements at their recorded amounts, the
consolidated earnings of FCC will include earnings of FCC and Bancshares
for the entire fiscal year in which the Mergers occur and the reported
earnings of FCC and Bancshares for prior periods will be combined and
restated as consolidated earnings of FCC. See "- Regulatory Approvals
and Other Conditions of the Mergers" and "- Status Under Federal
Securities Laws; Certain Restrictions on Resales."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following discussion is a summary of material federal income
tax consequences to holders of Bancshares Common Stock resulting from
the Mergers. The discussion set forth below is based upon applicable
federal law and judicial and administrative interpretations on the date
hereof, any of which is subject to change at any time.
Consummation of the Mergers is conditioned upon receipt by the
Companies of an opinion from Arthur Andersen & Co. to the following
effects, among others:
(a) Each of the Mergers qualifies as a reorganization under
Section 368(a)(1)(A) of the Internal Revenue Code (the "Code"), and
Bancshares, LNB, FCC and FNBLC each will be a "party to a reor-
ganization" within the meaning of Section 368(b) of the Code.
(b) No material gain or loss will be recognized by Bancshares,
LNB, FCC or FNBLC as a result of the Mergers.
(c) No gain or loss will be recognized by a shareholder of
Bancshares on the receipt solely of FCC Common Stock in exchange for his
shares of Bancshares Common Stock.
(d) The basis of the shares of FCC Common Stock to be received
by Bancshares' shareholders pursuant to the Holding Company Merger will,
in each instance, be the same as the basis of the shares of Bancshares
Common Stock surrendered in exchange therefor, increased by any gain
recognized on the exchange.
(e) The holding period of the shares of FCC Common Stock to be
received by Bancshares' shareholders pursuant to the Holding Company
Merger will, in each instance, include the holding period of the
respective shares of Bancshares Common Stock exchanged therefor,
provided that the shares of Bancshares Common Stock are held as capital
assets on the date of the Holding Company Merger.
(f) The payment of cash to Bancshares' shareholders in lieu of
fractional share interests of FCC Common Stock will be treated as if the
fractional shares were distributed as part of the exchange and then
redeemed by FCC. These cash payments will be treated as having been
received as a distribution in redemption of that fractional share
interest subject to the conditions and limitations of Section 302 of the
Code. If a fractional share of FCC Common Stock would constitute a
capital asset in the hands of a redeeming shareholder, any resulting
gain or loss will be characterized as capital gain or loss in accordance
with the provisions and limitations of Subchapter P of Chapter 1 of the
Code.
(g) A Bancshares' shareholder who perfects his statutory right
to dissent from the Holding Company Merger and who receives solely cash
in exchange for his Bancshares Common Stock will be treated as having
received such cash payment as a distribution in redemption of his shares
of Bancshares Common Stock, subject to the provisions and limitations of
Section 302 of the Code. After such distribution, if the former
Bancshares shareholder does not actually or constructively own any
Bancshares Common Stock, the redemption will constitute a complete
termination of interest and be treated as a distribution in full payment
in exchange for the Bancshares Common Stock redeemed.
The opinion of Arthur Andersen & Co. is not binding on the
Internal Revenue Service (the "IRS"), which could take positions
contrary to the conclusions in such opinion.
As a result of the complexity of the tax laws, and because the tax
consequences to any particular shareholder may be affected by matters
not discussed herein, it is recommended that each shareholder of
Bancshares consult his personal tax advisor concerning the applicable
federal, state and local income tax consequences of the Mergers.
DISSENTERS' RIGHTS
Unless the Plan is approved by the holders of at least 80% of the
total voting power of Bancshares, Section 131 of the LBCL allows a
shareholder of Bancshares who objects to the Holding Company Merger and
who complies with the provisions of that section to dissent from the
Holding Company Merger and to have paid to him in cash the fair cash
value of his shares of Bancshares Common Stock as of the day before the
Special Meeting, as determined by agreement between the shareholder and
FCC or by the state district court for the Parish of Orleans if the
shareholder and FCC are unable to agree upon the fair cash value.
To exercise the right of dissent, a shareholder (i) must file with
Bancshares a written objection to the Plan prior to or at the Special
Meeting and (ii) must also vote his shares (in person or by proxy)
against the Plan at the Special Meeting. Neither a vote against the
Plan nor a specification in a proxy to vote against the Plan will in and
of itself constitute the necessary written objection to the Plan. More-
over, by voting in favor of, or abstaining from voting on, the Plan, or
by returning the enclosed proxy without instructing the proxy holders to
vote against the Plan, a shareholder waives his rights under Section
131. The right to dissent may be exercised only by the record owners of
the shares and not by persons who hold shares only beneficially.
Beneficial owners who wish to dissent to the Holding Company Merger
should have the record ownership of the shares transferred to their
names or instruct the record owner to follow the Section 131 procedure
on their behalf.
If the Plan is approved by less than 80% of the total number of
shares of Bancshares Common Stock outstanding, then promptly after the
Effective Date written notice of the consummation of the Holding Company
Merger will be given by registered mail to each former shareholder of
Bancshares who filed a written objection to the Plan and voted against
it. Within 20 days after the mailing of such notice, the shareholder
must file with FCC a written demand for payment for his shares at their
fair cash value as of the day before the Special Meeting and must state
the amount demanded and a post office address to which FCC may reply. He
must also deposit the certificate(s) formerly representing his shares of
Bancshares Common Stock in escrow with a bank or trust company located
in Orleans Parish, Louisiana. With the above-mentioned demand, the
shareholder must also deliver to FCC the written acknowledgement of such
bank or trust company that it holds the certificate(s), duly endorsed
and transferred to FCC, upon the sole condition that the certificate(s)
will be delivered to FCC upon payment of the value of the shares in
accordance with Section 131.
Unless the shareholder objects to and votes against the Holding
Company Merger, demands payment, deposits his certificates and delivers
the required acknowledgment in accordance with the procedures and within
the time periods set forth above, the shareholder will conclusively be
presumed to have acquiesced to the Mergers and will forfeit any right to
seek payment pursuant to Section 131.
If FCC does not agree to the amount demanded by the shareholder,
or does not agree that payment is due, it will, within 20 days after
receipt of such demand and acknowledgement, notify such shareholder in
writing of either (i) the value it will agree to pay or (ii) its belief
that no payment is due. If the shareholder does not agree to accept the
offered amount, or disagrees with FCC's assertion that no payment is
due, he must, within 60 days after receipt of such notice, file suit
against FCC in the Civil District Court for the Parish of Orleans for a
judicial determination of the fair cash value of the shares. Any
shareholder entitled to file such suit may, within such 60-day period
but not thereafter, intervene as a plaintiff in any suit filed against
FCC by another former shareholder of Bancshares for a judicial
determination of the fair cash value of such other shareholder's shares.
If a shareholder fails to bring or to intervene in such a suit within
the applicable 60-day period, he will be deemed to have consented to ac-
cept FCC's statement that no payment is due or, if FCC does not contend
that no payment is due, to accept the amount specified by FCC in its
notice of disagreement.
If upon the filing of any such suit or intervention FCC deposits
with the court the amount, if any, which it specified in its notice of
disagreement, and if in that notice FCC offered to pay such amount to
the shareholder on demand, then the costs (not including legal fees) of
the suit or intervention will be taxed against the shareholder if the
amount finally awarded to him, exclusive of interest and costs, is equal
to or less than the amount so deposited; otherwise, the costs (not
including legal fees) will be taxed against FCC.
Upon filing a demand for the value of his shares, a shareholder
ceases to have any rights of a shareholder except the rights created by
Section 131. The shareholder's demand may be withdrawn voluntarily at
any time before FCC gives its notice of disagreement, but thereafter
only with the written consent of FCC. If his demand is properly
withdrawn, or if the shareholder otherwise loses his dissenters' rights,
he will be restored to his rights as a shareholder as of the time of
filing of his demand for fair cash value.
Prior to the Effective Date, dissenting shareholders of Bancshares
should send any communications regarding their rights to Joseph W.
(Bill) Roberts, Jr., Lakeside Bancshares, Inc., One Lakeside Plaza, Lake
Charles, Louisiana 70602. On or after the Effective Date, dissenting
shareholders should send any communications regarding their rights to
Thomas L. Callicutt, Jr., Senior Vice President and Controller, First
Commerce Corporation, 210 Baronne Street, New Orleans, Louisiana 70112.
All such communications should be signed by or on behalf of the dissent-
ing shareholder in the form in which his shares are registered on the
books of Bancshares. FCC has the right to terminate the Plan if the
number of shares of Bancshares Common Stock as to which the holders
thereof have perfected dissenters' rights, together with the number of
shares as to which the holders are entitled to receive cash payments in
lieu of fractional shares exceeds in the aggregate 9.9% of the total
number of outstanding shares of Bancshares Common Stock on the date of
closing.
The foregoing summary of Section 131 of the LBCL is necessarily
incomplete and is qualified in its entirety by reference to excerpts
from that section set forth herein as Appendix C.
INFORMATION ABOUT BANCSHARES
The following documents, or the indicated portions thereof, have
been filed by Bancshares with the Commission and are incorporated by
reference into this Proxy Statement and Prospectus: Bancshares' most
recent annual report to shareholders; Bancshares' Annual Report on Form
10-K for the fiscal year ended December 31, 1993, as amended by
Bancshares' Form 10-K/A filed on August 4, 1994 (copies of which have
been furnished herewith to each Bancshares shareholder); Bancshares'
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31,
1994, as amended by Bancshares' Form 10-Q/A filed on August 4, 1994
(copies of which have been furnished herewith to each Bancshares
shareholder), and Bancshares' Form 8-K filed on May 28, 1994.
In addition, all other documents filed by Bancshares with the
Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Securities and Exchange Act of 1934 (the "Exchange Act") between the
date of this Proxy Statement and Prospectus and the date of the Special
Meeting shall be deemed to be incorporated herein by reference from the
date of filing. See "Available Information" for information with
respect to securing copies of documents incorporated by reference in
this Proxy Statement and Prospectus by Bancshares and not delivered
herewith.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded
to the extent that a statement contained herein or in any other document
subsequently filed and incorporated or deemed to be incorporated by
reference herein modifies or supersedes the statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement and Prospectus.
<PAGE>
INFORMATION ABOUT FCC
The following documents, or the indicated portions thereof, have
been filed by FCC with the Commission, and are incorporated by reference
into this Proxy Statement and Prospectus: FCC's Annual Report on Form
10-K for the fiscal year ended December 31, 1993; FCC's quarterly report
on Form 10-Q for the fiscal quarter ended March 31, 1994; and the
description of FCC Common Stock set forth in FCC's Applications for
Registration on Form 8-A filed with the Commission on November 9, 1972
and December 22, 1976, as amended by a report on Form 8 filed with the
Commission on June 19, 1989 and by a report on Form 8-A/A filed with the
Commission on August 12, 1993.
In addition, all other documents that will be filed by FCC with
the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act between the date of this Proxy Statement and Prospectus and
the date of the Special Meeting shall be deemed to be incorporated
herein by reference from the date of filing. See "Available
Information" for information with respect to securing copies of
documents incorporated by reference in this Proxy Statement and
Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded
to the extent that a statement contained herein or in any other document
subsequently filed and incorporated or deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Proxy Statement and Prospectus.
COMPARATIVE RIGHTS OF SHAREHOLDERS
If the shareholders of Bancshares approve the Plan and the Mergers
are subsequently consummated, all shareholders of Bancshares, other than
those exercising dissenters' rights, will become shareholders of FCC and
their rights will be governed by and be subject to the Articles of
Incorporation and By-laws of FCC rather than the Articles of
Incorporation and By-laws of Bancshares. The following is a brief
summary of certain of the principal differences between the rights of
shareholders of FCC and Bancshares not described elsewhere herein.
Preferred Stock
The Board of Directors of FCC is authorized, without action of its
shareholders, to issue FCC preferred stock (the "FCC Preferred Stock")
from time to time and to establish the designations, preferences and
relative, optional or other special rights and qualifications,
limitations and restrictions thereof, as well as to establish and fix
variations in the relative rights as between holders of any one or more
series of such FCC Preferred Stock. The authority of the Board of
Directors includes but is not limited to the determination or fixing of
the following with respect to each series of FCC Preferred Stock which
may be issued: (i) the designation of such series; (ii) the number of
shares initially constituting such series; (iii) the dividend rate and
conditions and the dividend preferences, if any, in respect of the FCC
Common Stock and among the series of FCC Preferred Stock; (iv) whether,
and upon what terms, the FCC Preferred Stock would be convertible into
or exchanged for shares of any other class or other series of the same
class; (v) whether, and to what extent, holders of one or more shares of
a series of FCC Preferred Stock will have voting rights; and (vi) the
restrictions, if any, that are to apply on the issue or reissue of any
additional FCC Preferred Stock.
Shares of FCC Preferred Stock that are authorized would be
available for issuance in connection with the acquisition of other
businesses, infusion of capital, or for other lawful corporate purposes,
at the discretion of the Board of Directors. The Board of Directors
could issue FCC Preferred Stock to a person or persons who would support
management in connection with a proxy contest to replace an incumbent
director or in opposition to an unsolicited tender offer. As a result,
such proposals or tender offers could be defeated even though favored by
the holders of a majority of the FCC Common Stock. As of March 31,
1994, FCC had 2,398,170 shares of Series 1992 Preferred Stock
outstanding.
The Articles of Incorporation of Bancshares do not authorize the
issuance of preferred stock.
Shareholders' Meetings
FCC's Articles of Incorporation and By-laws provide that upon the
written request of holders of a majority of the voting power of FCC, the
secretary shall call a special meeting of shareholders. Bancshares'
Articles of Incorporation provide that the Board of Directors or any
three or more shareholders owning an aggregate of at least 10% of the
voting power of Bancshares may call a special meeting of shareholders at
any time.
Preemptive Rights
Bancshares' Articles of Incorporation provide that holders of
common stock shall have the preemptive right to subscribe to any and all
share of Bancshares common stock authorized from time to time at such
prices and on such terms and conditions as may be fixed by Bancshares'
Board of Directors. Such preemptive rights must be exercised in the
ratio which the number of shares held by each shareholder bears to the
total number of shares outstanding. FCC's Articles of Incorporation do
not provide for preemptive rights.
Stock Dividends
Bancshares' Articles of Incorporation provide that the declaration
of dividends payable in Bancshares Common Stock must be approved by the
affirmative vote of at least two-thirds of the outstanding Bancshares
Common Stock.
FCC's Articles of Incorporation and By-laws have no such
provision.
Voting of Stock of Subsidiary
Bancshares' Articles of Incorporation contain a provision that
makes certain Louisiana statutes applicable if shareholders of
Bancshares holding shares representing less than two-thirds of the vote
cast, vote to direct Bancshares to vote shares it owns in any fifty
percent or more owned subsidiary in favor of any merger, consolidation
or voluntary transfer of substantially all the assets of any such
subsidiary. The effect of these Louisiana statutes essentially is to
assure that shareholders of Bancshares have dissenters' rights as
provided under Louisiana law if less than two-thirds of the shares vote
in favor of such action and such action is approved. See "Dissenters'
Rights."
FCC's Articles of Incorporation and By-laws have no such
provision.
Board Nominations
Bancshares' By-laws provide that nominations, other than those
made by or on behalf of the existing management of Bancshares, must be
made in writing and delivered or mailed to the President of Bancshares
not less than the close of business on the seventh calendar day
following the day on which notice of any meeting of Bancshares'
shareholders called for the election of directors was mailed.
FCC's Articles of Incorporation and By-laws do not contain any
such nomination procedures.
Election of Directors
Directors receiving the affirmative vote of a majority of the
outstanding stock of Bancshares are elected to Bancshares' board.
Further, Bancshares' Articles of Incorporation provide for cumulative
voting in the election of directors. FCC's directors are elected by
plurality vote. FCC's shareholders do not have cumulative voting rights
in the election of directors.
Limitation of Personal Liability of Directors and Officers
The Articles of Incorporation of FCC contain a provision limiting
the personal liability of FCC's directors and officers under certain
circumstances (the "Limitation of Liability Provision"). Pursuant to
the Limitation of Liability Provision, the officers and directors of FCC
have no personal liability to FCC or its shareholders for monetary
damages for breach of their fiduciary duty as a director or officer of
FCC except for (a) any breach of the director's or officer's duty of
loyalty to FCC or its shareholders, (b) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (c) liability under Section 92(D) of the LBCL (pertaining generally
to acts related to an unlawful stock repurchase or payment of a
dividend) or (d) any transaction from which the director or officer
derived an improper personal benefit.
The Limitation of Liability Provision also provides that any
subsequent amendment or repeal or the adoption of any inconsistent
provision cannot retroactively eliminate or reduce the protection it
provides directors and officers with regard to claims that arise after
the effective date of the proposed amendment but before any such
subsequent amendment, repeal or adoption of any inconsistent provision.
Additionally, while a two-thirds vote of FCC's voting power present is
required generally to amend its Articles of Incorporation, 80% of the
total voting power of FCC is required to amend or repeal the Limitation
of Liability Provision.
Bancshares' Articles of Incorporation contain a similar limitation
of liability provision, but the affirmative vote of two-thirds of the
outstanding Bancshares Common Stock is required to amend this provision
as well as any other provision of its Articles of Incorporation.
Fair Price Protection Statute
FCC is subject to Louisiana's Fair Price Protection Statute
(Sections 132 - 134 of the LBCL), which requires that, in addition to
any vote otherwise required by law or a corporation's articles of
incorporation, any "business combination" (as defined in the statute)
between a corporation and the holder of 10% or more of its total voting
power be recommended by the corporation's Board of Directors and
approved by (i) at least 80% of the total voting power of the
corporation and (ii) at least two-thirds of the votes entitled to be
cast by shareholders other than the 10% shareholder, unless certain
minimum price, form of consideration and procedural requirements are
satisfied by the 10% shareholder, or if the Board approves the business
combination before the 10% shareholder becomes a 10% shareholder.
The provisions of this statute are not applicable to Bancshares.
LEGAL MATTERS
Correro, Fishman & Casteix, L.L.P., New Orleans, Louisiana, has
rendered its opinion that the shares of FCC Common Stock to be issued in
connection with the Holding Company Merger have been duly authorized
and, if and when issued pursuant to the terms of the Plan, will be
validly issued, fully paid and non-assessable.
EXPERTS
The audited consolidated financial statements of Bancshares and
its subsidiaries incorporated by reference in this Proxy Statement and
Prospectus have been audited by Gragson, Casiday & Guillory, independent
public accountants, as indicated in their report with respect thereto,
and have been incorporated by reference in reliance upon the authority
of such firm as experts in accounting and auditing.
The audited consolidated financial statements of FCC and its
subsidiaries incorporated by reference in this Proxy Statement and
Prospectus have been audited by Arthur Andersen & Co., independent
public accountants, as indicated in their report with respect thereto,
and have been so incorporated by reference in reliance upon the
authority of such firm as experts in accounting and auditing. With
respect to the unaudited consolidated interim financial information of
FCC and its subsidiaries incorporated by reference in this Proxy
Statement and Prospectus from FCC's quarterly report on Form 10-Q,
Arthur Andersen & Co. has applied limited procedures in accordance with
professional standards for a review of that information. However, their
separate report thereon states that they did not audit and they do not
express an opinion on that interim financial information. Accordingly,
the degree of reliance on their report on that information should be
restricted in light of the limited nature of the review procedures
applied. In addition, Arthur Andersen & Co. is not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for
their report on the unaudited interim financial information because that
report is not a "report" or a "part" of the registration statement
prepared or certified by them within the meaning of Sections 7 and 11 of
the Securities Act of 1933.
OTHER MATTERS
At the time of the preparation of this Proxy Statement and
Prospectus, Bancshares had not been informed of any matters to be
presented by or on behalf of Bancshares or its management for action at
the Special Meeting other than those listed in the Notice of Special
Meeting of Shareholders and referred to herein. If any other matters
come before the meeting or any adjournment thereof, the persons named in
the enclosed proxy will vote on such matters according to their best
judgment.
Shareholders are urged to sign the enclosed proxy, which is
solicited on behalf of the Board of Directors of Bancshares, and return
it at once in the enclosed envelope.
BY ORDER OF THE BOARD OF DIRECTORS
___________________________________
Tom Flanagan, President
Lake Charles, Louisiana
August [12], 1994
<PAGE>
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
In addition to the Merger with Lakeside Bancshares, Inc., First
Commerce Corporation has several other transactions pending which are
described below. The unaudited pro forma condensed combined balance
sheets as of December 31, 1993 and March 31, 1994 and the unaudited pro
forma condensed combined statements of income for the years ended
December 31, 1993, 1992 and 1991 and for the three months ended March
31, 1994 appearing on the following pages give effect to the proposed
mergers of Lakeside Bancshares, Inc., First Bancshares, Inc., City
Bancorp, Inc., and Wolcott Mortgage Group, Inc. with First Commerce
Corporation ("FCC"). A brief description of each of the proposed plans
of merger follows.
FCC and Lakeside Bancshares, Inc. (Lakeside) have signed a
definitive agreement to merge the two companies and their respective
subsidiaries, The First National Bank of Lake Charles and Lakeside
National Bank. Shareholders of Lakeside will receive shares of FCC
Common Stock. The number of shares will be determined at the time the
mergers are effected, but will not exceed approximately 1,540,000
shares.
FCC and First Bancshares, Inc. (FB) have signed a definitive
agreement to merge the two companies and their respective subsidiaries,
First National Bank of Commerce and First Bank. Shareholders of FB will
receive shares of FCC Common Stock. The exact number of shares will be
determined at the time the mergers are effected, but in no event will
exceed 2,860,169 shares.
FCC and City Bancorp, Inc. (City) have signed a letter of intent
to merge the two companies and their respective subsidiaries, The First
National Bank of Lafayette and City Bank and Trust Company.
Shareholders of City will receive approximately 4.75 shares of FCC
Common Stock for each one share of City common stock owned. The total
number of FCC shares issuable in this transaction is fixed at 475,000.
FCC and Wolcott Mortgage Group, Inc. ("Wolcott") have signed a
definitive agreement for FCC to acquire Wolcott. The shareholders of
Wolcott will receive $1.251 million at closing, in the form of 51% FCC
Common Stock and 49% cash. A second contingent payment, 51% FCC Common
Stock and 49% cash, will be made one year from closing, with payment
determined by loan origination volume by Wolcott. The maximum total
purchase price will not exceed $2.5 million.
The Lakeside, FB, and City mergers will be accounted for under the
pooling-of-interests method of accounting. The Wolcott merger will be
accounted for under the purchase method of accounting. The pro forma
financial statements have been prepared to reflect the consummation of
all of the mergers. No assurance can be given, however, that any or all
of the mergers will be consummated, and consummation of one or more
mergers is not a condition to the consummation of any other merger.
No provision has been made for nonrecurring charges or credits
directly related to the mergers, and any such charges or credits are not
expected to be material. Certain direct costs of the mergers which have
been incurred and included in the pro forma financial statements are
immaterial. The unaudited pro forma condensed combined balance sheets
include adjustments directly attributable to the proposed mergers based
on estimates derived from information currently available.
The proforma financial statements do not purport to be indicative
of the financial position or results of operations that would actually
have been obtained if the mergers had been in effect at such dates or
for such periods, or of the results that may be obtained in the future.
These statements and related notes should be read in conjunction with
the consolidated financial statements of Lakeside and FCC and the notes
thereto incorporated by reference hereto.
<PAGE>
PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 1994
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Pro
------------------------------------------------------------------ Forma Forma
FCC Lakeside FB City Wolcott Adjustments<FN1> Combined
----------- ----------- ---------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 303,760 $ 15,341 $ 12,491 $ 4,651 $ 341 $ (1,225) $ 335,359
Interest-bearing deposits in
other banks 90,430 7,159 263 495 142 - 98,489
Securities held to maturity 446,697 48,976 8,608 4,765 - - 509,046
Securities available for sale 2,560,192 12,253 55,177 21,138 - - 2,648,760
Trading account securities 466 - - - - - 466
Federal funds sold and securities
purchased under resale agreements 106,900 5,347 8,430 10,650 - - 131,327
Loans and leases, net of unearned
income 2,658,134 92,943 152,604 44,950 2,454 - 2,951,085
Allowance for loan losses (63,844) (2,894) (2,241) (556) - - (69,535)
------------ --------- ---------- ------------ --------- --------- ------------
Net loans and leases 2,594,290 90,049 150,363 44,394 2,454 2,881,550
Premises and equipment 106,832 8,413 6,471 2,006 40 - 123,762
Goodwill and other intangible
assets 15,494 - - - - 2,141<FN6> 17,635
Other assets 148,063 2,586 4,725 895 58 - 156,327
------------ --------- ---------- ------------ --------- --------- ------------
Total assets $ 6,373,124 $ 190,124 $ 246,528 $ 88,994 $ 3,035 $ 916 $ 6,902,721
============ ========== ========== ============ ========= ========= ============
LIABILITIES
Domestic deposits
Noninterest-bearing deposits $ 1,287,217 $ 42,994 $ 48,102 $ 14,527 $ - $ - $ 1,392,840
Interest-bearing deposits 4,005,366 129,499 175,285 58,094 - - 4,368,244
Foreign branch interest-bearing
deposits 4,979 - - - - - 4,979
------------ ---------- ---------- ------------ --------- --------- ------------
Total deposits 5,297,562 172,493 223,387 72,621 - 5,766,063
Short-term borrowings 407,868 - 554 7,782 2,609 - 418,813
Other liabilities 70,544 1,144 1,675 752 67 - 74,182
Long-term debt 89,682 - - - - 89,682
------------ ---------- ---------- ------------ --------- --------- ------------
Total liabilities 5,865,656 173,637 225,616 81,155 2,676 6,348,740
------------ ---------- ---------- ------------ --------- --------- ------------
STOCKHOLDERS' EQUITY
Preferred stock 59,979 - - - 147 (147)<FN2> 59,979
Common stock 130,720 1,250 848 500 3 22,016 <FN2> 155,337
Capital surplus 137,406 2,500 3,823 2,504 - (20,744)<FN2> 125,489
Retained earnings 202,797 12,698 16,155 4,886 209 (209)<FN2> 236,536
Unearned restricted stock
compensation (1,191) - - - - - (1,191)
Unrealized gain(loss) on
securities available for sale (22,243) 39 86 (51) - - (22,169)
------------ ---------- ---------- ------------ --------- --------- ------------
Total stockholders' equity 507,468 16,487 20,912 7,839 359 916 553,981
------------ ---------- ---------- ------------ --------- --------- ------------
Total liabilities and
stockholders' equity $ 6,373,124 $ 190,124 $ 246,528 $ 88,994 $ 3,035 $ 916 $ 6,902,721
============ ========== ========== ============ ========= ========= ============
</TABLE>
(See accompanying notes)
<PAGE>
PRO FORMA CONDENSED COMBINED BALANCE SHEET
December 31, 1993
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Pro
--------------------------------------------------------- Forma Forma
FCC Lakeside FB City Adjustments<FN1> Combined<FN7>
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 387,548 $ 18,915 $ 11,042 $ 4,424 $ - $ 421,929
Interest-bearing deposits
in other banks 55,422 2,750 357 693 - 59,222
Securities held for investment 1,523,638 58,916 8,591 24,716 - 1,615,861
Securities held for sale 1,779,927 - 47,555 - - 1,827,482
Trading account securities 482 - - - - 482
Federal funds sold and
securities purchased under
resale agreements 28,600 3,500 2,000 2,425 - 36,525
Loans and leases, net of
unearned income 2,674,697 96,827 160,406 45,557 - 2,977,487
Allowance for loan losses (68,302) (2,971) (2,157) (590) - (74,020)
------------ ------------ ------------ ------------ ------------ ------------
Net loans and leases 2,606,395 93,856 158,249 44,967 2,903,467
Premises and equipment 102,230 8,498 6,634 2,053 - 119,415
Goodwill and other intangible
assets 16,143 - - - - 16,143
Other assets 159,900 2,043 4,316 918 - 167,177
------------ ------------ ------------ ------------ ------------ ------------
Total assets $ 6,660,285 $ 188,478 $ 238,744 $ 80,196 $ $ 7,167,703
============ ============ ============ ============ ============ ============
LIABILITIES
Domestic deposits
Noninterest-bearing deposits $ 1,196,259 $ 45,691 $ 44,465 $ 13,565 $ - $ 1,299,980
Interest-bearing deposits 4,107,813 125,863 170,926 53,487 - 4,458,089
Foreign branch interest-bearing
deposits 5,787 - - - - 5,787
------------ ------------ ------------ ------------ ------------ ------------
Total deposits 5,309,859 171,554 215,391 67,052 5,763,856
Short-term borrowings 678,316 - 1,951 4,914 - 685,181
Other liabilities 72,734 938 1,188 610 - 75,470
Long-term debt 89,704 - - - - 89,704
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities 6,150,613 172,492 218,530 72,576 6,614,211
------------ ------------ ------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock 59,979 - - - - 59,979
Common stock 130,311 1,250 848 500 21,778 <FN2> 154,687
Capital surplus 135,911 2,500 3,823 2,504 (21,778)<FN2> 122,960
Retained earnings 184,288 12,236 14,859 4,616 - 215,999
Unearned restricted stock
compensation (817) - - - - (817)
Unrealized gain(loss) on
securities available for sale - - 684<FN3> - - 684
------------ ------------ ------------ ------------ ------------ ------------
Total stockholders' equity 509,672 15,986 20,214 7,620 - 553,492
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities and
stockholders' equity $ 6,660,285 $ 188,478 $ 238,744 $ 80,196 $ - $ 7,167,703
============ ============ ============ ============ ============ ============
</TABLE>
(See accompanying notes)
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1994
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Pro
------------------------------------------------------------------------ Forma Forma
FCC Lakeside FB City Wolcott Adjustments Combined
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 97,183 $ 2,902 $ 4,762 $ 1,434 $ 39 $ - $ 106,320
Interest expense 34,437 717 1,124 457 33 - 36,768
------------ ------------ ------------ ------------ ------------ ---------- ------------
Net interest income 62,746 2,185 3,638 977 6 - 69,552
Provision for loan losses (3,832) - 75 20 - - (3,737)
Net interest income after ------------ ------------ ------------ ------------ ------------ ---------- ------------
provision for loan losses 66,578 2,185 3,563 957 6 - 73,289
Other income 28,501 823 827 255 260 - 30,666
Operating expense 56,472 2,319 2,453 803 261 27 <FN6> 62,335
------------ ------------ ------------ ------------ ------------ ---------- ------------
Income before income tax
expense 38,607 689 1,937 409 5 (27) 41,620
Income tax expense 12,475 227 641 139 2 - 13,484
------------ ------------ ------------ ------------ ------------ ---------- ------------
Net income 26,132 462 1,296 270 3 (27) 28,136
Preferred dividend
requirements 1,087 - - - 2 - 1,089
------------ ------------ ------------ ------------ ------------ ---------- ------------
Income applicable to common
shares $ 25,045 $ 462 $ 1,296 $ 270 $ 1 $ (27) $ 27,047
============ ============ ============ ============ ============ ========== ============
Earnings per share <FN4>
Primary $ .95 $ .92 $ 1.53 $ 2.70 $ 33.33 $ .87
Fully diluted $ .86 $ .92 $ 1.53 $ 2.70 $ 33.33 $ .80
Weighted average shares
outstanding <FN4)>
Primary 26,302,120 500,000 847,658 100,000 30 31,224,967
Fully diluted 32,244,994 500,000 847,658 100,000 30 37,167,841
(See accompanying notes)
</TABLE>
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Pro
------------------------------------------------------------------------ Forma Forma
FCC Lakeside FB City Wolcott Adjustments Combined
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income $ 393,334 $ 11,999 $ 20,640 $ 6,033 $ 308 $ - $ 432,314
Interest expense 143,324 3,207 5,030 1,788 254 - 153,603
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net interest income 250,010 8,792 15,610 4,245 54 - 278,711
Provision for loan losses (4,504) - (1,300) 205 - - (5,599)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 254,514 8,792 16,910 4,040 54 - 284,310
Other income 102,421 3,256 2,544 807 1,465 - 110,493
Operating expense 221,080 9,764 10,586 3,224 1,391 107 <FN6> 246,152
------------ ------------ ------------ ------------ ------------ ------------ ------------
Income before income tax
expense 135,855 2,284 8,868 1,623 128 (107) 148,651
Income tax expense 40,641 822 2,919 552 41 - 44,975
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net income <FN5> 95,214 1,462 5,949 1,071 87 (107) 103,676
Preferred dividend
requirements 4,348 - - - 9 - 4,357
------------ ------------ ------------ ------------ ------------ ------------ ------------
Income applicable to
common shares $ 90,866 $ 1,462 $ 5,949 $ 1,071 $ 78 $ (107) $ 99,319
============ ============ ============ ============ ============ ============ ============
Earnings per share <FN4><FN5>
Primary $ 3.48 $ 2.92 $ 7.02 $ 10.71 $ 2,600.00 $ 3.20
Fully diluted $ 3.18 $ 2.92 $ 7.02 $ 10.71 $ 2,600.00 $ 2.99
Weighted average shares
outstanding <FN4>
Primary 26,132,211 500,000 847,787 100,000 30 31,055,058
Fully diluted 32,125,003 500,000 847,787 100,000 30 37,047,850
</TABLE>
(See accompanying notes)
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Pro
--------------------------------------------------------- Forma Forma
FCC Lakeside FB City Adjustments Combined
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income $ 398,701 $ 13,593 $ 20,495 $ 6,086 $ - $ 438,875
Interest expense 163,348 4,798 6,682 2,073 - 176,901
------------ ------------ ------------ ------------ ------------ ------------
Net interest income 235,353 8,795 13,813 4,013 - 261,974
Provision for loan losses 22,040 675 680 236 - 23,631
------------ ------------ ------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 213,313 8,120 13,133 3,777 - 238,343
Other income 96,627 4,167 2,106 728 - 103,628
Operating expense 203,781 10,383 9,785 3,113 - 227,062
------------ ------------ ------------ ------------ ------------ ------------
Income before income tax
expense and minority
interest 106,159 1,904 5,454 1,392 - 114,909
Income tax expense 32,766 689 1,774 226 - 35,455
------------ ------------ ------------ ------------ ------------ ------------
Income before minority
interest 73,393 1,215 3,680 1,166 - 79,454
Earnings of minority
interest 918 - - - - 918
------------ ------------ ------------ ------------ ------------ ------------
Net income 72,475 1,215 3,680 1,166 - 78,536
Preferred dividend
requirements 4,076 - - - - 4,076
------------ ------------ ------------ ------------ ------------ ------------
Income applicable to
common shares $ 68,399 $ 1,215 $ 3,680 $ 1,166 $ -$ 74,460
============ ============ ============ ============ ============ ============
Earnings per share <FN4>
Primary $ 2.88 $ 2.43 $ 4.34 $ 11.66 $ 2.60
Fully diluted $ 2.70 $ 2.43 $ 4.34 $ 11.66 $ 2.50
Weighted average shares
outstanding <FN4>
Primary 23,728,540 500,000 847,787 100,000 28,603,274
Fully diluted 29,568,365 500,000 847,787 100,000 34,443,099
</TABLE>
(See accompanying notes)
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Historical Pro Pro
--------------------------------------------------------- Forma Forma
FCC Lakeside FB City Adjustments Combined
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Interest income $ 393,922 $ 16,779 $ 19,463 $ 6,549 $ -$ 436,713
Interest expense 202,060 7,986 9,187 3,031 - 222,264
------------ ------------ ------------ ------------ ------------ ------------
Net interest income 191,862 8,793 10,276 3,518 - 214,449
Provision for loan losses 43,734 300 1,334 80 - 45,448
------------ ------------ ------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 148,128 8,493 8,942 3,438 - 169,001
Other income 83,678 3,720 2,169 369 - 89,936
Operating expense 185,963 10,005 8,249 3,011 - 207,228
------------ ------------ ------------ ------------ ------------ ------------
Income before income tax expense and
minority interest 45,843 2,208 2,862 796 - 51,709
Income tax expense 10,936 547 872 13 - 12,368
------------ ------------ ------------ ------------ ------------ ------------
Income before minority interest 34,907 1,661 1,990 783 - 39,341
Earnings of minority interest 878 - - - - 878
------------ ------------ ------------ ------------ ------------ ------------
Net income 34,029 1,661 1,990 783 - 38,463
Preferred dividend requirements - - - - - -
Income applicable to common shares $ 34,029 $ 1,661 $ 1,990 $ 783 $ -$ 38,463
============ ============ ============ ============ ============ ============
Earnings per share <FN4>
Primary $ 1.56 $ 3.32 $ 2.35 $ 7.83 $ 1.44
Fully diluted $ 1.56 $ 3.32 $ 2.35 $ 7.83 $ 1.44
Weighted average shares outstanding <FN4>
Primary 21,808,941 500,000 847,787 100,000 26,683,675
Fully diluted 21,808,941 500,000 847,787 100,000 26,683,675
</TABLE>
(See accompanying notes)
<PAGE>
NOTES TO PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (Unaudited)
<FN1> In connection with the mergers, FCC will issue shares of its
Common Stock to the shareholders of Lakeside, FB, City, and Wolcott. To
calculate pro forma information, it has been assumed that the number of
outstanding shares of FCC Common Stock includes shares to be issued upon
consummation of the mergers. Under the terms of the proposed mergers
with Lakeside and FB, the number of shares of FCC Common Stock to be
delivered will be determined at the time the mergers are effected based
on the closing sales price of FCC Common Stock with a maximum number of
shares to be issued in the transactions of 1,540,000 and 2,860,169,
respectively. For purposes of these pro formas, it has been assumed
that the maximum number of shares issuable under the proposed mergers
with Lakeside and FB will be issued. The total number of shares of FCC
Common Stock issuable in the transaction with City is fixed at 475,000.
Under the terms of the proposed merger with Wolcott, the number of
shares to be delivered will be determined, among other things, by the
average sales price of a share of FCC Common Stock. Upon consummation,
the shareholders of Wolcott will receive $1,251,000, in the form of 51%
FCC Common Stock and 49% cash. A second contingent payment will be made
one year from closing, with payment determined by loan origination
volume at Wolcott. Payment of this second contingent payment will be in
the form of 51% stock and 49% cash. The maximum purchase price will not
exceed $2,500,000. For purposes of these pro formas, it has been
assumed that the maximum amount of $2,500,000, 51% FCC Common Stock; 49%
cash, is paid for Wolcott with an average sales price of FCC Common
Stock of $26.50 resulting in the issuance of 48,113 shares of FCC Common
Stock.
<FN2> Calculation of Pro Forma Capital. As required by generally
accepted accounting principles under the pooling-of-interests method of
accounting, FCC's Common Stock account has been decreased by the balance
in common stock for Lakeside, FB, and City and increased by the par
value of the FCC Common Stock assumed to be issued under the mergers.
As required by generally accepted accounting principles under the
purchase method of accounting, FCC's stockholders' equity has been
decreased by the balance in Wolcott's stockholders' equity accounts and
increased by the fair value of the FCC Common Stock assumed to be issued
under the merger. An analysis of these adjustments follows (in
thousands, except share data):
<TABLE>
<CAPTION>
Stockholders' Equity
___________________________________________________________________________________
Unrealized
Unearned Gain (Loss) On
Excess Restricted Securities Total
Cost Over Preferred Common Capital Retained Stock Available Stockholders'
Cash Fair Value Stock Stock Surplus Earnings Compensation For Sale Equity
____ __________ _________ ______ _______ ________ ____________ _____________ ____________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Lakeside (A) $ - $ - $ - $ 7,700 $ (3,950) $ - $ - $ - $ 3,750
(1,250) (2,500) (3,750)
FB (B) - - - 14,301 (9,630) - - - 4,671
(848) (3,823) (4,671)
City (C) - - - 2,375 629 - - - 3,004
(500) (2,504) (3,004)
Wolcott (D) (1,225) 2,141 - 241 1,034 - - - 1,275
(147) (3) - (209) - - (359)
______ ______ ______ _______ _______ ______ ________ _________ _______
Total $(1,225) $ 2,141 $ (147) $ 22,016 $(20,744) $ (209) $ - $ - $ 916
====== ====== ====== ======= ======= ====== ======== ========= =======
</TABLE>
(A) Issuance of 1,540,000 shares of FCC Common Stock for
500,000 shares of Lakeside common stock in a transaction
accounted for as a pooling-of-interests. FCC's Common
Stock account has been decreased by the balance in
Lakeside's common stock account ($1,250) and increased by
the par value of the FCC Common Stock issued ($7,700).
(B) Issuance of 2,860,169 shares of FCC Common Stock for
847,787 shares of FB common stock in a transaction
accounted for as a pooling-of-interests. FCC's Common
Stock account has been decreased by the balance in FB's
common stock account ($848) and increased by the par value
of the FCC Common Stock issued ($14,301).
(C) Issuance of 475,000 shares of FCC Common Stock for
100,000 shares of City common stock in a transaction
accounted for as a pooling-of-interests. FCC's Common
Stock account has been decreased by the balance in City's
common stock account ($500) and increased by the par value
of the FCC Common Stock issued ($2,375).
(D) Payment of $1,225 in cash and issuance of 48,113 shares of
FCC Common Stock in exchange for 30 shares of Wolcott
common stock and 120 shares of Wolcott preferred stock in
a transaction accounted for as a purchase. Excess cost
over fair value of $2,141 will be recorded as a result of
this transaction.
<FN3> FB adopted Statement of Financial Accounting Standards No.
115, "Accounting for Certain Investments in Debt and Equity
Securities" as of December 31, 1993. FCC, Lakeside, and City adopted
SFAS No. 115 as of January 1, 1994.
<FN4> Pro forma earnings per share have been computed on the pro
forma combined weighted average shares outstanding. Pro forma
combined weighted average shares outstanding include weighted average
outstanding shares of FCC Common Stock, after adjustment for shares of
FCC Common Stock assumed to be issued in connection with the mergers.
Income for primary earnings per share is adjusted for preferred stock
dividends. Income for fully diluted earnings per share is adjusted
for interest related to convertible debentures, net of the related
income tax effect, and preferred stock dividends.
<FN5> Lakeside and FB adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" in 1993 and reported
the cumulative effect of this accounting change in their respective
1993 consolidated statements of income. The effect of this change was
a $131,000 decrease in net income for Lakeside and a $672,000 increase
in net income for FB. These amounts are not considered to be
components of ongoing results and accordingly have not been included
in the historical or combined pro forma amounts presented.
<FN6> To record the excess cost over fair value for the Wolcott
merger of $2,141,000. The excess cost is being amortized over 20
years on a straight line basis.
<FN7> The pro forma condensed combined balance sheet as of
December 31, 1993 reflects only those mergers accounted for under the
pooling-of-interests method of accounting.
<PAGE>
FIRST COMMERCE CORPORATION
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(Unaudited)
(Lakeside Bancshares Transaction Only)
The unaudited pro forma condensed combined balance sheets as of
December 31, 1993 and March 31, 1994 and the unaudited pro forma
condensed combined statements of income for the years ended December
31, 1993, 1992 and 1991 and for the three months ended March 31, 1994
appearing on the following pages give effect to the proposed Lakeside
Bancshares, Inc. ("Lakeside") merger with First Commerce Corporation
("FCC") using the pooling-of-interests method of accounting. A brief
description of the proposed plan of merger follows.
FCC and Lakeside (collectively the "Companies") have signed a
definitive agreement to merge the two companies and their respective
subsidiaries, The First National Bank of Lake Charles and Lakeside
National Bank (the "Mergers"). Shareholders of Lakeside will receive
shares of FCC Common Stock. The number of shares will be determined at
the time the Mergers are effected, but will not exceed 1,540,000
shares.
No provision has been made for nonrecurring charges or credits
directly related to the Mergers, and any such charges or credits are
not expected to be material. Certain direct costs of the Mergers which
have been incurred and included in the pro forma financial statements
are immaterial. The unaudited pro forma condensed combined balance
sheets include adjustments directly attributable to the proposed
Mergers based on estimates derived from information currently available.
The pro forma financial statements do not purport to be indicative of
the financial position or results of operations that would actually have
been obtained if the Mergers had been in effect at such dates or for such
periods, or of the results that may be obtained in the future. These
statements and related notes should be read in conjunction with the
consolidated financial statements of the Companies and the notes thereto
incorporated by reference hereto.
<PAGE>
PRO FORMA CONDENSED COMBINED BALANCE SHEET
March 31, 1994
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Pro
Historical Forma Forma
---------------------------
FCC Lakeside Adjustments<FN1> Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 303,760 $ 15,341 $ - $ 319,101
Interest-bearing deposits in other banks 90,430 7,159 - 97,589
Securities held to maturity 446,697 48,976 - 495,673
Securities available for sale 2,560,192 12,253 - 2,572,445
Trading account securities 466 - - 466
Federal funds sold and securities
purchased under resale agreements 106,900 5,347 - 112,247
Loans and leases, net of unearned income 2,658,134 92,943 - 2,751,077
Allowance for loan losses (63,844) (2,894) - (66,738)
------------ ------------ ------------ ------------
Net loans and leases 2,594,290 90,049 2,684,339
Premises and equipment 106,832 8,413 - 115,245
Goodwill and other intangible assets 15,494 - - 15,494
Other assets 148,063 2,586 - 150,649
------------ ------------ ------------ ------------
Total assets $ 6,373,124 $ 190,124 $ - $ 6,563,248
============ ============ ============ ============
LIABILITIES
Domestic deposits
Noninterest-bearing deposits $ 1,287,217 $ 42,994 $ - $ 1,330,211
Interest-bearing deposits 4,005,366 129,499 - 4,134,865
Foreign branch interest-bearing deposits 4,979 - - 4,979
------------ ------------ ------------ ------------
Total deposits 5,297,562 172,493 - 5,470,055
Short-term borrowings 407,868 - - 407,868
Other liabilities 70,544 1,144 - 71,688
Long-term debt 89,682 - - 89,682
------------ ------------ ------------ ------------
Total liabilities 5,865,656 173,637 - 6,039,293
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock 59,979 - - 59,979
Common stock 130,720 1,250 6,450 <FN2> 138,420
Capital surplus 137,406 2,500 (6,450)<FN2> 133,456
Retained earnings 202,797 12,698 - 215,495
Unearned restricted stock compensation (1,191) - - (1,191)
Unrealized gain(loss) on securities
available for sale (22,243) 39 - (22,204)
------------ ------------ ------------ ------------
Total stockholders' equity 507,468 16,487 - 523,955
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity$ 6,373,124 $ 190,124 $ - $ 6,563,248
============ ============ ============ ============
(See accompanying notes)
</TABLE>
<PAGE>
PRO FORMA CONDENSED COMBINED BALANCE SHEET
December 31, 1993
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Pro Pro
Historical Forma Forma
---------------------------
FCC Lakeside Adjustments<FN1> Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 387,548 $ 18,915 $ - $ 406,463
Interest-bearing deposits in other banks 55,422 2,750 - 58,172
Securities held for investment 1,523,638 58,916 - 1,582,554
Securities held for sale 1,779,927 - - 1,779,927
Trading account securities 482 - - 482
Federal funds sold and securities
purchased under resale agreements 28,600 3,500 - 32,100
Loans and leases, net of unearned income 2,674,697 96,827 - 2,771,524
Allowance for loan losses (68,302) (2,971) - (71,273)
------------ ------------ ------------ ------------
Net loans and leases 2,606,395 93,856 2,700,251
Premises and equipment 102,230 8,498 - 110,728
Goodwill and other intangible assets 16,143 - - 16,143
Other assets 159,900 2,043 - 161,943
------------ ------------ ------------ ------------
Total assets $ 6,660,285 $ 188,478 $ - $ 6,848,763
============ ============ ============ ============
LIABILITIES
Domestic deposits
Noninterest-bearing deposits $ 1,196,259 $ 45,691 $ - $ 1,241,950
Interest-bearing deposits 4,107,813 125,863 - 4,233,676
Foreign branch interest-bearing deposits 5,787 - - 5,787
------------ ------------ ------------ ------------
Total deposits 5,309,859 171,554 5,481,413
Short-term borrowings 678,316 - - 678,316
Other liabilities 72,734 938 - 73,672
Long-term debt 89,704 - - 89,704
------------ ------------ ------------ ------------
Total liabilities 6,150,613 172,492 - 6,323,105
------------ ------------ ------------ ------------
STOCKHOLDERS' EQUITY
Preferred stock 59,979 - - 59,979
Common stock 130,311 1,250 6,450 <FN2> 138,011
Capital surplus 135,911 2,500 (6,450)<FN2> 131,961
Retained earnings 184,288 12,236 - 196,524
Unearned restricted stock compensation (817) - - (817)
Unrealized gain(loss) on securities
available for sale - - - -
------------ ------------ ------------ ------------
Total stockholders' equity 509,672 15,986 - 525,658
------------ ------------ ------------ ------------
Total liabilities and stockholders' equity$ 6,660,285 $ 188,478 $ - $ 6,848,763
============ ============ ============ ============
(See accompanying notes)
</TABLE>
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Three Months Ended March 31, 1994
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Pro Pro
Historical Forma Forma
---------------------------
FCC Lakeside Adjustments Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income $ 97,183 $ 2,902 $ - $ 100,085
Interest expense 34,437 717 - 35,154
------------ ------------ ------------ ------------
Net interest income 62,746 2,185 - 64,931
Provision for loan losses (3,832) - - (3,832)
------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 66,578 2,185 - 68,763
Other income 28,501 823 - 29,324
Operating expense 56,472 2,319 - 58,791
------------ ------------ ------------ ------------
Income before income tax expense 38,607 689 - 39,296
Income tax expense 12,475 227 - 12,702
------------ ------------ ------------ ------------
Net income 26,132 462 - 26,594
Preferred dividend requirements 1,087 - - 1,087
------------ ------------ ------------ ------------
Income applicable to common shares $ 25,045 $ 462 $ - $ 25,507
============ ============ ============ ============
Earnings per share <FN3>
Primary $ .95 $ .92 $ .92
Fully diluted $ .86 $ .92 $ .84
Weighted average shares outstanding <FN3>
Primary 26,302,120 500,000 27,842,120
Fully diluted 32,244,994 500,000 33,784,994
(See accompanying notes)
</TABLE>
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 1993
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Pro Pro
Historical Forma Forma
---------------------------
FCC Lakeside Adjustments Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income $ 393,334 $ 11,999 $ - $ 405,333
Interest expense 143,324 3,207 - 146,531
------------ ------------ ------------ ------------
Net interest income 250,010 8,792 - 258,802
Provision for loan losses (4,504) - - (4,504)
------------ ------------ ------------ ------------
Net interest income after
provision for loan losses 254,514 8,792 - 263,306
Other income 102,421 3,256 - 105,677
Operating expense 221,080 9,764 - 230,844
------------ ------------ ------------ ------------
Income before income tax expense 135,855 2,284 - 138,139
Income tax expense 40,641 822 - 41,463
------------ ------------ ------------ ------------
Net income <FN4> 95,214 1,462 - 96,676
Preferred dividend requirements 4,348 - - 4,348
------------ ------------ ------------ ------------
Income applicable to common shares $ 90,866 $ 1,462 $ - $ 92,328
============ ============ ============ ============
Earnings per share <FN3>
Primary $ 3.48 $ 2.92 $ 3.34
Fully diluted $ 3.18 $ 2.92 $ 3.08
Weighted average shares outstanding <FN3>
Primary 26,132,211 500,000 27,672,211
Fully diluted 32,125,003 500,000 33,665,003
(See accompanying notes)
</TABLE>
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 1992
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Pro Pro
Historical Forma Forma
--------------------------
FCC Lakeside Adjustments Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income $ 398,701 $ 13,593 $ - $ 412,294
Interest expense 163,348 4,798 - 168,146
------------ ------------ ------------ ------------
Net interest income 235,353 8,795 - 244,148
Provision for loan losses 22,040 675 - 22,715
Net interest income after ------------ ------------ ------------ ------------
provision for loan losses 213,313 8,120 - 221,433
Other income 96,627 4,167 - 100,794
Operating expense 203,781 10,383 - 214,164
------------ ------------ ------------ ------------
Income before income tax expense and
minority interest 106,159 1,904 - 108,063
Income tax expense 32,766 689 - 33,455
------------ ------------ ------------ ------------
Income before minority interest 73,393 1,215 - 74,608
Earnings of minority interest 918 - - 918
------------ ------------ ------------ ------------
Net income 72,475 1,215 - 73,690
Preferred dividend requirements 4,076 - - 4,076
------------ ------------ ------------ ------------
Income applicable to common shares $ 68,399 $ 1,215 $ - $ 69,614
============ ============ ============ ============
Earnings per share <FN3>
Primary $ 2.88 $ 2.43 $ 2.75
Fully diluted $ 2.70 $ 2.43 $ 2.61
Weighted average shares outstanding <FN3>
Primary 23,728,540 500,000 25,268,540
Fully diluted 29,568,365 500,000 31,108,365
(See accompanying notes)
</TABLE>
<PAGE>
PRO FORMA CONDENSED COMBINED STATEMENT OF INCOME
Year Ended December 31, 1991
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
Pro Pro
Historical Forma Forma
---------------------------
FCC Lakeside Adjustments Combined
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest income $ 393,922 $ 16,779 $ - $ 410,701
Interest expense 202,060 7,986 - 210,046
------------ ------------ ------------ ------------
Net interest income 191,862 8,793 - 200,655
Provision for loan losses 43,734 300 - 44,034
Net interest income after ------------ ------------ ------------ ------------
provision for loan losses 148,128 8,493 - 156,621
Other income 83,678 3,720 - 87,398
Operating expense 185,963 10,005 - 195,968
------------ ------------ ------------ ------------
Income before income tax expense and
minority interest 45,843 2,208 - 48,051
Income tax expense 10,936 547 - 11,483
Income before minority interest 34,907 1,661 - 36,568
Earnings of minority interest 878 - - 878
------------ ------------ ------------ ------------
Net income 34,029 1,661 - 35,690
Preferred dividend requirements - - - -
------------ ------------ ------------ ------------
Income applicable to common shares $ 34,029 $ 1,661 $ - $ 35,690
============ ============ ============ ============
Earnings per share <FN3>
Primary $ 1.56 $ 3.32 $ 1.53
Fully diluted $ 1.56 $ 3.32 $ 1.53
Weighted average shares outstanding <FN3>
Primary 21,808,941 500,000 23,348,941
Fully diluted 21,808,941 500,000 23,348,941
(See accompanying notes)
</TABLE>
<PAGE>
NOTES TO PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (Unaudited)
<FN1> In connection with the Mergers, FCC will issue shares of its Common
Stock to the shareholders of Lakeside. To calculate pro forma
information, it has been assumed that the number of outstanding
shares of FCC Common Stock includes shares to be issued upon
consummation of the Mergers. Under the terms of the proposed
Mergers with Lakeside, the number of shares of FCC Common Stock
to be delivered will be determined at the time the Mergers are
effected based on the closing sales price of FCC Common Stock with a
maximum number of shares of 1,540,000. For purposes of these pro
formas, it has been assumed that the maximum number of shares issuable
under the proposed Mergers with Lakeside will be issued.
<FN2> Calculation of Pro Forma Capital. As required by generally accepted
accounting principles under the pooling-of-interests method of
accounting, FCC's Common Stock account has been decreased by the
balance in common stock for Lakeside and increased by the par value
of the FCC Common Stock assumed to be issued under the Mergers. An
analysis of these adjustments follows (in thousands, except share
data):
<TABLE>
<CAPTION>
Unrealized
Unearned Gain (Loss) On
December 31, 1993 Restricted Securities Total
and Preferred Common Capital Retained Stock Available Stockholders'
March 31, 1994 Stock Stock Surplus Earnings Compensation For Sale Equity
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lakeside (A) $ - 7,700 $(3,950) $ - $ - $ - $ 3,750
(1,250) (2,500) (3,750)
-----------------------------------------------------------------------------------------
Total $ - 6,450 $(6,450) $ - $ - $ - $ -
=========================================================================================
</TABLE>
(A) Issuance of 1,540,000 shares of FCC Common Stock for 500,000 shares
of Lakeside common stock in a transaction accounted for as a pooling
-of-interests. FCC's Common Stock account has been decreased by the
balance in Lakeside's common stock account ($1,250) and increased by
the par value of the FCC Common Stock issued ($7,700).
<FN3> Pro forma earnings per share have been computed on the pro forma
combined weighted average shares outstanding. Pro forma combined
weighted average shares outstanding include weighted average
outstanding shares of FCC Common Stock, after adjustment for shares
of FCC Common Stock assumed to be issued in connection with the
Mergers. Income for primary earnings per share is adjusted for
preferred stock dividends. Income for fully diluted earnings per
share is adjusted for interest related to convertible debentures,
net of the related income tax effect, and preferred stock dividends.
<FN4> Lakeside adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" in 1993 and reported the cumulative
effect of this accounting change in its 1993 consolidated statement
of income. The effect of this change was a $131,000 decrease in net
income for Lakeside. This amount is not considered to be a component
of ongoing results and accordingly has not been included in the
historical or combined pro forma amounts presented.
<PAGE>
APPENDIX A
PERTINENT PORTIONS
OF
AGREEMENT AND PLAN OF MERGER
<PAGE>
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is made
________, 1994, between First Commerce Corporation, a Louisiana
corporation ("FCC"), and its wholly-owned subsidiary, First
National Bank of Lake Charles, a national banking association
("FNBLC"), on the one hand, and Lakeside Bancshares, Inc., a
Louisiana corporation ("Holding"), and its wholly-owned
subsidiary, Lakeside National Bank of Lake Charles, a national
banking association ("Bank"), on the other.
WHEREAS, the Board of Directors of FNBLC and the Board of
Directors of Bank have each determined that it is desirable and
in the best interests of the institution and its sole shareholder
that Bank merge into FNBLC (the "Bank Merger") on the terms and
subject to the conditions set forth in this Agreement and in the
agreement of merger attached hereto as Exhibit A (the "Bank
Merger Agreement"); and
WHEREAS, the Board of Directors of FCC and the Board of
Directors of Holding have each determined that it is desirable
and in the best interests of the corporation and its shareholders
that, immediately following the Bank Merger, Holding merge into
FCC (the "Holding Company Merger" and, together with the Bank
Merger, collectively called the "Mergers") on the terms and
subject to the conditions set forth in this Agreement and in the
joint agreement of merger attached hereto as Exhibit B (the
"Holding Company Merger Agreement" and, together with the Bank
Merger Agreement, collectively called the "Merger Agreements").
NOW THEREFORE, in consideration of the representations,
warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
SECTION 1
Mergers and Closing
1.01 Bank Merger. Simultaneously with the execution of
this Agreement, FNBLC and Bank have entered into the Bank Merger
Agreement, pursuant to which Bank will, subject to the conditions
stated herein and therein, merge into FNBLC, which shall be the
surviving association.
1.02 Holding Company Merger. Simultaneously with the
execution of this Agreement, FCC and Holding have entered into
the Holding Company Merger Agreement, pursuant to which Holding
will, subject to the conditions stated herein and therein, merge
into FCC, which shall be the surviving corporation.
1.03 The Closing. The "Closing" of the transactions
contemplated hereby will take place in the Board Room of FCC,
Third Floor, 210 Baronne Street, New Orleans, Louisiana 70112,
at 10:00 a.m., New Orleans Time, on a mutually agreeable date as
soon as practicable following satisfaction of the conditions set
forth in subparagraphs (a), (b) and (d) of subsection 6.01
hereof, or if no date has been agreed to, on any date specified
by any party to the others upon ten days notice following
satisfaction of such conditions. The date on which the Closing
occurs is herein called the "Closing Date". If all conditions
set forth in Section 6 hereof are satisfied or waived by the
party entitled to grant such waiver, at the Closing (a) FCC and
FNBLC, on the one hand, and Holding and Bank, on the other hand,
shall each provide to the other such proof or indication of
satisfaction of the conditions set forth in Section 6 as the
party whose obligations are conditioned upon such satisfaction
may reasonably request, (b) the certificates, letters and
opinions required by Section 6 shall be delivered, (c) the
appropriate officers of the parties shall execute, deliver and
acknowledge the Merger Agreements and (d) the parties shall take
such further action as is required to consummate the transactions
contemplated by this Agreement and the Merger Agreements. If on
any date established for the Closing all conditions in Section 6
hereof have not been satisfied or waived by the party entitled to
grant such waiver, then any party, on one or more occasions, may
declare a delay of the Closing of such duration, not exceeding 10
business days, as the declaring party shall select, but no such
delay shall extend beyond the date set forth in subparagraph (c)
of subsection 7.01, and no such delay shall interfere with the
right of any party to declare a termination pursuant to Section
7.
1.04 The Effective Date and Time. The Bank Merger
Agreement shall be filed and recorded as provided by law
immediately following (or concurrently with) the Closing, and the
Bank Merger will be effective at the time specified in a
certificate or other written record issued by the Office of the
Comptroller of the Currency ("OCC"). The Holding Company Merger
Agreement shall be filed with and recorded by the Secretary of
State of Louisiana immediately following (or concurrently with)
the Closing, and the Holding Company Merger shall be effective at
the date and time specified in the Holding Company Merger
Agreement. The date on which and the time at which the Holding
Company Merger becomes effective are herein referred to as the
"Effective Date" and the "Effective Time," respectively.
SECTION 2
Conversion of Stock of Holding
2.01 Conversion of Stock of Holding. Except for shares as
to which dissenters' rights have been perfected and not withdrawn
or otherwise forfeited under Section 131 of the Louisiana
Business Corporation Law (the "BCL"), on the Effective Date, by
reason of the Holding Company Merger, each issued and outstanding
share of the common stock, $2.50 per share par value, of Holding
("Holding Common Stock") shall be converted as set forth in
Section 4 of the Holding Company Merger Agreement.
SECTION 3
Representations and
Warranties of Holding and Bank
Holding and Bank represent and warrant to FCC and FNBLC
that, except as set forth in the corresponding subsection of the
Schedule of Exceptions that Holding and Bank have delivered to
FCC and FNBLC:
3.01 Consolidated Group; Organization; Qualification.
Holding's "consolidated group", as such term is used in this
Agreement, consists of Holding and Bank. Holding is a
corporation duly organized and validly existing under the laws of
the State of Louisiana and is a bank holding company within the
meaning of the Bank Holding Company Act of 1956, as amended (the
"Bank Holding Company Act"). Bank is a national banking
association duly organized and validly existing under the laws of
the United States. Each member of Holding's consolidated group
has all requisite corporate power and authority to own and lease
its property and to carry on its business as it is currently
being conducted and is qualified and in good standing as a
foreign corporation in all jurisdictions in which the failure to
so qualify would have a material adverse effect on such member's
financial condition, results of operations, business or
prospects.
3.02 Capital Stock; Other Interests. The authorized
capital stock of Holding consists of 500,000 shares of Holding
Common Stock, of which 500,000 shares are issued and outstanding
and no shares are held in its treasury. The authorized capital
stock of Bank consists of 500,000 shares of common stock, $2.50
par value per share, of which 500,000 shares are issued and
outstanding and no shares are held in its treasury. All issued
and outstanding shares of capital stock of each member of
Holding's consolidated group have been duly authorized and are
validly issued, fully paid and (except as provided in 12 U.S.C.
Section 55) non-assessable, and all of the outstanding shares
of each such member (other than Holding) are owned by Holding,
free and clear of all liens, charges, security interests,
mortgages, pledges and other encumbrances. No member of Holding's
consolidated group has outstanding any stock options or other
rights to acquire any shares of its capital stock or any security
convertible into such shares, or has any obligation or commitment
to issue, sell or deliver any of the foregoing or any shares of
its capital stock. The capital stock of each member of Holding's
consolidated group has been issued in compliance with all legal
requirements and in compliance with any preemptive or similar
rights. No member of Holding's consolidated group has a
subsidiary or direct or indirect ownership interest exceeding 5%
in any firm, corporation, partnership or other business except
for interests in any other such member.
3.03 Corporate Authorization; No Conflicts. Subject to
the approval of this Agreement and the Holding Company Merger
Agreement by the shareholders of Holding in accordance with the
BCL, all corporate acts and other proceedings required of each
member of Holding's consolidated group for the due and valid
authorization, execution, delivery and performance of this
Agreement and the Merger Agreements and consummation of the
Mergers have been validly and appropriately taken. This
Agreement and the Bank Merger Agreement has been approved by
Holding as sole shareholder of Bank. Subject to their approval
by the shareholders of Holding and to such regulatory approvals
as are required by law, this Agreement and the Merger Agreements
are legal, valid and binding obligations of the members of
Holding's consolidated group that are parties thereto,
respectively, and are enforceable against such members in
accordance with the respective terms of such instruments, except
that enforcement may be limited by bankruptcy, reorganization,
insolvency and other similar laws and court decisions relating to
or affecting the enforcement of creditors' rights generally and
by general equitable principles. With respect to each member of
Holding's consolidated group, neither the execution, delivery or
performance of this Agreement or the Merger Agreements, nor the
consummation of the transactions contemplated hereby or thereby
will (i) violate, conflict with, or result in a breach of any
provisions of, (ii) constitute a default (or event that, with
notice or lapse of time or both, would constitute a default)
under, (iii) result in the termination of or accelerate the
performance required by, or (iv) result in the creation of any
lien, security interest, charge or encumbrance upon any of its
properties or assets under, any of the terms, conditions or
provisions of its articles of incorporation or by-laws or any
material note, bond, mortgage, indenture, deed of trust, lease,
license, agreement or other instrument or obligation to or by
which it or any of its assets is bound; or violate any order,
writ, injunction, decree, statute, rule or regulation of any
governmental body applicable to it or any of its assets.
3.04 Financial Statements, Reports and Proxy Statements.
Holding has delivered to FCC true and complete copies of (a) the
consolidated balance sheets as of December 31, 1992 and 1993 of
Holding and its consolidated subsidiaries, the related
consolidated statements of income, shareholders' equity and cash
flows for the respective years then ended, the related notes
thereto, and the report of its independent public accountants
with respect thereto (collectively, the "Financial Statements"),
(b) the unaudited consolidated balance sheet as of March 31, 1994
and March 31, 1993 of Holding and its consolidated subsidiaries,
and the related unaudited statements of income, shareholders'
equity and cash flows for the three-month periods then ended
(collectively, the "Interim Financial Statements"), (c) the
annual report to the Board of Governors of the Federal Reserve
System ("Federal Reserve Board") for the year ended December 31,
1993, of each member of Holding's consolidated group required to
file such reports, (d) all call reports, including all amendments
thereto, made to the OCC or the Federal Deposit Insurance
Corporation ("FDIC") or the Federal Reserve Board, as the case
may be, since December 31, 1991, of each member of Holding's
consolidated group required to file such reports, (e) Holding's
Annual Report to Shareholders for 1993 and all subsequent
Quarterly Reports to Shareholders, (f) all reports filed since
December 31, 1991 pursuant to Section 15(d) of the Securities Act
of 1933, as amended (the "Securities Act"), or Section 13 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
of each member of Holding's consolidated group required to file
such reports, and (g) all Proxy Statements disseminated to
Holding's shareholders or the shareholders of any of its
subsidiaries at any time since December 31, 1991. The Financial
Statements and the Interim Financial Statements have been
prepared in conformity with generally accepted accounting
principles applied on a basis consistent with prior periods, and
present fairly, in conformity with generally accepted accounting
principles, the consolidated results of operations of Holding's
consolidated group for the respective periods covered thereby and
the consolidated financial condition of its consolidated group as
of the respective dates thereof. All call reports referred to
above have been filed on the appropriate form and prepared in
accordance with such form's instructions and the applicable rules
and regulations of the regulating federal agency. No member of
Holding's consolidated group has, nor are any of any such
member's assets subject to, any material liability, commitment,
indebtedness or obligation (of any kind whatsoever, whether
absolute, accrued, contingent, known, unknown, matured or
unmatured) which is not reflected and adequately reserved against
in the latest balance sheet forming part of the Interim Financial
Statements (the "Latest Balance Sheet") other than such expenses
as are included in the Deductible Amount and for which no reserve
was included in the Latest Balance Sheet. The Financial
Statements and Interim Financial Statements are supported by and
consistent with detailed trial balances of investment securities,
loans and commitments, depositors' accounts and cash balances on
deposit with other institutions, copies of which have been made
available to FCC.
3.05 Loan and Investment Portfolios. All loans, discounts
and financing leases (in which a member of Holding's consolidated
group is lessor) reflected on the Latest Balance Sheet (a) were,
at the time and under the circumstances in which made, made for
good, valuable and adequate consideration in the ordinary course
of business of its consolidated group, (b) are evidenced by
genuine notes, agreements or other evidences of indebtedness and
(c) to the extent secured, have been secured by valid liens and
security interests which have been perfected. Accurate lists of
all such loans, discounts and financing leases as of the date of
the Latest Balance Sheet, and of the investment portfolios of
each member of Holding's consolidated group as of such date, have
been delivered to FCC.
3.06 Adequacy of Allowances for Losses . Each of the
allowances for losses on loans, financing leases and other real
estate shown on the Latest Balance Sheet is adequate in
accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects, and
there are no facts or circumstances known to any executive
officer of Holding or Bank which are likely to require in
accordance with applicable regulatory guidelines or generally
accepted accounting principles a future material increase in any
such provisions for losses or a material decrease in any of the
allowances therefor reflected in the Latest Balance Sheet. Each
of the allowances for losses on loans, financing leases and other
real estate reflected on the books of Holding's consolidated
group at all times from and after the date of the Latest Balance
Sheet until the Closing Date has been and will be adequate in
accordance with applicable regulatory guidelines and generally
accepted accounting principles in all material respects.
3.07 Examination Reports. To the extent permitted by
applicable law, Holding has provided to FCC true and correct
copies of all examination reports with respect to each member of
Holding's consolidated group made by any federal or state bank or
bank holding company regulatory authority since December 31,
1991.
3.08 Absence of Certain Changes or Events. Since the date
of the Latest Balance Sheet, there has been no event or condition
of any character (whether actual, threatened or contemplated)
that has had, or can reasonably be anticipated to have, a
material adverse effect on the financial condition, results of
operations, business or prospects of any member of Holding's
consolidated group, other than those events the related expenses
of which are included in the Deductible Amount. No such member
has, since the date of the Latest Balance Sheet:
(a) with respect to Holding, borrowed any money or,
except in the ordinary course of business consistent with past
practices, (i) with respect to the Bank, borrowed any money, (ii)
loaned any money or pledged any of its credit in connection with
any aspect of its business, (iii) mortgaged or otherwise
subjected to any lien, encumbrance or other liability any of its
assets, (iv) sold, assigned or transferred any of its assets, or
(v) incurred any material liability, commitment, indebtedness or
obligation (of any kind whatsoever, whether accrued, contingent,
known, unknown, matured or unmatured);
(b) suffered any material damage, destruction or loss,
whether or not covered by insurance;
(c) experienced any material change in asset
concentrations as to customers or industries or in the nature and
source of its liabilities or in the mix of interest-bearing
versus non-interest bearing deposits;
(d) received notice or had knowledge or reason to believe
that any material labor unrest exists among any of its employees
or that any group, organization or union has attempted to
organize any of its employees;
(e) received notice or had knowledge or reason to believe
that any of its substantial customers has terminated or intends
to terminate such customer's relationship with it; provided that
this representation shall not apply to any customer with respect
to whom Holding (i) has given notice to FCC of such customer's
intent to terminate its relationship, (ii) has given FCC an
opportunity to contact such customer to solicit the continuation
of such relationship and (iii) can demonstrate such customer
terminated or intends to terminate such relationship primarily as
a result of the pending consummation of the Mergers;
(f) failed to operate its business in the ordinary course
consistent with past practices, or failed to use its best efforts
to preserve its business organization intact or to use its best
efforts to preserve the goodwill of its customers and others with
whom it has business relations;
(g) incurred any material loss except for losses
adequately reserved for on the Latest Balance Sheet and expenses
associated with this transaction that will be included in the
Deductible Amount, as defined by Section 4.1 of the Holding
Company Merger Agreement, or waived any material right in
connection with any aspect of its business, whether or not in the
ordinary course of business;
(h) cancelled any debt owed to it, or cancelled any of
its claims, or paid any of its noncurrent obligations or
liabilities, other than debts, claims or obligations not
exceeding in the aggregate $25,000;
(i) made any capital expenditure or capital addition or
betterment, other than improvements which had already been
approved by Lakeside management or its Board of Directors prior
to February 28, 1994 or were in process at that time, and, in
both cases, listed on the Schedule of Exceptions, or any new or
additional projects in excess of $25,000 which have received
prior approval of the Chief Executive Officer of FCC or his
designee;
(j) entered into any agreement requiring the payment,
conditionally or otherwise, of any salary, bonus, extra
compensation, pension or severance payment to any of its present
or former directors, officers or employees, except such
agreements as are terminable at will without any penalty or other
payment by it and except the severance plan described in
subsection 3.21 hereof and the severance provisions of the four
existing employment contracts, or increased by more than 5% the
compensation (including salaries, fees, bonuses, profit sharing,
incentive, pension, retirement or other similar payments) of any
such person whose annual compensation would, following such
increase, exceed $30,000;
(k) except as required in accordance with generally
accepted accounting principles, changed any accounting practice
followed or employed in preparing the Financial Statements or
Interim Financial Statements;
(l) made any loan, given any discount or entered into any
financing lease which has not been (i) at the time and under the
circumstances in which made, made for good, valuable and adequate
consideration in the ordinary course of business, (ii) evidenced
by genuine notes, agreements or other evidences of indebtedness
and (iii) fully reserved against in any amount sufficient to
provide for all charge-offs reasonably anticipated in the
ordinary course of business after taking into account all
recoveries reasonably anticipated in the ordinary course of
business; or
(m) entered into any agreement, contract or commitment to
do any of the foregoing.
3.09 Taxes. Each member of Holding's consolidated group
has timely filed all federal, state, foreign and local income,
franchise, excise, real and personal property, employment and
other tax returns, tax information returns and reports required
to be filed, has paid all taxes, interest payments and penalties
which have become due, has made (and will make) adequate
provision for the payment of all taxes accruable for all periods
ending on or before the date of this Agreement (and the Closing
Date) to any city, parish, state, foreign country, the United
States or any other taxing authority, and is not delinquent in
the payment of any tax or governmental charge of any nature.
Neither the federal nor the state income tax returns of Holding's
consolidated group have been audited, nor is any audit,
examination or investigation pending, or to the best knowledge of
Holding or Bank, threatened, by the IRS or the applicable state
authority or agency, and no member of Holding's consolidated
group has ever granted the IRS or a state authority or agency an
extension of the time period within which any of such income tax
returns may be audited. No material unpaid tax deficiencies or
additional liabilities of any sort have been proposed by any
governmental representative, and no agreements for extension of
time for the assessment of any tax have been entered into by or
on behalf of any member of Holding's consolidated group. Each
such member has withheld from its employees (and timely paid to
the appropriate governmental entity) proper and accurate amounts
for all periods in compliance with all tax withholding provisions
of applicable federal, state, foreign and local laws (including
without limitation income, social security and employment tax
withholding for all forms of compensation).
3.10 Title to Assets. (a) On the date of the Latest
Balance Sheet, each member of Holding's consolidated group had
and, except with respect to assets disposed of for adequate
consideration in the ordinary course of business since such date,
now has, good and merchantable title to all real property and
good and merchantable title to all other properties and assets
reflected on the Latest Balance Sheet, free and clear of all
mortgages, liens, pledges, restrictions, security interests,
charges and encumbrances of any nature except for (i) mortgages
and encumbrances which secure indebtedness which is properly
reflected in the Latest Balance Sheet; (ii) liens for taxes
accrued but not yet payable; (iii) liens arising as a matter of
law in the ordinary course of business with respect to
obligations incurred after the date of the Latest Balance Sheet,
provided that the obligations secured by such liens are not
delinquent or are being contested in good faith; (iv) such
imperfections of title and encumbrances, if any, as do not
materially detract from the value or materially interfere with
the present use of any of such properties or assets or the
potential sale of any of such owned properties or assets; and (v)
capital leases and leases, if any, to third parties for fair and
adequate consideration. Each member of Holding's consolidated
group owns, or has valid leasehold interests in, all material
properties and assets used in the conduct of its business. Any
real property and other material assets held under lease by any
such member are held under valid, subsisting and enforceable
leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such
property by such member.
(b) With respect to each lease of any real property or a
material amount of personal property to which any member of
Holding's consolidated group is a party, except for financing
leases in which a member of such consolidated group is lessor,
(i) such lease is in full force and effect in accordance with its
terms; (ii) all rents and other monetary amounts that have become
due and payable thereunder have been paid; (iii) there exists no
default, or event, occurrence, condition or act, which with the
giving of notice, the lapse of time or the happening of any
further event, occurrence, condition or act would become a
default under such lease; and (iv) neither the Holding Company
Merger nor the Bank Merger will constitute a default or a cause
for termination or modification of such lease.
(c) No member of Holding's consolidated group has any
legal obligation, absolute or contingent, to any other person to
sell or otherwise dispose of any substantial part of its assets;
or to sell or dispose of any of its assets except in the ordinary
course of business consistent with past practices.
3.11 Litigation, Pending Proceedings and Compliance with
Laws. (a) Except as described in the list referred to in
subparagraph (e) below, there are no claims of any kind or any
actions, suits, proceedings, arbitrations or investigations
pending or, to the best of Holding's and Bank's knowledge,
threatened, nor does any member of Holding's consolidated group
have knowledge of a basis for any claim, in any court or before
any governmental agency or instrumentality or arbitration panel
or otherwise, against any member of Holding's consolidated group.
(b) Each member of Holding's consolidated group has
complied with and is not in default in any material respect under
(and has not been charged or threatened with or come under
investigation with respect to any charge concerning any material
violation of any provision of) any federal, state or local law,
regulation, ordinance, rule or order (whether executive,
judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality.
(c) There are no material uncured violations, or
violations with respect to which material refunds or restitution
may be required, cited in any compliance report to any member of
Holding's consolidated group as a result of examination by any
bank or bank holding company regulatory authority.
(d) No member of Holding's consolidated group is subject
to any written agreement, memorandum or order with or by any bank
or bank holding company regulatory authority.
(e) The subsection of the Schedule of Exceptions that
corresponds to this subsection lists each claim, action, suit,
proceeding, arbitration, or investigation, pending or known to be
threatened, in which any material claim or demand is made or
threatened to be made against any member of Holding's
consolidated group.
3.12 Employee Benefit Plans. Holding and the Bank
currently maintain two qualified retirement plans (the "Plans")
known as Lakeside National Bank of Lake Charles Deferred Savings
Plan (the "Deferred Savings Plan") and Lakeside Bancshares, Inc.
Employee Stock Ownership Plan ("ESOP"). These plans are the only
"employee pension benefit plans," as such term is defined in
Section 3(2)(A) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), maintained by Holding or any member
of Holding's consolidated group. Those Plans, including the
related trusts, are qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and the
related trusts are exempt from taxation under Section 501(a) of
the Code. In making the above representation with regard to the
Deferred Savings Plan, Holding and the Bank are relying solely on
the determination letter received from IRS dated April 8, 1986
and their knowledge of the operation of the Deferred Savings
Plan. An amendment is currently being drafted for the Deferred
Savings Plan so that it can be resubmitted to IRS for a
determination letter that such Plan is qualified under current
legal requirements. In addition, an amendment to the ESOP is
currently being drafted for adoption so that it can be submitted
to IRS for such a determination letter. No determination letter
has been requested for the ESOP prior to this time. A
determination letter, on both the Deferred Savings Plan and the
ESOP will be requested on or before December 31, 1994, and
neither Holding nor Bank have knowledge of any factor that would
prevent such determination letters from being issued.
The Plans comply in all material respects with all
applicable requirements of ERISA, the Code and all other
applicable laws and are administered in all material respects in
accordance with the express provisions of the Plans' documents,
including the trust agreements. No member of Holding's
consolidated group has any knowledge of any fact that would
materially adversely affect the qualified status of the Plans.
True and complete copies of the Plans and related trust
agreements, all amendments thereto and any relevant
communications from the IRS or the Department of Labor related to
the Plans have been delivered to FCC. No member of Holding's
consolidated group currently maintains any Benefit Plans that are
subject to regulation by the Pension Benefit Guaranty Corporation
("PBGC").
In 1985, Holding and the Bank terminated a defined benefit
plan known as the Retirement Plan for Employees of Lakeside
National Bank of Lake Charles. A Notice of Sufficiency was
received from the PBGC as a part of such termination and all of
the assets from such terminated plan have been distributed. In
addition, another defined benefit plan was terminated by the Bank
with distribution of the benefits thereunder and a Post-
Distribution Certification for Standard Terminations dated July
7, 1992 was filed with the PBGC. A Notice of Sufficiency was
received from the PBGC with respect to this plan termination. No
other "employee pension benefit plan" has been maintained in the
past by any member of Holding's consolidated group.
With respect to the Plans, no termination, whether partial
or complete, has occurred, and there has been no complete
discontinuance of contributions. Except for the Plans as defined
above, there is no profit sharing, pension, stock purchase, stock
option, bonus, retirement or similar employee pension benefit
plan covering persons employed by any member of Holding's
consolidated group. All of the Plans of Holding's consolidated
group have been fully funded to the extent funding is required,
and all necessary accruals therefor have been made on the books
of account of such consolidated group, in the manner and to the
extent required by generally accepted accounting principles.
3.13 Insurance Policies. Each member of Holding's
consolidated group maintains in force insurance policies and
bonds in such amounts and against such liabilities and hazards as
are considered by it to be adequate. An accurate list of all
such insurance policies has been delivered to FCC. No member of
Holding's consolidated group is now liable, nor will any such
member become liable, for any material retroactive premium
adjustment. All policies are valid and enforceable and in full
force and effect, and no member of Holding's consolidated group
has received any notice of a material premium increase or
cancellation with respect to any of its insurance policies or
bonds. Within the last three years, no member of Holding's
consolidated group has been refused any insurance coverage sought
or applied for, and no such member has reason to believe that its
existing insurance coverage cannot be renewed as and when the
same shall expire, upon terms and conditions as favorable as
those presently in effect.
3.14 Agreements. No member of Holding's consolidated
group is a party to:
(a) any collective bargaining agreement;
(b) except as set forth on Schedule 3.14, any employment
or other agreement or contract with or commitment to any employee
except such agreements as are terminable without penalty upon not
more than five days notice by the employer;
(c) except, as entered into in the ordinary course of
business consistent with past practices with respect to
customers, any obligation of guaranty or indemnification, letters
of credit, guaranties of endorsements and guaranties of
signatures;
(d) any agreement, contract or commitment which is or if
performed may be materially adverse to the financial condition,
results of operations, business or prospects of any member of
Holding's consolidated group; or
(e) any agreement, contract or commitment containing any
covenant limiting the freedom of any member of Holding's
consolidated group to engage in any line of business permitted by
regulatory authorities or to compete with any person.
The subsection of the Schedule of Exceptions that
corresponds to this subsection contains a list of each material
agreement, contract or commitment (except those entered into in
the ordinary course of business with respect to loans, lines of
credit, letters of credit, depositor agreements, certificates of
deposit and similar banking activities) to which any member of
Holding's consolidated group is a party or which affects any such
member. No member of Holding's consolidated group has in any
material respect breached, nor is there any pending or to its
knowledge threatened claims that it has materially breached, any
of the terms or conditions of any of its agreements, contracts or
commitments.
3.15 Licenses, Franchises and Governmental Authorizations.
Each member of Holding's consolidated group possesses all
licenses, franchises, permits and other governmental
authorizations necessary for the continued conduct of its
business without interference or interruption. The deposits of
each such member are insured by the FDIC to the extent provided
by applicable law, and there are no pending or to the best of
Holding's and Bank's knowledge threatened proceedings to revoke
or modify that insurance or for relief under 12 U.S.C. Section
1818.
3.16 Corporate Documents. Holding has delivered to FCC,
with respect to each member of Holding's consolidated group, true
and correct copies of its articles of incorporation or articles
of association, and its by-laws, all as amended. All of the
foregoing and all of the corporate minutes and stock transfer
records of each member of Holding's consolidated group are
current, complete and correct in all material respects.
3.17 Certain Transactions. Except as disclosed by Holding
in any report filed with the Securities and Exchange Commission
(the "SEC") and delivered to FCC prior to the date of this
Agreement, no past or present director, executive officer or five
percent shareholder of any member of Holding's consolidated group
has, since January 1, 1991, engaged in any transaction or series
of transactions which, if such member had been subject to Section
14(a) of the Exchange Act at all times since that date, would be
required to be disclosed in its proxy materials pursuant to Item
404 of Regulation S-K of the Rules and Regulations of the SEC.
3.18 Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of any member of Holding's consolidated
group is entitled to any commission, broker's or finder's fee
from any of the parties hereto in connection with any of the
transactions contemplated by this Agreement, except for Chaffe &
Associates, Inc. and Southard Financial, Inc. who were retained
pursuant to written agreements previously delivered to FCC and
FNBLC.
3.19 Environmental Matters.
(a) (i) Holding and each member of Holding's
consolidated group has obtained all material permits, licenses
and other authorizations that are required to be obtained by it
under any applicable Environmental Law Requirements (as
hereinafter defined) in connection with the operation of its
businesses and ownership of its properties (collectively, the
"Subject Properties"), including without limitation properties
acquired by foreclosure or in settlement of loans;
(ii) Holding and each member of its consolidated
group is in compliance in all material respects with all terms
and conditions of such permits, licenses and authorizations and
with all applicable Environmental Law Requirements;
(iii) There are no past or present events,
conditions, circumstances, activities or plans by any member of
Holding's consolidated group related in any manner to Holding or
any member of its consolidated group or the Subject Properties
that did or would, in any material respect, violate or prevent
compliance or continued compliance with any of the Environmental
Law Requirements, or give rise to any Environmental Liability, as
hereinafter defined;
(iv) There is no civil, criminal or administrative
action, suit, demand, claim, order, judgment, hearing, notice or
demand letter, notice of violation, investigation or proceeding
pending or, to the knowledge of any executive officer of any
member of Holding's consolidated group, threatened by any person
against Holding or any member of its consolidated group, or any
prior owner of any of the Subject Properties and relating to the
Subject Properties, and relating in any way to any Environmental
Law Requirement or seeking to impose any Environmental Liability;
and
(v) No member of Holding's consolidated group is
subject to or responsible for any material Environmental
Liability that is not set forth and adequately reserved against
on the Latest Balance Sheet.
(b) "Environmental Law Requirement" means, for purposes
of this Agreement, all applicable present and future statutes,
regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises, and
similar items, of all governmental agencies, departments,
commissions, boards, bureaus, or instrumentalities of the United
States, states and political subdivisions thereof and all
applicable judicial, administrative, and regulatory decrees,
judgments and orders relating to the protection of human health
or the environment, including without limitation: (A) all
requirements, including but not limited to those (i) pertaining
to reporting, licensing, permitting, investigation, and
remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials (as such term is defined below),
chemical substances, pollutants, contaminants, or hazardous or
toxic substances, materials or wastes whether solid, liquid, or
gaseous in nature, into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
Hazardous Materials, chemical substances, pollutants,
contaminants, or hazardous or toxic substances, materials or
wastes, whether solid, liquid, or gaseous in nature; (B) all
requirements pertaining to protection of the health and safety of
employees or the public; and (C) all requirements pertaining to
the (i) drilling, production, and abandonment of oil and gas
wells, (ii) the transportation of produced oil and gas, and (iii)
the remediation of sights related to that drilling, production or
transportation.
(c) "Hazardous Materials" shall mean: (A) Any
"hazardous substance" as defined by either the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 USC Section 9601, et seq.) ("CERCLA") as amended from time to
time, or regulations promulgated thereunder; (B) asbestos; (C)
polychlorinated biphenyls; (D) any "regulated substance" as
defined by 40 C.F.R. Section 280.12, or La. Admin. Code 33:XI.103;
(E) any naturally occurring radioactive material ("NORM"), as
defined by La. Admin. Code 33:XV, Chapter 14, as amended from time
to time, irrespective of whether the NORM is located in Louisiana
or another jurisdiction; (F) any non-hazardous oilfield wastes
("NOW") defined under La. R.S. 30:1, et seq., and regulations
promulgated thereunder, irrespective of whether those wastes are
located in Louisiana or another jurisdiction; (G) any substance
the presence of which on the Subject Properties is prohibited by
any lawful rules and regulations of legally constituted
authorities from time to time in force and effect relating to the
Subject Properties; and (H) any other substance which by any such
rule or regulation requires special handling in its collection,
storage, treatment or disposal.
(d) "Environmental Liability" shall mean, for purposes of
this Agreement, (i) any liability or obligation (of any kind
whatsoever, whether absolute or contingent, accrued or unaccrued,
known or unknown) arising under any Environmental Law
Requirement, or (ii) any liability or obligation (of any kind
whatsoever, whether absolute or contingent, accrued or unaccrued,
known or unknown) under any other theory of law or equity
(including without limitation any liability for personal injury,
property damage or remediation) that results from, or is based
upon or related to, the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling, or the
emission, discharge, release or threatened release into the
environment, of any Hazardous Materials, pollutant, contaminant,
chemical, or industrial, toxic or hazardous substance or waste.
3.20 Community Reinvestment Act.Bank has complied in all
material respects with the provisions of the Community
Reinvestment Act ("CRA") and the rules and regulations
thereunder, has a CRA rating of not less than "satisfactory", and
has received no material criticism from regulators with respect
to discriminatory lending practices.
3.21 Severance Benefits. The Board of Directors of
Holding and Bank have adopted the severance benefit plan,
covering employees of Holding or Bank with the exception of four
officers of Bank who have employment contracts and Tom Flanagan,
heretofore agreed upon by the parties, and such plan, as adopted,
is the only plan pursuant to which employees of Holding or Bank
may be provided with severance benefits, other than the existing
employment contracts with such four officers.
3.22 Accuracy of Statements. No warranty or
representation made or to be made by any member of Holding's
consolidated group in this Agreement or in any document furnished
or to be furnished by any member of Holding's consolidated group
pursuant to this Agreement, and no information furnished by any
such member pursuant to this Agreement, contains or will contain,
as of the date of this Agreement, the effective date of the
Registration Statement (as defined in subsection 5.14 hereof) and
the Closing Date, an untrue statement of a material fact or an
omission of a material fact necessary to make the statements
contained herein and therein, in light of the circumstances in
which they are made, not misleading.
SECTION 4
Representations and Warranties
of FCC and FNBLC
FCC and FNBLC represent and warrant to Holding and Bank
that:
4.01 Organization and Qualification. FCC is a corporation
duly organized and validly existing under the laws of the State
of Louisiana and is a bank holding company within the meaning of
the Bank Holding Company Act. FNBLC is a national banking
association duly organized and validly existing under the laws of
the United States. Each of FCC and FNBLC has all requisite
corporate power and authority to own and lease its property and
to carry on its business as it is currently being conducted and
is qualified and in good standing as a foreign corporation in all
jurisdictions in which the failure to so qualify would have a
material adverse effect on its financial condition, results of
operations, business or prospects.
4.02 Capital Stock; Other Interests. The authorized
capital stock of FCC consisted at March 31, 1994 of 100,000,000
shares of common stock, $5.00 par value per share, of which at
such date 26,144,036 shares were issued and outstanding and no
shares were held in its treasury; and 5,000,000 shares of
preferred stock, no par value, of which at such date 2,399,170
shares were issued and outstanding and no shares were held in its
treasury. All issued and outstanding shares of capital stock of
FCC have been duly authorized and are validly issued, fully paid
and non-assessable. FCC owns all of the issued and outstanding
shares of capital stock of FNBLC.
4.03 Corporate Authorization; No Conflicts. Subject to
the approval of this Agreement and the Bank Merger Agreement by
FCC as sole shareholder of FNBLC, all corporate acts and other
proceedings required of FCC and FNBLC for the due and valid
authorization, execution, delivery and performance of this
Agreement and the Merger Agreements and consummation of the
Mergers have been validly and appropriately taken. Subject to
such shareholder approval and to such regulatory approvals as are
required by law, this Agreement and the Merger Agreements are
legal, valid and binding obligations of FCC and FNBLC, as the
case may be, and are enforceable against them in accordance with
the respective terms of such instruments, except that enforcement
may be limited by bankruptcy, reorganization, insolvency and
other similar laws and court decisions relating to or affecting
the enforcement of creditors' rights generally and by general
equitable principles. With respect to each of FCC and FNBLC,
neither the execution, delivery or performance of this Agreement
or the Merger Agreements, nor the consummation of the
transactions contemplated hereby or thereby will (i) violate,
conflict with, or result in a breach of any provision of, (ii)
constitute a default (or an event that, with notice or lapse of
time or both, would constitute a default) under, (iii) result in
the termination of or accelerate the performance required by, or
(iv) result in the creation of any lien, security interest,
charge or encumbrance upon any of its properties or assets under,
any of the terms, conditions or provisions of its articles of
incorporation or by-laws or any material note, bond, mortgage,
indenture, deed of trust, lease, license, agreement or other
instrument or obligation to or by which it or any of its assets
is bound; or violate any order, writ, injunction, decree,
statute, rule or regulation of any governmental body applicable
to it or any of its assets.
4.04 FCC Corporate Documents. FCC and FNBLC have
delivered to Holding true and correct copies of their articles of
incorporation or association, as amended, and by-laws, as
amended.
4.05 Reports of FCC. FCC has delivered to Holding true
and complete copies of (i) its Quarterly Reports to the SEC on
Form 10-Q for the quarters ended March 31, 1994 and March 31,
1993; (ii) its Annual Reports to the SEC on Form 10-K for the
years ended December 31, 1993 and 1992; (iii) its 1994 Proxy
Statement; (iv) any reports disseminated to its shareholders
since January 1, 1993; and (v) any other report made by it to the
SEC since December 31, 1992. None of the information furnished
or to be furnished by FCC or FNBLC pursuant to this Agreement
contains or will contain, when taken as a whole, an untrue
statement of a material fact or an omission of a material fact
necessary to make the statements made, in the light of the
circumstances in which they are made, not misleading.
4.06 Material Developments. Since March 31, 1994, there
has not been
(a) any material change in the business, financial
condition or results of operations of FCC, other than changes in
the ordinary course of business which have not had, and may
reasonably be expected not to have, a material adverse effect on
its financial condition, results of operations, business or
prospects;
(b) any event or circumstance that is likely to require a
future material increase or decrease as a result of charge-offs
in the allowance for loan losses reflected on FCC's balance sheet
as of March 31, 1994;
(c) any material claim of any kind or any material
actions, suits, proceedings, arbitrations or investigations
pending or threatened in any court or before any governmental
agency or instrumentality or arbitration panel or otherwise
against, by or affecting FCC or any member of its consolidated
group or the business, prospects, condition (financial or
otherwise) or assets of any such entity; or
(d) to FCC's knowledge, any past or present events,
conditions, circumstances, activities or plans related in any
manner to any member of FCC's consolidated group or any of FCC's
properties that, in any material respect, violate or prevent
compliance or continued compliance with any Environmental Law
Requirement or give rise to any Environmental Liability,
in each such case that (i) are of a type that would be required
to be disclosed by FCC in a registration statement or report
filed with the SEC in order that such registration statement or
report not contain a misstatement of material fact or omit to
state a material fact; (ii) have not been or shall not have been
publicly disclosed prior to the commencement of the 20 trading
day period over which the market value of a share of FCC Common
Stock will be calculated pursuant to Section 4.1 of the Holding
Company Merger Agreement; and (iii) which if publicly disclosed
would be reasonably likely to result in a material decrease in
such market value of FCC Common Stock.
4.07 Legality of FCC Securities. All shares of FCC Common
Stock (as such term is defined in the Holding Company Merger
Agreement) to be issued pursuant to the Holding Company Merger
have been duly authorized and, when issued pursuant to the
Holding Company Merger Agreement, will be validly issued, fully
paid and non-assessable.
4.08 Brokers' or Finders' Fees. No agent, broker,
investment banker, investment or financial advisor or other
person acting on behalf of FCC or FNBLC is entitled to any
commission, broker's or finder's fee from any of the parties
hereto in connection with any of the transactions contemplated by
this Agreement.
SECTION 5
Covenants and Conduct of Parties
Prior to the Effective Date
The parties covenant and agree as follows:
5.01 Investigations; Planning. Each member of Holding's
consolidated group shall continue to provide to FCC and FNBLC and
to their authorized representatives full access during all
reasonable times to its premises, properties, books and records
(including, without limitation, all corporate minutes and stock
transfer records, provided that all references to the pricing of
the transactions contemplated hereby and to the analysis of
Chaffe & Associates, Inc. of the bids received by Holding shall
be removed from all minutes of the special committee of the Board
of Directors before delivery to FCC and FNBLC), and to furnish
FCC and FNBLC and such representatives with such financial and
operating data and other information of any kind respecting its
business and properties as FCC and FNBLC shall from time to time
reasonably request, except as restricted by applicable law. Any
investigation shall be conducted in a manner which does not
unreasonably interfere with the operation of the business of
Holding's consolidated group. Each member of Holding's
consolidated group agrees to cooperate with FCC and FNBLC in
connection with planning for the efficient and orderly
combination of the parties and the operation of FCC and FNBLC
after consummation of the Mergers, including the transfer
subsequent to shareholder approval of the transactions
contemplated hereby, and subject to Section 5.13, of employees to
open positions at FNBLC. In the event of termination of this
Agreement prior to the Effective Date, FCC and FNBLC shall
return, without retaining copies thereof, all confidential or
non-public documents, work papers and other materials obtained
from Holding's consolidated group in connection with the
transactions contemplated hereby and, until February 18, 1996,
shall keep such information confidential, not disclose such
information to any other person or entity except as may be
required by law, and not use such information in connection with
its business, and shall use its best efforts to cause all of its
employees, agents and representatives to keep such information
confidential and not to disclose such information or use it in
connection with its business, in each case unless and until such
information shall come into the public domain through no fault of
FCC or FNBLC.
5.02 Cooperation and Best Efforts. Each of the parties
will cooperate with the other parties and use its best efforts to
(a) procure all necessary consents and approvals, (b) complete
all necessary filings, registrations and certificates, (c)
satisfy all requirements prescribed by law for, and all
conditions set forth in this Agreement to, the consummation of
the Mergers and the transactions contemplated hereby and by the
Merger Agreements, and (d) effect the transactions contemplated
by this Agreement and the Merger Agreements at the earliest
practicable date; provided, however, that if FCC is required as a
condition to any regulatory approval of the Mergers to divest up
to $36 million of deposits, FCC will use its best efforts to
comply with such condition by divesting deposits of Bank or
FNBLC, provided that it will not be required to pay any premium
to effect such divestiture; otherwise, FCC shall not be required
to divest any deposits or satisfy any condition to regulatory
approval other than usual and customary conditions required in
such transactions generally.
5.03 Information for, and Preparation of, Proxy Statement.
Each of the parties will cooperate in the preparation of the
Registration Statement referred to in subsection 5.14 and a proxy
statement of Holding (the "Proxy Statement") which complies with
the requirements of the Securities Act, the rules and regulations
promulgated thereunder and other applicable federal and state
laws, for the purpose of submitting this Agreement, the Holding
Company Merger Agreement and the transactions contemplated hereby
and thereby to Holding's shareholders for approval. Each of the
parties will as promptly as practicable after the date hereof
furnish all such data and information relating to it and its
subsidiaries as any of the other parties may reasonably request
for the purpose of including such data and information in the
Proxy Statement and the Registration Statement.
5.04 Approval of Bank Merger Agreement. FCC, as the sole
shareholder of FNBLC, and Holding, as the sole shareholder of
Bank, shall take all action necessary to effect shareholder
approval of the Bank Merger Agreement.
5.05 Press Releases. FCC and Holding will cooperate with
each other in the preparation of any press releases announcing
the execution of this Agreement or the consummation of the
transactions contemplated hereby. Without the prior written
consent of the chief executive officer of the other party, no
member of Holding's or FCC's consolidated group will issue any
press release or other written statement for general circulation
relating to the transactions contemplated hereby, except as may
otherwise be required by law and, if practical, prior notice of
such release is provided to the other parties.
5.06 Preservation of Business. Each member of Holding's
consolidated group will use its best efforts to preserve the
possession and control of all of its assets other than those
consumed or disposed of for value in the ordinary course of
business, to preserve the goodwill of customers and others having
business relations with it and to do nothing knowingly to impair
its ability to keep and preserve its business as it exists on the
date of this Agreement.
5.07 Conduct of Business in the Ordinary Course. Each
member of Holding's consolidated group shall conduct its business
only in the ordinary course consistent with past practices and,
except as otherwise provided herein, it shall not, without the
prior written consent of the chief executive officer of FCC or
his duly authorized designee:
(a) declare, set aside, increase or pay any dividend,
other than Holding's regular semi-annual dividends, which shall
not be more than $0.55 per share, paid at the times consistent
with past practices, or declare or make any distribution on, or
directly or indirectly combine, redeem, reclassify, purchase, or
otherwise acquire, any shares of its capital stock or authorize
the creation or issuance of or issue any additional shares of its
capital stock or any securities or obligations convertible into
or exchangeable for its capital stock, provided that this
subparagraph shall not apply to prevent dividends or
distributions from any member of Holding's consolidated group to
any other member of such consolidated group;
(b) amend its articles of incorporation or association or
by-laws or adopt or amend any resolution or agreement concerning
indemnification of its directors or officers;
(c) enter into or modify any agreement so as to require
the payment, conditionally or otherwise, of any salary, bonus,
extra compensation, pension or severance payment to any of its
present or former directors, officers or employees or increase
the compensation (including salaries, fees, bonuses, profit
sharing, incentive, pension, retirement or other similar benefits
and payment) of any such person; provided that, notwithstanding
the foregoing, Holding may pay employee bonuses on the Effective
Date to persons who are employees of Holding or Bank immediately
prior to the Effective Date, in a manner consistent with past
practices in accordance with its bonus plan, which has been
provided to FCC, and in amounts consistent with the amounts paid
in 1993 and make payments pursuant to the severance plan provided
in Section 3.21;
(d) except in the ordinary course of business consistent
with past practices, place or suffer to exist on any of its
assets or properties any mortgage, pledge, lien, charge or other
encumbrance, except those of the character described in
subsection 3.10 hereof, or cancel any material indebtedness owing
to it or any claims which it may have possessed, or waive any
right of substantial value or discharge or satisfy any material
noncurrent liability other than debts, claims, rights or
liabilities not exceeding in the aggregate $25,000;
(e) merge or consolidate with another entity, or sell or
otherwise dispose of a substantial part of its assets or, except
in the ordinary course of business consistent with past
practices, sell any of its assets;
(f) commit or omit to do any act which act or omission
would cause a breach of any covenant of Holding or Bank contained
in this Agreement or would cause any representation or warranty
of Holding or Bank contained in this Agreement to become untrue,
as if each such representation and warranty were continuously
made from and after the date hereof;
(g) violate in any material respect any law, statute,
rule, governmental regulation or order;
(h) fail to maintain its books, accounts and records in
the usual manner on a basis consistent with that heretofore
employed;
(i) fail to pay, or to make adequate provision for the
payment of, all taxes, interest payments and penalties due and
payable (and/or accruable for all periods up to the Effective
Date, including that portion of its fiscal year to and including
the Effective Date) to any city, parish, state, foreign country,
the United States or any other taxing authority, except those
being contested in good faith by appropriate proceedings and for
which sufficient reserves have been established;
(j) dispose of investment securities having an aggregate
market value greater than 2% of the aggregate book value of its
investment securities portfolio on the date of the Latest Balance
Sheet or make investments in non-investment grade securities or
which are inconsistent with past investment practices;
(k) enter into any new line of business;
(l) (i) charge off (except as may otherwise be required
by law or by regulatory authorities or by generally accepted
accounting principles consistently applied) or sell (except for a
price not less than the book value thereof) any of its portfolio
of loans, discounts or financing leases; (ii) except as set forth
on Schedule 5.07, sell any asset held as other real estate or
other foreclosed assets for an amount less than 100% of its book
value at the date of the Latest Balance Sheet; or (iii) except as
set forth on such Schedule, sell any asset held as other real
estate or other foreclosed assets that had a book value at the
date of the Latest Balance Sheet in excess of $25,000; or
(m) make any extension of credit which, when added to all
other extensions of credit to the borrower and its affiliates,
would exceed $500,000 or, unless reasonable prior notice is
provided the chief executive officer of FCC or his authorized
designee commit or otherwise become obligated to make any such
extension of credit in excess of $250,000.
5.08 Additional Information from Holding. Holding will
provide FCC and FNBLC (a) with prompt written notice of any
material adverse change in the financial condition, results of
operations, business or prospects of any member of its
consolidated group, (b) as soon as they become available, copies
of any financial statements, reports and other documents of the
type referred to in subsections 3.04 and 3.07 with respect to
each member of its consolidated group, and (c) promptly upon its
dissemination, any report disseminated to shareholders of
Holding.
5.09 Holding Shareholder Approval. Holding's Board of
Directors shall submit this Agreement and the Holding Company
Merger Agreement to its shareholders for approval in accordance
with the BCL, together with its recommendation that such approval
be given, at a special meeting of shareholders duly called and
convened for that purpose as soon as practicable.
5.10 Restricted FCC Common Stock. Holding will use its
best efforts to obtain by the Closing Date an agreement from each
person who beneficially owns, within the meaning of Rule 13d-3
under the Exchange Act, 10% or more of the capital stock of
Holding or is a director or executive officer who will receive
shares of FCC Common Stock by virtue of the Holding Company
Merger to the effect that such person will not dispose of any FCC
Common Stock received pursuant to the Holding Company Merger in
violation of the Securities Act or the rules and regulations of
the SEC thereunder.
5.11 Loan Policy. No member of Holding's consolidated
group will make any loans, or enter into any commitments to make
loans, which vary other than in immaterial respects from its
written loan policies, a true and correct copy of which loan
policies have been provided to FCC, provided that this covenant
shall not prohibit Bank from extending or renewing credit or
loans in connection with the workout or renegotiation of loans
currently in its loan portfolio.
5.12 No Solicitations. Prior to the Effective Time or
until the termination of this Agreement, no member of Holding's
consolidated group shall, without the prior approval of FCC,
directly or indirectly, solicit, initiate or encourage inquiries
or proposals with respect to, or, except to the extent required
in the opinion of its counsel to discharge properly its fiduciary
duties to Holding's consolidated group and its shareholders,
furnish any information relating to, or participate in any
negotiations or discussions concerning, any transaction of the
type that is referred to in clauses (B) (i), (ii) and (iii) of
subparagraph (e) of subsection 7.01 of this Agreement (and in no
event will any such information be supplied except pursuant to a
confidentiality agreement that is no more favorable to the person
receiving such information than the confidentiality agreement
between Holding and FCC); and each such member shall instruct its
officers, directors, agents and affiliates to refrain from doing
any of the above, and will notify FCC immediately if any such
inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are
sought to be initiated with it or any of its officers, directors,
agents and affiliates; provided, however, that nothing contained
herein shall be deemed to prohibit any officer or director of
Holding or Bank from taking any action that in the written
opinion of counsel of Holding or Bank is required by law or is
required to discharge his fiduciary duties to Holding's
consolidated group and its shareholders.
5.13 Operating Functions. Each member of Holding's
consolidated group agrees to cooperate in the consolidation of
appropriate operating functions with FCC and FNBLC to be
effective on the Effective Date, provided that the foregoing
shall not be deemed to require any action that, in the opinion of
such member's Board of Directors, would adversely affect its
operations if the Mergers were not consummated.
5.14 FCC Registration Statement. FCC will prepare and
file on Form S-4 a registration statement (the "Registration
Statement") under the Securities Act (which will include the
Proxy Statement) complying with all the requirements of the
Securities Act applicable thereto, for the purpose, among other
things, of registering the FCC Common Stock which will be issued
to the holders of Holding Common Stock pursuant to the Holding
Company Merger. FCC shall use its best efforts to cause the
Registration Statement to become effective as soon as
practicable, to qualify the FCC Common Stock under the securities
or blue sky laws of such jurisdictions as may be required and to
keep the Registration Statement and such qualifications current
and in effect for so long as is necessary to consummate the
transactions contemplated hereby. As a result of the
registration of the FCC Common Stock pursuant to the Registration
Statement, such stock shall be freely tradeable by the
shareholders of Holding except to the extent that the transfer of
any shares of FCC Common Stock received by shareholders of
Holding is subject to the provisions of Rule 145 under the
Securities Act or restricted under applicable tax or pooling-of-
interests rules.
5.15 Application to Regulatory Authorities. FCC shall
prepare (and Holding's consolidated group will cooperate in the
preparation of), as promptly as practicable, all regulatory
applications and filings which are required to be made with
respect to the Mergers.
5.16 Revenue Ruling. FCC may elect to prepare (and in
that event Holding shall cooperate in the preparation of) a
request for a ruling from the Internal Revenue Service with
respect to certain tax matters in connection with the
transactions contemplated by this Agreement and the Merger
Agreements.
5.17 Benefits Provided to Employees of Holding's
Consolidated Group. In addition to any benefits to be provided
in accordance with the severance benefit plan described in
subsection 3.21 hereof, from and after the Effective Date, FCC or
FNBLC shall offer to all persons who were employees of Holding or
Bank (as reflected in the payroll records of Holding and Bank)
immediately prior to the Effective Date and who become employees
(other than temporary employees) of FNBLC immediately following
the Effective Date, the same employee benefits (including
benefits under FCC's retirement, 401(k), flexible benefit,
vacation, severance and sick leave plans or policies) as are
offered by FCC or FNBLC to employees of FNBLC, except that there
shall be no waiting period for coverage under the First Commerce
Corporation Flexible Benefit Plan or any of its constituent plans
(including the First Commerce Corporation Medical and Dental Care
Plan) and no employee who is in an active employee on the
Effective Date shall be denied benefits under such plans for a
pre-existing condition. Full credit shall be given for prior
service by such employees with Holding or Bank for eligibility
vesting purposes under all of FCC's benefit plans and policies,
except that credit for prior service shall not be given for
eligibility, vesting or benefit accrual purposes under FCC's
Retirement Plan. All benefits accrued through the Effective Date
under benefit plans of Holding or Bank shall be paid by FCC or
FNBLC to the extent such benefits are not otherwise provided to
such employees through the benefit plans of FCC or FNBLC. Except
as provided in subsection 5.18, neither FCC nor FNBLC shall be
obligated to continue any employee benefit or ERISA Plan
maintained by Holding or Bank including, but not limited to,
those set forth on Section 3.12 of the Schedule of Exceptions,
nor shall they be obligated for any severance pay to employees of
Holding or Bank, regardless of whether they become employees of
FNBLC after the Mergers except as provided in the Holding and
Bank severance plan adopted concurrently with the execution of
this Agreement and referenced in subsection 3.21 hereof.
5.18 ESOP and 401(k) Plans. Holding shall amend its ESOP
and 401(k) Plans to provide that all participants in such plans
who are still employed by Holding or Bank on the date of this
Agreement shall be fully vested in their accounts in such plans
as of the effective date of the Mergers. FCC shall take all
reasonable actions necessary after the Effective Date of the
Mergers to maintain the qualification and tax-exempt status of
Holding's ESOP and 401(k) Plans and to meet all other
requirements of applicable law and regulations and the provisions
of such plans, but shall make no additional contributions under
either plan, until such plans are combined with plans of FCC;
provided that if either of Holding's plans has not received a
favorable determination letter from the Internal Revenue Service,
FCC may at its option terminate such plan in lieu of combining it
with an FCC plan.
5.19 Schedule Regarding Deductible Amount. Holding will
provide to FCC, at least five days prior to the Closing Date, a
schedule showing in reasonable detail each component of the
Deductible Amount, as defined by the Holding Company Merger
Agreement.
5.20 Publication of Post-Merger Financial Statements. FCC
shall file in a timely manner all Form 10-Qs and Form 10-Ks
required to be filed by it with the SEC and will issue press
releases concerning earnings in accordance with its established
practice, until such time as FCC has reported combined earnings
for a period of at least 30 days.
5.21 Bond for Lost Certificates. Upon receipt of notice
from any of its shareholders that a certificate representing
Holding Common Stock has been lost or destroyed and prior to
issuing a new certificate, Holding shall require such shareholder
to post a bond in such amount as is sufficient to support the
shareholder's agreement to indemnify Holding against any claim
made by the owner of such certificate, unless FCC agrees to the
waiver of such bond requirement.
SECTION 6
Conditions of Closing
6.01 Conditions of All Parties. The obligations of each
of the parties hereto to consummate the Mergers are subject to
the satisfaction of the following conditions at or prior to the
Closing:
(a) Shareholder Approval. This Agreement and the Holding
Company Merger Agreement shall have been duly approved by the
shareholders of Holding and, if required by the BCL, by the
shareholders of FCC, and this Agreement and the Bank Merger
Agreement shall have been duly approved by the shareholders of
Bank and FNBLC.
(b) Effective Registration Statement. The Registration
Statement shall have become effective prior to the mailing of the
Proxy Statement, no stop order suspending the effectiveness of
the Registration Statement shall have been issued, and no
proceedings for that purpose shall have been instituted or, to
the knowledge of any party, shall be contemplated, and FCC shall
have received all state securities laws permits and
authorizations necessary to consummate the transactions
contemplated hereby.
(c) No Restraining Action. No action or proceeding shall
have been threatened or instituted before a court or other
governmental body to restrain or prohibit the transactions
contemplated by the Merger Agreements or this Agreement or to
obtain damages or other relief in connection with the execution
of such agreements or the consummation of the transactions
contemplated hereby or thereby; and no governmental agency shall
have given notice to any party hereto to the effect that
consummation of the transactions contemplated by the Merger
Agreements or this Agreement would constitute a violation of any
law or that it intends to commence proceedings to restrain
consummation of either of the Mergers.
(d) Statutory Requirements and Regulatory Approval. All
statutory requirements for the valid consummation of the
transactions contemplated by the Merger Agreements and this
Agreement shall have been fulfilled; all appropriate orders,
consents and approvals from all regulatory agencies and other
governmental authorities whose order, consent or approval is
required by law for the consummation of the transactions
contemplated by this Agreement and the Merger Agreements shall
have been received; and the terms of all requisite orders,
consents and approvals shall then permit the effectuation of the
Mergers without imposing any material conditions with respect
thereto except for any such conditions that are acceptable to FCC
and FNBLC and such conditions as are set forth in Section 5.02 of
this Agreement.
(e) Tax Opinion. FCC and Holding shall have received the
opinion of Arthur Andersen & Co., substantially in the Form of
Exhibit C annexed hereto, as to certain tax aspects of the
Mergers, including an opinion that the receipt of FCC Common
Stock by Holding's shareholders will not be a taxable event to
such shareholders.
6.02 Additional Conditions of FCC and FNBLC. The
obligations of FCC and FNBLC to consummate the Mergers are also
subject to the satisfaction of the following additional
conditions at or prior to the Closing:
(a) Representations, Warranties and Covenants. Each of
the representations and warranties of Holding and Bank contained
in this Agreement shall be true and correct in all material
respects on the Closing Date, with the same effect as though made
at such date, except to the extent of changes permitted by the
terms of this Agreement, and each of Holding and Bank shall have
in all material respects performed all obligations and complied
with all covenants required by this Agreement and the Merger
Agreements to be performed or complied with by it at or prior to
the Closing. In addition, each of Holding and Bank shall have
delivered to FCC and FNBLC its certificate dated as of the
Closing Date and signed by its chief executive officer and chief
financial officer or other official acceptable to FCC to the
effect that, except as specified in such certificate, such
persons do not know, and have no reasonable grounds to know, of
any material failure or breach of any representation, warranty or
covenant made by it in this Agreement.
(b) No Material Adverse Change. There shall not have
occurred any material adverse change from the date of the Latest
Balance Sheet to the Closing Date in the financial condition,
results of operations, business or prospects of Holding's
consolidated group. Without limiting the occurrences that would
constitute such a material adverse change with respect to
Holding's consolidated group, each of the following shall be
deemed to constitute such a change with respect to such group for
all purposes of this Agreement: (a) any change or changes which,
in the aggregate, have resulted or are likely to result in a
reduction of either net earnings or earnings before securities
transactions and provision for loan losses of $250,000 or more
from the amount or amounts contained in Holding's budget for its
fiscal year ending December 31, 1994, a copy of which has been
provided to FCC (excluding all expenses incurred in connection
with this Agreement and the Merger Agreements and the
transactions contemplated hereby and thereby and the Deductible
Amount); and (b) any net decrease in the core deposits (meaning
all deposits other than time deposits that exceed $100,000 each)
of Holding's consolidated group, if such net decrease exceeds by
more than $10,000,000 the amount of such core deposits at the
date of the Latest Balance Sheet. Notwithstanding the above, any
adverse change occurring (i) as a result of a loan that was
approved by FCC in accordance with subsection 5.07(m) hereof,
after having received from Bank full disclosure of all material
facts concerning such loan, or (ii) resulting from the transfer
of employees of Holding or Bank to positions at FNBLC will not be
considered a material adverse change for purposes of this
subsection 6.02(b).
(c) Accountants' Letters. FCC and FNBLC shall have
received letters from Gragson, Casiday & Guillory, independent
public accountants for Holding, dated, respectively, the date of
the Proxy Statement and immediately prior to the Closing Date, in
form and substance satisfactory to FCC and FNBLC, to the effect
set forth in Exhibit D to this Agreement.
(d) Tax Consequences of Mergers. FCC and FNBLC shall
have received satisfactory assurances from their independent
accountants that the consummation of the Mergers will not be a
taxable event to FCC.
(e) Opinion of Counsel. FCC and FNBLC shall have
received from Stockwell, Sievert, Viccellio, Clements & Shaddock
L.L.P., counsel for Holding's consolidated group, an opinion
dated as of the Closing Date, in form and substance satisfactory
to FCC and FNBLC, to the effect set forth in Exhibit E to this
Agreement.
(f) Joinder of Shareholders; Confirmation. A Joinder of
Shareholders in the form of Exhibit F-1 annexed hereto shall have
been executed by each person who serves as an executive officer
or director of Holding or Bank or who owns 5% or more of the
Holding Common Stock outstanding, including without limitation
Mary Ellen Chavanne, Hazel Prince Chavanne, Claire G. Turner,
Harry J. Chavanne, Jeannie C. McGann and David P. Chavanne, who
shall each have executed such Joinder as of the date of this
Agreement; provided that the four officers with employment
contracts shall execute the Joinder set forth in Exhibit F-2 and
Tom Flanagan shall have executed the Non-competition Agreement
described in subsection 6.02(j) hereof in lieu of executing a
Joinder; and FCC and FNBLC shall have received from each person
who executes a Joinder of Shareholders a written confirmation
dated not earlier than 5 days prior to the Closing Date to the
effect that each representation made by such person in the
Joinder of Shareholders is true and correct as of the date of
such confirmation and that such person has complied with all of
his or her covenants therein through the date of such
confirmation.
(g) Pooling-of-Interests. Neither FCC's independent
accountants nor the SEC shall have taken the position that the
transactions contemplated by this Agreement and the Merger
Agreements do not qualify for pooling-of-interests accounting
treatment under generally accepted accounting principles.
(h) Resolution of Disputes and Litigation. All existing
disputes and litigation between the shareholders of Holding and
Holding or its management and between Holding and all regulatory
authorities, including all federal and state court shareholder
litigation, shall have been finally resolved.
(i) Schedule Regarding Deductible Amount. FCC and FNBLC
shall have received from Holding a schedule showing each
component of the Deductible Amount, as required by subsection
5.19, at least five days prior to the Closing Date.
(j) Non-competition Agreement. That non-competition
agreement executed by Tom Flanagan, FCC and FNBLC
contemporaneously with the execution of this Agreement shall be
in full force and effect and, in FCC's reasonable judgment, shall
be enforceable in accordance with its terms.
(k) Additional Non-competition Agreements. The four
officers of Bank with employment contracts shall have, by the
earlier of five days from the date of the shareholders meeting of
Holding held to obtain approval of this Agreement or September 4,
1994, either (i) executed non-competition agreements with FCC and
FNBLC in form and substance satisfactory to FCC providing that
such persons will not compete with FCC or FNBLC for a period of
at least six months after the Effective Date or (ii) left the
employment of Holding and Bank in all capacities other than as
directors of Holding; provided that if the shareholders meeting
of Holding is not held on or before August 29, 1994, FCC may in
its sole discretion extend such September 4th date by action of
its Chief Executive Officer or his designee.
6.03 Additional Conditions of Holding and Bank. The
obligations of Holding and Bank to consummate the Mergers are
also subject to the satisfaction of the following additional
conditions at a prior to the Closing:
(a) Representations, Warranties and Covenants. Each of
the representations and warranties of FCC and FNBLC contained in
this Agreement shall be true and correct on the Closing Date,
with the same effect as though made at such date, except to the
extent of changes permitted by the terms of this Agreement, and
each of FCC and FNBLC shall have performed all obligations and
complied with all covenants required by this Agreement and the
Merger Agreements to be performed or complied with by it at or
prior to the Closing. In addition, each of FCC and FNBLC shall
have delivered to Holding and Bank its certificate dated as of
the Closing Date and signed by its chief executive officer and
chief financial officer to the effect that, except as specified
in such certificate, such persons do not know, and have no
reasonable grounds to know, of any material failure or breach of
any representation, warranty or covenant made by it in this
Agreement.
(b) Opinion of Counsel. Holding shall have received from
Correro, Fishman & Casteix, counsel for FCC and FNBLC, an
opinion, dated as of the Closing Date, in form and substance
satisfactory to Holding and Bank, to the effect set forth in
Exhibit G annexed to this Agreement.
(c) Opinion of Investment Bankers. Holding shall have
received an opinion, dated within ten days prior to the mailing
of the Proxy Statement to shareholders of Holding, from Southard
Financial, Inc., in form and substance satisfactory to Holding,
to the effect that the terms of the transactions as contemplated
by this Agreement and the Merger Agreements are fair to Holding
and its shareholders from a financial point of view.
(d) Material Adverse Change. There shall not have
occurred any material adverse change from March 31, 1994 to the
Effective Date in the financial condition, results of operations,
business or prospects of FCC's consolidated group taken as a
whole.
6.04 Waiver of Conditions. Any condition to a party's
obligations hereunder may be waived by that party, other than the
conditions specified in subparagraphs (a), (b) and (d) of
subsection 6.01. The failure to waive any condition hereunder
shall not be deemed a breach of subsection 5.02 hereof.
SECTION 7
Termination
7.01 Termination. This Agreement may be terminated at any
time before the time at which the Bank Merger becomes effective:
(a) Mutual Consent. By the mutual consent of the Boards
of Directors of FCC and Holding.
(b) Material Breach. By the Board of Directors of either
FCC or Holding in the event of a material breach by any member of
the consolidated group of the other of them of any representation
or warranty contained in this Agreement or of any covenant
contained in this Agreement, which in either case cannot be cured
within 10 days after written notice of such breach is given to
the entity committing such breach, provided that the right to
effect such cure shall not extend beyond the date set forth in
subparagraph (c) below. The Board of Directors of FNBLC and Bank
shall be entitled to terminate this Agreement for any reason that
would permit the Board of Directors of FCC or Holding,
respectively, to terminate it.
(c) Abandonment. By the Board of Directors of either FCC
or Holding if (i) all conditions to Closing required by Section 6
have not been met or waived by February 28, 1995, or (ii) any
such condition cannot be met by such date and has not been waived
by each party in whose favor such condition runs or (iii) the
Bank Merger has not occurred by such date.
(d) Dissenting Shareholders. By the Board of Directors
of FCC or FNBLC, if the number of shares of Holding Common Stock
as to which the holders thereof are, at the time of the Closing,
legally entitled to assert dissenting shareholder's rights plus
the number of such shares as to which the holders thereof are
entitled to receive cash payments in lieu of fractional shares,
exceeds, in the aggregate, 9.9% of the total number of shares of
Holding Common Stock issued and outstanding on the Closing Date.
(e) Holding Recommendation. By the Board of Directors of
either FCC or FNBLC if the Board of Directors of Holding (A)
shall withdraw, modify or change its recommendation to its
shareholders of this Agreement or the Mergers or shall have
resolved to do any of the foregoing; (B) shall have recommended
to the shareholders of Holding (i) any merger, consolidation,
share exchange, business combination or other similar transaction
(other than the transactions contemplated by this Agreement),
(ii) any sale, lease, transfer or other disposition of all or
substantially all of the assets of any member of Holding's
consolidated group, or (iii) any acquisition, by any person or
group, of the beneficial ownership of 15% or more of any class of
Holding capital stock; or (C) shall have made any announcement of
a proposal, plan or intention to do any of the foregoing or
agreement to engage in any of the foregoing.
7.02 Effect of Termination; Survival. Upon termination of
this Agreement pursuant to this Section 7, the Merger Agreements
shall also terminate, and this Agreement and the Merger
Agreements shall be void and of no effect, and there shall be no
liability by reason of this Agreement or the Merger Agreements,
or the termination thereof, on the part of any party or their
respective directors, officers, employees, agents or shareholders
except for any liability of a party hereto arising out of a
breach of any representation, warranty or covenant in this
Agreement prior to the date of termination or any covenant that
survives pursuant to the following sentence. The following
provisions shall survive any termination of this Agreement: the
last sentence of subsection 5.01; subsection 7.02; and Section 9.
SECTION 8
Indemnification of Directors and Officers of Holding and
Bank
8.01 From and after the Effective Time of the Mergers, FCC
and FNBLC agree to indemnify and hold harmless each person who is
an officer or director of Holding or Bank on the date of this
Agreement or has served as a director at any time since January
1, 1990 (an "Indemnified Person") from and against all damages,
liabilities, judgments and claims (and related expenses,
including, but not limited to, attorneys' fees and amounts paid
in settlement) based upon or arising from his capacity as an
officer or director of Holding or Bank, to the same extent as he
would have been indemnified under the articles of association (or
articles of incorporation) or bylaws of Holding or Bank, as
appropriate, as such articles of association (or articles of
incorporation) or bylaws were in effect on the date of execution
of this Agreement.
8.02 The rights granted to the Indemnified Persons hereby
will be contractual rights inuring to the benefit of all
Indemnified Persons and shall survive this Agreement and any
merger, consolidation or reorganization of FCC or FNBLC.
8.03 The rights to indemnification granted by this Section
8 are subject to the following limitations: (a) the total
aggregate indemnification to be provided by FCC or FNBLC pursuant
to Section 8.01 hereof will not exceed, as to all of the
Indemnified Persons described herein as a group, the sum of $5
million, and FCC and FNBLC will have no responsibility to any
Indemnified Person for the manner in which such sum is allocated
among that group (but the Indemnified Persons may seek
reallocation among themselves); (b) a director of officer who
would otherwise be an Indemnified Person under this Section 8
shall not be entitled to the benefits hereof unless such director
or officer has executed a Joinder of Shareholders (the "Joinder
of Shareholders") substantially in the form annexed to this
Agreement; (c) amounts otherwise required to be paid by FCC to an
Indemnified Person pursuant to this Section 8 will be reduced by
any amounts that such Indemnified Person recovers by virtue of
the claim for which indemnification is sought; (d) no Indemnified
Person shall be entitled to indemnification for any claim made
prior to the Closing Date of which such Indemnified Person,
Holding or Bank was aware but did not disclose to FCC and FNBLC
prior to the Closing Date and (e) any claim for indemnification
pursuant to this Section 8 must be submitted in writing to the
Chief Executive Officer of FCC promptly upon such Indemnified
Person becoming aware of such claim.
8.04 FCC and FNBLC agree that the indemnification limit
set forth in Section 8.03(a) will not apply to any damages,
liabilities, judgments and claims (and related expenses,
including, but not limited to, attorney's fees and amounts paid
in settlement) insofar as they arise out of or are based upon any
misstatement by FCC or FNBLC of a material fact in the
Registration Statement or are based upon an omission by FCC or
FNBLC of a material fact required to be stated therein, or
necessary in order to make a statement therein not misleading.
SECTION 9
Miscellaneous
9.01 Notices. Any notice, communication, request, reply,
advice or disclosure (hereinafter severally and collectively
called "notice") required or permitted to be given or made by any
party to another in connection with this Agreement or the Merger
Agreements or the transactions herein or therein contemplated
must be in writing and may be given or served by depositing the
same in the United States mail, postage prepaid and registered or
certified with return receipt requested, or by delivering the
same to the address of the person or entity to be notified, or by
sending the same by a national commercial courier service (such
as Federal Express, Emery Air Freight, Network Courier, Purolator
or the like) for next-day delivery provided such delivery is
confirmed in writing by such courier. Notice deposited in the
mail in the manner hereinabove described shall be effective 48
hours after such deposit, and notice delivered in person or by
commercial courier shall be effective at the time of delivery. A
party delivering notice shall endeavor to obtain a receipt
therefor. For purposes of notice, the addresses of the parties
shall, until changed as hereinafter provided, be as follows:
If to FCC:
First Commerce Corporation
210 Baronne Street
New Orleans, Louisiana 70112
Attention: Mr. Ian Arnof
With copies to:
First Commerce Corporation
210 Baronne Street
New Orleans, Louisiana 70112
Attention: Mr. David B. Kelso
and
Anthony J. Correro, III
Correro, Fishman & Casteix
201 St. Charles Avenue, 47th Floor
New Orleans, Louisiana 70170
If to FNBLC:
First National Bank of Lake Charles
3401 Ryan Street
Lake Charles, Louisiana 70605
Attention: Robert Ryder
With copies as aforesaid
If to Holding or Bank:
Lakeside Bancshares, Inc.
One Lakeside Plaza
Box 1268
Lake Charles, Louisiana 70602
With copy to:
Jeffrey C. Gerrish
Gerrish & McCreary, P.C.
700 Colonial Road, Suite 200
Memphis, Tennessee 38117
and
William B. Monk
Stockwell, Sievert, Vicellio
One Lakeside Plaza
Lake Charles, Louisiana 70601
and
Thomas M. Bergstedt
Bergstedt & Mount
Magnolia Life Building
1101 Lakeshore Drive, 2nd Floor
Lake Charles, Louisiana 70607
or such substituted persons or addresses of which any of the
parties may give notice to the other in writing.
9.02 Waiver. The failure by any party to enforce any of
its rights hereunder shall not be deemed to be a waiver of such
rights, unless such waiver is an express written waiver which has
been signed by the waiving party and expressly approved by its
Board of Directors. Waiver of any one breach shall not be deemed
to be a waiver of any other breach of the same or any other
provision hereof.
9.03 Expenses. Regardless of whether the Mergers are
consummated, all expenses incurred in connection with this
Agreement and the Merger Agreements and the transactions
contemplated hereby and thereby shall be borne by the party
incurring them, except for such expenses as are included in the
Deductible Amount, as defined by Section 4.1 of the Holding
Company Merger Agreement.
9.04 Headings. The headings in this Agreement have been
included solely for reference and shall not be considered in the
interpretation or construction of this Agreement.
9.05 Exhibits and Schedules. The exhibits and schedules
to this Agreement are incorporated herein by this reference and
expressly made a part hereof.
9.06 Integrated Agreement. This Agreement, the Merger
Agreements, the exhibits and schedules hereto and all other
documents and instruments delivered in accordance with the terms
hereof constitute the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof, and
there are no agreements, understanding, restrictions,
representations or warranties among the parties other than those
set forth herein or therein or herein or therein provided for,
all prior agreements and understandings being superseded hereby.
9.07 Choice of Law. The validity of this Agreement and
the Merger Agreements, the construction of their terms and the
determination of the rights and duties of the parties hereto in
accordance therewith shall be governed by and construed in
accordance with the laws of the United States and those of the
State of Louisiana applicable to contracts made and to be
performed wholly within such State.
9.08 Parties in Interest. This Agreement shall bind and
inure to the benefit of the parties hereto and their respective
successors and assigns, except that this Agreement may not be
transferred or assigned by any member of Holding's consolidated
group without the prior written consent of FCC and FNBLC,
including any transfer or assignment by operation of law.
Nothing in this Agreement or the Merger Agreements is intended or
shall be construed to confer upon or to give any person other
than the parties hereto any rights or remedies under or by reason
of this Agreement or the Merger Agreements, except as expressly
provided for herein and therein.
9.09 Amendment. The parties may, by mutual agreement of
their respective Boards of Directors, amend, modify or supplement
this Agreement, the Merger Agreements, or any exhibit or schedule
of any of them, in such manner as may be agreed upon by the
parties in writing, at any time before or after approval of this
Agreement and the Merger Agreements and the transactions
contemplated hereby and thereby by the shareholders of the
parties hereto. This Agreement and any exhibit or schedule to
this Agreement may be amended at any time and, as amended,
restated by the chief executive officers of the respective
parties (or their respective designees) without the necessity for
approval by their respective Boards of Directors or shareholders,
to correct typographical errors or to change erroneous references
or cross references, or in any other manner which is not material
to the substance of the transactions contemplated hereby.
9.10 Counterparts. This Agreement may be executed by the
parties in one or more counterparts, all of which shall be deemed
an original, but all of which taken together shall constitute one
and the same instrument.
9.11 Non-Survival of Representations and Warranties. None
of the representations and warranties in this Agreement or in any
instrument delivered pursuant hereto shall survive the Effective
Time of the Mergers. Each party hereby agrees that its sole
right and remedy with respect to any breach of a representation
or warranty by the other party or the breach of the covenants set
forth in subsection 5.07(f) hereof shall be not to close the
transactions subscribed herein if such breach results in the
nonsatisfaction of a condition set forth in Section 6 hereof;
provided, however, that the foregoing shall not be deemed to be a
waiver of any claim for an intentional breach of a representation
or warranty or for fraud except if such breach is required by law
or by any bank or bank holding company regulatory authority; it
being understood that a disclosure in any closing certificate
provided in accordance with Section 6.02(a) or 6.03(a) hereof
concerning an inaccuracy of a representation or warranty shall
not of itself be deemed to be an intentional breach of such
representation or warranty.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
FIRST COMMERCE CORPORATION LAKESIDE BANCSHARES, INC.
BY:____________________________ BY:_____________________
CHIEF EXECUTIVE OFFICER PRESIDENT
FIRST NATIONAL BANK OF LAKESIDE NATIONAL BANK
LAKE CHARLES OF LAKE CHARLES
BY:____________________________ BY:____________________
CHIEF EXECUTIVE OFFICER PRESIDENT
<PAGE>
EXHIBIT A
AGREEMENT OF MERGER
OF
LAKESIDE NATIONAL BANK OF LAKE CHARLES
INTO
FIRST NATIONAL BANK OF LAKE CHARLES
This Agreement of Merger (this "Agreement") is made and
entered into as of this ______ day of ________, 1994, between
Lakeside National Bank of Lake Charles, a national banking
association domiciled at Lake Charles, Louisiana ("Bank"), and
First National Bank of Lake Charles, a national banking
association domiciled at Lake Charles, Louisiana ("FNBLC" or the
"Receiving Association").
WHEREAS, as required by law, at least a majority of the
members of the respective Boards of Directors of Bank and FNBLC
(collectively called the "Merging Associations") deem it
advisable that Bank be merged with and into FNBLC (the "Bank
Merger"), as provided in this Agreement and in the Agreement and
Plan of Merger dated ________, 1994 (the "Plan"), among the
Merging Associations, First Commerce Corporation, a Louisiana
corporation ("FCC") of which FNBLC is a wholly-owned subsidiary,
and Lakeside Bancshares, Inc., a Louisiana corporation
("Holding") of which Bank is wholly-owned subsidiary, which sets
forth, among other things, certain representations, warranties,
covenants and conditions relating to the Bank Merger; and
WHEREAS, as required by law, at least a majority of the
members of the respective Boards of Directors of the Merging
Associations wish to enter into this Agreement and submit it to
the respective shareholders of the Merging Associations for
approval in the manner required by law and, subject to said
approval and to approval by the Comptroller of the Currency of
the United States (the "Comptroller") being duly given and to
such other approvals as may be required by law, to effect the
Bank Merger, all in accordance with the provisions of this
Agreement.
NOW THEREFORE, in consideration of the mutual benefits to
be derived from this Agreement and the Bank Merger, the parties
hereto agree as follows:
1. The Bank Merger. At the Effective Time (as defined
in Section 2 hereof), Bank and FNBLC shall be merged with and
into FNBLC under the Articles of Association of FNBLC, as
amended, existing Charter No. 4154, pursuant to the provisions
of, and with the effect provided in, 12 U.S.C. Section 215a and
La. R.S. 6:351 et seq. At the Effective Time, FNBLC, the Receiving
Association, shall continue to be a national banking association,
and its business shall continue to be conducted at its main
office in Lake Charles, Louisiana, and at its legally established
branches (including, without limitation, the legally established
offices from which Bank conducted business immediately prior to
the Effective Time). The Articles of Association of FNBLC shall
not be altered or amended by virtue of the Bank Merger, and the
incumbency of the directors and officers of FNBLC shall not be
affected by the Bank Merger nor shall any person succeed to such
positions by virtue of the Bank Merger; provided that it is the
present intention of FNBLC to add Tom Flanagan, President of
Holding, to its Board of Directors.
2. Effective Time. The Bank Merger shall become
effective at the time specified or permitted by the Comptroller
in a certificate or other written record issued by his Office
(the "Effective Time").
3. Cancellation of Capital Stock of Bank. At the
Effective Time, by virtue of the Bank Merger, all shares of the
capital stock of Bank, other than any such shares as to which
dissenters' rights shall exist at the Effective Time, shall be
cancelled.
4. Capital Stock of the Receiving Association. The
shares of the capital stock of FNBLC, the Receiving Association,
issued and outstanding immediately prior to the Effective Time
shall, at the Effective Time, continue to be issued and
outstanding, and no additional shares of FNBLC shall be issued as
a result of the Bank Merger. Therefore, at the Effective Time,
the amount of capital stock of FNBLC, the Receiving Association,
shall be $1,500,000, divided into 150,000 shares of common stock,
par value $10.00 per share.
5. Assets and Liabilities of the Merging Associations.
At the Effective Time, the corporate existence of each of the
Merging Associations shall be merged into and continued in FNBLC,
the Receiving Association, and such Receiving Association shall
be deemed to be the same corporation as each bank or banking
association participating in the Bank Merger. All rights,
franchises, and interests of the individual Merging Associations
in and to every type of property (real, personal and mixed) and
chooses in action shall be transferred to and vested in the
Receiving Association by virtue of the Bank Merger without any
deed or other transfer. The Receiving Association, upon the Bank
Merger and without any order or other action on the part of any
court or otherwise, shall hold and enjoy all rights of property,
franchises, and interests, including appointments, designations,
and nominations, and all other rights and interests as trustee,
executor, administrator, registrar of stocks and bonds, guardian
of estates, and in every other fiduciary capacity, in the same
manner and to the same extent as such rights, franchises, and
interests were held or enjoyed by any one of the Merging
Associations at the time of the Bank Merger, subject to the
conditions specified in 12 U.S.C. Section 215a(f). The
Receiving Association shall, from and after the Effective Time,
be liable for all liabilities of the Merging Associations.
6. Shareholder Approval; Conditions; Filing. This
Agreement shall be submitted to the shareholders of the Merging
Associations for ratification and confirmation in accordance with
applicable provisions of law. The obligations of the Merging
Associations to effect the Bank Merger shall be subject to all
the terms and conditions of the Plan. If the shareholders of the
Merging Associations ratify and confirm this Agreement, then the
fact of such approval shall be certified hereon by the Secretary
of each of the Merging Associations and this Agreement, so
approved and certified, shall, as soon as is practicable, be
signed and acknowledged by the President or Vice-President of
each of them. As soon as may be practicable thereafter, this
Agreement, so certified, signed and acknowledged, shall be
delivered to the Comptroller for filing in the manner required by
law.
7. Miscellaneous. This Agreement may, at any time prior
to the Effective Time, be amended or terminated as provided in
the Plan. This Agreement may be executed in counterparts, each
of which shall be deemed to constitute an original. This
Agreement shall be governed and interpreted in accordance with
federal law and the applicable laws of the State of Louisiana.
This Agreement may be assigned only to the extent that the party
seeking to assign it is permitted to assign its interests in the
Plan, and subject to the same effect as any such assignment. The
headings in this Agreement are inserted for convenience only and
are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed by a
majority of the directors of each of the Merging Associations, as
of the day and year first above written.
FOR THE BOARD OF DIRECTORS OF
LAKESIDE NATIONAL BANK OF LAKE CHARLES:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
FOR THE BOARD OF DIRECTORS OF
FIRST NATIONAL BANK OF LAKE CHARLES:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
<PAGE>
CERTIFICATE OF SECRETARY OF
LAKESIDE NATIONAL BANK OF LAKE CHARLES
(a national banking association)
I hereby certify that I am the duly elected Secretary of
Lakeside National Bank of Lake Charles, a national banking
association, presently serving in such capacity and that the
foregoing Agreement was, in the manner required by law, duly
approved, without alteration or amendment, by the sole
shareholder of Lakeside National Bank.
Certificate dated , 1994.
____________________________
________________, Secretary
CERTIFICATE OF SECRETARY OF
THE FIRST NATIONAL BANK OF LAKE CHARLES
(a national banking association)
I hereby certify that I am the duly elected Secretary of
The First National Bank of Lake Charles, a national banking
association, presently serving in such capacity and that the
foregoing Agreement was, in the manner required by law, duly
approved, without alteration or amendment, by the sole
shareholder of The First National Bank of Lake Charles.
Certificate dated , 1994.
_________________________
____________, Secretary
<PAGE>
EXECUTION BY BANKS
Considering the approval of this Agreement by the
shareholders of the parties hereto, as certified above, this
Agreement is executed by such parties, acting through their
respective Presidents, this _____ day of _______________, 1994.
LAKESIDE NATIONAL BANK OF
LAKE CHARLES
By: _______________________
President
Attest:
___________________________________
Secretary
THE FIRST NATIONAL BANK OF
LAKE CHARLES
By: ________________________
President
Attest:
___________________________________
Secretary
<PAGE>
ACKNOWLEDGMENT AS TO
LAKESIDE NATIONAL BANK OF LAKE CHARLES
STATE OF LOUISIANA
PARISH OF _______________
BEFORE ME, the undesigned authority, personally came and
appeared ____________________, who, being duly sworn, declared
and acknowledged before me that he is the President of Lakeside
National Bank of Lake Charles and that in such capacity he was
duly authorized to and did execute the foregoing Agreement on
behalf of such bank, for the purposes therein expressed and as
his and such bank's free act and deed.
__________________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1994.
___________________________________
Notary Public
<PAGE>
ACKNOWLEDGMENT AS TO
THE FIRST NATIONAL BANK OF LAKE CHARLES
STATE OF LOUISIANA
PARISH OF ____________________
BEFORE ME, the undersigned authority, personally came and
appeared ____________________ who, being duly sworn, declared and
acknowledged before me that he is the President of The First
National Bank of Lake Charles and that in such capacity he was
duly authorized to and did execute the foregoing Agreement on
behalf of such bank, for the purposes therein expressed and as
his and such bank's free act and deed.
________________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1994.
___________________________________
Notary Public
<PAGE>
EXHIBIT B
JOINT AGREEMENT OF MERGER
OF
LAKESIDE BANCSHARES, INC.
WITH AND INTO
FIRST COMMERCE CORPORATION
This Joint Agreement of Merger (this "Joint Agreement") is
dated as of the ______ day of ________, 1994, between Lakeside
Bancshares, Inc., a Louisiana corporation ("Holding"), and First
Commerce Corporation, a Louisiana corporation ("FCC"); and is
entered into pursuant to the provisions of Sections 111 et seq.
of the Louisiana Business Corporation Law ("LBCL").
WHEREAS, as required by law, at least a majority of the
members of the respective Boards of Directors of Holding and FCC
(collectively, the "Merging Corporations") deem it advisable that
Holding be merged with and into FCC (the "Merger"), as provided
in this Joint Agreement and in the Agreement and Plan of Merger
dated ________, 1994 (the "Plan"), among First National Bank of
Lake Charles (which is a wholly-owned subsidiary of FCC),
Lakeside National Bank ("Bank") (which is a wholly-owned
subsidiary of Holding), Holding and FCC, which sets forth, among
other things, certain representations, warranties, covenants and
conditions relating to the Merger; and
WHEREAS, as required by law, at least a majority of the
members of the respective Boards of Directors of the Merging
Corporations wish to enter into this Joint Agreement and submit
it to the shareholders of Holding for approval in the manner
required by law (approval by the shareholders of FCC not being
required by virtue of Section 112E of the LBCL) and, subject to
such approval and to such other approvals as may be required, to
effect the Merger, all in accordance with the provisions of this
Joint Agreement.
NOW THEREFORE, in consideration of the mutual benefits to
be derived from this Joint Agreement and the Merger, the parties
hereto agree as follows:
1. THE MERGER
In accordance with the applicable provisions of the LBCL,
Holding shall be merged with and into FCC; the separate existence
of Holding shall cease; and FCC shall be the corporation
surviving the merger.
2. EFFECTIVENESS OF THE MERGER
2.1 Effective Time of the Merger. The Merger shall
become effective at the time (the "Effective Time") at which this
Joint Agreement, having been executed and acknowledged in the
manner required by law, is filed in the office of the Secretary
of State of Louisiana.
2.2 Effect of the Merger. At the Effective Time, (i) the
separate existence of Holding shall cease and Holding shall be
merged with and into FCC; (ii) FCC shall continue to possess all
of the rights, privileges and franchises possessed by it and
shall, at the Effective Time, become vested with and possess all
rights, privileges and franchises possessed by Holding; (iii) FCC
shall be responsible for all of the liabilities and obligations
of Holding in the same manner as if FCC had itself incurred such
liabilities or obligations, and the Merger shall not affect or
impair the rights of the creditors or of any persons dealing with
the Merging Corporations; (iv) the Merger will not of itself
cause a change, alteration or amendment to the Articles of
Incorporation or the By-Laws of FCC; (v) the Merger will not of
itself affect the tenure in office of any officer or director of
FCC and no such person will succeed to such positions solely by
virtue of the Merger; and (vi) the Merger shall, from and after
the Effective Time, have all the effects provided by applicable
Louisiana law.
2.3 Additional Actions. If, at any time after the
Effective Time, FCC shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary
or desirable (a) to vest, perfect or confirm, of record or
otherwise, in FCC, title to or the possession of any property or
right of Holding acquired or to be acquired by reason of, or as a
result of, the Merger, or (b) otherwise to carry out the purposes
of this Joint Agreement, Holding and its proper officers and
directors shall be deemed to have granted to FCC an irrevocable
power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or
proper to vest, perfect or confirm title to and possession of
such property or rights in FCC and otherwise to carry out the
purposes of this Joint Agreement; and the proper officers and
directors of FCC are fully authorized in the name of Holding to
take any and all such action.
3. METHOD OF CARRYING MERGER INTO EFFECT
This Joint Agreement shall be submitted to the shareholders
of Holding for their approval. If such approval is given, then
the fact of such approval shall be certified hereon by the
Secretary of Holding. Approval of this Joint Agreement by the
shareholders of FCC is not required by virtue of Section 112E of
the LBCL, and that fact shall be certified hereon by the
Secretary of FCC. This Joint Agreement, so approved and
certified, shall, as soon as is practicable, be signed and
acknowledged by the President or Vice President of each of the
Merging Corporations. As soon as may be practicable thereafter,
this Joint Agreement, so certified, signed and acknowledged,
shall be delivered to the Secretary of State of Louisiana for
filing in the manner required by law and shall be effective at
the Effective Time; and thereafter, as soon as practicable, a
copy of the Certificate of Merger issued by the Secretary of
State of Louisiana, and certified by him to be a true copy, shall
be filed for record in the Office of the Recorder of Mortgages of
the parishes in which the Merging Corporations have their
respective registered offices and in the Office of the Recorder
of Conveyances of each parish in which Holding has immovable
property.
4. CONVERSION OF SHARES
4.1 Conversion of Holding Shares. Except for shares as
to which dissenters' rights have been perfected and not withdrawn
or otherwise forfeited under Section 131 of the LBCL, on the
Effective Date, by reason of the Merger, each issued and
outstanding share of the common stock, par value $2.50 per share,
of Holding ("Holding Common Stock") shall be converted into that
number of shares of common stock, $5.00 par value per share, of
FCC ("FCC Common Stock") equal to (i) $37 million less the
Deductible Amount, as defined below, divided by the market value
of a share of FCC Common Stock as determined as of the close of
business on the fifth day prior to the closing of the Merger
based on the average of the closing sales prices of a share of
FCC Common Stock on the NASDAQ stock market for the 20 trading
days ending on the fifth trading day before the closing date for
the Merger; provided, that if the market value of a share of FCC
Common Stock as so determined is less than $24, then the divisor
shall be 24, and if such market value is greater than $33, then
the divisor shall be 33, divided by (ii) the number of shares of
Holding Common Stock outstanding on the Effective Date; provided
that the formula set forth above shall be adjusted to take into
account any change in the number of shares of FCC Common Stock
outstanding as a result of a stock split or stock dividend.
4.2 The term "Deductible Amount" means the excess over
$200,000 which Holding had not accrued, or for which Holding had
not established a reserve, on its financial statements dated
February 28, 1994, which financial statements have previously
been furnished to FCC, which excess amount Holding or Bank pays
or is or becomes obligated to pay for (a) expenses, including
legal fees and amounts paid in settlement related to the
shareholder federal and state court litigation in which Holding
and Bank are currently involved, (b) investment banking fees and
expenses, (c) expenses, including legal fees, related to the
potential sale of Holding and Bank, including expenses of the
transactions contemplated hereby and by the Plan, (d) $413,000,
which the parties have agreed shall be reserved for payments to
be made to the non-employment contract employees of Holding and
Bank under the severance benefits plan adopted by the Board of
Directors of Holding and Bank and described in subsection 3.21 of
the Plan and (e) $68,000, which the parties have agreed shall be
reserved for the payment of medical insurance premiums for a
period of four years for four employees of Bank if their
employment is terminated as a result of or within one year
following the Holding Company Merger.
4.3 Fractional Shares. In lieu of the issuance of any
fractional share of FCC Common Stock to which a holder of Holding
Common Stock may be entitled (after aggregation of all fractional
shares to which such holder is entitled), each shareholder of
Holding, upon surrender of the certificate or certificates which
immediately prior to the Effective Time represented Holding
Common Stock held by such shareholder, shall be entitled to
receive a cash payment (without interest) equal to such
fractional share multiplied by the fair market value of a share
of FCC Common Stock as determined in accordance with Section 4.1.
4.4 Exchange of Certificates. After the Effective Time,
each holder of an outstanding certificate or certificates
theretofore representing shares of Holding Common Stock (other
than shares as to which dissenters' rights have been perfected
and not withdrawn or otherwise forfeited under Section 131 of the
LBCL), upon surrender thereof to FCC, shall be entitled to
receive the property into which such shares have been converted
as provided in Section 4.1 and cash in lieu of any fractional
share as provided in Section 4.3. Until so surrendered, each
outstanding certificate shall be deemed for all purposes, other
than as provided below with respect to the payment of dividends
or other distributions, if any, in respect of the FCC Common
Stock, to represent the number of whole shares of FCC Common
Stock into which the shares of Holding Common Stock theretofore
represented thereby shall have been converted. FCC may, at its
option, refuse to pay any dividend or other distribution, if any,
payable to the holders of shares of FCC Common Stock to the
holders of unsurrendered certificates evidencing Holding Common
Stock provided, however, that upon surrender of such certificates
there shall be paid to the record holders of the stock
certificate or certificates issued in exchange therefor the
amount, without interest, of dividends and other distributions,
if any, which have become payable with respect to the number of
whole shares of FCC Common Stock into which the shares of Holding
Common Stock theretofore represented thereby shall have been
converted and which have not previously been paid, unless such
dividend shall have reverted to FCC in full ownership pursuant to
its Articles of Incorporation. Whether or not a stock
certificate representing Holding Common Stock is surrendered,
from and after the Effective Time such certificate shall under no
circumstances evidence, represent or otherwise constitute any
stock or other interest in Holding or any other person, firm or
corporation (other than FCC).
4.5 Shares of FCC. The shares of capital stock of FCC
outstanding immediately prior to the Effective Time shall not be
converted by virtue of the Merger.
5. MISCELLANEOUS
5.1 Termination. Prior to the Effective Time, this Joint
Agreement may be terminated, and the Merger abandoned, as set
forth in the Plan.
5.2 Headings. The descriptive headings of the sections
of this Joint Agreement are inserted for convenience only and do
not constitute a part hereof for any other purpose.
5.3 Modifications, Amendments and Waivers. At any time
prior to the Effective Time (notwithstanding any shareholder
approval that may have already been given), the parties hereto
may, to the extent permitted by and as provided in the Plan,
modify, amend or supplement any term or provision of this Joint
Agreement.
5.4 Governing Law. This Joint Agreement shall be
governed by the laws of the State of Louisiana (regardless of the
laws that might be applicable under principles of conflicts of
law) as to all matters, including, but not limited to, matters of
validity, construction, effect and performance.
IN WITNESS WHEREOF, this Joint Agreement has been executed
by a majority of the respective Directors of each of the Merging
Corporations, as of the day and year first above written.
FOR THE BOARD OF DIRECTORS OF
LAKESIDE BANCSHARES, INC.:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
<PAGE>
FOR THE BOARD OF DIRECTORS OF
FIRST COMMERCE CORPORATION:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
<PAGE>
CERTIFICATE OF SECRETARY OF
LAKESIDE BANCSHARES, INC.
I hereby certify that I am the duly elected Secretary of
Lakeside Bancshares, Inc., a Louisiana corporation, presently
serving in such capacity and that the foregoing Agreement was, in
the manner required by law, duly approved, without alteration or
amendment, by a majority of the voting power present of Lakeside
Bancshares, Inc.
Certificate dated , 1994.
___________________________
_______________, Secretary
CERTIFICATE OF SECRETARY OF
FIRST COMMERCE CORPORATION
I hereby certify that I am the duly elected Secretary of
First Commerce Corporation, a Louisiana corporation, presently
serving in such capacity and that the foregoing Agreement was
adopted pursuant to La. R.S. 12:112E and that, as of the date of
this certificate, First Commerce Corporation had a sufficient
number of shares of FCC Common Stock outstanding to render
La.R.S. 12:112E applicable to this Agreement.
Certificate dated , 1994.
_________________________
Michael A. Flick, Secretary
<PAGE>
EXECUTION BY CORPORATIONS
Considering the approval of this Agreement by the
shareholders of Lakeside Bancshares, Inc., as certified above,
this Agreement is executed by such corporation and by First
Commerce Corporation, acting through their respective Presidents,
this _____ day of __________, 1994.,
LAKESIDE BANCSHARES, INC.
By: _________________________
President
Attest:
___________________________________
Secretary
FIRST COMMERCE CORPORATION
By: __________________________
Ian Arnof, President and
Chief Executive Officer
Attest:
___________________________________
Michael A. Flick, Secretary
<PAGE>
ACKNOWLEDGMENT AS TO
LAKESIDE BANCSHARES, INC.
STATE OF LOUISIANA
PARISH OF ____________________
BEFORE ME, the undersigned authority, personally came and
appeared ____________________ who, being duly sworn, declared and
acknowledged before me that he is the President of Lakeside
Bancshares, Inc. and that in such capacity he was duly authorized
to and did execute the foregoing Agreement on behalf of such
corporation, for the purposes therein expressed and as his and
such corporation's free act and deed.
_______________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1994.
___________________________________
Notary Public
<PAGE>
ACKNOWLEDGMENT AS TO
FIRST COMMERCE CORPORATION
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned authority, personally came and
appeared Ian Arnof who, being duly sworn, declared and
acknowledged before me that he is the President and Chief
Executive Officer of First Commerce Corporation and that in such
capacity he was duly authorized to and did execute the foregoing
Agreement on behalf of such corporation, for the purposes therein
expressed and as his and such corporation's free act and deed.
_______________________
Appearer
Sworn to and subscribed before me
this _____ day of __________, 1994.
___________________________________
Notary Public
<PAGE>
APPENDIX B
SOUTHARD FINANCIAL
FAIRNESS OPINION
<PAGE>
FAIRNESS OPINION
MERGER BY AND BETWEEN
FIRST COMMERCE CORPORATION
AND
LAKESIDE BANCSHARES, INC.
As of August 3, 1994
Report Dated
August 3, 1994
<PAGE>
August 4, 1994
Board of Directors
Lakeside Bancshares, Inc.
Lake Charles, Louisiana
RE: Fairness Opinion Relative to Pending Agreement of
Lakeside Bancshares, Inc., Lake Charles, Louisiana,
to Merge with and into First Commerce Corporation,
New Orleans, Louisiana
Gentlemen:
The Board of Directors of Lakeside Bancshares, Inc. ("Lakeside")
retained Southard Financial, in its capacity as a financial
valuation and consulting firm, to render its opinion of the
fairness, from a financial viewpoint, of the acquisition of
Lakeside by First Commerce Corporation ("FCOM"). Southard
Financial and its principals have no past, present, or future
contemplated financial, equity, or other interest in either
Lakeside or FCOM. This opinion is issued based upon financial
data as of June 30, 1994, and is issued within ten days of the
proxy date as set forth in the Agreement and Plan of Merger
referenced in this letter.
Approach to Assignment
The approach to this assignment was to consider the following
factors:
. A review of the financial performance and position of
Lakeside and the value of its common stock;
. A review of the financial performance and position of
FCOM and the value of its common stock;
. A review of recent Bank merger transactions;
. A review of the current and historical market prices
of bank holding companies in Louisiana and
surrounding states;
. A review of the investment characteristics of the
common stock of Lakeside and FCOM;
. A review of the Agreement and Plan of Merger between
First Commerce Corporation and Lakeside Bancshares,
Inc., dated July 21, 1994;
. An evaluation of the impact of the merger on the
expected return to the current shareholders of
Lakeside; and,
. An evaluation of other factors as were considered
necessary to render this opinion.
It is Southard Financial's understanding that the merger and
resulting exchange of the stock of First Commerce Corporation for
the outstanding common stock of Lakeside Bancshares, Inc.
constitutes a non-taxable exchange for federal income tax
purposes.
DUE DILIGENCE REVIEW PROCESS
In performing this assignment, Southard Financial reviewed the
documents specifically outlined in Exhibit 1 pertaining to
Lakeside Bancshares, Inc. and in Exhibit 2 pertaining to First
Commerce Corporation.
Review of Lakeside Bancshares, Inc.
Southard Financial visited with the management of Lakeside in
Lake Charles, Louisiana. Discussions included questions
regarding the current and historical financial position and
performance of Lakeside, its outlook for the future, and other
pertinent factors.
Review of First Commerce Corporation
Southard Financial visited with the Senior Vice
President/Controller/Principal Accounting Officer and Executive
Vice President/Chief Financial Officer of FCOM in New Orleans,
Louisiana. Discussions included questions regarding the current
and historical financial position and performance of FCOM and its
operating subsidiaries, its outlook for the future, and other
pertinent factors. It should be noted that FCOM management did
not allow us to review any information other than publicly
available annual reports and SEC regulatory filings (see
Exhibit 2). We were not given access to other information
typically provided in a due diligence review, such as board
minutes, current year budget, details of problem loans and other
real estate, etc.
Merger Documentation
Southard Financial reviewed the Agreement and Plan of Merger
Between First Commerce Corporation (and its wholly-owned
subsidiary, First National Bank of Lake Charles) and Lakeside
Bancshares, Inc. (and its wholly-owned subsidiary, Lakeside
National Bank), dated July 21, 1994. Appropriate aspects of this
agreement were discussed with management and with legal counsel
for Lakeside. (See Exhibit 3, Terms of the Agreement and Plan of
Merger.)
Southard Financial did not independently verify the information
reviewed, but relied on such information as being complete and
accurate in all material respects. Southard Financial did not
make any independent evaluation of the assets of FCOM or
Lakeside, but reviewed data supplied by the management of both
institutions.
MAJOR CONSIDERATIONS
Numerous factors were considered in the overall review of the
proposed merger. The review process included considerations
regarding Lakeside, FCOM, and the proposed merger. The major
considerations are as follows:
Lakeside Bancshares, Inc.
. Historical earnings;
. Historical dividend payments;
. Outlook for future performance, earnings, and dividends;
. Economic conditions and outlook in Lakeside's market;
. The competitive environment in Lakeside's market;
. Comparisons with peer banks;
. Potential risks in the loan and securities portfolios;
. Recent minority stock transactions in Lakeside's common
stock; and,
. Other such factors as were deemed appropriate in rendering
this opinion.
First Commerce Corporation
. Historical earnings;
. Historical dividend payments;
. Outlook for future performance, earnings, and dividends;
. Economic conditions and outlook in FCOM's market;
. The competitive environment in FCOM's market;
. Comparisons with peer banks;
. Potential risks in the loan and securities portfolios;
. Recent minority stock transactions in FCOM's common stock;
and,
. Other such factors as were deemed appropriate in rendering
this opinion.
Common Factors
. Historical and current bank merger pricing;
. Current market prices for minority blocks of common stocks
of regional bank holding companies in Louisiana and
surrounding states;
The Proposed Merger
. The merger agreement and its terms;
. The specific pricing of the merger;
. Adequacy of the consideration paid to the shareholders of
Lakeside;
. The assumption that the tax opinion regarding the tax-free
nature of the exchange will be upheld;
. The amount of debt and goodwill on the balance sheet of
FCOM and the impact of the merger of Lakeside on FCOM's
capital and liquidity positions;
. The historical dividend payments of FCOM and the likely
impact on the dividend income of the current shareholders
of Lakeside (equivalency of cash dividends);
. Pro-forma combined income statements for FCOM post merger
and the expected returns to Lakeside shareholders
(equivalency of earnings yield);
. The market for minority blocks of FCOM common stock; and,
. Other such factors as deemed appropriate.
OVERVIEW OF FAIRNESS ANALYSIS
In connection with rendering its opinion, Southard Financial
performed a variety of financial analyses, which are summarized
below. Southard Financial believes that its analyses must be
considered as a whole and that considering only selected factors
could create an incomplete view of the analyses and the process
underlying the opinion. The preparation of a fairness opinion is
a complex process involving subjective judgments and is not
susceptible to partial analyses or summary description. In its
analyses, Southard Financial made numerous assumptions, many of
which are beyond the control of Lakeside and FCOM. Any estimates
contained in the analyses prepared by Southard Financial are not
necessarily indicative of future results or values, which may
vary significantly from such estimates. Estimates of value of
companies do not purport to be appraisals or necessarily reflect
the prices at which companies or their securities may actually be
sold. None of the analyses performed by Southard Financial was
assigned a greater significance than any other. (More details on
the analyses prepared by Southard Financial are contained in
Exhibits 3-7.)
Dividend Yield Analysis
In evaluating the impact of the proposed merger on the
shareholders of Lakeside, Southard Financial reviewed the
dividend paying histories of Lakeside and FCOM. Based upon this
review, it is reasonable to expect that the shareholders of
Lakeside, in total, will receive dividends at or above the level
currently paid by Lakeside, after the merger is completed
(defined as post merger combined dividends per share times the
exchange ratio). This is predicated on the assumption that FCOM
will continue per share dividends at current levels (see Exhibit
4).
Earnings Yield Analysis
In evaluating the impact of the proposed merger on the
shareholders of Lakeside, Southard Financial determined that,
based upon the proposed exchange ratio, the shareholders of
Lakeside would have seen an increase in their share of earnings
(defined as post merger combined earnings per share times the
exchange ratio), had the merger been consummated by year-end
1993. The analysis also suggests expected higher earnings yields
for Lakeside shareholders in subsequent years if the merger is
consummated (see Exhibit 4).
Book Value Analysis
In evaluating the impact of the proposed merger on the
shareholders of Lakeside, Southard Financial determined that the
shareholders of Lakeside would have seen an increase in the book
value of their investment had the merger been consummated prior
to March 31, 1994.
Analysis of Alternatives
In evaluating the fairness of the proposed merger on the
shareholders of Lakeside, Southard Financial reviewed other
offers received for the purchase/merger of Lakeside. Further,
Southard Financial considered recent public market merger pricing
information (see Exhibit 5).
Analysis of Market Transactions
Based upon the merger terms, Lakeside shareholders will receive
231% of year-end 1993 book value per share (225% of June 30, 1994
book value per share), 27.80x reported 1993 earnings, and 19.73x
projected 1994 earnings. Based upon the review conducted by
Southard Financial, the pricing for Lakeside in the merger is
above the multiples seen in recent bank acquisitions (see Exhibit
5).
Fundamental Analysis
Southard Financial reviewed the financial characteristics of
Lakeside and FCOM with respect to profitability, capital ratios,
liquidity, asset quality, and other factors. Southard Financial
compared Lakeside and FCOM to a universe of publicly traded banks
and bank holding companies and to peer groups prepared by the
Federal Financial Institutions Examination Council (FFIEC).
Southard Financial found that the post-merger combined entity
will have capital ratios and profitability ratios near those of
the public peer group and the FFIEC peer group (predominantly
non-publicly traded banks). (See Exhibits 6-7.)
Liquidity
Unlike Lakeside stock, FCOM shares are actively traded on the
NASDAQ market. Further, except in the case of officers,
directors, and certain principal shareholders of Lakeside, FCOM
shares received will be freely tradeable with no restrictions.
Summary of Analyses
The summary set forth does not purport to be a complete
description of the analyses performed by Southard Financial. The
analyses performed by Southard Financial are not necessarily
indicative of actual values, which may differ significantly from
those suggested by such analyses. Southard Financial did not
appraise any individual assets or liabilities of Lakeside or
FCOM.
Throughout the due diligence process, all information provided by
Lakeside, FCOM, and third party sources, was relied upon by
Southard Financial without independent verification. As noted
above, the information reviewed for FCOM was limited to publicly
available annual reports and regulatory reports.
Based upon the analyses discussed above, and other analyses
performed by Southard Financial, the impact of the merger on the
shareholders of Lakeside Bancshares, Inc. is expected to be
favorable.
FAIRNESS OPINION
Based upon the analyses of the foregoing and such matters as were
considered relevant, it is the opinion of Southard Financial that
the terms of the offer for the acquisition of Lakeside
Bancshares, Inc. by First Commerce Corporation are fair, from a
financial viewpoint, to the shareholders of Lakeside Bancshares,
Inc.
We understand that the stated purchase price is to be reduced by
the excess over $200,000 of: expenses related to the settlement
of Lakeside shareholder litigation; investment banking expenses;
and fees and expenses related to the merger with FCOM, which were
not accrued as of February 28, 1994. Based upon discussions with
Lakeside's legal counsel regarding the expected amount of this
purchase price reduction, the transaction would still be fair,
from a financial viewpoint, to the shareholders of Lakeside
Bancshares, Inc.
Thank you for this opportunity to be of service to the
shareholders of Lakeside Bancshares, Inc.
Sincerely yours,
SOUTHARD FINANCIAL
David A. Harris, CFA, ASA
Douglas K. Southard,
DBA, CFA, ASA
Attachments:
Exhibit 1: Lakeside Bancshares, Inc. and Lakeside National
Bank of Lake Charles, Document Review List
Exhibit 2: First Commerce Corporation, Document Review List
Exhibit 3: Terms of the Agreement and Plan of Merger
Exhibit 4: Expected Impact of the Merger on the Shareholders
of Lakeside Bancshares, Inc.
Exhibit 5: Comparison of The Merger Pricing to Public Market
Transactions
Exhibit 6: Overview of Lakeside Bancshares, Inc. and Lakeside
National Bank of Lake Charles
Exhibit 7: Overview of First Commerce Corporation
Exhibit 8: Qualifications of Southard Financial
<PAGE>
EXHIBIT 1
LAKESIDE BANCSHARES, INC.
AND
LAKESIDE NATIONAL BANK OF LAKE CHARLES
DOCUMENT REVIEW LIST
1. Consolidated Reports of Condition and Income ("Call
Report") for the periods ended December 31, 1993, March 31,
1994, and June 30, 1994.
2. Uniform Bank Performance Report ("UBPR") for the periods
ended December 31, 1993 and March 31, 1994.
3. Annual Reports for 1989-93.
4. Securities and Exchange Commission Annual Report (Form 10-
K) for the year ended December 31, 1993.
5. Securities and Exchange Commission Quarterly Report (Form
10-Q) for the quarters ended March 31, 1993, June 30, 1993,
September 30, 1993, and March 31, 1994.
6. Budget Comparison as of June 30, 1994.
7. Summary analysis of loan loss reserve calculation and
determination of adequacy.
8. Shareholder list as of June 16, 1994.
9. Litigation letter, dated April 28, 1994, from Stockwell,
Sievert, Viccellio, Clements & Shaddock, L.L.P., Lake
Charles, Louisiana.
10. Local economic data.
11. Offer letters from other institutions.
12. Additional pertinent information deemed necessary to render
this opinion.
<PAGE>
EXHIBIT 2
FIRST COMMERCE CORPORATION
DOCUMENT REVIEW LIST
1. Annual Reports (including audited financial statements) for
the years ended December 31, 1992-93.
2. Quarterly Report (including reviewed financial statements)
for the quarter ended March 31, 1994.
3. Securities and Exchange Commission Annual Report (Form 10-
K) for the years ended December 31, 1992-93.
4. Securities and Exchange Commission Quarterly Report (Form
10-Q) for the quarters ended March 31, 1992-94, June 30,
1992-93, and September 30, 1992-93.
5. Research reports by Tucker Anthony, Inc.; Donaldson, Lufkin
& Jenrette Securities Corporation; Dean Witter Reynolds,
Inc.; Alex Brown & Sons; Morgan Keegan & Company, Inc.; and
J.C. Bradford & Co.
6. Additional pertinent information deemed necessary to render
this opinion.
<PAGE>
EXHIBIT 3
TERMS OF THE
AGREEMENT AND PLAN OF MERGER
The Agreement and Plan of Merger, dated as of July 21, 1994, by
and between First Commerce Corporation and Lakeside Bancshares,
Inc. (the "Agreement") contains several provisions. The
following are key provisions of the Agreement:
In exchange for the 500,000 shares of Lakeside common stock
outstanding, Lakeside shareholders will receive newly issued
shares of FCOM common stock.
The parties intend for the merger to qualify as a
"reorganization" under the Internal Revenue Code. Thus, the
exchange of Lakeside stock for FCOM stock is expected to
qualify as a tax-free exchange for Federal income tax
purposes. The exchange of cash for fractional shares may
have tax consequences.
The exchange ratio will be based upon the result of
$37,000,000, less certain unaccrued expenses in excess of
$200,000 (see Page 7), divided by the average of the closing
prices of FCOM common stock on the twenty trading days
immediately prior to the fifth calendar day preceding the
effective date of the transaction (the "average price").
If the average price is greater than $33.00 per share, the
exchange ratio will be calculated based upon an average price
of $33.00 per share. If the average price is less than
$24.00 per share, the exchange ratio will be calculated based
upon an average price of $24.00 per share.
No fractional shares will be issued by FCOM. Lakeside
shareholders who would otherwise have been entitled to
fractional shares (after aggregating all shares owned) will
be paid in cash based upon the average price of FCOM stock as
defined above.
The Agreement may be terminated by mutual consent of the
Board of Directors of each institution or by either party's
Board of Directors if the merger is not approved by its
shareholders.
The exchange ratio will be adjusted to reflect any
reclassification, recapitalization, split-up, combination or
exchange of shares, or stock dividend which might occur at
FCOM subsequent to the date of the Agreement but prior to the
consummation of the merger.
Based upon the terms of the Agreement, Lakeside shareholders
would receive:
-2.79245 shares of FCOM stock (fractional shares paid in
cash) if the average price of FCOM stock (as defined
above) is equal to the recent price of $26.50 per share;
-2.24242 shares of FCOM stock (fractional shares paid in
cash) if the average price of FCOM stock is $33.00 per
share or above;
-3.08333 shares of FCOM stock (fractional shares paid in
cash) if the average price of FCOM stock is $24.00 per
share or below; or,
-something in between 2.24242 shares and 3.08333 shares of
FCOM stock (fractional shares paid in cash) if the
average price is between $24.00 per share and $33.00 per
share.
<PAGE>
EXHIBIT 4
EXPECTED IMPACT OF THE MERGER
ON THE SHAREHOLDERS OF LAKESIDE BANCSHARES, INC.
The following is a summary of the various analyses undertaken in
conjunction with this fairness opinion. This summary is not
intended to represent all analyses performed by Southard
Financial, but is presented here for the convenience of Lakeside
Bancshares, Inc. and its shareholders.
The average price of FCOM common stock for the twenty trading
days prior to the date of this opinion, as calculated by Southard
Financial, was $26.50 per share. Assuming this price as the
average price to be used in the merger, Lakeside shareholders
would receive 2.79245 equivalent shares of FCOM stock (two shares
plus $21.00 cash) for each share of Lakeside stock exchanged
under the Agreement.
Earnings Lakeside earned $2.66 per share in 1993. FCOM earned
$3.18 per share (fully diluted) in 1993. Had the
merger been consummated prior to January 1, 1993,
each former Lakeside share would have earned $8.88 in
1993 (FCOM 1993 diluted earnings of $3.18 per share
times 2.79245 equivalent shares). This represents an
increase of 234% over what Lakeside earned in 1993.
Based upon the analysts surveyed, FCOM is expected to
earn $3.10-$3.40 per share in 1994. On an ongoing
basis, Southard Financial estimates that Lakeside
should earn $3.50-$4.00 per share in 1994. Given the
mid-point of these estimates, and assuming that the
merger was consummated prior to January 1, 1994,
Lakeside shareholders would see an increase of about
142% over what Lakeside would be expected to earn in
1994, absent the merger.
Dividends Each share of Lakeside stock received $1.10 per share
in dividends in 1993. Had the merger been
consummated prior to January 1, 1993, each former
share of Lakeside stock would have received dividends
of $2.37 in 1993 (FCOM 1993 dividends of $0.85 per
share times 2.79245 equivalent shares). This
represents an increase of 116% over the dividends
paid to Lakeside shareholders in 1993. Based upon
projected FCOM dividends of $1.00 per share in 1994
and anticipated Lakeside dividends of $1.10 per
share, the merger would provide Lakeside shareholders
with a 154% increase in projected dividends.
Book Value Reported book value of Lakeside was $32.98 per share
at March 31, 1994, and $33.09 per share at June 30,
1994. Reported book value of FCOM at March 31, 1994
was $17.14 per share. Had the merger been
consummated prior to March 31, 1994, each former
Lakeside share would have book value of $47.86 (FCOM
March 31, 1994 book value of $17.14 per share times
2.79245 equivalent shares). This represents 145% of
Lakeside book value at March 31, 1994 and June 30,
1994.
Liquidity Unlike Lakeside stock, FCOM shares are actively
traded on the NASDAQ market. Average daily trading
volume was about 80,000 shares from mid-June to mid-
July, 1994. Further, except in the case of officers
and directors of Lakeside, FCOM shares received will
be freely tradeable with no restrictions.
<PAGE>
EXHIBIT 5
COMPARISON OF THE MERGER PRICING
TO PUBLIC MARKET TRANSACTIONS
Southard Financial compared the pricing terms of the Agreement to
the pricing of recent acquisitions of banks and bank holding
companies across the United States, and to the minority interest
prices of publicly traded banks and bank holding companies in the
Southeast.
Pricing data for recent acquisitions of banks and bank holding
companies (nationwide) is summarized as follows:
<TABLE>
<CAPTION>
Price/ Price/ Price/ Equity/
Earnings Book Val Assets ROAA Assets ROAE
-------- -------- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
All Transactions - 1993 17.60x 177% 14.51% 0.84% 8.29% 10.13%
LA<FN1>, TX, MS, AR - 1993 13.81x 165% 14.50% 1.54% 8.93% 17.58%
Louisiana<FN1> - 1993 12.24x 165% 15.73% 1.41% 9.98% 14.79%
All Transactions - 1st Qtr 1994 19.00x 179% 10.88% 1.02% 9.03% 11.30%
LA, TX, MS, AR - 1st Qtr 1994 17.90x 175% 14.70% 1.21% 8.32% 14.25%
Louisiana - 1st Qtr 1994 13.70x 205% 18.41% 1.44% 9.30% 15.60%
</TABLE>
<FN1> Excluding Hibernia's acquisition of First Continental in
Gretna
Based upon a purchase price of $37 million, the merger of
Lakeside into FCOM will take place at 27.80x 1993 Lakeside
earnings, 19.73x anticipated 1994 earnings, and 225% of June 30,
1994 book value, or well above recent market multiples.
In determining the attractiveness of owning FCOM stock, it is
important to examine FCOM's recent pricing in comparison with
recent pricing multiples for publicly traded banks and bank
holding companies. This pricing data is presented below as of
June 30, 1994.
<TABLE>
<CAPTION>
Price/
Price/ Book Current Current
Publicly Traded Banks<FN1> Earnings Val ROAE Yield
__________________________ ________ ______ _______ _______
<S> <C> <C> <C> <C>
All Banks (203) 11.95x 152% 13.1% 2.59%
LA, TX, MS, AR Banks (15) 10.82x 156% 14.7% 2.78%
Louisiana Banks (2) 11.15x 145% 13.0% 3.85%
Texas Banks (3) 11.23x 155% 14.4% 1.89%
Mississippi Banks (6) 10.08x 151% 15.2% 3.11%
Arkansas Banks (4) 11.47x 171% 14.9% 2.43%
FCOM - 1993 Actual 7.61x 155% 23.3% 3.17%
FCOM - 1994 Projected 8.15x na na 3.77%
</TABLE>
<FN1> Subject to certain screens performed by Southard
Financial
Based upon an analysis of the data provided above, FCOM's
price/earnings multiple is below that of other publicly traded
banks in its region, while the price/book value ratio, return on
average equity, and current dividend yield are all above the
range.
<PAGE>
EXHIBIT 6
OVERVIEW OF LAKESIDE BANCSHARES, INC.
Lakeside Bancshares, Inc. is a one-bank holding company whose
primary asset is 100% of the common stock of Lakeside National
Bank of Lake Charles, Louisiana (the "Bank"). The Bank, which
was opened in 1959, serves the Lake Charles area with six full
service branches, one drive-up facility, and one stand-alone ATM.
The Bank had consolidated assets of about $177 million at June
30, 1994, and equity of 9.3% of assets. The Bank earned $1.34
million (0.68% of average assets) in 1992, $1.49 million (0.79%)
in 1993, and $1.01 million (1.08%) in the first half of 1994.
Earnings are budgeted to reach $2.175 million in 1994, for an
ROAA of about 1.14%. The Lake Charles market is currently being
impacted by: (1) the development of gambling casinos on the lake;
(2) the continued conversion of Chenalt Air Force Base for
commercial aircraft retro-fitting; (3) the resurgence of capital
spending in the local petrochemical industry; and, (4) the
resulting increase in employment and residential housing
construction. Further details on Lakeside and the Bank are
documented in Southard Financial's file.
EXHIBIT 7
OVERVIEW OF FIRST COMMERCE CORPORATION
First Commerce Corporation (FCOM) is a regional multi-bank
holding company with total consolidated assets of $6.37 billion
at March 31, 1994. Through its five wholly-owned banks in
Louisiana (New Orleans, Baton Rouge, Lafayette, Alexandria, and
Lake Charles) and its seven banking related subsidiaries, FCOM
offers complete banking and related financial services to
commercial and consumer customers in the Gulf South, primarily
Louisiana and southern Mississippi. FCOM operates with nearly
3,500 employees in over 108 banking offices.
Four of FCOM's five banking subsidiaries were acquired in 1984.
FCOM's latest acquisition was of First Acadiana National
Bancshares, Inc. in January 1994 in a stock for stock
transaction. First Acadiana was merged into FCOM's bank
subsidiary in Lafayette. Management is interested in acquiring
other banks with good market share and/or earnings potential.
Fully diluted earnings per share increased rapidly since 1991.
FCOM earned $3.18 per share (1.43% of average assets) in 1993, up
17.8% from $2.70 per share (1.19%) in 1992, which was up 73.0%
from $1.56 per share in 1991. FCOM earned $0.86 per share (fully
diluted) in the first quarter of 1994, or 1.52% of average
assets. The analyst's earnings estimates for 1994 range from
$3.10 per share to $3.40 per share. Common dividends of $0.85
per share in 1993 were 21.4% above 1992 dividends of $0.70 per
share. Per share dividends were $0.25 in the first quarter of
1994. According to management, the dividend has never been
reduced.
FCOM had common equity to total assets of 7.02% at March 31,
1994, up from 5.01% at year-end 1991. FCOM's net charge-offs
decreased from $30.72 million (1.32% of average loans) in 1991 to
$4.17 million (0.17%) in 1993. Also, non-accrual loans declined
from $56.55 million at year-end 1991 to $20.52 million at March
31, 1994. FCOM has a high percentage of non-interest bearing
deposits, relative to industry norms, which has a positive impact
on profit margins.
As noted above, all information on FCOM was obtained from analyst
reports and from limited information provided by FCOM's
management. Further details on FCOM are contained in Southard
Financial's file.
<PAGE>
EXHIBIT 8
QUALIFICATIONS OF SOUTHARD FINANCIAL
<PAGE>
AN OVERVIEW OF SOUTHARD FINANCIAL
BACKGROUND . Founded in 1987.
. Principals have combined business
valuation experience of approximately
twenty years.
. Serves clients throughout the United
States, with concentration in the
Southeast.
. Broad industry experience.
. Services provided for public and closely-
held companies.
. Provides valuation services for over 100
ESOPs, making Southard Financial one of
the largest ESOP appraisers in the United
States.
PROFESSIONAL
CREDENTIALS . Southard Financial's principals, Douglas
K. Southard and David A. Harris, are
senior members of the American Society of
Appraisers (ASA).
. Both principals of Southard Financial are
Chartered Financial Analysts (CFA).
. Both principals are current or former
officers of the West Tennessee Chapter of
the ASA.
EDUCATIONAL
CREDENTIALS . Douglas Southard holds Doctor of Business
Administration and Master of Business
Administration degrees from Indiana
University, with concentrations in
finance, economics, and quantitative
analysis.
. David Harris holds the Master of Business
Administration degree from Memphis State
University, with concentrations in
finance and business investments.
BUSINESS
ETHICS . Southard Financial and its principals
adhere to the ethical standards of the
Institute of Chartered Financial Analysts
and the American Society of Appraisers.
. All reports conform to the Uniform
Standards of Professional Appraisal
Practice.
. Southard Financial is committed to
providing unbiased opinions to be used
for decision making.
. Fees for valuation services are not
contingent upon the conclusion of value
or the completion of a transaction.
<PAGE>
BIOSKETCH
DOUGLAS K. SOUTHARD, DBA, CFA, ASA
EDUCATIONAL AND PROFESSIONAL CREDENTIALS
Doctor of Business Administration, 1981, Indiana University
Master of Business Administration, 1976, Indiana University
Bachelor of Arts, 1975, Rhodes College (formerly Southwestern
at Memphis)
Chartered Financial Analyst, 1987, Institute of Chartered
Financial Analysts (now part of the Association for
Investment Management and Research)
Senior Member, 1987, American Society of Appraisers, Business
Valuation
PROFESSIONAL BACKGROUND
Founder and Principal, Southard Financial, Memphis TN
Partner, Mercer Capital Management, Inc., Memphis TN (1984-87)
Consulting Associate, Mercer Capital Management, Inc., Memphis
TN (1983-84)
Principal, Douglas K. Southard, Financial Consultant, Memphis
TN (1982-83)
ACADEMIC POSITIONS HELD
Assistant Professor of Finance, Rhodes College, Memphis TN
Assistant Professor of Finance, Virginia Polytechnic Institute
& State Univ., Blacksburg VA
Lecture in Finance, Indiana University, Bloomington IN
RELATED EXPERIENCE
Frequent Speaker, professional organizations, business
valuation topics
Expert Witness, business valuation, local, state and federal
courts
Board of Directors, Management Computing Solutions, Inc.,
Memphis TN
Board of Directors, Columbian Rope Company, Auburn NY
Advisory Board, MicroAge, Memphis TN
Former Officer, West Tennessee Chapter, American Society of
Appraisers
PUBLICATIONS
"Using the Capital Asset Pricing Model to Determine
Capitalization Rates: Adjusting forDifferences in Financial
Structure, " with Severin C. Carlson, Business Valuation Review,
June 1991 "Business Valuation Can Serve in Lifetime Planning, "
with Z.C. Mercer, Memphis Business
Journal, April 1-5, 1985
"Valuation Process Holds Keys to Executive Wealth," with Z.C.
Mercer, Memphis Business
Journal, March 25-29, 1985
"What IRA's Are Worth," with Z.C. Mercer, The Southern Banker,
June 1984
<PAGE>
BIOSKETCH
DAVID A. HARRIS, CFA, ASA
EDUCATIONAL AND PROFESSIONAL CREDENTIALS
Master of Business Administration, 1982, Memphis State
University
Bachelor of Arts, 1979, Colorado State University
Senior Member, 1990, American Society of Appraisers, Business
Valuation
Chartered Financial Analyst, 1989, Institute of Chartered
Financial Analysts
(now part of the Association for Investment Management and
Research)
PROFESSIONAL BACKGROUND
Principal, Southard Financial, Memphis TN
Associate, Mercer Capital Management, Inc., Memphis TN (1985-
90)
Financial Analyst, Methodist Hospitals of Memphis, Inc. (1983-
85)
Cost Analyst, Schering-Plough, Inc., Memphis TN (1982-83)
PROFESSIONAL/COMMUNITY SERVICE
President, West Tennessee Chapter, American Society of
Appraisers (1994-95)
Vice President, West Tennessee Chapter, American Society of
Appraisers (1993-94)
Board of Directors, Solomon Schechter Day School of Memphis,
Inc. (1993-94)
President, West Tennessee Chapter, American Society of
Appraisers (1990-91)
Vice President, Sea Isle Park Neighborhood Association, Memphis
TN (1992-95)
Board of Directors, Sea Isle Park Neighborhood Association,
Memphis TN (1990-95)
Business Liaison, Junior Achievement of Memphis TN (1984-85)
RELATED EXPERIENCE
Expert Witness, business valuation
Co-Author, "The Perils of Excess," with Z. C. Mercer, ABA
Banking Journal, October 1987
<PAGE>
APPENDIX C
EXCERPT FROM SECTION 131 OF THE
LOUISIANA BUSINESS CORPORATION LAW
<PAGE>
APPENDIX C
EXCERPT FROM SECTION 131 OF
THE LOUISIANA BUSINESS CORPORATION LAW
C. [A]ny 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 percent 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....
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 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.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 83 of the Louisiana Business Corporation Law
provides in part that a corporation may indemnify any director,
officer, employee or agent of the corporation against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with any action, suit or proceeding to which he is or was a party
or is threatened to be made a party (including any action by or
in the right of the corporation) if such action arises out of the
fact that he is or was a director, officer, employee or agent of
the corporation and 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 indemnification provisions of the Louisiana Business
Corporation Law are not exclusive; however, no corporation may
indemnify any person for willful or intentional misconduct. A
corporation has the power to obtain and maintain insurance, or to
create a form of self-insurance on behalf of any person who is or
was acting for the corporation, regardless of whether the
corporation has the legal authority to indemnify the insured
person against such liability.
Section 11 of FCC's by-laws (the "Indemnification By-Law")
provides for mandatory indemnification for directors and officers
or former directors and officers of FCC to the full extent
permitted by Louisiana law. The right to indemnification
provided by the Indemnification By-law applies to all covered
claims, whether such claims arose before or after the date the
Indemnification By-law was adopted.
As permitted by FCC's Articles of Incorporation, FCC has
entered into contracts with its directors and officers providing
for indemnification to the fullest extent permitted by law
("Indemnification Contracts"). The rights of the directors and
officers under the Indemnification Contracts substantially mirror
those granted under the Indemnification By-law.
FCC maintains an insurance policy covering the liability of
its directors and officers for actions taken in their official
capacity.
The Indemnification Contracts provide that, to the extent
insurance is reasonably available, FCC will maintain comparable
insurance coverage for each contracting party as long as he or
she serves as an officer or director and thereafter for so long
as he or she is subject to possible personal liability for
actions taken in such capacities. The Indemnification Contracts
also provide that if FCC does not maintain comparable insurance,
it will hold harmless and indemnify a contracting party to the
full extent of the coverage that would otherwise have been
provided for his or her benefit.
Item 21. Exhibits and Financial Statement Schedules
a) Exhibits
The following Exhibits are filed as part of this
Registration Statement:
Exhibit No. Description
2 Agreement and Plan of Merger dated July 21, 1994
included in the Registration Statement as Appendix A.
4.1 Indenture between First Commerce Corporation and
Republic Bank Dallas, N.A., Trustee, including the
form of 12 3/4% Convertible Debenture due 2000, Series
A included as Exhibit 4.1 to First Commerce
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1985 and incorporated herein by
reference.
4.2 Indenture between First Commerce Corporation and
Republic Bank Dallas, N.A., Trustee, including the
form of 12 3/4% Convertible Debenture due 2000, Series
B included as Exhibit 4.2 to First Commerce
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1985 and incorporated herein by
reference.
5 Opinion of Correro, Fishman & Casteix, L.L.P.
8 Form of opinion of Arthur Andersen & Co. as to certain
tax matters.
15 Letter of Arthur Anderson & Co. regarding unaudited
interim financial information.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Gragson, Casiday & Guillory.
23.3 Consent of Correro, Fishman & Casteix, L.L.P.,
included in Exhibit 5.
24 Powers of Attorney of directors of First Commerce
Corporation contained on page S-1 of the registration
statement.
99 Form of Proxy of Lakeside Bancshares, Inc.
_________________
b) Financial Statement Schedules
None
Item 22. Undertakings
The undersigned Registrant hereby undertakes as follows:
(1) To respond to requests for information that is
incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11, or 13 of Form S-4, 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.
(2) 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.
(3) That for purposes of determining any liability
under the Securities Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")
(and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new
registration statement related 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.
(4) 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.
(5) That every prospectus (i) that is filed
pursuant to paragraph (4) immediately preceding, or (ii)
that purports to meet the requirements of Section 10(a)(3)
of the Securities 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, 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.
(6) Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to
directors, officers and controlling persons of the
Registrant, 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 Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Act, the
Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized in the City of New Orleans, State of Louisiana on the
[5] day of August, 1994.
FIRST COMMERCE CORPORATION
By: /s/ THOMAS L. CALICUTT, JR.
Thomas L. Callicutt, Jr.
Senior Vice President and Controller
(Principal Accounting Officer and
Acting Chief Financial Officer)
Pursuant to the requirements of the Securities Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated. Each
person whose signature appears below hereby constitutes and
appoints David B. Kelso and Thomas L. Callicutt, Jr., or either
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 such Registration Statement, including post-
effective amendments, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-
in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done 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 or agent, or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ IAN ARNOF President and Chief August 5, 1994
Ian Arnof Executive Officer and
Director
/s/ HERMANN MOYSE, JR. Chairman of the Board August 5, 1994
Hermann Moyse, Jr.
Executive Vice President , 1994
David B. Kelso and Chief Financial
Officer
/s/ THOMAS L. CALLICUTT, JR. Senior Vice President and August 5, 1994
Thomas L. Callicutt, Jr. Controller (Principal
Accounting Officer and
Acting Chief Finanical
Officer)
Director , 1994
James J. Bailey III
/s/ JOHN W. BARTON Director August 5, 1994
John W. Barton
Director , 1994
Sydney J. Bestoff III
/s/ ROBERT H. BOLTON Director August 5, 1994
Robert H. Bolton
/s/ FRANCES B. DAVIS Director August 5, 1994
Frances B. Davis
/s/ LAURANCE EUSTIS, JR. Director August 5, 1994
Laurance Eustis, Jr.
/s/ WILLIAM P. FULLER Director August 5, 1994
William P. Fuller
/s/ ARTHUR HOLLINS III Director August 5, 1994
Arthur Hollins III
/s/ F. BEN JAMES, JR. Director August 5, 1994
F. Ben James, Jr.
/s/ ERIK F. JOHNSEN Director August 5, 1994
Erik F. Johnsen
/s/ JOSEPH MERRICK JONES, JR. Director August 5, 1994
Joseph Merrick Jones, Jr.
Director , 1994
Edwin Lupberger
/s/ O. MILES POLLARD, JR. Director August 5, 1994
O. Miles Pollard, Jr.
/s/ G. FRANK PURVIS, JR. Director August 5, 1994
G. Frank Purvis, Jr.
/s/ EDWARD M. SIMMONS Director August 5, 1994
Edward M. Simmons
/s/ H. LEIGHTON STEWARD Director August 5, 1994
H. Leighton Steward
/s/ JOSEPH B. STOREY Director August 5, 1994
Joseph B. Storey
/s/ ROBERT A. WEIGLE Director August 5, 1994
Robert A. Weigle
</TABLE>
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibits Pages
2 Agreement and Plan of Merger dated July 21, 1994
included in the Registration Statement as Appendix
A.
4.1 Indenture between First Commerce Corporation and
Republic Bank Dallas, N.A., Trustee, including the
form of 12 3/4% Convertible Debenture due 2000,
Series A included as Exhibit 4.1 to First Commerce
Corporation's Annual Report on Form 10-K for the
year ended December 31, 1985 and incorporated herein
by reference.
4.2 Indenture between First Commerce Corporation and
Republic Bank Dallas, N.A., Trustee, including the
form of 12 3/4% Convertible Debenture due 2000,
Series B included as Exhibit 4.2 to First Commerce
Corporation's Annual Report on Form 10-K for the
year ended December 31, 1985 and incorporated herein
by reference.
5 Opinion of Correro, Fishman & Casteix, L.L.P.
8 Form of opinion of Arthur Andersen & Co.,
independent public accountants as to certain tax
matters.
15 Letter of Arthur Anderson & Co. regarding unaudited
interim financial information.
23.1 Consent of Arthur Andersen & Co.
23.2 Consent of Gragson, Casiday & Guillory.
23.3 Consent of Correro, Fishman & Casteix, L.L.P.
included in Exhibit 5.
24 Powers of Attorney of directors of First Commerce
Corporation contained on page S-1 of the
registration statement.
99 Form of Proxy of Lakeside Bancshares, Inc.
_________________
EXHIBIT 5
[CORRERO, FISMAN & CASTEIX, L.L.P. LETTERHEAD]
August 5, 1994
First Commerce Corporation
210 Baronne Street
New Orleans, LA 70112
Gentlemen:
We have acted as counsel for First Commerce Corporation, a
Louisiana corporation (the "Company"), in connection with the
Company's Registration Statement on Form S-4 (the "Registration
Statement") covering up to 1,540,000 shares of common stock (the
"Common Stock") of the Company (the "Shares") which the Company
proposes to issue to shareholders of Lakeside Bancshares, Inc. in
accordance with the Agreement and Plan of Merger (the "Plan")
described in the Registration Statement.
For the purposes of the opinions expressed below, we have
examined the Registration Statement, the Plan, the Articles of
Incorporation, as amended, and By-laws, as amended, of the
Company, resolutions adopted by the Board of Directors and
Executive Committee of the Company and such other documents and
sources of law as we considered necessary.
On the basis of the foregoing, we are of the opinion that
the proposed issuance of the Shares has been duly authorized by
all necessary corporate action, and the Shares will, when issued
in accordance with the terms of the Plan, be validly issued,
fully paid and non-assessable.
We hereby consent (i) to be named in the Registration
Statement under the heading "Legal Matters" as counsel for the
Company and (ii) to the filing of this opinion as an Exhibit to
the Registration Statement. In so doing we do not admit that we
are "experts" within the meaning of the Securities Act of 1933.
Yours sincerely,
Anthony J. Correro, III
EXHIBIT 8
August___, 1994
D R A F T
BY HAND
Mr. Leon K. Poche, Jr.
First Commerce Corporation
210 Baronne Street
New Orleans, Louisiana 70112
Dear Mr. Poche:
This opinion is being furnished to you in connection with the
proposed acquisition of Lakeside Bancshares, Inc. ("Holding")
and its wholly owned banking subsidiary, Lakeside National Bank
of Lake Charles ("Bank") by First Commerce Corporation ("FCC"),
which is expected to be completed on July ___, 1994 ("the
Effective Date"). You have requested our opinion concerning
the following:
. Whether the merger of Holding into FCC will qualify as a
tax-free reorganization under Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended ("the Code").
. That the exchange of Holding common stock to the extent
exchanged for FCC common stock will not give rise to gain
or loss for federal income tax purposes to the holders of
Holding common stock with respect to such exchange.
. Whether the merger of Bank into First National Bank of
Lake Charles ("FNBLC"), a wholly-owned banking subsidiary
of FCC, will qualify as a tax-free reorganization under
Section 368(a)(1)(A) of the Code.
You have asked for our opinion on the federal income tax
consequences to FCC, Holding, Bank, FNBLC and the stockholders
of Holding. We have not considered any nonincome tax, state,
local or foreign income tax consequences, and, therefore, do
not express any opinion regarding the treatment that would be
given the merger by the applicable authorities on any nonincome
tax or any state, local or foreign tax issues. We also express
no opinion on nontax issues, such as corporate law or
securities law matters, including, but not limited to, all
securities law disclosure requirements.
In rendering our opinion, we have relied upon the accuracy and
completeness of the facts and information as contained in the
Agreement and Plan of Merger dated ___________, 1994 ("the
Agreement"), including all exhibits attached thereto, and the
representations included below. To the extent there are any
changes to the Agreement or representations, our opinion may be
affected accordingly.
The discussion and conclusions set forth below are based upon
the Code, the Treasury Regulations, and existing administrative
and judicial interpretations thereof, as of the Effective Date,
all of which are subject to change. If there is a change in
the Code, the Treasury Regulations or public rulings
thereunder, the current Internal Revenue Service rulings or
releases, or in the prevailing judicial interpretation of the
foregoing, the opinion expressed herein would necessarily have
to be re-evaluated in light of any such changes. We have no
responsibility to update this opinion for events, transactions,
changes in the above-listed law and authority or circumstances
occurring after the Effective Date.
This opinion is solely for the benefit of Holding and FCC and
is not intended to be relied upon by anyone other than Holding
and FCC. Although you do hereby have our express consent to
inform Bank, FNBLC, and Holding common stockholders of our
opinion by including copies of this letter as an exhibit to the
Agreement and as an exhibit in the Registration Statement on
Form S-4 for the proposed transactions, we assume no
responsibility for tax consequences to them. Instead, each of
these parties must consult and rely upon the advice of his/her
counsel, accountant or other advisor. Except to the extent
expressly permitted hereby, and without the prior written
consent of this firm, this letter may not be quoted in whole or
in part or otherwise referred to in any documents or delivered
to any other person or entity.
Proposed Transaction
Our understanding of the proposed transactions, as described in
the Agreement, is as follows:
A. Holding will be merged with and into FCC under the
Articles of Incorporation of FCC, pursuant to Louisiana
Business Corporation Law.
B. Immediately following the merger of Holding into FCC, and
as part of the same overall transaction, Bank will be
merged with and into FNBLC pursuant to Federal law (12
U.S.C. Section 215a). No additional shares of FNBLC or
FCC will be issued as a result of this transaction.
C. The common stockholders of Holding will receive shares of
FCC common stock proportionate in value, based on the
terms contained in Section 4 of Exhibit B of the
Agreement. In lieu of issuing fractional shares of FCC
common stock as a result of the merger, common
stockholders of Holding will be entitled to receive a
cash payment equal to such fractional share multiplied by
the designated value of a share of FCC common stock.
Unless stockholders of Holding common stock holding at least
eighty (80) percent of the voting rights of Holding approve the
plan of reorganization, objecting stockholders of Holding may
dissent from the merger involving Holding and HC, and instead
receive cash in exchange for their shares of Holding common
stock, based on the fair market value of such stock determined
under Section 131 of the Louisiana Business Corporation Law
(La. R.S. Section 12:131).
Additional Representations
In addition to the representations included in the Agreement,
the following representations have been made to us by
representatives of FCC, FNBLC, Holding, and Bank:
a) FCC and the stockholders of Holding will pay their
respective expenses, if any, incurred in connection with
the successful consummation of the transaction.
b) There is no intercorporate indebtedness existing between
Holding and FCC, or between FNBLC and Bank, that was
issued, acquired, or will be settled at a discount.
c) The fair market value of the assets of Holding
transferred to FCC will equal or exceed the sum of the
liabilities assumed by FCC plus the amount of
liabilities, if any, to which the transferred assets are
subject.
d) The fair market value of the assets of Bank transferred
to FNBLC will equal or exceed the sum of the liabilities
assumed by FNBLC plus the amount of liabilities, if any,
to which the transferred assets are subject.
e) None of the compensation received by any stockholder-
employees of Holding or Bank will be separate
consideration for, or allocable to, any of their shares
of Holding common stock; none of the shares of FCC 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.
f) Holding will be merged with and into FCC under the
Articles of Incorporation of FCC, pursuant to Louisiana
Business Corporation Law.
g) Bank will be merged with and into FNBLC pursuant to
Federal law (12 U.S.C. Section 215a).
h) The Holding common stockholders will have unrestricted
rights of ownership of FCC common stock received in the
transaction, and their ability to retain the FCC common
stock received in the transaction will not be limited in
any way.
i) The ratio for the exchange of shares of Holding common
stock for FCC common stock in the transaction was
negotiated through arm's length bargaining. Accordingly,
the fair market value of the FCC common stock to be
received by Holding common stockholders in the
transaction will be approximately equal to the fair
market value of the Holding common stock surrendered by
such stockholders in exchange therefor.
The following representations have been made to us by
representatives of FCC and FNBLC:
a) FCC has no plan or intention to re-acquire any of its
stock issued in the transaction.
b) FCC and FNBLC have no plan or intention to sell or
otherwise dispose of the stock of Bank or any of the
assets of Holding acquired in the transactions,
except for dispositions made in the ordinary course of
business or transfers described in Section 368(a)(2)(C)
of the Code. Additionally, FCC and FNBLC have no plan or
intention to sell or otherwise dispose of any of the
assets of Bank acquired in the transactions, except for
dispositions required by federal regulatory authorities
as a condition of regulatory approval for the transactions,
dispositions made in the ordinary course of business, or
transfers described in Section 368(a)(2)(c) of the Code.
Such dispositions of Bank assets will constitue a
disposition of less than 50 (fifty) percent of the fair
market value of the assets of Bank. Proceeds from the
disposition of Bank assets will be retained for use in
the conduct of the trade or business of Bank.
c) Following the transactions, FCC and FNBLC will continue
the historic businesses of Holding and Bank,
respectively, or use a significant portion of these
historic business assets in the operation of a trade or
business.
d) The payment of cash in lieu of fractional shares of FCC
common stock is solely for the purpose of avoiding the
expense and inconvenience to FCC 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 Holding stockholders
instead of issuing fractional shares of FCC common stock
will not exceed (1) one percent of the total
consideration that will be issued in the transaction to
the Holding stockholders in exchange for their shares of
Holding common stock. The fractional share interests of
each Holding stockholder will be aggregated, and no
Holding stockholder will receive cash for such fractional
share interests in an amount equal to or greater than the
value of one full share of FCC common stock.
e) The assumption by FCC of the liabilities of Holding, and
FNBLC of the liabilities of Bank, pursuant to the
transactions are for bona fide business purposes and the
principal purpose of such assumptions is not the
avoidance of federal income tax on the transfer of assets
of Holding to FCC, or FNBLC to Bank, respectively,
pursuant to the transactions.
f) FCC and FNBLC are not investment companies as defined in
Sections 368(a)(2)(F)(iii) and 368(a)(2)(F)(iv).
g) The proposed transaction is being undertaken for reasons
germane to the continuance of the business of FCC and
FNBLC.
The following representations have been made to us by
representatives of Holding and Bank:
a) To the best of the knowledge of the management and Board
of Directors of Holding, there is no plan or intention by
the common stockholders to sell, exchange, or otherwise
dispose of a number of shares of FCC common stock
received in the transaction that would reduce Holding
stockholders' ownership of FCC common stock to a number
of shares having a value, as of the Effective Date, of
less than (50) fifty percent of the value of all the
formerly outstanding common stock of Holding as of the
same date. For purposes of this representation, shares
of Holding common stock exchanged for cash in lieu of
fractional shares of FCC stock will be treated as
outstanding Holding common stock on the Effective Date.
Moreover, shares of Holding common stock and shares of
FCC common stock held by Holding stockholders and
otherwise sold, redeemed, or disposed of prior or
subsequent to the transaction will be considered in
making this representation.
b) The liabilities of Holding and Bank assumed by FCC and
FNBLC, respectively, and the liabilities to which the
transferred assets of Holding and Bank are subject were
incurred by Holding and Bank in the ordinary course of
business.
c) Holding and Bank are not investment companies as defined
in Sections 368(a)(2)(F)(iii) and 368(a)(2)(F)(iv).
d)The proposed transaction is being undertaken for reasons
germane to the continuance of the business of Holding and
Bank.
Analysis of Applicable Federal Tax Provisions
Section 354(a)(1) addresses the effects of corporate
reorganizations on shareholders, providing in general that no
gain or loss shall be recognized if stock or securities in a
corporation a party to a reorganization are, in pursuance of
the plan of reorganization, exchanged solely for stock or
securities in such corporation or in another corporation, a
party to the reorganization.
For purposes of Code Section 354, the terms "reorganization"
and "party to a reorganization" mean only a reorganization or a
party to a reorganization as defined in Sections 368(a)
and 368(b). Section 368(a)(1)(A) states that the term
reorganization includes a statutory merger or consolidation.
Reg. Section 1.368-2(b)(1) states that in order for a
transaction to qualify as a reorganization under Section
368(a)(1)(A), the transaction must be a merger or consolidation
effected pursuant to the corporation laws of the United States
or State or Territory or the District of Columbia. Under
Section 368(b), the term party to a reorganization includes
both corporations in the case of a reorganization resulting
from the acquisition by one corporation of stock or properties
of another.
The regulations under Section 368 require as a part of a
reorganization a continuity of the business enterprise under
the modified corporate form, a bona fide business purpose
for the reorganization, and a continuity of interest therein
on the part of those persons who, directly or indirectly, were
owners of the enterprise prior to the reorganization.
Reg. Section 1.368-1(d)(2) states that the continuity of
business enterprise requirement is met if the acquiring
corporation either continues the acquired corporation's
historic business or uses a significant portion of the acquired
corporation's business assets in the operation of a trade or
business. Based on the representations set forth above, the
continuity of business enterprise requirement is met with
respect to the assets and business operations of Bank.
Reg. Section 1.368-2(g) indicates that in addition to coming
within the scope of the specific language of Sec. 368(a), a
reorganization must also be "undertaken for reasons germane to
the continuance of the business of a corporation a party to the
reorganization." If the transaction or series of transactions
has no business or corporate purpose, then the plan is not a
reorganization pursuant to Section 368(a). [Reg. Section
1.368-1(c).]
The continuity of interest requirement does not require that
all shareholders of the acquired corporation have a proprietary
interest in the surviving corporation after the acquisition; it
is not even necessary for a substantial percentage of such
shareholders to have such an interest. Rather, the IRS
announced in Rev. Proc. 77-37 that it would rule that the
continuity of interest requirement is met so long as one or
more of the acquired corporation's shareholders retain a
sufficient proprietary interest in the continuing corporation.
In addition to meeting the continuity of interest requirement
immediately after the reorganization, the former shareholders
of the acquired corporation must retain their interest in the
acquiring corporation for some time after the reorganization.
The courts have ruled that the tax-free nature of the
reorganization may be retroactively invalidated if the
continuity of interest is not maintained either because, at the
time of the reorganization, the shareholders intended to
dispose of the proprietary interest soon after the
reorganization (Christian Est. v. Comr., T.C. Memo 1989-413) or
because a shareholder disposes of stock immediately following
the reorganization in accordance with a pre-existing commitment
to sell (American Wire Fabrics Corp. v. Comr., 16 TC 607). The
courts have generally looked to the intent of the shareholders
at the time of the reorganization to dispose of their interests
in determining whether the continuity of interest requirement
is subsequently violated.
The Internal Revenue Service has ruled that the continuity of
interest requirement was met in situations similar to the
proposed transactions (PLR 8839036, PLR 8903054, PLR 9319017
and PLR 9325026). It should be noted, however, that a private
letter ruling (PLR) is directed only to the taxpayer who
requested it. Section 6110(j)(3) provides that it may not be
used or cited as precedent. On the other hand, a PLR does
represent an indication of how the IRS may view the tax
consequences of a taxpayer with similar facts and
circumstances. In these rulings, a corporation and its wholly-
owned subsidiary were simultaneously merged into the acquiring
parent and its wholly-owned subsidiary, respectively, as part
of the same overall transaction. Based on the representations
set forth above, the continuity of interest requirement is met
with respect to FCC's ownership of Bank.
Section 356(a)(1) provides that if Section 354 would apply to
an exchange but for the fact that the property received in the
exchange consists not only of property permitted to be received
under Section 354 without the recognition of gain but also of
other property or money then the gain, if any, to the recipient
shall be recognized but not in excess of the sum of money and
the fair market value of the property received.
Section 356(c) states that no loss from the exchange may be
recognized by the shareholder.
In other official pronouncements, the Internal Revenue Service
has treated the distribution of cash distributed as part of a
reorganization and in a transaction subject to Section 356
considerations by applying the redemption principles under
Section 302. Section 302 provides, in part, that a redemption
will be treated as a distribution in part or full payment in
exchange for stock if it can meet the tests of that section.
In Rev. Rul. 66-365, the IRS announced that in a transaction
qualifying as a reorganization under Section 368(a)(1)(A) of
the Code where a cash payment is made by the acquiring
corporation in lieu of fractional shares and is not separately
bargained for, such cash payment will be treated under
Section 302 of the Code as in redemption of fractional share
interests. Therefore, each shareholder's redemption will be
treated as a distribution in full payment in exchange for his
or her fractional share interest under Section 302(a) of the
Code and accorded capital gain or loss treatment provided the
redemption is not essentially equivalent to a dividend and that
the fractional shares redeemed constitute a capital asset in
the hands of the holder as discussed below. In Rev. Proc. 77-
41, the IRS stated that "a ruling will usually be issued under
Section 302(a) of the Code that cash to be distributed to
shareholders in lieu of fractional share interests arising in
corporate reorganizations...will be treated as having been
received in part or in full payment in exchange for the stock
redeemed if the cash distribution is undertaken solely for the
purpose of saving the corporation the expense and inconvenience
of issuing and transferring fractional shares, and is not
separately bargained-for consideration."
Under Section 302, where there is a complete redemption of all
of a shareholder's stock in a corporation (after consideration
of the constructive ownership rules of Section 302(c)), the
redemption payment is treated as made entirely in exchange for
the shareholder's stock in the corporation (Section 302(b)(3)).
Under Section 358(a)(1), in the case of an exchange to which
Section 354 or Section 356 applies, the basis of property which
is permitted to be received under such section without the
recognition of gain or loss shall be the same as that of the
property exchanged, decreased by the amount of any money
received by the recipient and the amount of loss recognized by
the recipient as a result of the exchange and increased by the
amount which was treated as a dividend and the amount of other
gain recognized by the recipient as a result of the
transaction.
It should be noted that where cash is received in lieu of
fractional shares, the substance of the transaction is that of
a hypothetical receipt of the fractional shares and then a
redemption of such shares. Therefore, the basis that is to be
allocated to the stock of the acquiring corporation received
must be allocated to the shares retained and the fractional
shares hypothetically received. The gain or loss attributable
to the receipt of cash in lieu of fractional shares is measured
by comparing the cash received with the basis allocated to the
fractional shares that are hypothetically received, and such
gain or loss is recognized as discussed earlier pursuant to
Rev. Rul. 66-365.
Code Section 361(a) states that, as a general rule, no gain or
loss is to be recognized by a corporation if such corporation
is a party to a reorganization and exchanges property, in
pursuance of the plan of reorganization, solely for stock or
securities in another corporation a party to the
reorganization. Section 361(b) states that if Section 361(a)
would apply to an exchange but for the fact that the property
received in exchange consists not only of stock or securities
afforded nonrecognition treatment under Section 361(a), but
also of other property or money, then provided the corporation
receiving such other property or money distributes it in
pursuance to the plan of reorganization, no gain to the
corporation shall be recognized from the exchange. Section
361(a) states that as a general rule no gain or loss shall be
recognized to a corporation a party to a reorganization on the
distribution to its shareholders of any stock in another
corporation which is a party to the reorganization if such
stock was received by the distributing corporation in the
exchange.
Section 1032(a) states that no gain or loss shall be recognized
to a corporation on the receipt of money or other property in
exchange for such corporation's stock, including treasury
stock.
Code Section 362(b) states that the basis of property received
by the acquiring corporation in a reorganization is the same as
it would be in the hands of the transferor of the assets,
increased by any gain recognized by the transferor. The
transferor for purposes of the preceding sentence in the
instant case is Holding.
Section 1221 defines a capital asset as property held by the
taxpayer which is not inventory or other property held by the
taxpayer primarily for sale to customers in the ordinary course
of a trade or business, property used in the taxpayer's trade
or business subject to the allowance for depreciation under
Section 167, a copyright, literary, musical or artistic
composition, a letter or memorandum, or similar property
created by the personal efforts of the taxpayer, accounts or
notes receivable acquired in the ordinary course of a trade or
business for services rendered or from the sale of inventory or
other property held by the taxpayer primarily for sale to
customers in the ordinary course of business, or a publication
of the United States Government which is received from the
United States Government or any agency thereof other than by
purchase at the price at which it is offered for sale to the
public.
Section 1223(1) states that in determining the period for which
a taxpayer has held property received in an exchange, there
shall be included the period for which he or she held the
property exchanged if the property has, for the purpose of
determining gain or loss from a sale or exchange, the same
basis as the property exchanged and the property exchanged was
a capital asset as defined in Section 1221 as of the date of
the exchange.
Section 1223(2) states that for determining the period for
which the taxpayer has held property however acquired there
shall be included the period for which such property was held
by another person if the property has the same basis in whole
or in part in his hands as it would have had in the hands of
such other person.
Subchapter P of Chapter 1 of the Code provides limitations on
the recognition of capital gains and losses including, but not
limited to, the allowance of capital losses to the extent of
capital gains with respect to corporate taxpayers and the
allowance of up to $3,000 of net capital losses with respect to
taxpayers other than corporate taxpayers.
Opinion
Based upon all of the foregoing, including representations of
the management of FCC and the management and Board of Directors
of Holding, it is our opinion that:
a) The merger of Holding with and into FCC, as described
above, will constitute a reorganization under Section 368
of the Code (Section 368(a)(1)(A)).
b) Holding and FCC will each be "a party to a
reorganization" (Section 368(b)).
c) No gain or loss will be recognized by the common
stockholders of Holding on the receipt of FCC common
stock in exchange for surrendered Holding common stock
pursuant to the plan of reorganization
(Section 354(a)(1)).
d) The tax basis of the FCC common stock received by Holding
common stockholders will be the same as the basis of the
Holding common stock surrendered in exchange therefor,
decreased by the amount of basis allocated to the
fractional shares that are hypothetically received by the
stockholder and redeemed for cash, and increased by any
gain recognized on the exchange (not including any gain
recognized for the receipt of cash in lieu of fractional
shares) (Section 358(a)(1)).
e) The holding period of the FCC common stock received by
the Holding common stockholders will include the period
during which the Holding common stock surrendered in
exchange therefor was held, provided that the Holding
common stock is held as a capital asset in the hands of
the Holding stockholders on the Effective Date (Section
1223(1)).
f) The payment of cash in lieu of fractional share interests
of FCC common stock will be treated as if each fractional
share was distributed as part of the exchange and then
redeemed by FCC. Pursuant to Section 302(a) of the Code,
these cash payments will be treated as having been
received as distributions in full payment in exchange for
the FCC common stock. Any gain or loss recognized upon
such exchange (as determined under Section 1001 and
subject to the limitations of Section 267) will be
capital gain or loss provided the fractional share would
constitute a capital asset in the hands of the exchanging
stockholder (Rev. Rul. 66-365 and Rev. Proc. 77-41).
g) Each shareholder of Holding who elects to dissent from
the merger transaction involving Holding and FCC under
the provisions of Louisiana R.S. 12:131, and receives
cash in exchange for their shares of Holding common
stock, will be treated as receiving such payment in
complete redemption of their shares of Holding, provided
such shareholder does not actually or constructively own
any Holding common stock after the exchange under the
provisions and limitations of Section 302.
h) No gain or loss will be recognized by Holding on the
transfer of all of its assets to FCC solely in exchange
for FCC common stock and cash in lieu of fractional
shares which is subsequently distributed to Holding
common stockholders pursuant to the plan of
reorganization (Section 361).
i) No gain or loss will be recognized by FCC on the receipt
by FCC of substantially all of the assets of Holding in
exchange for FCC stock (Section 1032(a).)
j) The tax basis of Holding's assets in the hands of FCC
will be the same as the basis of those assets in the
hands of Holding immediately prior to the merger
(Section 362(b).)
k) The holding period of the assets of Holding in the hands
of FCC will include the period during which such assets
were held by Holding (Section 1223(2).)
l) The merger of Bank with and into FNBLC, as described
above, will constitute a reorganization under Section 368
of the Code (Section 368 (a)(1)(A)).
m) FNBLC and Bank will each be a "party to a reorganization"
(Section 368 (b)).
n) No gain or loss will be recognized by FCC on the merger
of Bank into FNBLC (Section 354(a)(1)).
o) No gain or loss will be recognized by Bank on the
transfer of all of its assets to FNBLC pursuant to the
plan of reorganization (Section 361).
p) The tax basis of Bank's assets in the hands of FNBLC will
be the same as the basis of those assets in the hands of
Bank immediately prior to the transaction (Section
362(b)).
q) The holding period of the assets of Bank in the hands of
FNBLC will include the period during which such assets
were held by Bank (Section 1223(2)).
We express no opinion on the impact, if any, on any other
sections of the Code, including but not limited to Section 382,
other than that as stated immediately above, and neither this
opinion nor any prior statements are intended to imply or to be
an opinion on any other matters.
The opinions expressed herein are based solely upon our
interpretation of the Code and income tax regulations as
further interpreted by court decisions, rulings, and procedures
issued by the Internal Revenue Service, as of the effective
date of this letter. Our opinions may be subject to change in
the event of changes in any of the foregoing authorities, some
of which could be retroactive. The opinions expressed herein
are not binding on the Internal Revenue Service, and there can
be no assurance that the Internal Revenue Service will not take
a position contrary to any of the opinions expressed herein, or
if the Internal Revenue Service took such a position, whether
it would be sustained by the courts. Further, Holding, Bank,
FNBLC, and Holding common stockholders are urged to discuss the
consequences of the proposed transactions with their own tax
advisors.
Very truly yours,
ARTHUR ANDERSEN & CO.
By
Kay Gravolet Priestly
EXHIBIT 15
August 5, 1994
First Commerce Corporation:
We are aware that First Commerce Corporation has incorporated
by reference in its Registration Statement its Form 10-Q for
the quarter ended March 31, 1994, which includes our report
dated April 13, 1994, covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the
Securities Act of 1933, that report is not considered a part of
the registration statement prepared or certified by our firm or
reports prepared or certified by our firm within the meaning of
Sections 7 and 11 of the Act.
Very truly yours,
Arthur Andersen & Co.
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of
our report dated January 12, 1994 included in First Commerce
Corporation's Form 10-K for the year ended December 31, 1993
and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN & CO.
New Orleans, Louisiana
August 5, 1994
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of
our report dated February 11, 1994 included in Lakeside
Bancshares, Inc.'s Form 10-K for the year ended December 31,
1993 and to all references to our Firm included in this
registration statement.
GRAGSON, CASIDAY & GUILLORY
New Orleans, Louisiana
August 5, 1994
EXHIBIT 99
PROXY
LAKESIDE BANCSHARES, INC.
SEPTEMBER 20, 1994
SPECIAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
The undersigned hereby constitutes and appoints R. Wayne
Vincent and Andy McElveen, or any of them, the proxies of the
undersigned, with full power of substitution, to represent the
undersigned and to vote all of the shares of common stock of
Lakeside Bancshares, Inc. ("Bancshares") that the undersigned
is entitled to vote at the special meeting of the shareholders
of Bancshares to be held on September 20, 1994 and at any and
all adjournments thereof.
1. A proposal to approve an Agreement and Plan of Merger and
two related merger agreements (collectively, the "Plan")
pursuant to which, among other things, (i) Lakeside
National Bank of Lake Charles, the wholly-owned bank
subsidiary of Bancshares, will merge into The First
National Bank of Lake Charles, a wholly-owned bank
subsidiary of First Commerce Corporation ("FCC"); (ii)
Bancshares will merge into FCC (the "Holding Company
Merger"); and (iii) on the effective date of the
Holding Company Merger, each outstanding share of common
stock of Bancshares will be converted into a number of
shares of FCC common stock as determined in accordance
with the terms of the Plan.
FOR ______ AGAINST ______ ABSTAIN ______
2. In their discretion, to vote upon such other business as
may properly come before the meeting or any adjournment
thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFIC
DIRECTIONS ARE GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSAL
SET FORTH HEREIN.
Please sign exactly as name appears on the certificate or
certificates representing shares to be voted by this proxy.
When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by president or other
authorized persons. If a partnership, please sign in
partnership name by authorized persons.
Dated: ________, 1994
_________________________
Signature of Shareholder
Insert Mailing Label
_________________________
Signature (if jointly owned)
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD
TO BANCSHARES PROMPTLY USING THE ENCLOSED ENVELOPE.
