<PAGE> 1
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-4
REGISTRATION STATEMENT
Under the Securities Act of 1933
-----------------------
FIRSTAR CORPORATION
(Exact name of Registrant as specified in its charter)
-----------------------
<TABLE>
<S> <C> <C>
WISCONSIN 6022 39-0711710
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code No.) Identification No.)
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
(414) 765-4321
</TABLE>
(Address, including ZIP Code and telephone number, including area code, of
registrant's principal executive officers)
-----------------------
HOWARD H. HOPWOOD III COPY TO:
SENIOR VICE PRESIDENT & GENERAL COUNSEL DANIEL O'ROURKE, ESQ.
FIRSTAR CORPORATION VEDDER, PRICE, KAUFMAN & KAMMHOLZ
777 EAST WISCONSIN AVENUE 222 NORTH LASALLE STREET
MILWAUKEE, WISCONSIN 53202 CHICAGO, ILLINOIS 60601-1003
(414) 765-5977 (312) 609-7500
(Name, address, including ZIP Code, and
telephone number, including area code,
of agent for service)
-----------------------
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. / /
-----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.25 par value, with 7,720,697 shares
attached Preferred Share Purchase and
Rights . . . . . . . . . . . . . . . 3,860,349 rights(1) $26.3425(2) $203,382,385(2) $70,132
Depositary Shares . . . . . . . . . . . 775,000 shares(3) $30.00(4) $23,265,000(4) $8,022
Series D Convertible Preferred Stock,
$1.00 par value . . . . . . . . . . 38,775 shares N/A(4) N/A(4) N/A(4)
Common Stock, $1.25 par value, with
attached Preferred Share Purchase
Rights . . . . . . . . . . . . . . . (5) N/A N/A N/A
---------------
$78,155
=======
</TABLE>
(1) Represents the maximum number of shares of Common Stock of Firstar
Corporation ("Firstar") and associated Preferred Share Purchase Rights
issuable upon consummation of the merger of First Colonial Bankshares
Corporation ("First Colonial") into Firstar Corporation of Illinois as
described herein. Each share of Firstar Common Stock issued will have
attached thereto one-half of one Preferred Share Purchase Right.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f) under the Securities Act of 1933 based on (a) the
average of the high and low prices for First Colonial Class A Common Stock
as reported on the Nasdaq National Market on November 16, 1994 ($21.50)
and the 8,425,829 shares of First Colonial Class A Common Stock that may
be outstanding at closing of the merger and which are the maximum number
to be received by Firstar or cancelled in the merger and (b) the book
value for First Colonial Class B Common Stock on October 31, 1994 ($14.17)
and the 1,568,600 shares of First Colonial Class B Common Stock that may
be outstanding at closing of the merger and which are the maximum number
to be received by Firstar or cancelled in the merger. The value
attributable to the Preferred Share Purchase Rights is reflected in the
market price of the Firstar Common Stock to which the Rights are attached.
(3) Each Depositary Share of Firstar represents 1/20 share of Series D
Convertible Preferred Stock of Firstar.
(4) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f)(1) under the Securities Act of 1933 based on
the average of the high and low prices for First Colonial Depositary
Shares as reported on the Nasdaq National Market on November 15, 1994 and
the 775,500 shares of First Colonial Depositary Shares (representing
38,775 shares of First Colonial Series C Convertible Preference Stock)
that are outstanding and which are the maximum number to be received by
Firstar or cancelled in the merger.
(5) Such indeterminate number of shares of Firstar common stock and Preferred
Share Purchase Rights as may be issuable upon conversion of the Firstar
Series D Convertible Preferred Stock registered hereby.
-------------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
FIRSTAR CORPORATION
CROSS-REFERENCE SHEET TO
PROXY STATEMENT-PROSPECTUS PURSUANT TO
RULE 501(B) OF REGULATION S-K
<TABLE>
<CAPTION>
LOCATION IN PROXY
ITEM OF FORM S-4 STATEMENT-PROSPECTUS
---------------- --------------------
<S> <C> <C>
A. INFORMATION ABOUT THE TRANSACTION
Cross Reference Sheet; Outside Front
1. Forepart of Registration Statement and Outside Front Cover Page of Cover Page of Proxy Statement-
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prospectus
2. Inside Front and Outside Back Cover Pages of Prospectus . . . . . . . Available Information; Incorporation
of Certain Information by Reference
3. Risk Factors, Ratio of Earnings to Fixed Charges and Other
Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary
4. Terms of the Transaction . . . . . . . . . . . . . . . . . . . . . . . Summary; Proposed Merger
Pro Forma Combining Financial
5. Pro Forma Financial Information . . . . . . . . . . . . . . . . . . . Statements
6. Material Contacts with the Company Being Acquired . . . . . . . . . . Proposed Merger
7. Additional Information Required for Reoffering by Persons and Parties
Deemed to be Underwriters . . . . . . . . . . . . . . . . . . . . . . *
8. Interests of Named Experts and Counsel . . . . . . . . . . . . . . . . Experts; Opinions
9. Disclosure of Commission Position on Indemnification for Securities Act
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
B. INFORMATION ABOUT THE REGISTRANT
Firstar Corporation; Comparative
10. Information with Respect to S-3 Registrants . . . . . . . . . . . . . Rights of Stockholders
Incorporation of Certain Information
11. Incorporation of Certain Information by Reference . . . . . . . . . . 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-3 or S-2
Registrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
First Colonial Bankshares
Corporation; Comparative Rights of
15. Information with Respect to S-3 Companies . . . . . . . . . . . . . . Stockholders
</TABLE>
__________________
* Omitted because answer to item is negative or item is not applicable.
<PAGE> 3
<TABLE>
<CAPTION>
LOCATION IN PROXY
ITEM OF FORM S-4 STATEMENT-PROSPECTUS
---------------- --------------------
<S> <C> <C>
16. Information with Respect to S-2 or S-3 Companies . . . . . . . . . . . *
17. Information with Respect to Companies other than S-3 or S-2
Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *
D. VOTING AND MANAGEMENT INFORMATION
Outside Front Cover Page of Proxy
18. Information if Proxies, Consents and Authorizations are to be Statement-Prospectus; Summary;
Solicited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Meeting Information; Proposed Merger
19. Information if Proxies, Consents or Authorizations are not to be
Solicited or in an Exchange Offer . . . . . . . . . . . . . . . . . . *
</TABLE>
__________________
* Omitted because answer to item is negative or item is not applicable.
<PAGE> 4
[First Colonial Logo]
FIRST COLONIAL BANKSHARES CORPORATION
December __, 1994
Dear Fellow Stockholder:
We are pleased to enclose materials relating to a Special Meeting of
Common Stockholders of First Colonial Bankshares Corporation ("First Colonial")
to be held at 9:00 a.m. (local time), on Wednesday, January 18, 1995, at the
Chicago Cultural Center, 77 East Randolph Street, Chicago, Illinois.
The purpose of the meeting is to consider and vote on an Agreement and
Plan of Reorganization among Firstar Corporation ("Firstar"), Firstar
Corporation of Wisconsin ("FCW"), a subsidiary of Firstar, and First Colonial,
dated as of July 31, 1994, and the Plan of Merger attached thereto (together,
the "Merger Agreements"), relating to the proposed merger (the "Merger") of
First Colonial with and into FCW. Pursuant to the Merger, First Colonial will
become a wholly owned subsidiary of Firstar.
Under the terms of the Merger Agreements and upon consummation of the
Merger, each outstanding share of Class A Common Stock and Class B Common Stock
of First Colonial ("First Colonial Common Stock") will be converted into 0.7725
of a share of Firstar Common Stock (including associated Preferred Share
Purchase Rights), and each outstanding Depositary Share representing an
interest in First Colonial Series C Convertible Preference Stock ("First
Colonial Depositary Shares") will be converted into one Depositary Share
representing an interest in a newly created class of Firstar convertible
preferred stock having substantially the same terms ("Firstar Preferred
Stock"), as more fully described in the accompanying Proxy
Statement-Prospectus.
The Merger is intended to be tax-free to First Colonial stockholders
for federal income tax purposes except as described under "PROPOSED
MERGER--Certain Federal Income Tax Consequences of the Merger" in the
accompanying Proxy Statement-Prospectus.
The enclosed Proxy Statement-Prospectus of Firstar and First Colonial
contains a more complete description of the terms of the proposed Merger. You
are urged to read the Proxy Statement-Prospectus carefully.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENTS
AS BEING IN THE BEST INTERESTS OF FIRST COLONIAL AND ITS STOCKHOLDERS AND
RECOMMENDS THAT HOLDERS OF FIRST COLONIAL COMMON STOCK VOTE IN FAVOR OF THE
MERGER. IN MAKING THIS RECOMMENDATION, THE BOARD OF DIRECTORS HAS CONSIDERED
NUMEROUS FACTORS, INCLUDING, BUT NOT LIMITED TO THE CONSIDERATION OFFERED BY
FIRSTAR AND THE STRUCTURE OF THE PROPOSED MERGER, WHICH IS DESIGNED TO MAKE THE
MERGER TAX-FREE FOR FEDERAL INCOME TAX PURPOSES TO STOCKHOLDERS OF FIRST
COLONIAL WHO RECEIVE FIRSTAR COMMON STOCK (EXCEPT FOR CASH RECEIVED IN LIEU OF
FRACTIONAL SHARES OF FIRSTAR COMMON STOCK) OR FIRSTAR PREFERRED STOCK (OR
DEPOSITARY SHARES REPRESENTING AN INTEREST IN SUCH FIRSTAR PREFERRED STOCK) AND
TO ALLOW FIRST COLONIAL STOCKHOLDERS TO PARTICIPATE IN THE FUTURE OF THE
COMBINED ORGANIZATION.
Whether or not you plan to attend the Special Meeting, holders of
First Colonial Common Stock are asked to please fill out, sign, and date the
enclosed proxy card, and return it promptly in the accompanying envelope, which
requires no postage if mailed in the United States. If you later find that you
may be present at the Special Meeting or for any other reason desire to revoke
your proxy, you may do so at any time before it is voted. Please note that
holders of the receipts representing First Colonial Depositary Shares are not
entitled to vote on the Merger.
C. Paul Johnson
Chairman of the Board and Chief Executive Officer
<PAGE> 5
PLEASE DO NOT SEND YOUR STOCK CERTIFICATES OR RECEIPTS AT THIS TIME. IF THE
MERGER IS CONSUMMATED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF
YOUR STOCK CERTIFICATES AND RECEIPTS.
<PAGE> 6
[First Colonial Logo]
FIRST COLONIAL BANKSHARES CORPORATION
30 North Michigan Avenue, Suite 300
Chicago, Illinois 60602-0493
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 18, 1995
To the Stockholders of First Colonial Bankshares Corporation:
NOTICE IS HEREBY GIVEN that a special meeting of the holders
of Class A and Class B Common Stock of First Colonial Bankshares Corporation, a
Delaware corporation ("First Colonial"), pursuant to action of the Board of
Directors, will be held at the Chicago Cultural Center, 77 East Randolph
Street, Chicago, Illinois, on January 18, 1995, at 9:00 a.m. local time, for
the following purposes:
1. To consider and vote upon the approval and adoption
of an Agreement and Plan of Reorganization and a Plan of Merger (the
"Merger Agreements"), each dated as of July 31, 1994, that provide
for, among other things, the merger (the "Merger") of First Colonial
with and into Firstar Corporation of Wisconsin, a wholly owned
subsidiary of Firstar Corporation, the conversion of the outstanding
shares of First Colonial Class A and Class B Common Stock into the
right to receive shares of Firstar Corporation Common Stock and
associated Preferred Share Purchase Rights, and the conversion of the
outstanding shares of First Colonial Series C Convertible Preference
Stock into the right to receive shares of Firstar Corporation Series D
Convertible Preferred Stock, as described in the Proxy
Statement-Prospectus accompanying this notice; and
2. To transact such other business as may properly be
brought before the Special Meeting or any adjournments thereof.
The close of business on December 12, 1994 has been fixed as
the record date for the determination of stockholders entitled to notice of,
and to vote at, the Special Meeting and any adjournment or postponement
thereof. Please note that holders of depositary receipts representing an
interest in First Colonial Series C Convertible Preference Stock are not
entitled to vote on the Merger Agreements but are entitled to receive this
notice of the Special Meeting.
Holders of First Colonial Class B Common Stock have the
statutory right to dissent from the Merger and, if the Merger is consummated,
to receive payment in cash for the "fair value" of their shares of First
Colonial Class B Common Stock upon compliance with the provisions of Section
262 of the Delaware General Corporation Law. To perfect this right, a holder
of First Colonial Class B Common Stock must not vote such shares in favor of
the Merger Agreements at the Special Meeting (this may be done by marking a
proxy either to vote against the Merger Agreements or to abstain from voting
thereon or by not voting at all), must deliver written notice of dissent before
the vote on the Merger is
<PAGE> 7
taken and must otherwise comply with this statute. A copy of Section 262
of the Delaware General Corporation Law is attached as Appendix A to the
Proxy Statement-Prospectus.
The Special Meeting may be postponed or adjourned from time to
time without any notice other than by announcement at the Special Meeting of
any postponements or adjournments thereof, and any and all business for which
notice is hereby given may be transacted at such postponed or adjourned Special
Meeting.
THE BOARD OF DIRECTORS OF FIRST COLONIAL BELIEVES THE PROPOSED
MERGER IS IN THE BEST INTERESTS OF FIRST COLONIAL AND ITS STOCKHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT THE COMMON STOCKHOLDERS OF FIRST COLONIAL VOTE
"FOR" PROPOSAL NUMBER (1) ABOVE.
Whether or not you plan to attend the Special Meeting, holders
of First Colonial Class A and Class B Common Stock are asked to please
complete, date and sign the enclosed proxy, which is solicited by the Board of
Directors of First Colonial, and return it promptly in the accompanying
envelope. No postage is required if mailed in the United States. The giving
of such proxy does not affect your right to vote in person in the event you
attend the Special Meeting. You may revoke the proxy at any time prior to its
exercise in the manner described in the Proxy Statement-Prospectus.
By Order of the Board of Directors,
C. Paul Johnson, Chairman of the Board
and Chief Executive Officer
Chicago, Illinois
December __, 1994
PLEASE DO NOT SEND YOUR STOCK CERTIFICATES OR RECEIPTS AT THIS TIME. IF THE
MERGER IS CONSUMMATED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF
YOUR STOCK CERTIFICATES AND RECEIPTS.
<PAGE> 8
[Firstar Logo] [First Colonial Logo]
PROXY STATEMENT
FIRST COLONIAL BANKSHARES CORPORATION
30 NORTH MICHIGAN AVENUE, SUITE 300
CHICAGO, ILLINOIS 60602-0493
(312) 419-9891
SPECIAL MEETING OF COMMON STOCKHOLDERS
____________________
PROSPECTUS
FIRSTAR CORPORATION
____________________
This Proxy Statement-Prospectus is being furnished to the
stockholders of First Colonial Bankshares Corporation, a Delaware corporation
("First Colonial"), in connection with the solicitation of proxies of common
stockholders of First Colonial by the Board of Directors of First Colonial for
use at the special meeting of stockholders of First Colonial to be held on
January 18, 1995, at the Chicago Cultural Center, 77 East Randolph Street,
Chicago, Illinois, commencing at 9:00 a.m., local time, and any adjournments or
postponements thereof (the "Special Meeting"). At the Special Meeting, holders
of First Colonial's Class A common stock, $1.25 par value ("First Colonial
Class A Common Stock"), and Class B common stock, $1.25 par value ("First
Colonial Class B Common Stock" and, together with the First Colonial Class A
Common Stock, "First Colonial Common Stock"), will consider and vote upon the
approval and adoption of an Agreement and Plan of Reorganization, dated as of
July 31, 1994 (the "Reorganization Agreement"), among First Colonial, Firstar
Corporation, a Wisconsin corporation ("Firstar"), and Firstar Corporation of
Wisconsin (as successor to Firstar Corporation of Illinois), a Wisconsin
corporation and wholly owned subsidiary of Firstar ("FCW"), and a related Plan
of Merger, dated as of July 31, 1994, by and between First Colonial and FCW and
joined in by Firstar for certain limited purposes (the "Plan of Merger" and,
together with the Reorganization Agreement, the "Merger Agreements"), which
provide for the merger of First Colonial with and into FCW (the "Merger").
Under the Merger Agreements, each outstanding share of First
Colonial Common Stock will be converted into the right to receive 0.7725 of a
share of common stock of Firstar, $1.25 par value, and associated Preferred
Share Purchase Rights (collectively referred to herein as "Firstar Common
Stock"), and each outstanding share of First Colonial's Series C Convertible
Preference Stock, no par value ("First Colonial Series C Preference Stock"),
will be converted into the right to receive one share of Series D Convertible
Preferred Stock, $1.00 par value, of Firstar ("Firstar Preferred Stock"), which
is a new class of preferred stock of Firstar with terms substantially the same
as the First Colonial Series C Preference Stock.
The Merger will not be taxable for federal income tax
purposes, except with respect to cash received by holders of First Colonial
Common Stock in lieu of fractional shares of Firstar Common Stock or by holders
of First Colonial Class B Common Stock as a result of their exercise of
statutory rights to dissent from the Merger. For a more complete description
of the Merger Agreements and the terms of the Merger, see "PROPOSED MERGER."
<PAGE> 9
This Proxy Statement-Prospectus also constitutes a prospectus
of Firstar with respect to shares of Firstar Common Stock to be issued in the
Merger in exchange for outstanding shares of First Colonial Common Stock and
shares of Firstar Preferred Stock to be issued in the Merger in exchange for
outstanding shares of First Colonial Series C Preference Stock. In addition,
this Proxy Statement-Prospectus constitutes a prospectus of Firstar with
respect to the shares of Firstar Common Stock issuable upon conversion of the
Firstar Preferred Stock. This Proxy Statement-Prospectus also relates to
depositary shares each of which currently represents ownership of one-twentieth
of a share of First Colonial Series C Preference Stock deposited with First
Chicago Trust Company of New York and each of which entitles the holder thereof
to all proportional rights and preferences of the First Colonial Series C
Preference Stock. In accordance with the terms of the Deposit Agreement
between First Colonial, First Chicago Trust Company of New York, as depositary
(the "Depositary"), and all holders from time to time of the depositary
receipts issued thereunder, dated as of April 27, 1992 (the "Deposit
Agreement"), upon the conversion of First Colonial Series C Preference Stock
into Firstar Preferred Stock in the Merger, each depositary share will
thereafter, at the direction of FCW as the surviving corporation in the Merger
(the "Surviving Corporation"), represent ownership of one-twentieth of a share
of Firstar Preferred Stock. The depositary shares that currently represent
First Colonial Series C Preference Stock and that after the Merger will
represent Firstar Preferred Stock are collectively referred to herein as the
"Depositary Shares".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS ANY SUCH COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Copies of this Proxy Statement-Prospectus are first being
mailed to stockholders of First Colonial on or about December __, 1994.
The date of this Proxy Statement-Prospectus is December __, 1994.
<PAGE> 10
AVAILABLE INFORMATION
Firstar and First Colonial are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, file reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
Such reports, proxy statements and other information can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Regional
Offices of the Commission at Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such material may also be obtained
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, Firstar Common Stock
is listed on the New York Stock Exchange and the Chicago Stock Exchange, and
reports, proxy statements and other information filed by Firstar with such
exchanges may be inspected at the offices of the New York Stock Exchange, Inc.,
20 Broad Street, New York, New York 10005 and the Chicago Stock Exchange
Incorporated, 440 South LaSalle Street, Chicago, Illinois 60605.
This Proxy Statement-Prospectus does not contain all of the
information set forth in the Registration Statement on Form S-4 and exhibits
thereto (the "Registration Statement") covering the securities offered hereby
which Firstar has filed with the Commission, certain portions of which have
been omitted pursuant to the rules and regulations of the Commission, and to
which portions reference is hereby made for further information with respect to
Firstar, First Colonial and the securities offered hereby.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS AND, IF GIVEN
OR MADE, THE INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY FIRSTAR, FCW OR FIRST COLONIAL. THIS PROXY
STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO PURCHASE THE SECURITIES OFFERED HEREBY, OR THE SOLICITATION OF A
PROXY, IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION OF AN OFFER OR PROXY IN SUCH JURISDICTION. NEITHER
THE DELIVERY OF THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF THE
SECURITIES TO WHICH THIS PROXY STATEMENT-PROSPECTUS RELATES SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF FIRSTAR, FCW OR FIRST COLONIAL SINCE THE DATE OF THIS PROXY
STATEMENT-PROSPECTUS.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF
DOCUMENTS RELATING TO FIRSTAR, EXCLUDING EXHIBITS UNLESS SPECIFICALLY
INCORPORATED HEREIN, ARE AVAILABLE UPON REQUEST WITHOUT CHARGE FROM MR. WILLIAM
H. RISCH, SENIOR VICE PRESIDENT-FINANCE AND TREASURER, FIRSTAR CORPORATION, 777
EAST WISCONSIN AVENUE, MILWAUKEE, WISCONSIN 53202 (TELEPHONE 414/765-4985).
COPIES OF DOCUMENTS RELATING TO FIRST COLONIAL, EXCLUDING EXHIBITS UNLESS
SPECIFICALLY INCORPORATED HEREIN, ARE AVAILABLE WITHOUT CHARGE FROM MS. BARBARA
A. KILIAN, SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, FIRST COLONIAL
BANKSHARES CORPORATION, 30 NORTH MICHIGAN AVENUE, SUITE 300, CHICAGO, ILLINOIS
60602-0493 (TELEPHONE (312) 696-1321). IN ORDER TO ENSURE TIMELY DELIVERY OF
THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY ______________.
2
<PAGE> 11
The following documents filed with the Commission are
incorporated herein by reference:
(a) Firstar's Annual Report on Form 10-K for the year
ended December 31, 1993;
(b) Firstar's Quarterly Reports on Form 10-Q for the
quarters ended March 31, June 30, and September 30, 1994;
(c) the description of Firstar Common Stock (including
the Preferred Share Purchase Rights) contained in Firstar's
registration statements filed pursuant to Section 12 of the Exchange
Act and any amendment or report filed for the purpose of updating such
description;
(d) First Colonial's Annual Report on Form 10-K for the
year ended December 31, 1993;
(e) First Colonial's Quarterly Reports on Form 10-Q for
the quarters ended March 31, June 30, and September 30, 1994;
(f) First Colonial's Current Report on Form 8-K filed
August 4, 1994; and
(g) the descriptions of First Colonial Common Stock,
First Colonial Series C Preference Stock and the depositary shares
representing such preference stock contained in First Colonial's
registration statements filed pursuant to Section 12 of the Exchange
Act and any amendment or report filed for the purpose of updating such
description.
All documents filed by Firstar or First Colonial pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
hereof and prior to the Special Meeting will be deemed to be incorporated by
reference into this Proxy Statement-Prospectus and to be a part hereof from the
date of filing of the documents.
Any statement contained in a document incorporated by
reference herein or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes hereof to the extent that a
statement contained herein (or in any subsequently filed document which also
is, or is deemed to be, incorporated by reference herein) modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed to constitute a part hereof except as so modified or superseded.
3
<PAGE> 12
FIRSTAR CORPORATION
AND
FIRST COLONIAL BANKSHARES CORPORATION
PROXY STATEMENT-PROSPECTUS
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Proposed Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recommendation of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Date of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dividends on First Colonial Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Management and Operations After the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 10
Waivers and Amendments to the Merger Agreements . . . . . . . . . . . . . . . . . . . . . . 11
Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 11
Resales of Firstar Common Stock by Affiliates . . . . . . . . . . . . . . . . . . . . . . . 11
Preferred Share Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Markets and Market Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Comparative Per Common Share Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
COMPARATIVE PER COMMON SHARE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
HISTORICAL AND PRO FORMA SELECTED FINANCIAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 14
HISTORICAL AND PRO FORMA SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . 15
MEETING INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Date, Place and Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Record Date; Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Voting and Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
PROPOSED MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
First Colonial's Reasons for the Merger and Board Recommendation . . . . . . . . . . . . . . 25
</TABLE>
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<S> <C>
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Terms of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Firstar Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Assignment and Assumption Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Business Pending the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Termination, Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Management and Operations After the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 51
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 51
Effect on Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Certain Federal Income Tax Consequences of the Merger . . . . . . . . . . . . . . . . . . . 56
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Resale of Firstar Common Stock, Firstar Preferred Stock and Firstar Subordinated Notes . . . 58
Rights of Dissenting Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
COMPARATIVE RIGHTS OF STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Preferred Share Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Appraisal Rights and Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Assessability; Potential Liability For Wages . . . . . . . . . . . . . . . . . . . . . . . . 61
Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Liability of Directors; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Action Without A Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Dividend Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
FIRSTAR CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Supervision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Other Acquisitions and Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Incorporation of Certain Information by Reference . . . . . . . . . . . . . . . . . . . . . 68
FIRST COLONIAL BANKSHARES CORPORATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
</TABLE>
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<TABLE>
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<S> <C>
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
PRO FORMA COMBINING FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
APPENDIX A - Section 262 of the Delaware General Corporation Law
APPENDIX B - Merger Agreements
APPENDIX C - Fairness Opinion of Donaldson, Lufkin & Jenrette
</TABLE>
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SUMMARY
The following is a brief summary of certain information with
respect to matters to be considered at the Special Meeting of holders of First
Colonial Common Stock. As used in this Proxy Statement-Prospectus, the terms
"Firstar" and "First Colonial" refer to such corporations, respectively, and
except where the context otherwise requires, such entities and their respective
subsidiaries. All information concerning Firstar included in this Proxy
Statement-Prospectus has been furnished by Firstar, and all information
concerning First Colonial has been furnished by First Colonial. This summary
is not intended to be complete and is qualified in its entirety by reference to
the more detailed information contained elsewhere in this Proxy Statement of
First Colonial and Prospectus of Firstar, including the appendices hereto (this
"Proxy Statement-Prospectus"), and the documents incorporated in this Proxy
Statement-Prospectus by reference. Stockholders are urged to review carefully
the entire Proxy Statement-Prospectus.
THE COMPANIES
Firstar Corporation and Firstar Corporation of Wisconsin
Firstar, a Wisconsin corporation, whose common stock is listed
on the New York Stock Exchange ("NYSE") and the Chicago Stock Exchange, is a
multi-bank holding company organized in 1929. The principal assets of Firstar
are its investments in ____ banks with offices located in the states of
Wisconsin, Minnesota, Illinois, Iowa and Arizona. On September 30, 1994,
Firstar had consolidated total assets of $14.3 billion and stockholders' equity
of $1.2 billion. Firstar's principal executive offices are located at 777 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202 (telephone: (414) 765-4321). See
"FIRSTAR CORPORATION." Firstar Corporation of Illinois, which was a wholly
owned subsidiary of Firstar, merged into FCW on November __, 1994. FCW, a
wholly owned subsidiary of Firstar, owns [19 banks with 126 offices, including
15 in Illinois, and a trust subsidiary]. At the time of the Merger, one
subsidiary bank of FCW, Firstar Bank Illinois, will operate Firstar's existing
Illinois offices.
First Colonial Bankshares Corporation
First Colonial, a Delaware corporation, is a multi-bank
holding company that commenced operations in 1978. On September 30, 1994,
First Colonial had consolidated total assets of $1.8 billion and stockholders'
equity of $158 million. First Colonial's principal executive offices are
located at 30 North Michigan Avenue, Suite 300, Chicago, Illinois 60602-0493
(telephone (312) 419-9891). The principal assets of First Colonial are its
investments in 17 banks located in the Chicago metropolitan area. See "FIRST
COLONIAL BANKSHARES CORPORATION."
PROPOSED MERGER
Firstar, First Colonial and FCW have entered into an Agreement
and Plan of Reorganization dated as of July 31, 1994 and a related Plan of
Merger dated as of July 31, 1994, providing, among other things, for the merger
of First Colonial with and into FCW, as a result of which Firstar will directly
own 100% of the stock of the surviving corporation, FCW. Upon the Merger, the
rights of First Colonial stockholders will be governed by Wisconsin law and the
Restated Articles of Incorporation and Bylaws of Firstar. See "PROPOSED
MERGER."
Upon consummation of the Merger, each outstanding share of
First Colonial Common Stock will be converted into 0.7725 of a share of Firstar
Common Stock (subject to the payment of cash in lieu of fractional shares and,
in the case of First Colonial Class B Common Stock, except for shares as to
which dissenters' rights are perfected) (such ratio, the "Exchange Ratio") and
each outstanding share
7
<PAGE> 16
of First Colonial Series C Preference Stock will be converted into one
share of Firstar Preferred Stock. Pursuant to the Deposit Agreement, upon
conversion of First Colonial Series C Preference Stock into Firstar Preferred
Stock, each Depositary Share will thereafter automatically and with no action
on the part of the holder thereof represent ownership of one-twentieth of a
share of Firstar Preferred Stock. See "PROPOSED MERGER--Terms of the Merger;
Firstar Preferred Stock; Depositary Shares; Options; Assignment and Assumption
Agreements."
THE MEETING
The Special Meeting of the holders of First Colonial Common Stock will
be held at the Chicago Cultural Center, 77 East Randolph Street, Chicago,
Illinois, on January 18, 1995 at 9:00 a.m., local time. The close of business
on December 12, 1994 is the record date (the "Record Date") for determining the
stockholders of First Colonial entitled to notice of and, in the case of
holders of First Colonial Common Stock, to vote at the Special Meeting and any
postponement or adjournments thereof. The purpose of the Special Meeting is to
consider and vote upon a proposal to approve the Merger Agreements. For
additional information relating to the Special Meeting, see "MEETING
INFORMATION."
VOTE REQUIRED
The Delaware General Corporation Law ("DGCL") requires that the Merger
Agreements be approved by the affirmative vote of a majority of the votes
attributable to the outstanding shares of First Colonial Common Stock, voting
as a single class. As of the Record Date, there were outstanding __________
shares of First Colonial Class A Common Stock, each of which is entitled to one
vote, and ___________ shares of First Colonial Class B Common Stock, each of
which is entitled to 20 votes. Holders of First Colonial Series C Preference
Stock are entitled to notice of the Special Meeting but are not entitled to
vote on the Merger Agreements.
Colonial and their affiliates owned beneficially approximately _____%
of the outstanding shares of First Colonial Class A Common Stock and ___%
of the outstanding shares of First Colonial Class B Common Stock, representing
approximately _____% of the voting power of the First Colonial Common Stock. As
of the Record Date, directors and executive officers of First Colonial owned
beneficially _____ shares of Firstar Common Stock. As of the Record Date,
directors and executive officers of Firstar owned beneficially 7,500 shares
(_____% of the voting power of First Colonial Common Stock) of First Colonial
Class A Common Stock and no shares of First Colonial Class B Common Stock. See
"MEETING INFORMATION--Record Date; Vote Required."
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF FIRST COLONIAL UNANIMOUSLY RECOMMENDS THAT
FIRST COLONIAL'S COMMON STOCKHOLDERS VOTE FOR APPROVAL OF THE MERGER
AGREEMENTS. The Board, after consideration of the terms and conditions of the
Merger Agreements and other factors deemed relevant by the Board of Directors,
including the opinion of Donaldson, Lufkin & Jenrette Securities Corporation,
First Colonial's financial advisor ("DLJ"), believes that the terms of the
Merger Agreements are fair and that the Merger is in the best interest of First
Colonial and its stockholders. See "PROPOSED MERGER--Background of the Merger;
First Colonial's Reasons for the Merger and Board Recommendation."
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<PAGE> 17
OPINION OF FINANCIAL ADVISOR
First Colonial's financial advisor, DLJ, has rendered its
opinion to the Board of Directors of First Colonial to the effect that the
consideration to be received by the holders of First Colonial Common Stock upon
consummation of the Merger is fair, from a financial point of view, to such
holders. The opinion of DLJ, attached as Appendix C to this Proxy
Statement-Prospectus, sets forth the assumptions made, the matters considered,
and the limitations in the review undertaken in rendering such opinion. See
"PROPOSED MERGER--Opinion of Financial Advisor."
DISSENTERS' RIGHTS
Under the provisions of Delaware law, any holders of First
Colonial Class B Common Stock who assert dissenters' rights will have a
statutory right to have the value of their shares appraised. To perfect this
right, a holder of First Colonial Class B Common Stock must not vote such
shares in favor of the Merger Agreements at the Special Meeting (this may be
done by marking the proxy either to vote against the Merger Agreements or to
abstain from voting thereon or by not voting at all) and must take such other
action as is required by the provisions of Section 262 of the DGCL, including
delivering written demand for appraisal of such First Colonial Class B Common
Stock. Under Section 262 of the DGCL, holders of First Colonial Class A Common
Stock and First Colonial Series C Preference Stock (represented by the
Depositary Shares) are not entitled to assert dissenters' rights. See
"PROPOSED MERGER--Rights of Dissenting Stockholders" and Appendix A hereto.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Merger is expected to qualify as a tax-free reorganization
for federal income tax purposes. First Colonial and Firstar have received an
opinion from Vedder, Price, Kaufman & Kammholz, counsel to First Colonial, that
the Merger will be treated as a tax-free reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"),
subject to customary assumptions and representations. Consummation of the
Merger is conditioned on such opinion not having been withdrawn or modified in
any material respect prior to such consummation. Such opinion, however, is not
binding on the Internal Revenue Service. In the event the Merger qualifies as
a tax-free reorganization, stockholders of First Colonial will generally
recognize no gain or loss for federal income tax purposes as a result of (a)
the exchange of their First Colonial Common Stock for Firstar Common Stock,
except to the extent they receive cash in lieu of fractional shares of Firstar
Common Stock or, in the case of holders of First Colonial Class B Common Stock,
upon the receipt of cash pursuant to the exercise of their statutory
dissenters' rights, or (b) the exchange of their First Colonial Series C
Preference Stock for Firstar Preferred Stock. See "PROPOSED MERGER--Certain
Federal Income Tax Consequences of the Merger."
FIRST COLONIAL STOCKHOLDERS SHOULD READ CAREFULLY THE
DISCUSSION SET FORTH UNDER "PROPOSED MERGER--CERTAIN FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER" AND ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS
TO THE SPECIFIC CONSEQUENCES TO THEM OF THE MERGER UNDER FEDERAL, STATE, LOCAL
AND ANY OTHER APPLICABLE TAX LAWS.
ACCOUNTING TREATMENT
Firstar anticipates that the Merger will be accounted for as a
pooling of interests. See "PROPOSED MERGER--Accounting Treatment."
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<PAGE> 18
DATE OF MERGER
The Merger Agreements provide that the Merger will be
consummated on a date (the "Closing Date") within five business days of the
latest to occur of (a) expiration of the statutory 15-day to 30-day waiting
period after approval of the Merger by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), (b) approval of the Merger by the
Illinois Commissioner of Banks and Trust Companies (the "Illinois
Commissioner"), and (c) the Special Meeting, or on another mutually agreed upon
date. It is presently anticipated that the Merger will be consummated in the
first quarter of 1995. See "PROPOSED MERGER--Effective Time of the Merger;
Conditions to the Merger."
REGULATORY APPROVALS
The Merger is conditioned upon prior approval by the Federal
Reserve Board and the Illinois Commissioner. Firstar submitted applications
with the Federal Reserve Board seeking approval of the Merger and related
matters on September 28, 1994, which were accepted for filing on November __,
1994. Firstar submitted an application with the Illinois Commissioner seeking
approval of the Merger on September 30, 1994; this application was accepted for
processing on October 21, 1994. There are no assurances that all required
regulatory approvals will be obtained or when such required approvals will be
obtained. See "PROPOSED MERGER--Effective Time of the Merger; Conditions to
the Merger; Regulatory Approvals."
DIVIDENDS ON FIRST COLONIAL STOCK
Under the Reorganization Agreement, First Colonial is allowed
to declare regular quarterly cash dividends on First Colonial Class A Common
Stock and First Colonial Class B Common Stock at a rate not in excess of $.15
per share and $.125 per share, respectively, and regular quarterly cash
dividends on First Colonial Series C Preference Stock as required by First
Colonial's currently effective certificate of incorporation (the "First
Colonial Certificate"). Increases in the rates of dividends on the First
Colonial Class A Common Stock and First Colonial Class B Common Stock are
permitted beginning with the dividends payable in the _____ quarter of 1995 at
rates of increase no greater than ______% and ______%, respectively.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
In the Merger, First Colonial will be merged into FCW and the
separate corporate existence of First Colonial will cease. FCW, as the
surviving corporation in the Merger and a wholly owned subsidiary of Firstar,
will continue operations and will own the 17 bank subsidiaries now owned by
First Colonial (the "First Colonial Banks"). The officers and directors of FCW
prior to the Merger will continue as officers and directors of the surviving
corporation. Immediately following the Closing Date, one or more management
representatives of Firstar will be added to the board of each First Colonial
Bank. Within several months of the Closing Date, Firstar and FCW intend to
merge each of the First Colonial Banks into Firstar Bank Illinois, FCW's sole
Illinois bank subsidiary, subject to regulatory approval. At the time of the
bank- level mergers, a management representative of Firstar will serve as
President and Chief Executive Officer of Firstar Bank Illinois, and the
remainder of management of Firstar Bank Illinois will be drawn from management
of Firstar and its subsidiaries and the First Colonial Banks. Certain First
Colonial Bank directors may be invited to join the Board of Directors of the
surviving bank. See "PROPOSED MERGER-- Management and Operations of First
Colonial After the Merger; Interests of Certain Persons in the Merger."
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<PAGE> 19
WAIVERS AND AMENDMENTS TO THE MERGER AGREEMENTS
Firstar, FCW and First Colonial may amend, modify or waive
certain terms and conditions of the Merger Agreements. Any such action taken
by First Colonial following a favorable vote by holders of First Colonial
Common Stock at the Special Meeting may be taken only if the action would not
have an adverse effect on its stockholders, change the amount or kind of
consideration in the Merger or have a similar effect. See "PROPOSED
MERGER--Termination, Amendment and Waiver."
TERMINATION
The Merger may be abandoned (i) by mutual consent of Firstar
and First Colonial at any time before the Merger takes place, (ii) by either
Firstar or First Colonial if (a) the Merger has not taken place by July 31,
1995; (b) any warranty or representation made by the other party in the Merger
Agreements is discovered to have become untrue in any material respect; (c) the
other party commits one or more material breaches of the Merger Agreements; (d)
any permanent injunction preventing the consummation of the Merger shall have
become final and nonappealable; or (e) the Federal Reserve Board or the
Illinois Commissioner has denied approval of the Merger and neither Firstar nor
First Colonial has filed a petition seeking review of such order within thirty
days; or (iii) by First Colonial on either of the two trading days occurring
immediately after the ten consecutive trading days commencing on the first
business day following the date the Federal Reserve Board approves the Merger,
if (1) the average of the daily closing prices of a share of Firstar Common
Stock during such ten trading days is less than $29.00 and (2) the percentage
decline in the average price of the Firstar Common Stock since July 29, 1994
exceeds by more than 12.5% the percentage decline in the weighted average price
of a selected group of bank stocks. See "PROPOSED MERGER--Termination,
Amendment and Waiver."
TERMINATION FEE
Under the Reorganization Agreement, upon the occurrence of
specified events ("Trigger Events"), First Colonial must pay Firstar a fee of
$7,500,000 (the "Termination Fee") in addition to expense reimbursement up to
$2,000,000 that is due upon certain events of termination of the Agreement.
The Trigger Events relate generally to unopposed offers by, or transactions or
proposed transactions with, third parties, acquisition of specified percentages
of First Colonial voting stock by third parties, and solicitation of proxies in
opposition to the Merger, none of which has occurred as of the date hereof, to
the best of Firstar's and First Colonial's knowledge. The Termination Fee may
tend to discourage other proposals to acquire First Colonial and is intended to
increase the likelihood that the Merger will be consummated. See "PROPOSED
MERGER--Termination Fee; Expenses."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In the Reorganization Agreement, Firstar has agreed to elect
C. Paul Johnson, First Colonial's Chairman and Chief Executive Officer, to
Firstar's Board of Directors. Further, directors, executive officers and/or
employees of First Colonial have an interest in the consummation of the Merger
under certain employment and severance agreements, and provisions of the
Reorganization Agreement relating to indemnification and insurance for First
Colonial directors and officers. See "PROPOSED MERGER--Management and
Operations of First Colonial after the Merger; Interests of Certain Persons in
the Merger."
RESALES OF FIRSTAR COMMON STOCK BY AFFILIATES
Resales of Firstar Common Stock issued to "affiliates" of
First Colonial in connection with the Merger and of Depositary Shares held by
affiliates of First Colonial have not been registered
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<PAGE> 20
under applicable securities laws in connection with the Merger. Such shares
may only be sold (a) under a separate registration for distribution (which
Firstar has not agreed to provide), (b) pursuant to Rule 145 under the
Securities Act of 1933, as amended, or (c) pursuant to some other exemption
from registration. For Firstar to be able to account for the Merger as a
pooling of interests, certain additional restrictions will be placed on
affiliates of First Colonial and Firstar with respect to dispositions of First
Colonial Common Stock, Firstar Common Stock, Depositary Shares and other
instruments during the period beginning 30 days before the Merger and ending
when the results for at least 30 days of post-Merger combined operations have
been published. See "PROPOSED MERGER--Resale of Firstar Common Stock, Firstar
Preferred Stock and Firstar Subordinated Notes; Assignment and Assumption
Agreements."
PREFERRED SHARE PURCHASE RIGHTS
Firstar has adopted a Shareholder Rights Plan, pursuant to
which each share of Firstar Common Stock, including the Firstar Common Stock to
be issued in the Merger, entitles its holder to one-half of a right ("Preferred
Share Purchase Right") to purchase one one-hundredth of a share of Firstar's
Series C Preferred Stock under certain limited circumstances. The Rights have
certain anti-takeover effects. The Rights will cause substantial dilution to a
person or group that attempts to acquire Firstar without conditioning the offer
on redemption of the Rights or on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by Firstar's Board of Directors prior to the time that the
Rights have become nonredeemable. See "COMPARATIVE RIGHTS OF STOCKHOLDERS."
MARKETS AND MARKET PRICES
Firstar Common Stock is listed on the New York Stock Exchange
and the Chicago Stock Exchange. First Colonial Class A Common Stock is quoted
on the Nasdaq National Market. The Depositary Shares representing interests in
the First Colonial Series C Preference Stock are quoted on the Nasdaq National
Market. There is no established public trading market for First Colonial Class
B Common Stock.
The following table sets forth the closing price per share of
Firstar Common Stock as reported on the Consolidated Tape System for NYSE stock
and the last reported sale price per share of First Colonial Class A Common
Stock on the dates set forth, which include July 29, 1994, the last trading day
preceding public announcement of the Merger, and December __, 1994, the last
trading date available for practical purposes before the mailing of this Proxy
Statement-Prospectus, as well as the equivalent per share prices for First
Colonial Class A Common Stock as reported on the Nasdaq National Market. The
equivalent per share price of First Colonial Class A Common Stock at each
specified date represents the closing price of a share of Firstar Common Stock
on such date multiplied by the Exchange Ratio of 0.7725. See "PROPOSED MERGER
- --Terms of the Merger."
<TABLE>
<CAPTION>
Firstar Common First Colonial Class Equivalent First Colonial
Stock A Common Stock Per Share Price
<S> <C> <C> <C>
Market Price Per Share at:
December 31, 1993 $ . $19.500 $ .
July 29, 1994 $ . $24.125 $ .
September 30, 1994 $ . $22.625 $ .
December __, 1994 $ . $ . $ .
</TABLE>
Because the market price of Firstar Common Stock is subject to
fluctuation and the Exchange Ratio is fixed, the market value of the shares of
Firstar Common Stock that holders of First Colonial Common Stock will receive
in the Merger may increase or decrease prior to the Merger. First Colonial
stockholders are advised to obtain current market quotations for Firstar Common
Stock and First Colonial Class A Common Stock.
12
<PAGE> 21
COMPARATIVE PER COMMON SHARE DATA
The following table presents selected comparative unaudited
per share data for Firstar Common Stock and First Colonial Common Stock on a
historical and pro forma combined basis and for First Colonial Common Stock on
a pro forma equivalent basis giving effect to the Merger accounted for as a
pooling-of-interests. For a description of the pooling-of-interests accounting
basis with respect to the Merger and the related effects on the historical
financial statements of Firstar, see "PROPOSED MERGER--Accounting Treatment."
The information is derived from the consolidated historical financial
statements of Firstar and First Colonial, including the related notes thereto,
incorporated by reference into this Proxy Statement-Prospectus, and the pro
forma financial statements, including the notes thereto, appearing elsewhere
herein. This information should be read in conjunction with such historical
and pro forma financial statements and the related notes thereto. See
"INCORPORATION OF CERTAIN INFORMATION BY REFERENCE" and "PRO FORMA COMBINING
FINANCIAL STATEMENTS."
This information is not necessarily indicative of the results
of the future operations of the combined entity or the actual results that
would have occurred had the Merger been consummated prior to the periods
indicated.
COMPARATIVE PER COMMON SHARE DATA
The following table presents selected comparative unaudited
per common share data for Firstar Common Stock and First Colonial Common Stock
on a historical and pro forma combined basis and for First Colonial Common
Stock on a pro forma equivalent basis giving effect to the Merger on a
pooling-of-interests accounting basis.
This information is not necessarily indicative of the results
of the future operations of the combined entity or the actual results that
would have occurred had the Merger been consummated prior to the periods
indicated.
<TABLE>
<CAPTION>
Years Ended December 31,
Nine Months Ended ------------------------
September 30, 1994 1993 1992 1991
------------------ ---- ---- ----
<S> <C> <C> <C> <C>
Firstar - Historical:
Net income $ 2.36 $ 3.15 $ 2.62 $ 2.14
Cash dividends declared .86 1.00 .80 .705
Book value (at period end) 19.37 17.96 15.94 14.17
First Colonial - Historical:
Net income $ 1.06 $ 1.15 $ 1.08 $ 1.48
Cash dividends declared-Class A common .45 .55 .50 .48
Class B common .375 .44 .417 .40
Book value (at period end) 14.11 13.72 12.93 12.38
Firstar-First Colonial - Pro Forma Combined:
Net income(1) $ 2.26 $ 2.99 $ 2.50 $ 2.12
Cash dividends declared(2) .86 1.00 .80 .705
Book value (at period end)(3) 19.26 17.94 16.02 14.37
First Colonial Common Stock - Equivalent Pro
Forma Combined(4):
Net income(1) $ 1.75 $ 2.31 $ 1.93 $ 1.64
Cash dividends declared .66 .77 .62 .54
Book value (at period end) 14.88 13.86 12.38 11.10
</TABLE>
(1) The pro forma combined net income per common share (based on weighted
average shares outstanding) is based upon the combined historical net
income for Firstar and First Colonial reduced for dividend payments on
Firstar's outstanding series B preferred stock and First Colonial's
preference stock divided by the average pro forma common shares of the
combined entity.
13
<PAGE> 22
(2) The pro forma combined dividends declared assume no changes in
historical dividends per share declared by Firstar.
(3) The pro forma combined book value per share of Firstar common stock are
based upon the historical total common equity for Firstar and First
Colonial divided by total pro forma common shares of the combined
entity assuming conversion of the First Colonial common stock.
(4) The equivalent pro forma combined income, dividends and book value per
share of First Colonial common stock represent the pro forma combined
amounts multiplied by the assumed exchange ratio of .7725, which is
based on the terms of the Merger Agreements.
HISTORICAL AND PRO FORMA SELECTED FINANCIAL CONTRIBUTIONS
HISTORICAL AND PRO FORMA SELECTED FINANCIAL CONTRIBUTIONS
The following table sets forth certain consolidated unaudited
financial data of Firstar as of and for the nine months ended September 30,
1994 and the data on a pro forma combined basis after giving effect to the
acquisition of First Colonial and other pending Firstar acquisitions.
<TABLE>
<CAPTION>
Pro Forma
Combined Other
First Firstar & Pending
Firstar Colonial First Acquisitions Pro Forma
Historical Historical Colonial Pro Forma Combined
-------------- ------------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C>
For the nine months ended
September 30, 1994:
(Thousands of dollars)
Total revenue
Amount $ 927,432 $ 100,837 $ 1,028,269 $ 89,053 $ 1,117,322
Percentage of total 83.00% 9.03% 92.03% 9.97% 100.00%
Net income
Amount $ 151,596 $ 12,372 $ 163,968 $ 9,760 $ 173,728
Percentage of total 87.26% 7.12% 94.38% 5.62% 100.00%
At September 30, 1994:
Total assets
Amount $ 14,329,204 $ 1,802,941 $ 16,132,145 $ 1,544,231 $ 17,676,376
Percentage of total 81.06% 10.20% 91.26% 8.74% 100.00%
Stockholders' equity
Amount $ 1,241,011 $ 157,767 $ 1,398,778 $ 75,100 $ 1,473,878
Percentage of total 84.20% 10.70% 94.90% 5.10% 100.00%
Shares of common stock
Amount 64,054,211 7,720,696* 71,774,907 5,004,577* 76,779,484
Percentage of total 83.43% 10.05% 93.48% 6.52% 100.00%
</TABLE>
__________________
*Equivalent pro forma shares of Firstar.
14
<PAGE> 23
HISTORICAL AND PRO FORMA SELECTED FINANCIAL DATA
SELECTED CONSOLIDATED FINANCIAL DATA OF FIRSTAR
The following table sets forth in summary form certain
consolidated financial data of Firstar. This summary should be read in
conjunction with the financial review and consolidated financial statements
included in the documents incorporated by reference in this Proxy
Statement-Prospectus.
<TABLE>
<CAPTION>
Unaudited
Nine Months Ended
September 30 Years Ended December 31
----------------------- ----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Summary
(Thousands of dollars)
Net interest revenue $ 440,106 $ 423,108 $ 568,056 $ 539,152 $ 480,596 $ 429,954 $ 413,102
Provision for loan losses 8,274 18,451 24,567 44,821 50,276 49,161 52,362
---------- ---------- ---------- ---------- ----------- ---------- ---------
Net interest revenue after loan
loss provision 431,832 404,657 543,489 494,331 430,320 380,793 360,740
Other operating revenue 249,612 251,668 342,265 300,767 272,535 248,301 225,521
Other operating expense 454,665 434,506 587,744 557,566 515,536 464,800 429,508
---------- ---------- ---------- ---------- ----------- ---------- ---------
Income before income taxes 226,779 221,819 298,010 237,532 187,319 164,294 156,753
Provision for income tax 75,183 70,041 93,716 71,547 52,988 46,837 45,618
---------- ---------- ---------- ---------- ----------- ---------- ---------
Net income $ 151,596 $ 151,778 $ 204,294 $ 165,985 $ 134,331 $ 117,457 $ 111,135
========== ========== ========== ========== =========== ========== =========
Per common share:
Net income $ 2.36 $ 2.35 $ 3.15 $ 2.62 $ 2.14 $ 1.82 $ 1.72
Dividends .86 .74 1.00 .80 .705 .635 .545
Selected Period-End Balances
(Millions of dollars)
Total assets $ 14,329 $ 13,429 $ 13,794 $ 13,169 $ 12,309 $ 12,020 $ 11,163
Loans 9,520 8,533 8,984 8,111 7,545 7,346 6,871
Deposits 10,648 10,761 11,164 10,884 10,063 9,721 8,931
Long-term debt 125 127 126 158 144 185 166
Stockholders' equity 1,241 1,172 1,156 1,048 916 844 790
Selected Financial Ratios
Net income as a % of average
assets 1.50% 1.59% 1.59% 1.36% 1.16% 1.06% 1.07%
Net income as a % of average
common equity 16.84 18.81 18.61 17.43 15.85 14.83 15.65
Net interest margin % 5.05 5.23 5.21 5.27 5.00 4.76 4.88
Total capital to risk-adjusted
assets 13.43 13.81 13.18 13.20 11.92 11.94 12.09
Nonperforming assets as a %
of period-end loans and
other real estate .73 .81 .72 1.09 1.43 1.87 1.61
Reserve for loan losses as a %
of period-end loans 1.80 2.06 1.95 2.08 2.00 1.83 1.69
Net charge-offs as a % of
average loans .27 .27 .25 .43 .47 .48 .66
</TABLE>
15
<PAGE> 24
SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST COLONIAL BANKSHARES CORPORATION
The following table sets forth in summary form certain
consolidated financial data of First Colonial. This summary should be read in
conjunction with Management's Discussion and Analysis and consolidated
financial statements incorporated by reference in this Proxy
Statement-Prospectus.
<TABLE>
<CAPTION>
Unaudited
Nine Months Ended
September 30 Years Ended December 31
----------------------- ----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Summary
(Thousands of dollars)
Net interest revenue $ 53,871 $ 48,836 $ 64,773 $ 64,020 $ 56,474 $ 54,039 $ 48,153
Provision for loan losses 1,733 2,712 3,892 5,043 3,935 3,928 3,511
---------- ---------- ---------- ---------- ----------- ---------- ---------
Net interest revenue after loan
loss provision 52,138 46,124 60,881 58,977 52,539 50,111 44,642
Other operating revenue 16,971 17,090 22,352 23,375 23,787 15,679 13,954
Other operating expense 50,819 47,300 63,404 64,793 55,954 48,989 43,001
---------- ---------- ---------- ---------- ----------- ---------- ---------
Income before income taxes 18,290 15,914 19,829 17,559 20,372 16,801 15,595
Provision for income tax 5,918 5,075 6,210 5,357 5,324 4,239 3,777
---------- ---------- ---------- ---------- ----------- ---------- ---------
Net income $ 12,372 $ 10,839 $ 13,619 $ 12,202 $ 15,048 $ 12,562 $ 11,818
========== ========== ========== ========== =========== ========== =========
Per common share:
Net income $ 1.06 $ .92 $ 1.15 $ 1.08 $ 1.48 $ 1.35 $ 1.33
Dividends
Class A Common .45 .41 .55 .50 .48 .44 .39
Class B Common .38 .33 .44 .42 .40 .36 .32
Selected Period-End Balances
(Millions of dollars)
Total assets $ 1,803 $ 1,574 $ 1,604 $ 1,581 $ 1,635 $ 1,531 $ 1,251
Loans 1,090 984 962 996 921 948 747
Deposits 1,543 1,346 1,361 1,359 1,415 1,334 1,104
Long-term debt 26 9 12 21 14 27 21
Stockholders' equity 158 153 156 149 121 109 83
Selected Financial Ratios
Net income as a % of average
assets .96% .93% .87% .77% .95% .87% 1.02%
Net income as a % of average
common equity 10.92 9.76 9.10 8.90 13.41 13.42 15.65
Net interest margin % 4.93 4.87 4.84 4.74 4.30 4.49 4.87
Total capital to risk-adjusted
assets 12.90 14.00 14.15 13.44 11.55 9.76 9.87
Nonperforming assets as a %
of period-end loans and
other real estate 1.95 1.74 1.49 1.70 1.74 1.51 .93
Reserve for loan losses as a %
of period-end loans 1.23 1.20 1.23 1.22 1.15 1.07 1.02
Net charge-offs as a % of
average loans .18 .41 .43 .36 .38 .33 .44
</TABLE>
16
<PAGE> 25
SELECTED COMBINED PRO FORMA DATA OF FIRSTAR AND FIRST COLONIAL
The following table sets forth in summary form certain
unaudited pro forma combined financial data of Firstar and First Colonial.
This summary should be read in conjunction with the financial review and
consolidated financial statements included in the documents incorporated by
reference in this Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
Nine Months Ended
September 30 Years Ended December 31
----------------------- ----------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Summary
(Thousands of dollars)
Net interest revenue $ 493,977 $ 471,944 $ 632,829 $ 603,172 $ 537,070 $ 483,993 $ 461,255
Provision for loan losses 10,007 21,163 28,459 49,864 54,211 53,089 55,873
---------- ---------- ---------- ---------- ----------- ---------- ---------
Net interest revenue after loan
loss provision 483,970 450,781 604,370 553,308 482,859 430,904 405,382
Other operating revenue 266,583 268,758 364,617 324,142 296,322 263,980 239,475
Other operating expense 505,484 481,806 651,148 622,359 571,490 513,789 472,509
---------- ---------- ---------- ---------- ----------- ---------- ---------
Income before income taxes 245,069 237,733 317,839 255,091 207,691 181,095 172,348
Provision for income tax 81,101 75,116 99,926 76,904 58,312 51,076 49,395
---------- ---------- ---------- ---------- ----------- ---------- ---------
Net income $ 163,968 $ 162,617 $ 217,913 $ 178,187 $ 149,379 $ 130,019 $ 122,953
========== ========== ========== ========== =========== ========== =========
Per common share:
Net income $ 2.26 $ 2.23 $ 2.99 $ 2.50 $ 2.12 $ 1.82 $ 1.73
Dividends .86 .74 1.00 .80 .705 .635 .545
Selected Period-End Balances
(Millions of dollars)
Total assets $ 16,120 $ 15,003 $ 15,398 $ 14,750 $ 13,944 $ 13,551 $ 12,414
Loans 10,598 9,517 9,946 9,107 8,466 8,294 7,618
Deposits 12,191 12,107 12,525 12,243 11,478 11,055 10,035
Long-term debt 151 136 138 179 158 212 187
Stockholders' equity 1,399 1,325 1,312 1,197 1,037 953 873
Selected Financial Ratios
Net income as a % of average
assets 1.44% 1.52% 1.51% 1.30% 1.13% 1.04% 1.07%
Net income as a % of average
common equity 16.23 17.83 17.59 16.45 15.57 14.67 15.65
Net interest margin % 5.04 5.20 5.17 5.20 4.92 4.73 4.88
Total capital to risk-adjusted
assets 13.38 13.83 13.28 13.22 11.88 11.69 11.88
Nonperforming assets as a %
of period-end loans and
other real estate .85 .90 .80 1.16 1.46 1.83 1.55
Reserve for loan losses as a %
of period-end loans 1.75 1.97 1.88 1.98 1.90 1.74 1.63
Net charge-offs as a % of
average loans .17 .25 .27 .43 .46 .46 .64
Ratio of earnings to combined
fixed charges and preferred stock
dividends 20.36x 14.47x 14.87x 11.49x 9.06x 6.66x 6.20x
</TABLE>
17
<PAGE> 26
MEETING INFORMATION
GENERAL
This Proxy Statement of First Colonial and Prospectus of
Firstar is being furnished to the stockholders of First Colonial in connection
with the solicitation by the Board of Directors of First Colonial of proxies to
be voted at the Special Meeting of holders of First Colonial Common Stock to be
held on January 18, 1995, and any adjournment thereof. The purpose of the
Special Meeting and of the solicitation is (i) to obtain approval of the
holders of First Colonial Common Stock of the Merger Agreements and (ii) the
transaction of such other business as may properly come before the meeting or
any adjournments thereof. Each copy of this Proxy Statement-Prospectus mailed
to holders of First Colonial Common Stock is accompanied by a form of proxy for
use at the Special Meeting.
DATE, PLACE AND TIME
The Special Meeting will be held at the Chicago Cultural
Center, 77 East Randolph Street, Chicago, Illinois, on January 18, 1995, at
9:00 a.m. (local time).
RECORD DATE; VOTE REQUIRED
The close of business on December 12, 1994, has been fixed by
the Board of Directors of First Colonial as the Record Date for the
determination of stockholders entitled to notice of, and to vote at, the
Special Meeting. On that date there were outstanding and entitled to vote
_______ shares of First Colonial Class A Common Stock, of which _______ (___%)
were held by directors or executive officers of First Colonial, and ________
shares of First Colonial Class B Common Stock, of which ______ (__%) were held
by directors or executive officers of First Colonial. Neither Firstar nor any
of its or FCW's directors or executive officers owns any shares of First
Colonial Common Stock, except that a director of Firstar beneficially owns
7,500 shares of First Colonial Class A Common Stock.
Each outstanding share of First Colonial Class A Common Stock
entitles the record holder thereof to one vote on all matters to be acted upon
at the Special Meeting. Each outstanding share of First Colonial Class B
Common Stock entitles the record holder thereof to 20 votes on all matters to
be acted upon at the Special Meeting. The DGCL requires that the Merger
Agreements be approved by the affirmative vote of a majority of the votes
attributable to the outstanding shares of First Colonial Class A Common Stock
and First Colonial Class B Common Stock, voting together as a single class.
Holders of Depositary Shares are not entitled to vote at the Special Meeting.
VOTING AND REVOCATION OF PROXIES
Shares of First Colonial Common Stock represented by a proxy
properly signed and received at, or prior to, the Special Meeting, unless
subsequently revoked, will be voted at the Special Meeting in accordance with
the instructions thereon. If a proxy is signed and returned without indicating
any voting instructions, shares of First Colonial Common Stock represented by
the Proxy will be voted FOR the Merger Agreements. Both broker nonvotes and
abstentions have the same effect as votes against the Merger Agreements. Any
proxy given pursuant to this solicitation may be revoked by the person giving
it at any time before the proxy is voted by the filing of an instrument
revoking it or of a duly executed proxy bearing a later date with the Secretary
of First Colonial prior to or at the Special Meeting. Attendance at the
Special Meeting will not in and of itself constitute a revocation of a proxy.
18
<PAGE> 27
The Board of Directors of First Colonial is not aware of any
business to be acted upon at the Special Meeting other than as described
herein. If, however, other matters are properly brought before the Special
Meeting, or any adjournments thereof, the persons appointed as proxies will
have discretion to vote or act thereon according to their best judgment.
SOLICITATION OF PROXIES
In addition to solicitation by mail, directors, officers, and
employees of First Colonial, who will not be specifically compensated for such
services, may solicit proxies from the stockholders of First Colonial,
personally or by telephone or telegram or other forms of communication.
Brokerage houses, nominees, fiduciaries, and other custodians will be requested
to forward soliciting materials to beneficial owners and will be reimbursed for
their reasonable expenses incurred in sending proxy material to beneficial
owners. First Colonial does not anticipate that anyone will be specially
engaged to solicit proxies or that special compensation will be paid for that
purpose, but First Colonial reserves the right to do so should it conclude that
such efforts are needed. First Colonial will bear its own expenses in
connection with the solicitation of proxies for the Special Meeting, except
that Firstar and First Colonial have agreed to share equally in the expense of
printing this Proxy Statement-Prospectus and the expense of all SEC and other
regulatory filing fees incurred in connection therewith. See "PROPOSED
MERGER--Expenses."
HOLDERS OF FIRST COLONIAL COMMON STOCK ARE REQUESTED TO
COMPLETE, DATE, AND SIGN THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY TO FIRST
COLONIAL IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE.
PROPOSED MERGER
The following description of the Merger is qualified in its
entirety by reference to the Merger Agreements, which are attached as Appendix
B to this Proxy Statement-Prospectus and are incorporated herein by reference.
All First Colonial stockholders are urged to read the Merger Agreements in
their entirety.
BACKGROUND OF THE MERGER
First Colonial. First Colonial has prospered by pursuing its
"community banking" philosophy, which emphasizes the delivery of services and
products tailored to the diverse banking needs of the communities in which it
operates. This approach emphasizes the autonomy of each subsidiary bank, with
the local management and board of directors responsible for tailoring the mix
of loans, deposits and services to meet the needs of the local community.
Utilizing this community banking approach, First Colonial has grown from a
one-bank holding company in 1983 to a multi-bank holding company operating 17
subsidiary banks with 30 banking locations, and 5 nonbank subsidiaries which
provide mortgage origination, trust services, equipment leasing, broker/dealer
investment services and data processing and operational services.
First Colonial has from time to time previously received
informal inquiries regarding possible merger affiliations, none of which led to
substantive discussions because First Colonial's Board of Directors believed
that stockholder value was better enhanced by preserving First Colonial's
independence. Although maintaining independence has been a successful strategy
for First Colonial, the Board of Directors, cognizant of the opportunities
presented by the recent consolidation movement in the
19
<PAGE> 28
banking industry and entrance of out-of-state financial institutions into
Illinois, determined in the Fall of 1993 that First Colonial should reassess
its long-term strategic goals.
As a result of this reassessment, the Board of Directors of
First Colonial consulted with and retained the law firm of Vedder, Price,
Kaufman & Kammholz ("Vedder Price"), a firm with extensive experience in
representing financial institutions in mergers and affiliations, to assist the
Board in evaluating strategic alternatives. The Board of Directors also
decided to retain an independent financial advisor to advise First Colonial on
various strategic alternatives, including the possible sale of First Colonial,
and to discuss and explore possible merger candidates for First Colonial.
Later in the year, First Colonial management raised for the
first time with several prospective merger partners, including Firstar, the
possibility that First Colonial might be willing to pursue merger discussions.
First Colonial also began evaluating financial advisor candidates during this
time.
On February 25, 1994 First Colonial retained DLJ, a nationally
recognized investment banking firm, as its exclusive financial advisor to
assist First Colonial in soliciting indications of interest in a possible
strategic business combination involving First Colonial. The Board selected
DLJ on the basis of, among other things, DLJ's expertise in mergers and
acquisitions and its familiarity with the Midwest regional banking industry and
the most likely potential affiliation partners for First Colonial.
During March and early April 1994, a Confidential Information
Memorandum containing financial and other information (the "Memorandum") was
prepared by First Colonial with the assistance of DLJ and Vedder Price. On
April 20, 1994, after execution and delivery of a Confidentiality and
Standstill Agreement, DLJ delivered the Memorandum to Firstar and three other
midwestern-based bank holding companies. Firstar and the three other bank
holding companies were each asked to review the Memorandum and submit an
indication of interest (including a narrow range of value on an aggregate
and/or per-share basis, form of consideration and structural features relating
to price) as well as certain additional information to assist First Colonial
and its advisors in assessing the value, timing and feasibility of the
indication of interest.
Firstar and two of the other midwestern bank holding companies
declined to submit written indications of interest. On May 5, 1994, the
remaining midwestern-based bank holding company ("MBHC") submitted a
preliminary indication of interest to DLJ.
MBHC's May 5, 1994 preliminary indication of interest stated
that MBHC was prepared to offer, upon completion of satisfactory due diligence,
between $24.50 and $27.00 per share for First Colonial Common Stock and to
offer equivalent securities for certain First Colonial stock options, First
Colonial Series C Preference Stock and the First Colonial 14% Subordinated
Capital Notes due October 17, 1996 ("First Colonial Subordinated Notes") issued
pursuant to the Mandatory Stock Purchase Agreements dated as of October 17,
1984 between First Colonial and the noteholders (the "MSP Agreements"). MBHC
indicated its expectation that the proposed transaction would qualify as a
tax-free reorganization and that it anticipated offering First Colonial
stockholders an election to receive cash or MBHC stock, subject to the tax-free
reorganization requirements (a "cash election transaction"). MBHC indicated
that it would seek as conditions to the execution of a definitive agreement (i)
an option to purchase up to 19.9% of the then-outstanding number of shares of
First Colonial Class A Common Stock upon the occurrence of certain events (a
"treasury stock option") and (ii) agreements from the holders of First Colonial
Class B Common Stock to vote in favor of the transaction.
20
<PAGE> 29
MBHC also indicated that it, among other things, (i) was
prepared to proceed in an expeditious manner to complete its due diligence
investigation of First Colonial and execute a definitive agreement; (ii) had
adequate financial resources to complete the proposed transaction; (iii) was
unaware of any securities or regulatory issues that would prevent the timely
consummation of the proposed transaction; and (iv) believed that it would close
the transaction within five months after the date of the execution of a
definitive agreement.
Discussions between management of First Colonial and MBHC
ensued, and in mid-May 1994, MBHC amended its preliminary indication of
interest to $27.00 per share of First Colonial Common Stock in a cash election
transaction, subject to the terms and conditions of its letter of May 5, 1994.
During May 1994, DLJ, Firstar and First Colonial began a
series of discussions regarding a possible merger. On May 19, 1994, management
of First Colonial met with management of Firstar, at which time they agreed to
proceed with discussions with the assistance of DLJ regarding the pricing of a
possible transaction. On May 25, 1994, management of Firstar and DLJ agreed to
explore the possibility of developing a Firstar proposal to structure a merger
involving an exchange of shares of Firstar Common Stock with a nominal value of
$25.00 to $26.00 per share of First Colonial Common Stock. These discussions
continued during June 1994, focusing primarily on the possibility of a proposal
with a nominal value of $26.00 for each share of First Colonial Common Stock.
Management of First Colonial and representatives of DLJ
discussed MBHC's preliminary indication of interest and the exploratory
discussions with Firstar with the Executive Committee of First Colonial's Board
of Directors (the "Executive Committee") at a meeting held on June 14, 1994.
After such discussion, the Executive Committee determined that First Colonial
should pursue each opportunity and seek to improve the consideration to First
Colonial stockholders in connection with each opportunity.
At its regular meeting on June 15, 1994, First Colonial's
Board of Directors was preliminarily informed by the Executive Committee of the
potential interest of two prospective merger partners in pursuing a transaction
with First Colonial. The Board was further informed of the Executive
Committee's view that an effort should be made to pursue such opportunities.
After discussing the two opportunities, First Colonial's Board of Directors
also directed management and DLJ to pursue the opportunities and to seek to
improve the consideration payable to First Colonial's stockholders under each,
and discussions continued with each of the two parties.
From June 15, 1994 through early July, DLJ and the management
of First Colonial contacted MBHC, seeking to improve the financial terms of its
indication of interest. A number of meetings ensued, but MBHC was not willing
to improve the financial terms of its indication of interest. Thereafter, and
prior to July 31, 1994, DLJ representatives had periodic, but nonsubstantive,
discussions with MBHC.
On June 29, 1994, management of First Colonial and Firstar
reached a preliminary agreement on a nominal purchase price of $26.50 per share
of First Colonial Common Stock in a pooling transaction, subject to
satisfactory completion of due diligence, arriving at a mutually satisfactory
transaction structure and negotiation of definitive agreements. C. Paul
Johnson, the Chairman of the Board of Directors and Chief Executive Officer of
First Colonial, was offered a position on the Firstar Board of Directors,
effective with the closing of the proposed merger.
21
<PAGE> 30
A special First Colonial Board meeting was held on July 7,
1994 to discuss and consider the two indications of interest in detail with
First Colonial's legal and financial advisors. All members of the Board were
present at the meeting. At the meeting, Vedder Price reviewed with the Board
members (i) their directors' duties in connection with a proposed transaction;
(ii) certain tax and legal considerations for a publicly held company involved
in stock and cash election transactions; (iii) certain requirements of the
Securities and Exchange Commission relating to mergers; and (iv) certain
requirements for "pooling-of-interests" accounting treatment. Vedder Price
then presented to the Board the substance of the two indications of interest
and discussed the possible future courses of action available to First
Colonial, including (i) continuing negotiations with one or both of Firstar and
MBHC; (ii) soliciting indications of interest from other parties; and (iii)
discontinuation of the merger process and remaining independent.
DLJ then made a presentation to the Board with respect to the
two indications of interest. DLJ's presentation included (i) a comparison of
the proposed financial and substantive terms of the indications of interest;
(ii) certain analyses regarding the value and prospects of First Colonial and
First Colonial Common Stock; (iii) the bank merger and acquisition environment
generally and in the Chicago area specifically; (iv) the stock price
performance, following announcement of certain mergers, of the larger of the
two merging parties in such mergers, and the likely negative, but normal,
change in Firstar's stock price that would follow announcement of the proposed
transaction; (v) a comparison of the proposed financial terms with those of
other recent unrelated but similar merger transactions; (vi) a comparison of
the ability to complete the transaction by, and cost of the transaction (in
terms of dilution and leverage ratio) to, each of Firstar and MBHC; and (vii)
the possibility of enhanced stockholder value for First Colonial's stockholders
if there were to be a subsequent merger or sale of Firstar or MBHC at a
premium.
After a full and thorough discussion of the two indications of
interest, the Board of Directors authorized First Colonial's management to
continue negotiations with Firstar. Firstar was chosen as the preferred merger
partner by the Board of Directors based on a number of factors including the
strong track record of Firstar Common Stock, the strong similarities between
First Colonial and Firstar businesses, the cultural compatibility between the
two organizations, and the perceived greater likelihood of a subsequent sale of
Firstar than of MBHC.
Subsequent to the July 7, 1994 Board meeting, First Colonial
and its legal and financial advisors entered into three weeks of diligence
discussions and negotiations with Firstar. MBHC was not informed of the
decision by First Colonial's Board authorizing merger negotiations with
Firstar, nor was MBHC's offer rejected.
On July 19, 1994, Firstar presented its merger proposal in
written form by delivering the first drafts of the Merger Agreements, an
"Investment Agreement" (i.e., a 19.9% treasury stock option to be granted by
First Colonial to Firstar), "Voting Agreements" (i.e., agreements from certain
holders of First Colonial Common Stock to vote in favor of the proposed
transaction), and Assignment and Assumption Agreements with respect to the MSP
Agreements (collectively, the "Related Documents"). The proposal included a
limitation on the number of shares of First Colonial Common Stock to be
outstanding immediately prior to the effective time of the proposed transaction
and reasonable comfort that the transaction would qualify for
pooling-of-interests accounting treatment. The First Colonial Board considered
the Firstar proposal as set forth in the draft Merger Agreements and Related
Documents at its regular Board meeting on July 20, 1994.
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At the July 20, 1994 meeting of the Board of Directors, Vedder
Price informed the Board regarding the course and status of the negotiations
with Firstar and reviewed the proposed Merger Agreements and Related Documents
in detail with the Board. Vedder Price concluded its presentation by noting
there were several issues that required further negotiation, the more
significant being (i) the mechanism for establishing the exchange ratio, (ii)
Firstar's request for the Investment Agreement and Voting Agreements, (iii) the
limitation of the ability of the First Colonial directors to take certain steps
in the event of a competing third party offer, (iv) certain "non-standard"
representations and warranties, (v) termination rights, and (vii) Firstar's
desire to limit the number of shares of First Colonial Common Stock outstanding
immediately prior to the effective time of the proposed transaction. After
significant discussion and consideration, the First Colonial Board of Directors
authorized management, with the assistance of DLJ and Vedder Price, to proceed
with due diligence and attempt to negotiate a final definitive agreement with
Firstar.
On July 29, 1994, the First Colonial Board met with Vedder
Price and DLJ to consider the revised merger proposal and proposed form of
Merger Agreements that had been negotiated between the parties and their
representatives during the preceding week. At the meeting, the Chairman of
First Colonial reported on the status of the negotiations with Firstar stating
that (i) the exchange ratio was still being negotiated; (ii) the post-signing
due diligence termination right of Firstar had been deleted from the Merger
Agreements with respect to matters other than environmental; and (iii) certain
provisions of the Transitional Compensation Program adopted April 20, 1994 by
First Colonial to provide transitional compensation to affected executive and
senior officers in the event of a change in control of First Colonial (the
"Transitional Compensation Program") required modification in order to assure
Firstar that the proposed transaction would qualify for "pooling-of-interests"
accounting treatment. See "INTERESTS OF CERTAIN PERSONS IN THE MERGER" for a
discussion of the Transitional Compensation Program. The Chairman also related
Firstar's desire to limit the number of shares of First Colonial Common Stock
that would be outstanding immediately prior to the effective time of the
proposed transaction. The Board discussed the need to repurchase shares of
First Colonial Common Stock to meet the exercise or conversion of any First
Colonial stock options, MSP Agreements, or shares of First Colonial Series C
Preference Stock that may occur prior to the effective time of the proposed
transaction.
Vedder Price then reviewed in detail the principal changes in
the proposed Merger Agreements and the proposed side letter regarding employee
benefits between Firstar and First Colonial to be executed simultaneously with
the Merger Agreements (the "Benefits Letter") and discussed the remaining
issues which had been identified at the July 20, 1994 meeting. DLJ followed
with a detailed presentation during which the terms and nature of the fairness
opinion to be issued by DLJ, and the analyses which DLJ would employ in
arriving at its opinion, were discussed and the directors were again informed
of the possible negative stock market effect on the price of Firstar Common
Stock once the proposed transaction was announced. At the conclusion of the
DLJ presentation, Vedder Price presented to the Board of Directors a letter
dated July 29, 1994 from Firstar to the effect that, without the Investment
Agreement, Voting Agreements and certain other protective provisions, Firstar
would be unwilling to enter into the Merger Agreements. The nature, purpose
and legal aspects of the Investment Agreement, the Voting Agreements and
termination fees demanded by Firstar were reviewed in detail by Vedder Price.
After significant discussion and consideration, the First Colonial Board of
Directors authorized management, with the assistance of DLJ and Vedder Price,
to proceed to negotiate a final definitive agreement with Firstar.
On July 31, 1994, the First Colonial Board met with Vedder
Price and DLJ to consider the final merger proposal and Merger Agreements. At
the meeting, the Chairman of First Colonial
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announced that (i) the negotiations with Firstar had resulted in an exchange
ratio of 0.7725, which provided a valuation of $26.75 per share of First
Colonial Common Stock based on the closing price of Firstar Common Stock on
July 29, 1994; and (ii) the purchase price was equal to 2.60 times tangible
book value of First Colonial Common Stock. The Chairman further reported that,
at the request of Firstar, he had agreed to cancel his rights under the
Transitional Compensation Program and thereby waive approximately $1.2 million
of compensation thereunder immediately prior to the effective time of the
proposed transaction under the terms of a letter agreement with Firstar,
pursuant to which Firstar consented to First Colonial's approval of bonus and
severance payments to Mr. Johnson in an aggregate amount equal to Mr. Johnson's
base annual salary of $470,000. See "Interests of Certain Persons In The
Merger" for a discussion of the bonus and severance payments to Mr. Johnson.
Vedder Price reviewed in detail with the Board the revised
Merger Agreements and the form and content of the revisions. In particular,
Vedder Price reviewed (i) the changes to the exchange ratio resulting in the
0.7725 exchange ratio; (ii) the removal of the Investment Agreement
requirement; (iii) the incorporation of break-up fees of up to $9.5 million
(consisting of a $7.5 million payment and up to $2 million in fees and
expenses) payable by First Colonial to Firstar in the event the Merger
Agreements were terminated due to First Colonial's agreement to a merger with
or sale to a third party; (iv) the final terms of the double trigger
"walk-away" provision which permits First Colonial to terminate the Merger
Agreements under certain circumstances as described under "Termination,
Amendment and Waiver"; and (v) certain employee benefits matters set forth in
the Benefits Letter.
After presentation by the Chairman of First Colonial of the
Executive Committee's recommendation in favor of the proposed merger and
receipt of an oral opinion from DLJ that the consideration to be received by
holders of the First Colonial Common Stock under the Firstar proposal was fair,
from a financial point of view, to the holders of First Colonial Common Stock,
the First Colonial Board unanimously (i) approved the Merger Agreements and the
Benefits Letter; (ii) authorized the execution of both the Merger Agreements
and the Benefits Letter; and (iii) approved and authorized the repurchase of up
to 550,000 shares of First Colonial Class A Common Stock. The Merger
Agreements and Benefits Letter were executed by First Colonial and Firstar on
July 31, 1994 at the conclusion of the Board of Directors meeting. Prior to
the opening of business on August 1, 1994, First Colonial issued press releases
announcing the execution of the Merger Agreements and its plans to undertake
the repurchase of up to 550,000 shares of First Colonial Class A Common Stock.
On August 8, 1994, MBHC sent to DLJ a letter revising its
previous indication of interest as follows: (i) consideration of $27.00 per
share, less an amount equal to the per share amount of the break-up fees (up to
$9.5 million) that would be due and payable to Firstar if First Colonial
terminated the Merger Agreements in order to enter into an agreement with MBHC;
(ii) a structure using either all MBHC stock or 50% stock and 50% cash; and
(iii) an intention to complete its due diligence and execute a definitive
agreement within twenty (20) days (the "August Letter"). Based upon aggregate
break-up fees of $9.5 million, the net per share consideration implied by the
August Letter was approximately $26.05.
Consideration of the August Letter occurred at a meeting of
the First Colonial Board on August 17, 1994. Vedder Price discussed with the
Board the basic contractual obligations of the Merger Agreements in light of
the August Letter and the basic Delaware law framework for considering the new
MBHC proposal contained in the August Letter. In reviewing the substance of
the proposal contained in the August Letter, the Board, among other things,
considered the following factors: (i) its view that the long term intrinsic
value of an interest in Firstar Common Stock remained unchanged despite the
drop in its market price that had occurred since the execution of the Merger
Agreements, i.e., $26.75 based
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on a $34.25 Firstar Common Stock price on July 31 as compared to $25.11 based
on a $32.50 price for Firstar Common Stock at approximately noon on August 17;
(ii) the perceived excellent quality of management of Firstar; (iii) Firstar's
record of successful merger transactions; (iv) the net per share value of the
MBHC proposal of $26.05; and (v) the resulting dip in Firstar's stock price in
this stock-for-stock merger transaction was discussed in advance by DLJ and the
possibility of it occurring had been factored into the decision by the Board to
authorize the Merger Agreements; and (vi) the potential impact of pursuing a
transaction with MBHC on First Colonial customers and employees due to the
uncertainty that would be created. In the original decision to authorize the
Merger Agreements and in its determination on August 17, the Board of Directors
took into account the possibility that Firstar might itself be acquired in a
business combination in the future at a price that would enhance the value of
Firstar Common Stock received by First Colonial stockholders in the Merger.
The Board of Directors judged the likelihood of this event against the
likelihood of MBHC being later acquired following a business combination with
First Colonial.
The Board was advised by Vedder Price that it may have a legal
obligation to pursue the MBHC offer in the August Letter if it concluded that
the offer was superior to the terms of the Merger Agreements. Vedder Price
also advised the Board that if, in the Board's judgment, the MBHC offer was
not, as a whole, superior to Firstar's, the Board had no obligation under
Delaware law to further explore a transaction with MBHC. DLJ advised the Board
of Directors that it had uncovered no evidence that any permanent reevaluation
or repricing of Firstar's stock price had occurred as a result of the proposed
merger with Firstar or other factors. After consideration of the foregoing and
other factors, the Board determined that MBHC's proposal was not, as a whole,
better than Firstar's, and unanimously elected not to further explore a
transaction with MBHC. On August 17, 1994, MBHC and Firstar were informed of
the Board's decision not to pursue a transaction with MBHC.
Firstar. Firstar concluded that the Merger would be in the
best interests of Firstar and its shareholders. Numerous factors were
considered by the Board of Directors of Firstar in approving the terms of the
Merger. These factors included information concerning the financial structure,
results of operations, and prospects of Firstar and First Colonial; the capital
adequacy of the resulting entity; the composition of the businesses of the two
organizations; the overall compatibility of the management and employees of the
organizations; the outlook for both organizations in the rapidly changing
banking and financial services industry; the historical and current market
prices of each company's stock and of certain other bank holding companies
whose securities are publicly traded; the relationship of the consideration to
be paid in the Merger to such market prices and the book value and earnings per
share of First Colonial; and the financial terms of certain other recent
business combinations in the banking industry. See "PRO FORMA COMBINING
FINANCIAL STATEMENTS."
The Board of Directors of Firstar believes that the expansion
of Firstar's customer base and assets in the Chicago area will enable the new
organization to realize certain economies of scale, to provide a wider and
improved array of financial services to its customers and those of First
Colonial and to achieve added flexibility in dealing with the region's changing
competitive environment. Additionally, the Board of Directors of Firstar
believes that the Merger will provide the combined company with the market
position and financial resources it needs to meet the competitive challenges
arising from changes in the banking and financial industry.
FIRST COLONIAL'S REASONS FOR THE MERGER AND BOARD RECOMMENDATION
After careful study and evaluation, the First Colonial Board
of Directors has unanimously approved the Merger Agreements and has determined
that the Merger is fair to, and in the best interests
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of, First Colonial and First Colonial's stockholders. The First Colonial Board
of Directors believes that the Merger will enable First Colonial stockholders
to realize significant value on their investment and also will enable them to
participate in opportunities for growth that First Colonial believes the Merger
makes possible.
In reaching its determination that the Merger Agreements is
fair to, and in the best interests of, First Colonial and First Colonial's
stockholders, the Board of Directors carefully considered a variety of factors
with the assistance of its legal and financial advisors. Among the factors it
considered were the following:
(a) First Colonial's business, financial condition,
results of operations and prospects, including, but not limited to,
its potential growth, development, productivity and profitability were
it to remain independent;
(b) The current and prospective environment in which
First Colonial operates, including national and local economic
conditions, the competitive environment for banks and other financial
institutions generally, and the trend toward consolidation in the
financial services industry generally and in the Chicago metropolitan
market specifically;
(c) The historical market value, book value, earnings per
share and dividends of First Colonial as compared to the historical
market value, book value, earnings per share and dividends of Firstar;
(d) The strategic and competitive advantages expected to
result from the combination of First Colonial and Firstar;
(e) The anticipated tax-free nature of the Merger to
First Colonial stockholders receiving Firstar Common Stock in exchange
for shares of First Colonial Common Stock or Firstar Preferred Stock
in exchange for shares of First Colonial Series C Preference Stock;
(f) The financial terms of other recent business
combinations in the financial services industry generally and in the
Chicago metropolitan market specifically;
(g) Information concerning the business, financial
condition, results of operations and prospects of Firstar;
(h) The value to be received by the First Colonial
stockholders pursuant to the Merger in relation to the historical
trading prices of the First Colonial Common Stock;
(i) The review by the First Colonial Board with its legal
and financial advisors of the provisions of the proposed Merger
Agreements;
(j) The financial advice rendered by DLJ to the First
Colonial Board of Directors and the opinion rendered by DLJ that the
consideration was fair to holders of First Colonial Common Stock (See
"Opinion of Financial Advisor");
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(k) The likelihood that the proposed transaction would be
consummated;
(l) The likely beneficial effect of the proposed
transaction on customers and employees of First Colonial;
(m) The expectation that Firstar will continue to provide
quality service to the communities and customers served by First
Colonial; and
(n) The compatibility of the respective businesses and
management philosophies of Firstar and First Colonial.
The Board of Directors also determined that the Merger is
preferable to the other alternatives available to First Colonial, such as (i)
pursuing a possible merger with MBHC; (ii) remaining independent and growing
internally or through acquisitions; (iii) remaining independent for a
relatively short period of time with a view toward being acquired in the
future; or (iv) engaging in a merger of equals with another party.
While each member of the First Colonial Board of Directors
individually evaluated each of the foregoing as well as other factors, the
First Colonial Board of Directors collectively did not assign any specific or
relative weights to the factors considered and did not make any determination
with respect to any individual factor. The First Colonial Board collectively
made its determination with respect to the Merger based on the unanimous
conclusion reached by its members that the Merger, in light of the factors that
each of them individually considered as appropriate, is fair and in the best
interests of the First Colonial stockholders.
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF
FIRST COLONIAL UNANIMOUSLY RECOMMENDS THAT HOLDERS OF FIRST COLONIAL COMMON
STOCK VOTE TO APPROVE THE MERGER AND THE MERGER AGREEMENTS.
OPINION OF FINANCIAL ADVISOR
In February 1994, the First Colonial Board of Directors
retained Donaldson, Lufkin & Jenrette Securities Corporation to act as its
exclusive financial advisor with respect to the sale, merger, consolidation, or
any other business combination involving First Colonial. As part of its
services, DLJ analyzed First Colonial and its operations, historical
performance and future prospects; identified and contacted a limited number of
bank holding companies acceptable to the First Colonial Board of Directors to
solicit indications of interest in a possible business combination with First
Colonial; participated in negotiations concerning the financial aspects of the
Merger Agreements under the guidance of the First Colonial Board of Directors;
and provided an opinion as to the fairness, from a financial point of view, of
the Exchange Ratio to the holders of First Colonial Common Stock. The First
Colonial Board of Directors imposed no limitations upon DLJ with respect to the
investigations made or procedures followed by DLJ in rendering its opinion.
DLJ has rendered a written opinion to the First Colonial Board
of Directors to the effect that, as of the date of this Proxy
Statement-Prospectus, the Exchange Ratio is fair, from a financial point of
view, to the holders of First Colonial Common Stock. Such opinion describes
the assumptions made, matters considered and the scope of the review undertaken
and procedures followed by DLJ. DLJ's opinion is attached hereto as Appendix C
and is incorporated herein by reference. STOCKHOLDERS ARE ENCOURAGED TO READ
SUCH OPINION IN ITS ENTIRETY.
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DLJ's opinion is directed to the First Colonial Board of
Directors only and is directed only to the Exchange Ratio and does not
constitute a recommendation to any holder of First Colonial Common Stock as to
how such holder should vote at the Special Meeting. Moreover, DLJ's written
opinion expressly states that it is not expressing an opinion on the relative
financial merits of a transaction with Firstar versus a transaction with MBHC.
For purposes of its opinion and in connection with its review
of the proposed transaction, DLJ, among other things: (i) participated in
discussions and negotiations among representatives of First Colonial and
Firstar and their respective financial and legal advisors that resulted in the
Merger Agreements; (ii) reviewed the Merger Agreements and this Proxy
Statement-Prospectus; (iii) reviewed certain publicly available financial
statements, both audited and unaudited, for First Colonial and Firstar,
including those included in the Annual Reports on Form 10-K for the five years
ended December 31, 1993, the Quarterly Report on Form 10-Q for the period ended
September 30, 1994, and the most recent regular annual proxy statement
available as of the date of DLJ's opinion for First Colonial and Firstar; (iv)
reviewed certain financial statements and other financial and operating data
concerning First Colonial and Firstar prepared by their respective managements;
(v) reviewed certain financial projections of First Colonial and Firstar, both
on a stand-alone and on a combined basis, prepared by their respective
managements; (vi) discussed certain aspects of the past and current business
operations, results of regulatory examinations, financial condition and future
prospects of First Colonial and Firstar with certain members of the management
of First Colonial and Firstar; (vii) reviewed reported market prices and
historical trading activity of First Colonial Common Stock and Firstar Common
Stock; (viii) reviewed certain aspects of the financial performance of First
Colonial and Firstar and compared such financial performance of First Colonial
and Firstar, together with the stock market data relating to First Colonial
Common Stock and Firstar Common Stock, with similar data available for certain
other financial institutions and certain of their publicly traded securities;
(ix) reviewed certain of the financial terms, to the extent publicly available,
of certain recent business combinations involving other financial institutions;
and (x) conducted such other studies, analyses and examinations as DLJ deemed
appropriate.
DLJ relied upon and assumed without independent verification
the accuracy and completeness of all of the financial and other information
provided to it by First Colonial, Firstar and their respective representatives
and of the publicly available information reviewed by DLJ. At the direction of
the First Colonial Board of Directors, DLJ also relied upon the managements of
both First Colonial and Firstar as to the reasonableness and achievability of
the financial and operating forecasts provided to DLJ (and the assumptions and
bases therefor). In that regard, DLJ assumed with the permission of the First
Colonial Board of Directors that such forecasts, including without limitation
projected cost savings and operating synergies resulting from the Merger,
reflect the best currently available estimates and judgments of such respective
managements and that such projections and forecasts will be realized in the
amounts and in the time periods currently estimated by the managements of both
First Colonial and Firstar. With the permission of the First Colonial Board of
Directors, DLJ did not independently verify and relied on and assumed that the
aggregate allowances for loan losses set forth in the balance sheets of each of
First Colonial and Firstar at September 30, 1994 were adequate to cover such
losses and complied fully with applicable law, regulatory policy and sound
banking practice as of the date of such financial statements. With the
permission of the First Colonial Board of Directors, DLJ did not independently
verify the carrying values of other real estate owned and loans classified as
in-substance foreclosures of each of First Colonial and Firstar in their
respective September 30, 1994 balance sheets, and DLJ assumed with the
permission of the First Colonial Board of Directors that such carrying values
complied fully with applicable law, regulatory policy and sound banking
practice as of such date. DLJ was not retained to and did not conduct a
physical inspection of any of the properties or facilities of First Colonial or
Firstar, nor did DLJ make any independent evaluation or appraisal of the
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assets, liabilities or prospects of First Colonial or Firstar, was not
furnished with any such evaluation or appraisal, and did not review any
individual credit files. With the permission of the First Colonial Board of
Directors and that of its counsel, in rendering its opinion DLJ relied on the
general advice of such counsel on all legal matters. DLJ also assumed with the
permission of the First Colonial Board of Directors that the Merger is, and
will be, in compliance with all laws and regulations that are applicable to
First Colonial and Firstar. With the permission of the First Colonial Board of
Directors, DLJ assumed for purposes of its opinion that the Merger will be
recorded as a pooling of interests under generally accepted accounting
principles and will qualify as a tax-free reorganization.
Prior to rendering its written opinion dated as of the date of
this Proxy Statement-Prospectus to the First Colonial Board of Directors, DLJ
rendered an oral opinion to the First Colonial Board of Directors on July 31,
1994. Set forth below is a brief summary of the analyses performed by DLJ in
reaching its July 31, 1994 opinion.
Stock Trading History. DLJ examined the history of trading
prices and volume for First Colonial Common Stock and Firstar Common Stock and
the relationship between the movements of such common stock prices to the
market prices of the common stocks of the companies in the First Colonial Peer
Group (as defined below) and the DLJ Midwest Universe (as defined below).
Discounted Cash Flow Analysis. Using discounted cash flow
analysis, DLJ estimated the future dividend streams that First Colonial could
produce over the period from June 30, 1994 through December 31, 1998, assuming
a minimum required tangible equity level of 6.75% of tangible total assets, if
First Colonial performed in accordance with management's forecast. DLJ also
estimated the terminal value of First Colonial's common equity as of December
31, 1998 by applying a range of multiples to First Colonial's projected 1998
earnings. The dividend streams and terminal value were discounted to present
values as of June 30, 1994 using discount rates ranging from 12% to 13%, which
reflect different assumptions regarding the required rates of return of holders
and prospective buyers of First Colonial Common Stock. The range of present
values per fully diluted share of First Colonial Common Stock resulting from
this analysis was $17.02 to $20.63.
Comparison with Selected Companies. DLJ compared selected
financial ratios for First Colonial to the corresponding ratios of the "First
Colonial Peer Group" (consisting of AMCORE Financial, Inc. of Rockford,
Illinois; First Midwest Bancorp, Inc. of Naperville, Illinois; First Oak Brook
Bancshares, Inc. of Oak Brook, Illinois; Firstbank of Illinois of Springfield,
Illinois; Heritage Financial Services, Inc. of Tinley Park, Illinois; Pinnacle
Banc Group, Inc. of Oak Brook, Illinois; River Forest Bancorp, Inc. of Chicago,
Illinois; and Suburban Bancorp, Inc. of Palatine, Illinois) and for Firstar to
the corresponding ratios of the "DLJ Midwest Universe" (consisting of Banc One
Corporation of Columbus, Ohio; Boatmen's Bancshares, Inc. of St. Louis,
Missouri; Comerica Incorporated of Detroit, Michigan; Fifth Third Bancorp of
Cincinnati, Ohio; First Bank System, Inc. of Minneapolis, Minnesota; First of
America Bank Corporation of Kalamazoo, Michigan; Huntington Bancshares
Incorporated of Columbus, Ohio; National City Corporation of Cleveland, Ohio;
NBD Bancorp, Inc. of Detroit, Michigan; Norwest Corporation of Minneapolis,
Minnesota; Old Kent Financial Corporation of Grand Rapids, Michigan; and
Society Corporation of Cleveland, Ohio). Such ratios included: market price
to 1994 estimated earnings per share ("EPS"), market price to 1995 estimated
EPS, market price to tangible book value per share, leverage ratio, return on
average assets, return on average common equity, loan loss reserve to
non-performing loans (defined as non-accrual loans, loans 90 days or more past
due but still accruing interest and renegotiated loans), non-performing assets
(defined as non-performing loans plus other real estate owned) to total loans
plus other real estate owned, five-year historical compound annual growth rates
of EPS, five-year historical average return on average assets and five-year
historical
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average return on average common equity. DLJ's analysis was based on financial
data at or for the five years ended December 31, 1993 and the six months ended
June 30, 1994, except that certain ratios for the companies comprising the
First Colonial Peer Group were based on financial data at or for the three
months ended March 31, 1994. In performing calculations, DLJ used market
prices as of July 29, 1994, except that DLJ used the market price for Suburban
Bancorp, Inc. common stock as of March 15, 1994, one month prior the
announcement of the merger of Suburban Bancorp, Inc. with Harris Bankcorp, Inc.
DLJ used projected earnings estimates for First Colonial and Firstar as
provided by management of both companies, and median projected earnings as
published by the Institutional Brokers Estimate System ("IBES") for the
companies comprising the First Colonial Peer Group and the DLJ Midwest
Universe. IBES is a data service which monitors and publishes a compilation of
earnings estimates produced by selected research analysts on companies of
interest to investors.
DLJ compared the mean values for each of such ratios for the
First Colonial Peer Group with the corresponding ratio for First Colonial.
This analysis showed that the First Colonial Peer Group had a mean ratio of
market price to 1994 estimated EPS of 12.4 times, as compared with 16.6 times
for First Colonial; a mean ratio of market price to 1995 estimated EPS of 11.3
times, as compared with 14.7 times for First Colonial; a mean ratio of market
price to tangible book value per share of 1.86 times, as compared to 2.34 times
for First Colonial; a mean leverage ratio of 7.90%, as compared to 6.95% for
First Colonial; a mean return on average assets of 1.11%, as compared to 1.05%
for First Colonial; a mean return on average stockholders' equity of 12.7%, as
compared to 11.9% for First Colonial; a mean ratio of loan loss reserves to
non-performing loans of 98.3%, as compared to 112.8% for First Colonial; a mean
ratio of non-performing assets to total loans plus other real estate owned of
1.65%, as compared with 1.51% for First Colonial; a mean five year historical
compound annual growth rate of EPS of 8.6%, as compared to negative 3.6% for
First Colonial; a mean five-year historical average return on average assets of
1.26%, as compared with 0.90% for First Colonial; and a mean five-year
historical average return on average common equity of 15.0%, as compared with
12.1% for First Colonial.
DLJ also compared the mean values for each of such ratios for
the DLJ Midwest Universe with the corresponding ratio for Firstar. This
analysis showed that the DLJ Midwest Universe had a mean ratio of market price
to 1994 estimated EPS of 10.1 times, as compared with 10.5 times for Firstar; a
mean ratio of market price to 1995 estimated EPS of 9.1 times, as compared with
9.1 times for Firstar; a mean ratio of market price to tangible book value per
share of 2.10 times, as compared to 1.98 times for Firstar; a mean leverage
ratio of 7.57%, as compared to 8.50% for Firstar; a mean return on average
assets of 1.39%, as compared to 1.64% for Firstar; a mean return on average
common equity of 17.6%, as compared to 18.2% for Firstar; a mean ratio of loan
loss reserves to non-performing assets of 193%, as compared to 149% for
Firstar; a mean ratio of non-performing assets to total loans plus other real
estate owned of 1.24%, as compared with 1.30% for Firstar; a mean five year
historical compound annual growth rate of EPS of 12.0%, as compared to 13.9%,
for Firstar; a mean five-year historical average return on average assets of
1.15%, as compared with 1.27% for Firstar; and a mean five-year historical
average return on average common equity of 15.3%, as compared with 17.0% for
Firstar.
Analysis of Selected Mergers. As part of its analyses, DLJ
reviewed three sets of mergers: (i) selected mergers involving Chicago-area
banks or bank holding companies announced between January 1, 1991 and July 29,
1994 in which the total assets of the smaller of the merging parties were
between $1 billion and $2 billion (the "Chicago-Area Mergers"); (ii) selected
mergers involving banks or bank holding companies headquartered in Iowa,
Illinois, Indiana, Minnesota, Ohio or Wisconsin announced between January 1,
1992 and July 29, 1994 in which the total assets of the smaller of the merging
parties were between $1 billion and $5 billion (the "Midwestern Mergers"); and
(iii) selected mergers involving banks or bank holding companies headquartered
anywhere in the United States
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announced between January 1, 1992 and July 29, 1994 in which the total assets
of the smaller of the merging parties were between $1 billion and $5 billion
(the "National Mergers"). Specifically, DLJ reviewed the mergers involving the
following pairs of institutions: the Chicago-Area Mergers consisted of Harris
Bankcorp, Inc./Suburban Bancorp, Inc., First Chicago Corporation/Lake Shore
Bancorp., Inc., Banc One Corporation/First Illinois Corp., and NBD Bancorp,
Inc./FNW Bancorp, Inc.; the Midwestern Mergers consisted of Harris Bankcorp,
Inc./Suburban Bancorp, Inc., First Chicago Corporation/Lake Share Bancorp.,
Inc., First Bank System, Inc./Boulevard Bancorp, Marshall & Ilsley
Corporation/Valley Bancorp, National City Corporation/Ohio Bancorp, Norwest
Corporation/Lincoln Financial Corp., and First Bank System, Inc./Bank Shares
Inc.; and the National Mergers consisted of 34 mergers involving banks or bank
holding companies headquartered anywhere in the United States in which the
total assets of the smaller of the merging parties were between $1 billion and
$5 billion. For each transaction, DLJ calculated the multiple of the offer
value to the acquired company's: (i) EPS for the twelve months preceding
("LTM"), fiscal year containing ("FY Est.") and fiscal year following ("FY+1
Est.") the announcement date of the transaction; (ii) book value per share;
(iii) tangible book value per share; and (iv) market price per share.
The calculations for the Chicago-Area Mergers yielded a range
of multiples of offer value to LTM EPS of 14.8 times to 18.5 times, with a mean
of 17.0 times and a median of 17.3 times; a range of multiples of offer value
to FY Est. EPS of 16.0 times to 20.1 times, with a mean of 18.1 times and a
median of 18.2 times; a range of multiples of offer value to FY+1 Est. EPS of
14.8 times to 18.0 times, with a mean of 16.6 times and a median of 16.8 times;
a range of multiples of offer value to book value of 2.20 times to 2.75 times,
with a mean of 2.46 times and a median of 2.44 times; a range of multiples of
offer value to tangible book value of 2.48 times to 2.92 times, with a mean of
2.62 times and a median of 2.56 times; and a range of multiples of offer value
to market price of 1.41 times to 1.78 times, with a mean of 1.54 times and a
median of 1.48 times.
The calculations for the Midwestern Mergers yielded a range of
multiples of offer value to LTM EPS of 10.9 times to 33.0 times, with a mean of
19.7 times and a median of 18.4 times; a range of multiples of offer value to
FY Est. EPS of 11.3 times to 29.7 times, with a mean of 20.4 times and a median
of 18.7 times; a range of multiples of offer value to FY+1 Est. EPS of 13.6
times to 22.3 times, with a mean of 17.1 times and a median of 16.2 times; a
range of multiples of offer value to book value of 1.10 times to 2.46 times,
with a mean of 1.91 times and a median of 2.05 times; a range of multiples of
offer value to tangible book value of 1.27 times to 2.62 times, with a mean of
2.05 times and a median of 2.24 times; and a range of multiples of offer value
to market price of 1.22 times to 1.78 times, with a mean of 1.44 times and a
median of 1.39 times.
The calculations for the National Mergers yielded a range of
multiples of offer value to LTM EPS of 7.4 times to 67.0 times, with a mean of
22.3 times and a median of 17.0 times; a range of multiples of offer value to
FY Est. EPS of 11.3 times to 45.2 times, with a mean of 23.0 times and a median
of 19.3 times; a range of multiples of offer value to FY+1 Est. EPS of 10.3
times to 22.3 times, with a mean of 16.1 times and a median of 15.0 times; a
range of multiples of offer value to book value of 0.23 times to 3.12 times,
with a mean of 1.85 times and a median of 2.04 times; a range of multiples of
offer value to tangible book value of 0.99 times to 3.22 times, with a mean of
2.03 times and a median of 2.16 times; and a range of multiples of offer value
to market price of 0.64 times to 1.78 times, with a mean of 1.35 times and a
median of 1.36 times.
DLJ compared these multiples with the corresponding multiples
for the Merger, valuing the shares of Firstar Common Stock that would be
received pursuant to the Merger Agreements at $26.75 (the "Announced Nominal
Dollar Value") and $22.40 (the "Walkaway Value") per share of First Colonial
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Common Stock. In calculating the multiples for the Merger, DLJ used First
Colonial's EPS for the twelve months ended June 30, 1994, estimated EPS for the
year ending December 31, 1994, estimated EPS for the year ending December 31,
1995, book value per share and tangible book value per share as of June 30,
1994, and the closing price per share of First Colonial Class A Common Stock on
December 31, 1993. DLJ calculated that the Announced Nominal Dollar Value
represented multiples of First Colonial's LTM EPS, 1994 estimated EPS, 1995
estimated EPS, book value per share, tangible book value per share and market
price per share of 22.7 times, 18.4 times, 16.3 times, 1.90 times, 2.59 times
and 1.41 times respectively. DLJ calculated that the Walkaway Value
represented multiples of First Colonial's LTM EPS, 1994 estimated EPS, 1995
estimated EPS, book value per share, tangible book value per share and market
price per share of 19.0 times, 15.5 times, 13.7 times, 1.59 times, 2.17 times
and 1.18 times, respectively.
No company or transaction used in the above analyses as a
comparison is identical to First Colonial, Firstar or the Merger. Accordingly,
an analysis of the results of the foregoing is not mathematical; rather, it
involves complex considerations and judgments concerning differences in
financial and operating characteristics of the companies and other facts that
could affect the public trading value of the companies to which they are being
compared.
Pro Forma Merger Analysis. In the course of discussions
preceding execution of the Merger Agreements, Firstar informed DLJ that, with
various cost savings and revenue enhancements that it believed could be
obtained as a result of the Merger, Firstar expected the transaction to be
modestly dilutive to EPS in the first year following the Effective Time and
slightly accretive in the second. Firstar also informed DLJ that it
anticipated the transaction would initially be modestly dilutive to Firstar's
book value and tangible book value per share. DLJ performed certain
calculations to confirm Firstar's statements regarding the anticipated effect
of the Merger on Firstar's EPS, book value per share and tangible book value
per share.
DLJ also analyzed certain additional pro forma effects of the
Merger. DLJ's analysis showed that holders of First Colonial Common Class A
Common Stock would experience an increase in dividend income of 54.5%, based on
First Colonial's and Firstar's current dividend payments as of July 29, 1994,
and that the shares of Firstar Common Stock issued in the Merger would
represent 10.8% of the pro forma total number of outstanding shares of Firstar
Common Stock.
In connection with its written opinion dated as of the date of
this Prospectus and Proxy Statement, DLJ performed procedures to update certain
of its analyses and reviewed the assumptions on which such analyses were based
and the factors considered in connection therewith.
Although the summary set forth above does not purport to be a
complete description of the analyses performed by DLJ, the material analyses
performed by DLJ in rendering its opinion have been summarized above. However,
the preparation of a fairness opinion is not necessarily susceptible to partial
analysis or summary description. DLJ believes that its analyses and the
summary set forth above must be considered as a whole and that selecting
portions of its analyses, without considering all factors and analyses, would
create an incomplete view of the process underlying the analyses by which DLJ
reached its opinions. In addition, DLJ may have given various analyses more or
less weight than other analyses, but no analysis was given materially more
weight than any other analysis. Also, DLJ may have deemed various assumptions
more or less probable than other assumptions, so that the ranges of valuations
resulting from any particular analysis described above should not be taken to
be DLJ's view of the actual value of First Colonial or the combined company.
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In performing its analyses, DLJ made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of First Colonial and
Firstar. The analyses performed by DLJ are not necessarily indicative of
actual value or actual future results, which may be significantly more or less
favorable than suggested by such analyses. Such analyses were prepared solely
as part of DLJ's analysis of the fairness of the Exchange Ratio, from a
financial point of view, to the holders of First Colonial Common Stock. The
analyses do not purport to be appraisals or to reflect the prices at which a
company might actually be sold or the prices at which any securities may trade
at the present time or at any time in the future. DLJ used in its analyses
various projections of future performance prepared by the managements of First
Colonial and Firstar. The projections are based on numerous variables and
assumptions which are inherently unpredictable and must be considered not
certain of occurrence as projected. Accordingly, actual results could vary
significantly from those assumed in the projections and any related analyses.
DLJ's opinion does not address the relative merits of the Merger as compared to
any alternative business strategies that might exist for First Colonial or the
effect of any other business combination in which First Colonial might engage.
In addition, as described above, DLJ's opinion to the First Colonial Board of
Directors was one of many factors taken into consideration by the First
Colonial Board of Directors in making its determination to approve the Merger
Agreements.
Pursuant to the terms of a letter agreement dated February 25,
1994 (the "Engagement Letter"), for DLJ's services in connection with the
Merger, including the rendering of its opinions, First Colonial (i) has paid
DLJ $425,000 and (ii) has agreed to pay DLJ an amount equal to 0.57% of the
aggregate amount of consideration received by First Colonial and/or its
stockholders (treating any shares of First Colonial issuable upon exercise of
options, warrants or other rights of conversion as outstanding), plus the
amount of any preferred stock redeemed or remaining outstanding in connection
with the Merger, including the net value of any assets not sold by First
Colonial, less the amount paid by First Colonial pursuant to clause (i) above.
Because the major portion of the aggregate consideration to be received by the
holders of First Colonial Common Stock is to be paid in the form of securities,
the Engagement Letter provides that the value of such securities, for purposes
of calculating the fee payable to DLJ, will be determined by the last sale
price for such securities on the last trading day thereof prior to consummation
of the Merger. Such fee shall be payable in cash upon consummation of the
Merger. First Colonial has also agreed under the Engagement Letter to
reimburse DLJ for all reasonable out-of-pocket expenses, including reasonable
fees and expenses of legal counsel, and has agreed to indemnify DLJ against
certain expenses and liabilities incurred in connection with its engagement,
including liabilities under federal securities law. The DLJ fee is an
obligation of First Colonial, which is payable at closing, and will have no
impact on the consideration to be received by the holders of First Colonial
Common Stock.
DLJ may, in the ordinary course of its business, actively
trade securities of First Colonial and Firstar for its own account or for the
accounts of customers and thus may hold long or short positions in such
securities at any time.
DLJ has from time to time in the past been, and may in the
future be, considered or employed by First Colonial or Firstar to provide
investment banking and securities brokerage services. These relationships are
considered by First Colonial and Firstar, respectively, to be in the ordinary
course of business and to be immaterial to DLJ's engagement relative to the
Merger.
TERMS OF THE MERGER
At the Effective Time (as defined below), First Colonial will
merge with and into FCW, which will be the surviving corporation. The Articles
of Incorporation and By-laws of FCW in effect
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at the Effective Time will govern the surviving corporation until amended or
repealed in accordance with applicable law. At the Effective Time, each
outstanding share of First Colonial Common Stock will be converted into the
right to receive 0.7725 of a share of Firstar Common Stock, subject in the case
of First Colonial Class B Common Stock to statutory dissenters' rights. See
"Rights of Dissenting Stockholders." At the Effective Time, each outstanding
share of First Colonial Series C Preference Stock will be converted into the
right to receive one share of Firstar Preferred Stock with the result that,
pursuant to the Deposit Agreement, each outstanding Depositary Share will
thereafter, with no action on the part of the holder thereof, represent
ownership of one-twentieth of a share of Firstar Preferred Stock.
The Reorganization Agreement provides that, if between the
date of the Reorganization Agreement and the Effective Time, Firstar declares a
stock dividend or distribution upon or subdivides, splits up, reclassifies or
combines its shares of Firstar Common Stock or declares a dividend or makes
distribution on Firstar Common Stock of any security convertible into Firstar
Common Stock, appropriate adjustment or adjustments will be made in the
Exchange Ratio.
No fractional shares of Firstar Common Stock will be issued in
the Merger. Instead, Firstar will pay to each holder of First Colonial Common
Stock who would otherwise be entitled to a fractional share an amount of cash
equal to the fraction of a share of Firstar Common Stock to which the First
Colonial stockholder would otherwise be entitled multiplied by the closing
price per share of Firstar Common Stock at the Effective Time on the NYSE. The
shares of Firstar Common Stock and shares of common stock of FCW issued and
outstanding immediately prior to the Effective Time will remain issued and
outstanding.
The terms of the Merger were determined on the basis of arm's
length negotiations. The conversion ratios applicable to First Colonial Common
Stock and First Colonial Series C Preference Stock were determined by First
Colonial, after consideration of the advice and recommendations of its
financial advisor, and by Firstar. See "Opinion of Financial Advisor."
FIRSTAR PREFERRED STOCK
At the Effective Time, each outstanding share of First
Colonial Series C Preference Stock will be converted into the right to receive
one share of Firstar Preferred Stock. The rights, preferences and privileges
of the Firstar Preferred Stock will be substantially the same as those of the
First Colonial Series C Preference Stock, and the Firstar Preferred Stock will
be limited to the estimated 39,700 shares to be exchanged in connection with
the Merger. No other shares of any series of preferred stock of Firstar are
currently outstanding, although Firstar has reserved 600,000 shares of Series C
Preferred Stock for issuance upon the exercise of the Preferred Share Purchase
Rights. See "COMPARATIVE RIGHTS OF STOCKHOLDERS--Preferred Stock; Preferred
Share Purchase Rights." Upon issuance in accordance with the Merger
Agreements, the Firstar Preferred Stock will be fully paid and nonassessable,
except with respect to assessability as provided in the Wisconsin Business
Corporation Law. See "COMPARATIVE RIGHTS OF STOCKHOLDERS--Assessability;
Potential Liability for Wages." Holders of Firstar Preferred Stock will have
no preemptive rights.
The following is a brief description of the terms of the
Firstar Preferred Stock (which will be represented by the Depositary Shares
after the Effective Time) and, although it encompasses all of the material
terms of the Firstar Preferred Stock, it does not purport to be complete and is
qualified in its entirety by the terms of the Firstar Preferred Stock. Such
terms are filed as an exhibit to the Registration Statement of which this Proxy
Statement-Prospectus is a part.
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Rank. Each share of the Firstar Preferred Stock will rank on
a parity with each other share of preferred stock, $1.00 par value, of Firstar,
irrespective of series, with respect to dividends and distributions upon
liquidation, dissolution or winding up of Firstar in the respective amounts
determined for such shares by the Board of Directors of Firstar. Firstar's
Board of Directors may issue additional series of preferred stock in the future
without shareholder action. See "COMPARATIVE RIGHTS OF STOCKHOLDERS--Preferred
Stock."
Dividends. Holders of the Firstar Preferred Stock will be
entitled to receive, when and as declared by the Board of Directors of Firstar,
out of assets of Firstar legally available for such payment, cash dividends at
the annual amount of $35 per share (equivalent to $1.75 per Depositary Share).
Dividends will be payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing at the end of the first calendar
quarter following consummation of the Merger. The initial dividend to be paid
by Firstar will be $8.75 (equivalent to approximately $.44 per Depositary
Share) and will be payable at the end of the first calendar quarter following
consummation of the Merger. Dividends on the Firstar Preferred Stock will be
cumulative from the Effective Time. Each dividend will be payable to holders
of record as they appear on the stock register of Firstar on the record date
fixed by the Board of Directors of Firstar.
No full dividends shall be declared or paid or set apart for
payment on any class or series of capital stock of Firstar ranking, as to
dividends, on a parity with the Firstar Preferred Stock for any period unless
full cumulative dividends have been or contemporaneously are declared and paid
or declared and a sum sufficient for the payment thereof set apart for such
payment on the Firstar Preferred Stock for all dividend payment periods
terminating on or prior to the date of payment of such dividends. If dividends
on the Firstar Preferred Stock and on any other class or series of stock
ranking on a parity as to dividends with the Firstar Preferred Stock are in
arrears, in making any dividend payment on account of such arrears Firstar
shall make payments ratably upon all outstanding shares of the Firstar
Preferred Stock and shares of such other class or series of stock of Firstar in
proportion to the respective amounts of dividends in arrears on the Firstar
Preferred Stock and on such other class or series of stock to the date of such
dividend payment. Holders of shares of the Firstar Preferred Stock shall not
be entitled to any dividend, whether payable in cash, property or stock, in
excess of full cumulative dividends as set forth above.
Unless full cumulative dividends on all outstanding shares of
Firstar Preferred Stock shall have been paid or declared and set aside for
payment for all past dividend payment periods, no dividend (other than a
dividend in Firstar Common Stock or in any other class or series of stock
ranking junior to the Firstar Preferred Stock as to dividends and upon
liquidation, and other than as described in the preceding paragraph) shall be
declared or made upon the Firstar Common Stock or upon any other stock ranking
junior to or on a parity with the Firstar Preferred Stock as to dividends or
upon liquidation, nor shall any Firstar Common Stock or any other stock of
Firstar ranking junior to or on a parity with the Firstar Preferred Stock as to
dividends or upon liquidation, be redeemed, purchased or otherwise acquired for
any consideration by Firstar (except by conversion into or exchange for stock
of Firstar ranking junior to the Firstar Preferred Stock as to dividends and
upon liquidation). No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Firstar Preferred
Stock which may be in arrears.
Conversion Rights. Shares of Firstar Preferred Stock will be
convertible at any time at the option of the holder into shares of Firstar
Common Stock. The number of shares of Firstar Common Stock issuable upon
conversion of each share of Firstar Preferred Stock will be equal to $500
divided by a conversion price of $23.30 per share of Firstar Common Stock
(equivalent to a conversion rate of 1.073
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shares of Firstar Common Stock per Depositary Share), subject to adjustment as
described below (except that a share of Firstar Preferred Stock that has been
called for redemption will be convertible up to and including but not after the
close of business on the date fixed for redemption, unless Firstar defaults in
the payment of the redemption price). As provided by the terms of the First
Colonial Series C Preference Stock (which are virtually identical to the terms
of the Firstar Preferred Stock set forth in the second paragraph below), the
conversion price of $23.30 per share of Firstar Preferred Stock was calculated
based on the number of shares of Firstar Common Stock a holder of First
Colonial Series C Preference Stock would have received for each such share as a
result of the Merger (21.46 shares) if such holder had converted, at the
current conversion price of $18.00 per share, his or her shares of First
Colonial Series C Preference Stock into shares of First Colonial Class A Common
Stock prior to the Merger.
The conversion price is subject to adjustment upon certain
events, including the declaration and payment by Firstar of a dividend on
shares of Firstar Common Stock in shares of its capital stock; subdivisions,
splits, combinations or reclassifications of outstanding shares of Firstar
Common Stock; the issuance to holders of Firstar Common Stock generally of
rights or warrants to subscribe for Firstar Common Stock at less than the then
current market price; or the distribution to holders of the Firstar Common
Stock of evidences of indebtedness, assets (excluding dividends or other
distributions paid out of earned surplus), or rights or warrants to subscribe
for securities of Firstar other than those mentioned above.
In the case of (i) any consolidation or merger to which
Firstar is a party (other than one in which Firstar is the continuing
corporation) or (ii) a sale or transfer of all or substantially all of the
assets of Firstar, there will be no adjustment of the conversion price, but the
holder of each share of Firstar Preferred Stock then outstanding will have the
right thereafter to convert such share into the kind and amount of securities,
cash or other property that the holder would have been entitled to receive
immediately after such consolidation, merger, sale or transfer if such share
had been converted into Firstar Common Stock immediately before the effective
date of such consolidation, merger, sale or transfer.
Upon conversion, no adjustments or payments will be made for
accrued dividends, and therefore, shares of Firstar Preferred Stock surrendered
for conversion after the record date next preceding a dividend payment date for
the Firstar Preferred Stock and before the dividend payment date must be
accompanied by payment of an amount equal to the dividend thereon which is to
be paid on such dividend payment date (unless the shares of Firstar Preferred
Stock surrendered for conversion have been called for redemption prior to such
dividend payment date).
No adjustment of the conversion price will be required to be
made in any case unless the adjustment amounts to one percent or more of the
conversion price, but any adjustment not made by reason of this limitation will
be required to be carried forward cumulatively and taken into account in any
subsequent adjustments.
If at any time Firstar makes a distribution of property to its
shareholders which would be taxable to such shareholders as a dividend for
federal income tax purposes (e.g., distributions of evidences of indebtedness
or assets of Firstar, but generally not stock dividends or rights to subscribe
to capital stock) and, pursuant to the antidilution provisions described above,
the conversion price of the Firstar Preferred Stock is reduced, such reduction
may be deemed to be the receipt of taxable income by holders of the Firstar
Preferred Stock.
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Fractional shares of Firstar Common Stock will not be
delivered upon conversion. Instead, a cash payment will be made in respect of
such fractional interest, based on the then current market price of the Firstar
Common Stock.
A holder may effect the conversion of any shares of Firstar
Preferred Stock or any whole number of Depositary Shares (whether or not evenly
divisible by 20) by (i) delivering the certificate or certificates evidencing
shares of Firstar Preferred Stock or the depositary receipts evidencing the
Depositary Shares (the "Depositary Receipts"), as the case may be, to the
transfer agent for the Firstar Preferred Stock or at such other place as the
Board of Directors of Firstar designates and (ii) giving written notice to
Firstar that he or she elects to convert the same and stating in writing
therein the name or names (with addresses) in which the certificate or
certificates for Firstar Common Stock shall be issued. Firstar will, as soon
as practicable thereafter, issue at said place or office to such holder a
certificate for the appropriate number of full shares of Firstar Common Stock
together with cash in lieu of any fraction of a share.
Treasury Regulations issued under Section 305 of the Code
treat as taxable events certain constructive distributions of stock or stock
rights. An adjustment in the conversion price of the Firstar Preferred Stock
to reflect taxable distributions on Firstar Common Stock (but not stock splits
or non-taxable stock dividends) may be treated as a constructive distribution
of stock that is taxable as a dividend to the extent of the current and
accumulated earnings and profits of Firstar.
Redemption. Shares of Firstar Preferred Stock will not be
redeemable prior to June 30, 1997. Subject to obtaining any requisite prior
approval of the Federal Reserve Board, the shares of Firstar Preferred Stock
will be redeemable at the option of Firstar, in whole or in part, at any time
or from time to time, on and after June 30, 1997, on not less than 30 nor more
than 60 days' notice by mail, at a redemption price of $500 per share
(equivalent to $25 per Depositary Share) plus accrued and unpaid dividends to
the redemption date.
The Firstar Preferred Stock will not be subject to any sinking
fund or other obligation of Firstar to redeem or retire the Firstar Preferred
Stock.
At its election, Firstar, before the redemption date, may
deposit the funds for such redemption, in trust, with a designated depository
and authorize such depository to complete the redemption notice, and after such
deposit, all rights of the holders of Firstar Preferred Stock so called for
redemption shall cease, except the right to receive the redemption price.
However, as and to the extent that Firstar or such depository is required or
permitted under the abandoned property laws of any jurisdiction to escheat any
redemption funds held for the benefit of any holder, Firstar and said
depository shall be absolved of any further liability or obligation to such
holder to the full extent provided by law.
If a notice of redemption has been given, from and after the
redemption date for the shares of Firstar Preferred Stock called for redemption
(unless default shall be made by Firstar in providing money for the payment of
the redemption price of the shares so called for redemption), dividends on the
Firstar Preferred Stock so called for redemption shall cease to accrue and such
shares shall no longer be deemed to be outstanding, and all rights of the
holders thereof as shareholders of Firstar (except the right to receive the
redemption price) shall cease. Upon surrender in accordance with such notice
of the certificates representing any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of Firstar shall so require
and the notice shall so state), the redemption price set forth above shall be
paid out of funds provided by Firstar. If fewer than all of the shares
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represented by any such certificates are redeemed, a new certificate shall be
issued representing the unredeemed shares without cost to the holder thereof.
Liquidation Rights. In the event of any voluntary or
involuntary dissolution, liquidation, or winding up of Firstar, the holders of
the Firstar Preferred Stock will be entitled to receive out of the assets of
Firstar available for distribution to its shareholders, before any payment or
distribution is made to holders of Firstar Common Stock or any other class or
series of stock ranking junior to the Firstar Preferred Stock as to
distributions upon liquidation, dissolution or winding up, a liquidating
distribution of $500 per share (equivalent to $25 per Depositary Share) plus
accrued and unpaid dividends. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of the
Firstar Preferred Stock will have no right or claim to any of the remaining
assets of Firstar. If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of Firstar, the amounts payable with respect to the
Firstar Preferred Stock and any other shares of stock of Firstar ranking as to
any such distribution on a parity with the Firstar Preferred Stock are not paid
in full, the holders of the Firstar Preferred Stock and of such other shares
will share ratably in any such distribution of assets of Firstar in proportion
to the full respective distributable amounts to which they are entitled.
Neither the sale of all or substantially all the property or business of
Firstar, nor the merger or consolidation of Firstar into or with any other
corporation, shall be deemed to be a dissolution, liquidation, or winding up,
voluntary or involuntary, of Firstar.
Voting. Except as otherwise expressly required by applicable
law or as described below, holders of Firstar Preferred Stock or Depositary
Shares will not be entitled to vote on any matter, including but not limited to
any merger, consolidation or transfer of assets, and will not be entitled to
notice of any meeting of shareholders of Firstar. Whenever the approval or
other action of holders of the Firstar Preferred Stock is required, each share
of the Firstar Preferred Stock will be entitled to one vote. Holders of
Depositary Shares will be entitled to vote the shares of Firstar Preferred
Stock which their Depositary Shares represent. See "Depositary
Shares--Voting."
The affirmative vote of the holders of a majority of the
outstanding shares of Firstar Preferred Stock is required to (i) amend the
Restated Articles of Incorporation of Firstar to create or authorize, or
increase the authorized number of, any shares of any class or series of stock
ranking prior to the Firstar Preferred Stock in respect of dividends or
distribution of assets on liquidation or dissolution of Firstar or otherwise
alter or abolish the liquidation preferences or any other preferential right of
the Firstar Preferred Stock, (ii) alter or abolish the conversion rights of the
Firstar Preferred Stock, (iii) reduce the redemption price or otherwise alter
any redemption rights of the Firstar Preferred Stock, (iv) alter or abolish any
right of the Firstar Preferred Stock to receive dividends, or (v) exclude or
limit the voting rights as to these matters.
If at any time Firstar falls in arrears in the payment of
dividends on the Firstar Preferred Stock in an aggregate amount at least equal
to the full accrued dividends for six quarterly dividend periods, the number of
directors of Firstar will be increased by two and the holders of the Firstar
Preferred Stock, voting separately as a single class, will have the right to
elect two directors to fill the positions so created, and such right will
continue until all dividends in arrears shall have been paid.
Under regulations adopted by the Federal Reserve Board, if the
holders of the Firstar Preferred Stock become entitled to vote for the election
of directors because dividends on the Firstar Preferred Stock are in arrears,
the series may then be deemed a "class of voting securities", and a holder of,
or a person seeking to acquire, 25% or more of the shares of Firstar Preferred
Stock (or a holder of 5% or more if such holder otherwise exercises a
"controlling influence" over Firstar) may then be
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<PAGE> 47
required to seek the approval of the Federal Reserve Board to become a bank
holding company under the Bank Holding Company Act of 1956, as amended. If
such holder fails to receive approval, such holder may be required to sell some
or all of the shares of Firstar Preferred Stock. In addition, at such time as
the Firstar Preferred Stock is deemed a class of voting securities, any other
bank holding company may be required to obtain the approval of the Federal
Reserve Board to retain or acquire 5% or more of the Firstar Preferred Stock,
and any person other than a bank holding company may be required by the Change
in Bank Control Act to obtain the prior approval of the Federal Reserve to
acquire 10% or more of the Firstar Preferred Stock.
Transfer Agent. The transfer agent and registrar for the
Firstar Preferred Stock will be Firstar Trust Company, Milwaukee, Wisconsin.
DEPOSITARY SHARES
Each Depositary Share currently represents one-twentieth of
one share of First Colonial Series C Preference Stock deposited under the
Deposit Agreement. Subject to the terms of the Deposit Agreement, each owner
of a Depositary Share is currently entitled, proportionately, to all the rights
and preferences of the First Colonial Series C Preference Stock represented
thereby (including dividend, conversion, liquidation, redemption and voting
rights). The Deposit Agreement provides that in the event of a merger
affecting First Colonial, the Depositary Shares will thereafter, at the
direction of First Colonial or its successors, represent the same proportionate
interest in any stock that is received in exchange for or upon conversion of
the underlying First Colonial Series C Preference Stock. Accordingly, upon
conversion of the First Colonial Series C Preference Stock into Firstar
Preferred Stock in the Merger, each Depositary Share will, at the direction of
FCW, thereafter represent one-twentieth of one share of Firstar Preferred
Stock. At the Effective Time, it is anticipated that First Chicago Trust
Company of New York will resign as Depositary and will be succeeded by Firstar
Trust Company. Simultaneous with the appointment of Firstar Trust Company as
successor Depositary, Firstar will become a signatory to the Deposit Agreement
and the Deposit Agreement will be amended and restated to reflect the
conversion of the First Colonial Series C Preference Stock. Firstar Trust
Company is a subsidiary of Firstar and is the transfer agent and registrar for
Firstar Common Stock.
The Depositary Shares are evidenced by the Depositary Receipts
issued pursuant to the Deposit Agreement. Following consummation of the
Merger, the Depositary Receipts will remain outstanding and will thereafter, at
the direction of FCW, represent an interest in shares of Firstar Preferred
Stock. Holders of Depositary Receipts are not required to take any action in
connection with the Merger.
The following is a brief description of the terms of the
Deposit Agreement as such will be amended and restated to reflect, among other
things, the conversion of the First Colonial Series C Preference Stock into
Firstar Preferred Stock. Although the following discussion encompasses all of
the material terms of the Deposit Agreement, it does not purport to be complete
and is subject to and qualified in its entirety by reference to the Deposit
Agreement and form of Depositary Receipt, as such are proposed to be amended.
The Deposit Agreement and form of Depositary Receipt as proposed to be amended
and restated are filed as an exhibit to the Registration Statement of which
this Proxy Statement-Prospectus is a part.
Withdrawal of Stock. Upon surrender of the Depositary
Receipts at the office of the Depositary (unless the related Depositary Shares
have previously been called for redemption), the owner of the Depositary Shares
evidenced thereby is entitled to delivery at such office, to or upon his order,
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<PAGE> 48
of the number of whole shares of Firstar Preferred Stock and any money or other
property represented by such Depositary Shares. Owners of Depositary Shares
will be entitled to receive whole shares of Firstar Preferred Stock on the
basis of one share of Firstar Preferred Stock for each 20 Depositary Shares.
Fractional shares of Firstar Preferred Stock will not be delivered. If the
Depositary Receipts delivered by the holder evidence a number of Depositary
Shares in excess of the number of Depositary Shares representing the number of
whole shares of Firstar Preferred Stock to be withdrawn, the Depositary will
deliver to such holder at the same time a new Depositary Receipt evidencing
such excess number of Depositary Shares. Holders of shares of Firstar
Preferred Stock thus withdrawn, and any subsequent holders of those shares,
will not thereafter be entitled to deposit such shares under the Deposit
Agreement or to receive Depositary Shares therefor. Firstar does not expect
that there will be any public trading market for the Firstar Preferred Stock
except as represented by the Depositary Shares.
Dividends and Other Distributions. The Depositary will
distribute all cash dividends and other cash distributions received in respect
of the Firstar Preferred Stock to the record holders of Depositary Shares
relating to such Firstar Preferred Stock in proportion to the number of
Depositary Shares owned by such holders. The Depositary shall distribute only
such amount, however, as can be distributed without attributing to any holder
of Depositary Shares a fraction of one cent, and the Depositary shall be
authorized to round up to the next whole cent any fraction of one-half cent or
greater and round down to the last whole cent any fraction less than one-half
cent.
In the event of a distribution other than in cash, the
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto, unless the Depositary determines that it is
not feasible to make such distribution, in which case the Depositary may, with
the approval of Firstar, adopt such method as it deems equitable and practical
for purposes of making such distribution, including selling such property and
distributing the net proceeds from such sale to such holders.
The amount distributed in any of the foregoing cases will be
reduced by any amounts required to be withheld by Firstar or the Depositary on
account of taxes.
Conversion of Firstar Preferred Stock. The Depositary Shares,
as such, are not convertible into Firstar Common Stock or any other securities
or property of Firstar. Nevertheless, Firstar has agreed, as a matter of
convenience, to accept delivery of Depositary Receipts for purposes of
effecting conversion of the Firstar Preferred Stock underlying the Depositary
Shares evidenced by such Depositary Receipts into Firstar Common Stock,
utilizing the same procedures as those provided for delivery of certificates
for shares of Firstar Preferred Stock to effect conversions in accordance with
the Restated Articles of Incorporation of Firstar. If the Depositary Shares
evidenced by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary Shares not to
be converted. No fractional shares of Firstar Common Stock will be issued upon
conversion, but if such conversion results in a fraction, an amount in respect
thereof will be paid in cash by Firstar. See "Firstar Preferred
Stock--Conversion Rights."
Redemption of Depositary Shares. The Depositary Shares will
be redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, at Firstar's option but subject to the terms
and conditions applicable thereto, of Firstar Preferred Stock held by the
Depositary (including any accrued but unpaid dividends). The Depositary shall
mail notice of redemption not less than 30 and not more than 60 days prior to
the date fixed for redemption to the record holders of the Depositary Shares to
be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be $25, which is equal
to one-twentieth of the
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<PAGE> 49
redemption price per share of Firstar Preferred Stock. Whenever Firstar
redeems shares of Firstar Preferred Stock held by the Depositary, the
Depositary will redeem as of the same redemption date the number of Depositary
Shares representing shares of Firstar Preferred Stock so redeemed. If less than
all the Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed will be selected by lot or pro rata (with adjustments to avoid
fractional shares) or in any other equitable manner determined by Firstar.
From and after the date fixed for redemption, the Depositary
Shares so called for redemption will no longer be deemed to be outstanding and
all rights of the holders of the Depositary Shares will cease, except the right
to receive the moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon such
redemption upon surrender to the Depositary of the Depositary Receipts
evidencing such Depositary Shares.
Voting. Upon receipt of notice of any meeting at which the
holders of the Firstar Preferred Stock are entitled to vote, the Depositary
will mail the information contained in such notice of meeting to the record
holders of the Depositary Shares representing such Firstar Preferred Stock.
Each record holder of Depositary Shares on the record date (which will be the
same date as the record date for the Firstar Preferred Stock) will be entitled
to instruct the Depositary as to the exercise of the voting rights pertaining
to the number of shares of Firstar Preferred Stock underlying such holder's
Depositary Shares. The Depositary will endeavor, insofar as practicable, to
vote the number of shares of Firstar Preferred Stock underlying such Depositary
Shares in accordance with such instructions, and Firstar has agreed to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting shares of Firstar
Preferred Stock to the extent it does not receive specific instructions from
the holders of the Depositary Shares representing such Firstar Preferred Stock.
Amendment and Termination of the Deposit Agreement. The form
of Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may at any time be amended by agreement between Firstar and
the Depositary. However, any amendment which imposes any fees, taxes or
charges upon holders of Depositary Shares (other than taxes and other
governmental charges, fees and other expenses payable by such holders as stated
below under "Charges of Depositary"), or which otherwise prejudices any
substantial existing right of holders of Depositary Shares, will not take
effect as to outstanding Depositary Shares until the expiration of 30 days
after notice of such amendment has been mailed to the record holders of
outstanding Depositary Shares. In no event may any amendment impair the right
of any owner of any Depositary Shares, subject to the conditions specified in
the Deposit Agreement, to surrender any Depositary Receipt or Receipts
evidencing such Depositary Shares with instructions to the Depositary to
deliver to such holder the Firstar Preferred Stock and any money or other
property represented thereby, except in order to comply with mandatory
provisions of applicable law.
Whenever directed by Firstar, the Depositary will terminate
the Deposit Agreement by mailing notice of such termination to the owners of
all outstanding Depositary Shares at least 30 days prior to the date of
termination. The Depositary may likewise terminate the Deposit Agreement at
any time 45 days after the Depositary has delivered to Firstar a written notice
of its election to resign if a successor depositary has not theretofore been
appointed and accepted its appointment. If any Depositary Shares remain
outstanding after the date of termination, the Depositary thereafter will
discontinue the transfer of Depositary Shares, will suspend the distribution of
dividends to the owners thereof, and will not give any further notices (other
than notice of such termination) or perform any further acts under the Deposit
Agreement except as provided below and except that the Depositary will continue
(i) to collect
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dividends on the Firstar Preferred Stock and any other distributions with
respect thereto and (ii) to deliver Firstar Preferred Stock together with such
dividends and distributions and the net proceeds of any sales of rights,
preferences, privileges or other property, without liability for interest, in
exchange for Depositary Shares surrendered. At any time after the expiration
of two years from the date of termination, the Depositary may sell the shares
of Firstar Preferred Stock then held by it at public or private sales, at such
place or places and upon such terms as it deems proper and may thereafter hold
the net proceeds of any such sale, together with any money and other property
then held by it, without liability for interest, for the pro rata benefit of
the owners of Depositary Shares which have not been surrendered. In the event
the Deposit Agreement is terminated, Firstar will use its best efforts to list
or designate the Firstar Preferred Stock for quotation on a national securities
exchange or the Nasdaq National Market, as the case may be. Firstar does not
intend to terminate the Deposit Agreement or to permit the resignation of the
Depositary without appointing a successor depositary.
Charges of Depositary. Firstar will pay all transfer and
other taxes and governmental charges arising solely from the existence of the
depositary arrangements. Firstar will pay charges of the Depositary in
connection with the initial deposit of the Firstar Preferred Stock as a result
of the Merger and any redemption of the Firstar Preferred Stock. Holders of
Depositary Shares will pay transfer and other taxes and governmental charges
and such other charges as are expressly provided in the Deposit Agreement to be
for their accounts.
Resignation and Removal of Depositary. The Depositary may
resign at any time by delivering to Firstar notice of its election to do so,
and Firstar may at any time remove the Depositary, any such resignation or
removal to take effect upon the appointment of a successor Depositary and its
acceptance of such appointment. Such successor Depositary must be appointed
within 45 days after delivery of the notice of resignation or removal and must
be a bank or trust company having its principal office in the United States
and having a combined capital and surplus of at least $50 million.
Registrar. The Depositary will be the registrar for the Depositary Shares.
Federal Income Taxation. Owners of Depositary Shares will be
treated for federal income tax purposes as if they were owners of the Firstar
Preferred Stock represented by such Depositary Shares and, accordingly, must
take into account for federal income tax purposes income, gain, or loss to
which they would be entitled if they were holders of such Firstar
Preferred Stock. In addition, (i) no gain or loss will be recognized for
federal income tax purposes upon the withdrawal of Firstar Preferred Stock in
exchange for the Depositary Shares as provided in the Deposit Agreement, (ii)
the tax basis of each share of Firstar Preferred Stock to an exchanging owner
of Depositary Shares will, upon such exchange, be the same as the aggregate tax
basis of the Depositary Shares exchanged therefor, and (iii) the holding period
for shares of the Firstar Preferred Stock in the hands of an exchanging owner
of Depositary Shares who holds such Depositary Shares at the time of the
exchange thereof for Firstar Preferred Stock will include the period during
which such person owned such Depositary Shares.
General. The Depositary will forward to the holders of
Depositary Shares all reports and communications from Firstar which are
delivered to the Depositary and which Firstar is required to furnish to the
holders of the Firstar Preferred Stock.
Neither the Depositary nor Firstar will be liable if the
Depositary is prevented or delayed by law or any circumstances beyond its
control in performing its obligations under the Deposit Agreement. The
obligations of Firstar and the Depositary under the Deposit Agreement are
limited to performance in good faith of their duties thereunder and they will
not be obligated to prosecute or defend
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<PAGE> 51
any legal proceeding in respect of any Depositary Shares or Firstar Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Firstar Preferred Stock for deposit, holders of Depositary Shares or other
persons believed to be competent and on documents believed to be genuine.
[The Depositary Shares have been approved for quotation on the
Nasdaq National Market under the symbol "_____."] [Firstar has applied to have
the Depositary Shares quoted on the Nasdaq National Market under the symbol
"_____."]
OPTIONS
Options to purchase First Colonial Class A Common Stock ("First
Colonial Stock Options") are outstanding under several different stock option
plans of First Colonial or its subsidiaries (the "First Colonial Stock Option
Plans"). A total of _______ First Colonial Stock Options have been issued to
date to First Colonial's directors, officers and other key individuals. Upon
consummation of the Merger, each First Colonial Stock Option that is
outstanding immediately prior to the Effective Time will automatically become
an option to purchase the number of shares of Firstar Common Stock (a "Firstar
Stock Option") determined by multiplying the number of shares of First Colonial
Class A Common Stock subject to the First Colonial Stock Option by 0.7725, the
Merger conversion ratio. The exercise price per share of Firstar Common Stock
will be equal to the exercise price per share of First Colonial Class A Common
Stock under the First Colonial Stock Option divided by 0.7725. Pursuant to the
terms of the First Colonial Stock Option Plans, the First Colonial Stock
Options become immediately exercisable upon a "change in control" (which
includes a transaction such as the Merger). Therefore, the Firstar Stock
Options that replace the First Colonial Stock Options upon consummation of the
Merger will be immediately exercisable. Each Firstar Stock Option will
otherwise be exercisable on the same terms and conditions as applied to the
First Colonial Stock Options.
ASSIGNMENT AND ASSUMPTION AGREEMENTS
The First Colonial Subordinated Notes were issued in tandem
with the MSP Agreements. The obligors under the MSP Agreements ("Obligors")
have agreed to purchase shares of First Colonial Class B Common Stock at a
price within a range of $3.40 to $4.60 per share. The Obligors must, at any
time prior to October 17, 1996, purchase First Colonial Class B Common Stock
equal to the amount of notes they hold. The First Colonial Subordinated
Notes are redeemable only to the extent of First Colonial Class B Common Stock
purchased. All current holders of First Colonial Subordinated Notes and
Obligors under the MSP Agreements are executive officers or directors of First
Colonial or its subsidiaries.
As of August 8, 1994, Firstar entered into Assignment and
Assumption Agreements with each of the Obligors (the "Assignment and Assumption
Agreements"). Under the Assignment and Assumption Agreements, as of the
Effective Time, each of the MSP Agreements will represent the obligation to
purchase shares of Firstar Common Stock, and Firstar will assume obligations
under the First Colonial Subordinated Notes.
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Set forth below are the names of the executive officers and
directors of First Colonial who are Obligors and the number of shares
of First Colonial Class B Common Stock each Obligor has agreed to purchase:
<TABLE>
<CAPTION>
SHARES OF FIRST COLONIAL
PRINCIPAL AMOUNT CLASS B COMMON STOCK
---------------- ----------------------
<S> <C> <C>
C. Paul Johnson $486,370 105,733
Robert F. Sherman 249,190 54,172
Robert J. Leander 116,563 25,340
John F. Burns* 124,592 27,085
Thomas J. Wigdahl 124,592 27,085
Ronald J. Aronberg 124,592 27,085
Alan G. Schwartz 124,592 27,085
Wallace E. Zook 118,904 25,849
John A. Benson 30,604 6,653
</TABLE>
*Director Emeritus
EFFECTIVE TIME OF THE MERGER
Subject to satisfaction or waiver of all other conditions to
the Merger, the closing of the Merger will take place on a date to be specified
by Firstar and First Colonial which is required to be no later than the fifth
business day after the later to occur of (i) approval of the Merger by the
Federal Reserve Board and the expiration of any waiting period, (ii) approval
of the Merger by the Illinois Commissioner and (iii) the date on which the
Special Meeting is held. If the closing does not take place on the date
referred to in the preceding sentence because any condition to the obligations
of Firstar and FCW, on the one hand, or First Colonial, on the other hand,
under the Reorganization Agreement is not met on that date, the other party may
postpone the closing from time to time to any designated subsequent business
day not more than ten business days after the original or postponed date on
which the closing was to occur. As soon as practicable on or after the closing
date, executed Articles of Merger will be filed with the Secretary of State of
the State of Wisconsin and an executed Certificate of Merger will be filed with
the Secretary of State of the State of Delaware, and the Merger will become
effective upon the filing of such Articles of Merger and Certificate of Merger
(the "Effective Time"). Subject to the conditions contained in the Merger
Agreements, the closing date is currently expected to occur during the first
quarter of 1995. See "Conditions to the Merger" and "Regulatory Approvals."
SURRENDER OF CERTIFICATES
As soon as reasonably practicable after the Effective Time,
Firstar Trust Company, or such other bank or trust company designated as
exchange agent for Firstar (the "Exchange Agent"), is required to mail to each
holder of record of First Colonial Common Stock a letter of transmittal and
instructions for use in effecting the surrender of such holder's First Colonial
stock certificates for certificates representing Firstar Common Stock
("Certificates").
FIRST COLONIAL STOCKHOLDERS SHOULD NOT SEND IN THEIR STOCK
CERTIFICATES OR DEPOSITARY RECEIPTS UNTIL THEY RECEIVE THE LETTER OF
TRANSMITTAL FORM AND INSTRUCTIONS.
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<PAGE> 53
Upon surrender to the Exchange Agent of one or more
certificates for First Colonial Common Stock, together with a properly
completed letter of transmittal, there will be issued and mailed to the holder
a Certificate or Certificates to which the holder is entitled and, where
applicable, a check for the amount representing any fractional share. A
Certificate may be issued in a name other than the name in which the
surrendered certificate is registered only if a certificate representing such
First Colonial Common Stock is presented to the Exchange Agent, accompanied by
all documents required to evidence and effect a transfer to the new name and by
evidence that any applicable stock transfer taxes have been paid.
All Firstar Common Stock and Firstar Preferred Stock issued
pursuant to the Merger will be deemed issued as of the Effective Time. No
dividends or other distributions declared or made after the Effective Time with
respect to Firstar Common Stock with a record date after the Effective Time
will be paid to the holder of any unsurrendered certificate representing First
Colonial Common Stock with respect to the shares of Firstar Common Stock
represented thereby, and no cash payment in lieu of fractional shares will be
paid to any such holder, until the holder of record of such certificate
surrenders the certificate. Subject to the effect of applicable laws,
following surrender of any certificate, there will be paid to the record holder
of the Certificates issued in exchange, without interest, (i) at the time of
such surrender, the amount of any cash payable in lieu of a fractional share of
Firstar Common Stock and the amount of dividends or other distributions with
record and payment dates after the Effective Time and before the date of such
surrender and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
the whole shares of Firstar Common Stock represented by the Certificates. In
no event shall the persons entitled to receive such dividends, distributions
and cash in lieu of fractional shares be entitled to receive interest on
amounts payable.
HOLDERS OF THE DEPOSITARY RECEIPTS ARE NOT REQUIRED TO TAKE
ANY ACTION IN CONNECTION WITH THE MERGER. Following the Effective Time, the
Depositary Receipts will remain outstanding and will thereafter, at the
direction of the Surviving Corporation, represent an interest in shares of
Firstar Preferred Stock.
CONDITIONS TO THE MERGER
The Merger will occur only if the Merger Agreements are
approved by the requisite vote by the holders of First Colonial Common Stock.
Consummation of the Merger is subject to the satisfaction of certain other
conditions unless waived to the extent waiver is permitted by applicable law.
Such conditions include the following, which constitute all material
conditions: (i) the receipt of all necessary regulatory approvals, including
the approval of the Federal Reserve Board and the Illinois Commissioner, with
no terms or conditions that Firstar does not accept and that (A) are not
customarily contained in such approvals, or (B) would, as determined by Firstar
in good faith, have a material adverse effect on its business or financial
condition, or materially detract from the value of First Colonial to Firstar;
(ii) the effectiveness of the Registration Statement and the absence of a stop
order suspending such effectiveness or proceedings seeking a stop order; (iii)
the absence of a temporary restraining order, injunction or other order of any
court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Merger; (iv) authorization for listing on
the NYSE upon official notice of issuance of the shares of Firstar Common Stock
issuable in the Merger, pursuant to the Firstar Stock Options and under the
Mandatory Stock Purchase Agreements; (v) the receipt by Firstar of opinions
from KPMG Peat Marwick LLP, as Firstar's independent auditors and as First
Colonial's independent auditors, to the effect that the Merger qualifies for
pooling of interests accounting treatment; (vi) the receipt by Firstar of
executed letter agreements in the form attached to the Agreement, relating to
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<PAGE> 54
securities law matters and pooling of interests treatment, from affiliates of
First Colonial; (vii) the opinion of Vedder Price delivered to Firstar and
First Colonial that the Merger qualifies as a tax-free reorganization within
the meaning of Section 368(a) of the Code shall not have been withdrawn or
modified in any material respect; (viii) the receipt of all consents or
approvals from third parties required under agreements for consummation of the
Merger other than those agreements for which failure to obtain such consents or
approvals would not have a material adverse effect on First Colonial; (ix) the
receipt by Firstar of "cold comfort" letters of KPMG Peat Marwick LLP, as First
Colonial's independent auditors, dated the date on which the Registration
Statement becomes effective and the Effective Time; (x) the absence of any
material adverse change since December 31, 1993, in the financial condition,
results of operations or business of First Colonial and Firstar, other than any
changes resulting primarily by reason of changes in banking business of First
Colonial and Firstar, other than any changes resulting primarily by reason of
changes in banking laws or regulations (or interpretations thereof), changes in
the general level of interest rates or changes in economic, financial or market
conditions affecting the banking industry generally in the regions in which
First Colonial or Firstar, as the case may be, operates; (xi) the absence of
any material action, suit or proceeding commenced against Firstar, First
Colonial or any affiliate, associate, officer or director of either of them
seeking to restrain, enjoin, prevent, change or rescind the transactions
contemplated by the Merger Agreements or questioning the validity or legality
of any such transaction which action, suit or proceeding Firstar reasonably
determines does not involve only frivolous claims; (xii) the continued accuracy
of representations and warranties by Firstar and First Colonial regarding,
among other things, the organization of the parties, financial statements,
capitalization, pending and threatened litigation, enforceability of the Merger
Agreement, compliance with law, and tax matters; (xiii) the aggregate of (A)
the fractional share interests in Firstar Common Stock that will be paid in
cash and (B) the shares of Firstar Common Stock that would be issuable by
virtue of the Merger with respect to shares of First Colonial Class B Common
Stock outstanding on the record date for the Special Meeting that will not be
converted into Firstar Common Stock due to the exercise of dissenters' rights
shall not be more than 10% of the maximum aggregate number of shares of Firstar
Common Stock which could be issued as a result of the Merger; (xiv) First
Colonial's consolidated allowance for loan losses shall not be less than an
amount requested by Firstar; and (xv) the number of outstanding shares of First
Colonial Common Stock shall not be greater than 9,994,429. See "Termination,
Amendment and Waiver" and "Regulatory Approvals."
As of November ___, 1994, __________ shares of First Colonial
Common Stock were issued and outstanding, and ___________ shares of First
Colonial Common Stock were issuable pursuant to exercisable First Colonial
Stock Options and pursuant to the Mandatory Stock Purchase Agreements. First
Colonial Common Stock is also issuable upon conversion of First Colonial Series
C Preference Stock. First Colonial has agreed to use its best efforts to
repurchase First Colonial Common Stock under certain conditions. See "Business
Pending the Merger."
In addition, unless waived, each party's obligation to effect
the Merger is subject to performance by the other party of its obligations
under the Merger Agreements and the receipt of certain certificates from the
other party and legal opinions.
REGULATORY APPROVALS
Federal. The Merger is subject to prior approval by the
Federal Reserve Board under the Bank Holding Company Act of 1956, as amended
(the "BHC Act"), which requires that the Federal Reserve Board take into
consideration, among other factors, the financial and managerial resources and
future prospects of the respective institutions and the convenience and needs
of the communities to be served. The BHC Act prohibits the Federal Reserve
Board from approving the Merger if it would result
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<PAGE> 55
in a monopoly or be in furtherance of any combination or conspiracy to
monopolize or to attempt to monopolize the business of banking in any part of
the United States, or if its effect in any section of the country may be to
substantially lessen competition or to tend to create a monopoly, or if it
would in any other manner be a restraint of trade, unless the Federal Reserve
Board finds that the anticompetitive effects of the Merger are clearly
outweighed in the public interest by the probable effect of the transaction in
meeting the convenience and needs of the communities to be served. The Federal
Reserve Board has the authority to deny an application if it concludes that the
combined organization would have an inadequate capital position. Furthermore,
the Federal Reserve Board must also assess the records of the bank subsidiaries
of Firstar and First Colonial under the Community Reinvestment Act of 1977, as
amended (the "CRA"). The CRA requires that the Federal Reserve Board analyze,
and take into account when evaluating an application, each bank's record of
meeting the credit needs of it local communities, including low- and
moderate-income neighborhoods, consistent with safe and sound operation.
Under the BHC Act, the Merger may not be consummated until up
to 30 days following the date of Federal Reserve Board approval, during which
time the United States Department of Justice may challenge the Merger on
antitrust grounds. The commencement of an antitrust action would stay the
effectiveness of the Federal Reserve Board's approval unless a court
specifically orders otherwise. The BHC Act provides for the publication of
notice and public comment on the applications and authorizes the regulatory
agency to permit interested parties to intervene in the proceedings.
Firstar filed an application with the Federal Reserve Bank of
Chicago (the "Federal Reserve Bank") that was accepted for filing by the
Reserve Bank on November __, 1994.
[Firstar has been advised that the Federal Reserve Bank has
accepted the application for processing under delegated authority from the
Federal Reserve Board. Under the regulations of the Federal Reserve Board, the
Federal Reserve Bank will act on the application within the 30-day period that
began on the date the application was accepted for filing (a period that will
be tolled by any public comments or other circumstances that may trigger
further requests for information from the Federal Reserve Bank). There can be
no assurance that the Federal Reserve Bank will continue processing the
application under delegated authority.]
There can be no assurance that the Federal Reserve Board will
approve the Merger, and if the Merger is approved, there can be no assurance as
to the date of such approval. There can likewise be no assurance that the
Department of Justice will not challenge the Merger or, if such a challenge is
made, as to the result thereof.
Illinois. The Merger is also subject to the prior approval by
the Illinois Commissioner under the Illinois Bank Holding Company Act of 1957,
as amended (the "Illinois Act"), which requires that the Illinois Commissioner
take into consideration whether (i) the proposed transaction will promote the
safety and soundness of the institution to be acquired, (ii) the banks already
controlled by the applicant meet the convenience and needs of the communities
served by them in accordance with the CRA, (iii) the applicant intends to
adequately meet the convenience and needs of the communities serviced by the
institution to be acquired in accordance with the CRA, and (iv) the transaction
will bring net new benefits to the state of Illinois. Under the Illinois Act,
the Merger may be consummated immediately following an approval from the
Illinois Commissioner.
Firstar filed an application with the Illinois Commissioner
that was accepted for processing on October 21, 1994. There can be no
assurance that the Illinois Commissioner will approve the Merger, and if the
Merger is approved, there can be no assurance as to the date of such approval.
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<PAGE> 56
General. The Merger cannot proceed in the absence of all
requisite regulatory approvals. See "Conditions to the Merger," "Effective
Time of the Merger" and "Termination, Amendment and Waiver." In the Agreement,
Firstar and First Colonial have agreed to take all reasonable actions necessary
to comply promptly with all legal requirements which may be imposed with
respect to the Merger, including furnishing information to the Federal Reserve
Board or in connection with approvals or filings with other governmental
entities. Firstar and First Colonial have also agreed to take all reasonable
action necessary to obtain approvals of the Federal Reserve Board, the Illinois
Commissioner and other governmental entities. However, the obligation to take
reasonable actions is not to be construed as including an obligation to accept
any terms of or conditions to an agreement or other approval of, or any
exemption by, any party that are not customarily contained in approvals of
similar transactions granted by such regulators or if Firstar in good faith
determines that such terms or conditions would have a material adverse effect
on its business or financial condition or would materially detract from the
value of First Colonial to Firstar. There can be no assurance that any
regulatory approvals will not contain a term or condition that causes such
approvals to fail to satisfy the conditions described above under "Conditions
to the Merger."
Firstar and First Colonial are not aware of any other
governmental approvals or actions that are required for consummation of the
Merger except as described above. Should any other approval or action be
required, it is presently contemplated that such approval or action would be
sought. There can be no assurance that any such approval or action, if needed,
could be obtained and, if such approvals or actions are obtained, there can be
no assurance as to the timing thereof.
BUSINESS PENDING THE MERGER
Under the Reorganization Agreement, First Colonial is
generally obligated to, and to cause its subsidiaries to, operate their
respective businesses only in the usual, regular and ordinary course consistent
with past practices; use its best efforts to preserve its business organization
and assets, maintain its rights and franchises, retain the services of
employees and maintain its relationships with customers; maintain its
properties; keep in full force and effect insurance; perform obligations under
material agreements; and comply with obligations imposed by laws. The
Reorganization Agreement also provides that prior to the Effective Time,
without Firstar's prior written consent, First Colonial may not, and may not
allow its subsidiaries to, among other things: (i) incur any material
liabilities or obligations, except in the ordinary course; (ii) increase the
compensation of employees, directors or officers, except in accordance with
past practice; (iii) increase retirement benefits or change any other benefit
plans, or enter into employment or similar agreements; (iv) effect any
fundamental corporate acquisition; (v) issue or redeem any of its capital
stock, other than (A) repurchase of First Colonial Common Stock in satisfaction
of its obligation under the Reorganization Agreement as described in the next
paragraph, (B) the issuance of First Colonial Class A Common Stock upon
conversions at the option of the holder of First Colonial Series C Preference
Stock or First Colonial Class B Common Stock, or pursuant to the First Colonial
Stock Option Plans, or (C) issuances of First Colonial Class B Common Stock
pursuant to the Mandatory Stock Purchase Agreements; (vi) propose or adopt any
amendments to its corporate charter or bylaws in any way adverse to Firstar;
(vii) except in fiduciary capacities, purchase any shares of Firstar Common
Stock; or (viii) change the lending, investment, liability, management and
other material policies concerning the banking business of First Colonial.
First Colonial has agreed to use its best efforts, consistent
with law, pooling-of-interests accounting rules and the provisions of the Code
governing tax-free reorganizations, to repurchase enough First Colonial Common
Stock to satisfy anticipated future issuances of such stock upon the conversion
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<PAGE> 57
of First Colonial Series C Preference Stock, upon the exercise of First
Colonial Stock Options or pursuant to the Mandatory Stock Purchase Agreements.
In addition, the Reorganization Agreement provides that prior
to the Effective Time First Colonial may not initiate, solicit or encourage, or
take any other action to facilitate, any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
"Competing Transaction," or negotiate with any person in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize or permit any of its officers, directors,
employees, investment banker, financial advisor, attorney, accountant or other
representative to take any such action. "Competing Transaction" means any of
the following involving First Colonial or any of its subsidiaries: any merger
or other business combination; a sale or other disposition of a substantial
portion of assets; a sale of capital stock or a right to acquire capital stock;
a tender offer or exchange offer for at least 10% of the outstanding share of
any class of its capital stock; a solicitation of proxies in opposition to
approval of the Merger by First Colonial's stockholders; or a public
announcement of a bona fide proposal, plan or intention to do any of the
foregoing. The Reorganization Agreement provides, however, that the Board of
Directors of First Colonial is not prohibited from (i) furnishing or permitting
certain persons to furnish information to any party that requests information
as to First Colonial if the Board of Directors is required to take such action,
and receives an opinion of counsel confirming such requirements, to comply with
its fiduciary duties to stockholders imposed by law and, prior to furnishing
such information, First Colonial receives a confidentiality agreement or (ii)
complying with Rules 14d-2 and 14e-2 promulgated under the Exchange Act with
regard to a Competing Transaction.
First Colonial has agreed to, through its Board of Directors,
(i) unanimously recommend to its stockholders approval of the Merger
Agreements; (ii) not withdraw, modify, or amend such recommendation; and (iii)
use its best efforts to obtain stockholder approval. However, the
Reorganization Agreement does not prohibit the Board of Directors of First
Colonial from failing to recommend such approval or withdrawing, modifying or
amending its recommendation if (A) the Board of Directors of First Colonial is
required to take such action to comply with its fiduciary duty to stockholders
imposed by law as a result of the receipt by such Board of Directors of a bona
fide proposal from a third party not affiliated with First Colonial to acquire
control of First Colonial or substantially all of the assets of First Colonial
after July 31, 1994, (B) First Colonial's Board obtains an opinion of counsel
confirming such requirement prior to taking such action and (C) First
Colonial's Board takes such action as is necessary to allow First Colonial's
stockholders to vote upon the Merger Agreements in accordance with the DGCL.
DIVIDENDS
Under the Reorganization Agreement, First Colonial is allowed
to declare regular quarterly cash dividends on First Colonial Class A Common
Stock and First Colonial Class B Common Stock at a rate not in excess of $.15
per share and $.125 per share, respectively, and regular quarterly cash
dividends on its Series C Preference Stock as required by the First Colonial
Certificate. Increases of up to _____% in the rate of dividends on the First
Colonial Class A Common Stock and up to _____% in the rate of dividends on the
First Colonial Class B Common Stock are permitted beginning with the dividends
payable in the second quarter of 1995.
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<PAGE> 58
TERMINATION, AMENDMENT AND WAIVER
The Reorganization Agreement provides that it may be
terminated, whether before or after approval of the matters presented in
connection with the Merger by the stockholders of First Colonial or Firstar,
(i) by mutual consent of Firstar and First Colonial; (ii) by either Firstar or
First Colonial (A) if there has been a material breach of a representation,
warranty, covenant or agreement on the part of the other party set forth in the
Reorganization Agreement or (B) if any representation or warranty of the other
party shall be discovered to have become materially untrue, in either case
which breach or other condition has not been cured within ten business days
following receipt by the nonterminating party of notice of such breach or other
condition; (iii) by either Firstar or First Colonial if any permanent
injunction preventing the consummation of the Merger shall have become final
and non-appealable; (iv) by either Firstar or First Colonial if the Merger
shall not have been consummated before July 31, 1995, for a reason other than
the failure of the terminating party to comply with its obligations under the
Reorganization Agreement; and (v) by either Firstar or First Colonial if the
Federal Reserve Board or the Illinois Commissioner has denied approval of the
Merger and neither Firstar nor First Colonial has, within 30 days after the
entry of the order denying such approval, filed a petition seeking review of
such order.
The Reorganization Agreement also provides that it may be
terminated by First Colonial on either of the two trading days occurring
immediately after the ten consecutive trading days commencing on the first
business day following the date the Federal Reserve Board approves the Merger
(the "Ten-Day Calculation Period"), if both of the following conditions are
satisfied: (i) the average of the daily closing prices of a share of Firstar
Common Stock as reported on the Consolidated Tape System for NYSE stocks during
the Ten-Day Calculation Period is less than $29.00 and (ii) the percentage
decline in the price of Firstar Common Stock after July 29, 1994, determined by
reference to such average of the daily closing prices, exceeds the percentage
decline in the weighted average price of a selected group of bank stocks by
more than 12.5%. If the foregoing conditions were applied as of November ___,
1994, the applicable average Firstar Common Stock price would be $___________
per share, representing a percentage [decline/increase] in the price of such
stock from July 29, 1994 that exceeded by _____% the percentage
[decline/increase] in the weighted average price of such group of bank stocks.
The selected group of bank stocks is identified on Exhibit 10.01 to the
Reorganization Agreement, which is included in Appendix B to this Proxy
Statement-Prospectus.
The Reorganization Agreement also gave Firstar the right to
terminate the Agreement at any time prior to November 3, 1994, if certain
environmental conditions were found. Firstar did not exercise this right.
The Merger Agreements may be amended by the parties at any
time before or after approval of the matters presented in connection with the
Merger by the stockholders of First Colonial, but after any such approval, no
amendment may be made which would have an adverse effect on First Colonial's
stockholders, change the consideration to be provided to such shareholders
pursuant to the Merger Agreements or have a similar effect. At any time prior
to the Effective Time, either party may, to the extent legally allowed, extend
the time for performance of any of the obligations of the other party, waive
any inaccuracies and representations and warranties of the other and waive
compliance with any of the agreements or conditions.
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<PAGE> 59
MANAGEMENT AND OPERATIONS AFTER THE MERGER
In the Merger, First Colonial will be merged into FCW and the
separate corporate existence of First Colonial will cease. Firstar will
thereby acquire control of First Colonial and the 17 bank subsidiaries it now
owns (the "First Colonial Banks"), as well as its five nonbank subsidiaries.
FCW, as the surviving corporation in the Merger and a wholly owned subsidiary
of Firstar, will continue operations under the name "Firstar Corporation of
Wisconsin."
The officers and directors of FCW prior to the Merger will
continue as officers and directors of the surviving corporation. First
Colonial's current Chairman and CEO, C. Paul Johnson, will become a director of
Firstar but plans to retire from management after the Merger. Immediately
following the Closing Date, one or more management representatives of Firstar
will be added to the board of each First Colonial Bank. Within several months
of the Effective Time, Firstar and FCW intend to merge each of the First
Colonial Banks into Firstar Bank Illinois, subject to regulatory approval.
When this planned consolidation into one bank is completed, John B. ("Jay")
Williams, an Executive Vice President of Firstar's lead bank, Firstar Bank
Milwaukee, N.A., will serve as Firstar Bank Illinois' President and Chief
Executive Officer, and the remainder of management of Firstar Bank Illinois
will be drawn from management of Firstar and its subsidiaries and the First
Colonial Banks. Certain First Colonial bank directors may be invited to join
the Board of Directors of the surviving bank. See "Interests of Certain
Persons in the Merger."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The directors and executive officers of First Colonial hold
First Colonial Stock Options granted pursuant to the First Colonial Stock
Option Plans. Pursuant to their terms, such options, to the extent not then
exercisable, will become immediately exercisable upon the occurrence of a
"change in control" (which includes a transaction such as the Merger).
Therefore, upon the consummation of the Merger and related replacement of the
First Colonial Stock Options with Firstar Stock Options in accordance with of
Merger Agreements, all the resulting Firstar Stock Options will be immediately
exercisable.
Set forth below is certain information with respect to the
Firstar Stock Options which will replace the First Colonial Stock Options held
by First Colonial's directors and executive officers upon consummation of the
Merger.
<TABLE>
<CAPTION>
OPTIONS EXERCISABLE OPTIONS FIRST
AS OF JANUARY 18, 1995 EXERCISABLE UPON THE MERGER
---------------------- ---------------------------
Shares of Shares of
Firstar Average Per Share Firstar Average Per Share
Common Stock Exercise Price Common Stock Exercise Price
------------ ------------------- ------------ -------------------
OUTSIDE DIRECTORS
-----------------
<S> <C> <C> <C> <C>
Ronald J. Aronberg 14,136 $16.55 5,716 $21.84
Thomas L. Cox 8,497 21.70 -- --
Robert J. Leander 14,078 16.53 5,542 21.86
Patrick L. O'Malley 5,330 16.56 2,394 21.50
Henry B. Pearsall 7,010 16.38 2,027 21.68
</TABLE>
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<TABLE>
<CAPTION>
OPTIONS EXERCISABLE OPTIONS FIRST
AS OF JANUARY 18, 1995 EXERCISABLE UPON THE MERGER
---------------------- ---------------------------
Shares of Shares of
Firstar Average Per Share Firstar Average Per Share
Common Stock Exercise Price Common Stock Exercise Price
------------ ------------------- ------------ -------------------
<S> <C> <C> <C> <C>
Alan G. Schwartz 35,844 $16.09 8,458 $21.92
William P. White 1,989 17.53 1,873 21.52
Thomas J. Wigdahl 4,821 16.61 1,873 21.52
EXECUTIVE OFFICERS
John A. Benson 17,381 $16.63 8,961 $21.74
Thomas A. Caravello 17,381 16.63 8,883 21.73
Michael J. Clawson 21,050 16.62 9,076 21.68
Craig B. Collinson 9,752 16.87 6,083 21.92
William J. Hornig 2,414 21.57 7,242 22.40
C. Paul Johnson 88,258 16.60 21,436 23.39
Barbara A. Kilian 4,635 16.96 5,021 22.51
Jon Knutsen 1,931 15.05 8,111 21.91
Martin J. Noll 1,448 21.69 5,890 22.19
Debra J. Pawlik 8,207 17.25 6,933 21.91
Bette B. Sherman 5,021 17.23 8,111 21.91
Robert F. Sherman 28,862 16.30 20,471 21.76
Wallace E. Zook 22,981 16.59 9,076 21.68
</TABLE>
The Reorganization Agreement provides, among other things,
that upon the consummation of the Merger the Firstar Board of Directors will be
increased by one director and C. Paul Johnson will be elected to fill the newly
created vacancy. The Reorganization Agreement also provides that upon
consummation of the Merger Firstar will indemnify and obtain insurance coverage
for each officer and director of First Colonial and its subsidiaries against
all losses, claims, damages, costs, expenses, liabilities or judgments (i)
arising out of the fact that such person was an officer or director of First
Colonial or one of its subsidiaries prior to the consummation of the Merger,
and (ii) arising out of or pertaining to the Reorganization Agreement or the
transactions contemplated thereby, in each case to the fullest extent permitted
under applicable law.
On April 20, 1994, First Colonial adopted the Transitional
Compensation Program to provide transitional compensation to affected executive
and senior officers in the event of a change in control of First Colonial
(which includes a transaction such as the Merger). Pursuant to the
Reorganization Agreement and the Benefits Letter, First Colonial has agreed to
amend the Transitional Compensation Program in certain respects prior to the
Merger. The Transitional Compensation Program, as amended, will provide for
monthly cash payments, payment of a pro rata bonus and continuation of certain
benefits under employee benefit plans for a Transitional Period (as defined
below) for Participants (as defined below) whose employment is terminated
within such Transitional Period after the Merger. "Participants" under the
Transitional Compensation Plan are members of the First Colonial Senior
Management Committee ("Senior Management Committee") and each of those
employees designated a "Senior Officer Group Member" by the First Colonial
Board of Directors. A Participant is considered
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terminated under the Transitional Compensation Plan if termination of
employment occurs during such Participant's Transitional Period (as defined
below) and is (i) employer-initiated for reasons other than a felony conviction,
or the Participant's continued and willful failure to be present and perform his
or her duties, or (ii) employee-initiated within ninety days after (a)(1) the
failure by the employer to maintain the Participant's salary, benefits or
perquisites at the same level as in effect upon the occurrence of the "change in
control," or as may be increased from time to time in accordance with the
regular practices of the employer with respect to employees with similar duties,
(2) a change in the Participant's duties and responsibilities such that they are
not at least commensurate with those of other employees of equivalent
compensation, or (3) a change in the Participant's primary employment location
by more than 35 miles, or (b) with respect to Senior Management Committee
members only, a good faith determination by the Participant that there has been
a significant adverse change in the Participant's working conditions or status.
Monthly cash payments begin upon termination, continue through the Transitional
Period and are equal to the Participant's base annual salary as of the date of
termination, or if greater, as of the date of the "change of control," divided
by twelve. Certain employee benefit plan coverage continues after termination
through the Transitional Period. If termination of employment occurs during the
first six months of the Transitional Period, the Participant will be entitled to
out placement counseling. Compensation payable under the Transitional
Compensation Program is limited, however, to the extent necessary so that such
compensation will not be subject to excise tax as an excess parachute payment
under the Code. A Participant's "Transitional Period" is twenty-one months for
members of the Senior Management Committee, and fifteen months for Senior
Officer Group Members. However, the otherwise applicable Transitional Period is
extended by (i) two months for Participants with ten but less than fifteen years
of service upon the "change in control," (ii) four months for Participants with
fifteen but less than twenty years of such service, and (iii) six months for
Participants with twenty or more years of such service. Set forth below are the
names of executive officers of First Colonial who are Participants and the
estimated amount, based on 1994 salary levels, of the aggregate cash payments
that would be due to the executive in the event of termination of employment
subsequent to the Merger:
<TABLE>
<CAPTION>
ESTIMATED CASH PAYMENT
----------------------
<S> <C>
John A. Benson $269,100
Thomas A. Caravello 295,650
Michael J. Clawson 246,750
Craig B. Collinson 138,125
William J. Hornig 175,000
Barbara A. Kilian 154,000
Jon Knutsen 220,500
Martin J. Noll 218,750
Debra J. Pawlik 93,750
Bette B. Sherman 179,375
Wallace E. Zook 314,167
</TABLE>
The maximum aggregate amount of all monthly cash payments that could be
required to be made to Participants under the Transitional Compensation
Program, based upon the Participants' 1994 annual salaries, is approximately
$4,360,000.
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Also on April 20, 1994, C. Paul Johnson, Chairman and Chief
Executive Officer, and Robert F. Sherman, President and Chief Operating
Officer, of First Colonial entered into Transitional Employment Agreements with
First Colonial providing for Transitional Periods of thirty and thirty-two
months, respectively. In connection with the consummation of the Merger, Mr.
Johnson has agreed to the cancellation of his Transitional Employment
Agreement, thereby waiving his right to approximately $1.2 million of aggregate
cash compensation based on his 1994 base annual salary of $470,000. In
connection with such cancellation and waiver, First Colonial has awarded to Mr.
Johnson a one-time bonus of $200,000 for services rendered in connection with
the negotiation of the Merger Agreements and has authorized cash payments
aggregating $270,000 and other benefits in connection with Mr. Johnson's
retirement upon the Merger. See "PROPOSED MERGER - Background of the Merger."
Mr. Sherman has agreed to amend his Transitional Employment Agreement to
conform its terms and conditions to those of the amended Transitional
Compensation Program applicable to Senior Management Committee Participants,
except with a Transitional Period of thirty-two months. Based upon his 1994
annual salary, the maximum aggregate amount of monthly cash payments that could
be required to be paid to Mr. Sherman under his Transitional Employment
Agreement is approximately $715,000.
On April 20, 1994, First Colonial also adopted the First
Colonial Bankshares Corporation SuperCobra Continuation Plan ("SuperCobra
Plan") to provide the opportunity for certain eligible officers and employees
to have access to group medical coverage in the event of termination of
employment following a change in control (which includes a transaction such as
the Merger). Pursuant to the Reorganization Agreement, First Colonial has
agreed to amend the SuperCobra Plan prior to the Merger. The SuperCobra Plan,
as amended, will provide for the continuation of the applicable employer group
health plan benefits implementing the continuation coverage requirements of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA
Coverage"), following the maximum required period of COBRA Coverage. The
opportunity to maintain extended coverage will be provided to Covered Persons
(as defined below) whose employment is terminated within a certain period of
time after the Merger. In most cases, the group health plan benefits
available will be limited to a health maintenance organization (HMO), unless
such option is determined to be unavailable, in which case coverage under
another group health plan maintained by FCW will be permitted. "Covered
Persons" include Participants under the Transitional Compensation Program,
parties to Transitional Employment Agreements, and employees who are fifty
years of age or who have completed twenty years of service, in all cases as of
the date of the Merger. A Covered Person is considered terminated under the
SuperCobra Plan if such person is considered terminated under either the
Transitional Compensation Program and is a Participant thereunder, or a
Transitional Employment Agreement and is a party thereto. Any other Covered
Person is considered terminated if such termination occurs within twelve months
of the Merger and is (i) employer-initiated for reasons other than misconduct
or performance below acceptable standards under the disciplinary policy
applicable to such Covered Person, or (ii) employee-initiated within thirty
days of (a) a reduction in the Covered Person's base annual salary or hourly
rate of pay or benefits, or (b) transfer of such Covered Person to an
employment location more than thirty-five miles from such Covered Person's
location as of the date of the "change in control." However, such other
Covered Persons are not considered terminated if they (x) leave employment
voluntarily under non-qualifying circumstances, or (y) are offered another
position with comparable compensation and decline such position. A Covered
Person's continuation of COBRA Coverage under the SuperCobra Plan expires upon
the earlier to occur of (A) their eligibility for Medicare benefits, (B) upon
the occurrence of any event which would then entitle an employer to terminate
COBRA Coverage (other than the expiration of the maximum required period of
COBRA Coverage), or (C) the completion of sixty months of such extended COBRA
Coverage.
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Certain directors and executive officers of First Colonial
have entered into MSP Agreements with First Colonial. See "PROPOSED MERGER -
Assignment and Assumption Agreements."
EFFECT ON EMPLOYEE BENEFITS
Under the Reorganization Agreement, Firstar covenants to
comply with its agreements to provide certain employee benefits set forth in
the Benefits Letter. The Benefits Letter states, among other things, that
Firstar will provide, or cause to be provided, to each employee of FCW or its
subsidiaries who was an employee of First Colonial at the time of the
consummation of the Merger the opportunity to participate in Firstar's employee
benefit plans on a basis comparable to that of similarly situated employees of
Firstar and its subsidiaries, with full credit for years of employment with
First Colonial. The Benefits Letter also provides that Firstar will implement
such bonus, incentive and equity-based plans for former First Colonial
employees as Firstar deems appropriate, after giving consideration to factors
similar to those used in creating and administering similar plans for current
employees in the Firstar organization. Finally, the Benefits Letter provides
that after the Merger, Firstar will honor or will cause FCW to honor the
Transitional Compensation Program, Transitional Employment Agreements and
SuperCobra Plan described above, as well as the First Colonial Severance
Benefits Program, as such programs and agreements may be amended by the
Benefits Letter, and will maintain the employee benefit plans of First Colonial
for the benefit of the employees of First Colonial at the time of the Merger
until such time as corresponding Firstar plans are extended to such employees.
TERMINATION FEE
As a condition to Firstar's willingness to enter into the
Agreement, First Colonial agreed to pay to Firstar a fee of $7,500,000 (the
"Termination Fee") within two days of a "Trigger Event." A Trigger Event means
the occurrence of one or more of the following events: (i) a Transaction
Proposal (as defined below); (ii) termination of the Reorganization Agreement
following a wilful and material breach thereof by First Colonial; or (iii) any
withdrawal, modification or amendment in any respect by First Colonial's Board
of Directors of its approval or recommendation regarding the Reorganization
Agreement and stockholder vote relating thereto or First Colonial's Board of
Directors adopting a resolution relating to any such withdrawal, modification
or amendment.
A "Transaction Proposal" means any of the following: (a) a
bona fide tender offer or exchange offer for at least 25% of the then
outstanding shares of any class of capital stock of First Colonial made by any
entity or person other than Firstar or its subsidiaries or affiliates, (b) any
entity or person filing an application under the BHC Act or the Change in Bank
Control Act with respect to the acquisition by such entity or person of any
shares of capital stock of First Colonial, (c) a merger, consolidation or other
business combination with First Colonial or any of its subsidiaries is effected
by any entity or person, (d) any sale, lease, transfer, mortgage or other
disposition involving a substantial part of First Colonial's or any of its
subsidiaries' consolidated assets, or any agreement to effect such a
transaction, (e) the acquisition by any entity or person of 10% or more of the
outstanding shares of any class of capital stock of First Colonial or
acquisition of additional shares by any entity or person currently holding 10%
or more of such shares, except for certain acquisitions made pursuant to
certain First Colonial benefit plans, (f) any reclassification of the
securities of, or recapitalization of, First Colonial that has the effect,
directly or indirectly, of increasing the proportionate share of any class of
equity security of First Colonial that is owned by an entity or person other
than Firstar or its subsidiaries or affiliates, or any agreement to effect such
a reclassification or recapitalization, (g) any transaction having an effect
similar to those described in (a) through (f) above, or (h) a public
announcement regarding a
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<PAGE> 64
proposal, plan or intention by First Colonial or another entity or
person to effect any of the foregoing transactions; provided, however, that
events described in clauses (a), (b) and (h) of this definition do not
constitute a "Transaction Proposal" unless either (x) the Board of Directors of
First Colonial takes or fails to take certain actions in connection therewith or
(y) First Colonial's stockholders fail to approve the Merger Agreements.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
Firstar and First Colonial have received an opinion of Vedder
Price that the Merger will qualify as a tax-free reorganization under Sections
368(a)(1)(A) and 368(a)(2)(D) of the Code. Accordingly First Colonial, Firstar
and FCW will recognize no gain or loss for federal income tax purposes as a
result of the Merger and no gain or loss will be recognized by any First
Colonial stockholder upon receipt of Firstar Common Stock or Firstar Preferred
Stock pursuant to the Merger (except upon the receipt of cash in lieu of
fractional shares of Firstar Common Stock). This discussion of federal income
tax consequences of the Merger assumes that none of the holders of First
Colonial Class B Common Stock will exercise dissenters' rights. The Internal
Revenue Service ("Service") has not been asked to rule upon the tax
consequences of the Merger and such request will not be made. The opinion of
Vedder Price is based entirely upon the Code, regulations now in effect
thereunder, current administrative rulings and practice, and judicial
authority, all of which are subject to change. Unlike a ruling from the
Service, an opinion of counsel is not binding on the Service and there can be
no assurance, and none is hereby given, that the Service will not take a
position contrary to one or more positions reflected herein or that the opinion
will be upheld by the courts if challenged by the Service. EACH STOCKHOLDER OF
FIRST COLONIAL IS URGED TO CONSULT HIS OR HER OWN TAX AND FINANCIAL ADVISORS AS
TO THE EFFECT OF SUCH FEDERAL INCOME TAX CONSEQUENCES ON HIS OR HER OWN
PARTICULAR FACTS AND CIRCUMSTANCES AND ALSO AS TO ANY STATE, LOCAL, FOREIGN OR
OTHER TAX CONSEQUENCES ARISING OUT OF THE MERGER.
Based upon the opinion of Vedder Price, which in turn is based
upon various representations and subject to various assumptions and
qualifications, the following federal income tax consequences to the First
Colonial stockholders will result from the Merger. For purposes of this
discussion, holders of Depositary Shares are treated as if they directly held
the stock represented by such Depositary Shares:
(i) Provided that the Merger of First Colonial
with and into FCW qualifies as a statutory merger under
applicable law, the Merger will qualify as a reorganization
within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(D)
of the Code, and First Colonial, Firstar and FCW will each be
"a party to a reorganization" within the meaning of Section
368(b) of the Code for purposes of this reorganization.
(ii) No gain or loss will be recognized by the
holders of First Colonial Common Stock or First Colonial
Series C Preference Stock upon the exchange of First Colonial
Common Stock or First Colonial Series C Preference Stock
solely for Firstar Common Stock or Firstar Preferred Stock,
respectively, pursuant to the Merger, except with respect to
cash received in lieu of fractional shares of Firstar Common
Stock.
(iii) A First Colonial stockholder's aggregate
basis in the Firstar Common Stock (including any fractional
share interest to which he or she may be entitled) or Firstar
Preferred Stock received in the exchange will be the same as
the aggregate basis
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of the First Colonial Common Stock or First Colonial Series
C Preference Stock exchanged therefor, respectively.
(iv) The holding period of the Firstar Common
Stock and Firstar Preferred Stock received by a stockholder of
First Colonial pursuant to the Merger will include the period
during which the First Colonial Common Stock or First Colonial
Series C Preference Stock exchanged therefor was held,
provided that the First Colonial stock surrendered was held as
a capital asset as of the time of the Merger.
(v) A First Colonial stockholder receiving cash
in lieu of fractional share interests of Firstar Common Stock
in the Merger will be treated as if he or she actually
received such fractional share interests which were
subsequently redeemed by Firstar. The cash a First Colonial
stockholder receives will be treated as having been received
as full payment in exchange for the stock redeemed as provided
in Section 302(a) of the Code.
The foregoing is only a general description of certain
material federal income tax consequences of the Merger for stockholders who are
citizens or residents of the United States and who hold their shares as capital
assets, without regard to the particular facts and circumstances of the tax
situation of each stockholder of First Colonial. It does not discuss all of
the consequences that may be relevant to First Colonial stockholders entitled
to special treatment under the Code (such as insurance companies, financial
institutions, dealers in securities, tax-exempt organizations or foreign
persons). The summary set forth above does not purport to be a complete
analysis of all potential tax effects of the transactions contemplated by the
Merger Agreements or the Merger itself. No information is provided herein with
respect to the tax consequences, if any, of the Merger under state, local or
foreign tax laws.
ACCOUNTING TREATMENT
Consummation of the Merger is conditioned upon qualification
of the Merger as a pooling-of-interests for accounting purposes as evidenced by
the receipt by Firstar of opinions from Firstar's and First Colonial's
independent public accountants to the effect that the Merger qualifies for
pooling-of-interests method of accounting. Under the pooling-of-interests
accounting treatment the historical basis of the assets and liabilities of
Firstar and First Colonial will be combined at the Effective Time and carried
forward at their previously recorded amounts and the shareholders' equity
accounts of First Colonial will be combined on Firstar's consolidated balance
sheet. Income and other financial statements of Firstar issued after
consummation of the Merger will be restated retroactively to reflect the
consolidated operations of Firstar and First Colonial as if the Merger had
taken place prior to the periods covered by such financial statements.
For the Merger to qualify for pooling-of-interests accounting
treatment, substantially all (90% or more) of the outstanding First Colonial
Common Stock must be exchanged for Firstar Common Stock. Firstar and First
Colonial have agreed not to take any action which would preclude use of
pooling-of-interests accounting treatment for the Merger by Firstar.
EXPENSES
The Agreement provides that if the Merger Agreements or the
transactions contemplated thereby are terminated, other than for certain
excepted reasons including a termination due to a breach by Firstar of its
obligations under the Merger Agreement, First Colonial will pay Firstar its
out-of-pocket
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expenses incurred in connection with the consummation of the
transactions contemplated by the Merger Agreements, but not to exceed $2.0
million. If the Merger Agreements or the transactions contemplated thereby are
terminated by First Colonial as a result of Firstar's breach of the Merger
Agreement, Firstar will pay First Colonial its out-of-pocket expenses incurred
in connection with the consummation of the transactions contemplated by the
Merger Agreements, but not to exceed $2.0 million.
Firstar and First Colonial have also agreed to share equally
in the expense of printing this Proxy Statement-Prospectus and the expense of
all SEC and regulatory filing fees incurred in connection therewith.
Except as described above, the Merger Agreement provides, in
general, that Firstar and First Colonial will each pay its own expenses in
connection with the Merger and the transactions contemplated thereby, including
fees and expenses of its own accountants and counsel. For information with
respect to financial advisory fees incurred in connection with the Merger, see
"Opinions of Financial Advisors."
RESALE OF FIRSTAR COMMON STOCK, FIRSTAR PREFERRED STOCK AND FIRSTAR
SUBORDINATED NOTES
The shares of Firstar Common Stock to be issued in connection
with the Merger to stockholders of First Colonial and the Depositary Shares
have been registered under the Securities Act of 1933, as amended (the
"Securities Act"), and may be freely traded by stockholders of First Colonial
who, at the Effective Time, are not "affiliates" of First Colonial (and are not
affiliates of Firstar at the time of the proposed resale). Pursuant to the
Merger Agreements, First Colonial must use its best efforts to cause each
affiliate of First Colonial to deliver to Firstar a written undertaking to the
effect that (a) he or she will not sell or dispose of the Firstar Common,
Depositary Shares or the Subordinated Notes to be assumed by Firstar pursuant
to the Assignment and Assumption Agreements (the "Firstar Subordinated Notes")
acquired by him or her in connection with the Merger other than in accordance
with the Securities Act, except under (i) a separate registration statement for
distribution (which Firstar has not agreed to provide), or (ii) Rule 145
promulgated thereunder by the Commission, or (iii) pursuant to some other
exemption from registration; and (b) he or she will not otherwise dispose of
the Firstar Common Stock, Depositary Shares or Firstar Subordinated Notes or
otherwise reduce his or her risk relative to the Firstar Common Stock or
Firstar Subordinated Notes prior to the publication by Firstar of an earnings
statement covering at least 30 days of combined operations after the Effective
Time.
RIGHTS OF DISSENTING STOCKHOLDERS
Under the provisions of Section 262 of the DGCL, a copy of
which is attached to this Proxy Statement-Prospectus as Appendix A, any holder
of record of First Colonial Class B Common Stock has the right to object to the
Merger and demand payment of the fair value of any of the stockholder's shares
in cash. Any such stockholder electing to do so must file a written objection
with First Colonial, at 30 North Michigan Avenue, Suite 300, Chicago, Illinois
60602-0493, before the vote on the Merger at the Special Meeting. A
stockholder may object as to less than all of the shares registered in the
stockholder's name. A PROXY OR VOTE AGAINST THE MERGER WILL NOT, OF ITSELF, BE
REGARDED AS A WRITTEN OBJECTION FOR PURPOSES OF ASSERTING APPRAISAL RIGHTS.
If the Merger is approved by the requisite vote of holders of
First Colonial Common Stock, any holder of First Colonial Class B Common Stock
seeking appraisal rights who has preserved his or her rights of appraisal by
filing an objection and refraining from voting in favor of the Merger
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("Stockholder Seeking Appraisal Rights"), will, within ten days after the
Closing Date, be notified by the surviving corporation of the Closing Date.
Within 120 days after the Closing Date, any Stockholder Seeking Appraisal
Rights may file a petition in the Delaware Court of Chancery demanding a
determination of the value of the First Colonial Class B Common Stock of all
Stockholders Seeking Appraisal Rights. Notwithstanding the foregoing, any such
Stockholder, within 60 days after the Closing Date, has the right to withdraw
his or her demand for appraisal and accept the terms of the Merger Agreements.
Within 120 days after the Closing Date, any Stockholder Seeking Appraisal
Rights, upon written request, will be entitled to receive from the surviving
corporation a statement setting forth the aggregate numbers of Stockholders
Seeking Appraisal Rights and shares they hold. The surviving corporation will
mail such a statement to the Stockholder Seeking Appraisal Rights within ten
days of the request or within ten days after the Closing Date, whichever is
later.
Upon the filing of such a petition by a Stockholder Seeking
Appraisal Rights, the Delaware Court of Chancery will appraise the shares of
Class B Common Stock as to which the Stockholder has demanded appraisal rights,
determining their "fair value" exclusive of any element of value arising from
the accomplishment or expectation of the Merger, together with a "fair rate of
interest," if any, to be paid on the amount determined to be the fair value.
The court may require the Stockholders Seeking Appraisal Rights to submit their
certificates of First Colonial Common Stock as to which appraisal rights have
been demanded to the Delaware Register in Chancery for notation thereon that
the appraisal proceedings are pending.
The Delaware Court of Chancery will direct the payment of such
fair value and interest, if any, by the surviving corporation to the
Stockholders Seeking Appraisal Rights upon their surrender of the certificate
or certificates representing such shares of First Colonial Class B Common
Stock.
In the event any holder of First Colonial Class B Common Stock
fails to perfect his or her rights of appraisal by failing to comply strictly
with the applicable statutory requirements, the stockholder will be bound by
the terms of the Merger Agreements and will not be entitled to payment for the
stockholder's shares under Section 262. Any holder of First Colonial Class B
Common Stock who wishes to object to the transaction and demand payment for the
Stockholder's shares of First Colonial Class B Common Stock should consider
consulting his or her own legal advisor.
Because an executed proxy relating to First Colonial Class B
Common Stock on which no voting direction is made will be voted at the Special
Meeting in favor of the Merger, a Stockholder Seeking Appraisal Rights who
wishes to have his or her shares of First Colonial Class B Common Stock
represented by proxy at the Special Meeting but preserve statutory rights of
appraisal must mark his or her proxy either to vote against the Merger or to
abstain from voting thereon, give the required notice of intent to seek
appraisal rights and make the required submission of stock certificates, as
described herein.
Only holders of record of First Colonial Class B Common Stock
may assert rights of appraisal. Such rights are not available for holders of
First Colonial Class A Common Stock or First Colonial Series C Preference Stock
(represented by the Depositary Shares). Any written objection or demand should
be signed by or for the holder of record of the shares to which it relates in
the same manner indicated on the accompanying proxy card. Any beneficial owner
of First Colonial Class B Common Stock who is not also the holder of record of
the shares, and who wishes to assert statutory rights of appraisal with respect
thereto, should instruct the holder of record to act accordingly on the
beneficial owner's behalf. First Colonial will not accept written objections
or demands for payment from
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any party other than the holder of record (whose name appears in the stock
records of First Colonial) of the shares to which the objection or demand
relates.
The foregoing is only a summary of the provisions of the DGCL
and is qualified in its entirety by reference to the text of Section 262, which
is set forth in Appendix A hereto.
COMPARATIVE RIGHTS OF STOCKHOLDERS
First Colonial is incorporated under the laws of the state of
Delaware, and Firstar is incorporated under the laws of the state of Wisconsin.
Stockholders of First Colonial, whose rights are governed by First Colonial's
Certificate of Incorporation and By-laws and by the DGCL, will, on consummation
of the Merger, become shareholders of Firstar. Their rights as Firstar
shareholders will then be governed by Firstar's Restated Articles of
Incorporation and By-laws and by the Wisconsin Business Corporation Law (the
"WBCL"). The following is a summary of the material differences between the
rights of stockholders of First Colonial and the rights of shareholders of
Firstar.
PREFERRED STOCK
The Certificate of Incorporation of First Colonial authorizes
the Board of Directors of First Colonial to issue up to 200,000 shares of
preference stock, no par value, from time to time in one or more series with
such rights, preferences, limitations and powers as the Board of Directors of
First Colonial may establish. As of October 31, 1994, 38,775 shares of First
Colonial Series C Preference Stock were issued and outstanding, which shares
entitle the holders to priority over the rights of holders of First Colonial
Common Stock with respect to the payment of dividends and distribution of
assets in the event of any voluntary or involuntary liquidation or dissolution
of First Colonial.
The Restated Articles of Incorporation of Firstar authorize
the Board of Directors of Firstar to issue up to 2,500,000 shares of preferred
stock, $1.00 par value. The Board of Directors may establish the relative
rights and preferences of preferred stock issued in the future without
shareholder action and issue such stock in series. As of the date hereof, no
shares of any series of Firstar preferred stock are issued and outstanding;
however, upon consummation of the Merger, up to 39,700 shares of Firstar
Preferred Stock will be issued to the holders of First Colonial Series C
Preference Stock. See "The Proposed Merger." Firstar has reserved 600,000
shares of Series C Preferred Stock for issuance upon exercise of the Preferred
Share Purchase Rights, as further described below.
PREFERRED SHARE PURCHASE RIGHTS
Firstar has adopted a Shareholder Rights Plan, pursuant to
which each share of Firstar Common Stock entitles its holder to one-half
Preferred Share Purchase Right. Under certain conditions, each Right entitles
the holder to purchase one one-hundredth of a share of Firstar's Series C
Preferred Stock at a price of $85, subject to adjustment. Recipients of
Firstar Common Stock in connection with the Merger will also receive one-half
Right per share of Firstar Common Stock. The description of the terms of the
Rights Agreement is set forth in a Rights Agreement dated as of January 19,
1989 (the "Rights Agreement"), between Firstar and Firstar Trust Company
(formerly First Wisconsin Trust Company) as Rights Agent. The description of
the Rights contained herein is qualified in its entirety by reference to the
Rights Agreement. The Rights will only be exercisable if a person or group has
acquired, or announced an intention to acquire, 20% or more of the outstanding
shares of Firstar
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Common Stock. Under certain circumstances, including the existence of a 20%
acquiring party, each holder of a Right, other than the acquiring party, will
be entitled to purchase at the exercise price Firstar Common Stock having a
market value of two times the exercise price. In the event of the acquisition
of Firstar by another company subsequent to a party acquiring 20% or more of
the Firstar Common Stock, each holder of a Right is entitled to purchase the
acquiring company's common shares having a market value of two times the
exercise price. The Rights may be redeemed at a price of $.01 per Right prior
to the existence of a 20% acquiring party, and thereafter may be exchanged for
one share of Firstar Common Stock per Right prior to the existence of a 50%
acquiring party. The Rights will expire on January 19, 1999. The Rights do
not have voting or dividend rights, and until they become exercisable, have no
dilutive effect on the earnings of Firstar. Under the Rights Agreement, the
Board of Directors of Firstar may reduce the thresholds applicable to the
Rights from 20% to not less than 10%.
First Colonial does not have a shareholder rights plan.
APPRAISAL RIGHTS AND DISSENTERS' RIGHTS
Under the DGCL, stockholders of a corporation who dissent from
a merger or consolidation of the corporation in the manner provided by Delaware
law are entitled to receive payment of the fair value of their stock, as
determined by the Court of Chancery. However, such right is not available to
stockholders (i) whose shares are listed on a national securities exchange,
quoted on The Nasdaq Stock Market or held of record by more than 2,000
stockholders, or (ii) where the vote of such stockholders of the corporation
surviving or resulting from the merger or consolidation was not required for
approval thereof. First Colonial's Class A Common Stock is quoted on the
Nasdaq National Market; its Class B Common Stock is not listed on any national
exchange. Delaware law does not provide appraisal rights to stockholders who
dissent from the sale of all or substantially all of the corporation's assets
unless the corporation's certificate of incorporation provides otherwise.
First Colonial's Certificate of Incorporation does not provide for appraisal
rights in the context of a sale of all or substantially all of First Colonial's
assets.
Under the WBCL, a shareholder of a corporation is generally
entitled to receive payment of the fair value of such shareholder's stock if
such shareholder dissents from a proposed merger or share exchange or a sale or
exchange of all or substantially all of the property and assets of the
corporation. However, dissenters' rights are not available to holders of
shares, such as shares of Firstar Common Stock, which are registered on a
national securities exchange or quoted on NASDAQ on the record date fixed to
determine shareholders entitled to notice of the meeting at which shareholders
are to vote on the proposed corporation action. Firstar Common Stock is listed
on the New York Stock Exchange and the Chicago Stock Exchange.
ASSESSABILITY; POTENTIAL LIABILITY FOR WAGES
Firstar Common Stock and Firstar Preferred Stock are subject
to possible assessment in certain circumstances. Section 180.0622(2)(b) of the
WBCL provides that shareholders of Wisconsin corporations are personally liable
to an amount equal to the par value of shares owned by them (and to the
consideration for which shares without par value were issued) for debts owing
to employees of the corporation for services performed for such corporation,
but not exceeding six months' service in any one case. The liability imposed
by the predecessor to this statute was interpreted in a trial court decision to
extend to the original issue price for shares, rather than the stated par
value. Although affirmed by the Wisconsin Supreme Court, the case offers no
precedential value due to the fact that the decision was
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affirmed by an equally divided court. Firstar Common Stock is not otherwise
subject to call or assessment.
Shares of stock of Delaware corporations are nonassessable
under the DGCL. The DGCL does not impose personal liability on holders of
First Colonial Common Stock for debts owing to employees or otherwise.
TAKEOVER STATUTES
Wisconsin law regulates a broad range of "business
combinations" between a Wisconsin corporation and an "interested stockholder."
Wisconsin law defines a "business combination" as including a merger or a share
exchange, sale of assets, issuance of stock or rights to purchase stock and
certain related party transactions. An "interested stockholder" is defined as
a person who beneficially owns, directly or indirectly, 10% of the outstanding
voting stock of a corporation or who is an affiliate or associate of the
corporation and beneficially owned 10% of the voting stock within the last
three years. In certain cases, Wisconsin law prohibits a corporation from
engaging in a business combination with an interested stockholder for a period
of three years following the date on which the person became an interested
stockholder, unless the board of directors approved the business combination or
the acquisition of the stock prior to the acquisition date, (ii) the business
combination is approved by a majority of the outstanding voting stock not owned
by the interested stockholder, (iii) the consideration to be received by
shareholders meets certain requirements of the statute with respect to form and
amount or (iv) the business combination is of a type specifically excluded from
the coverage of the statute.
Section 180.1150 of the WBCL provides that in particular
circumstances the voting of shares of a Wisconsin "issuing public corporation"
(a Wisconsin corporation which has at least 100 Wisconsin resident
shareholders, 500 or more shareholders of record and total assets exceeding $1
million) held by any person in excess of 20% of the voting power is limited to
10% of the full voting power of such excess shares. Full voting power may be
restored under Section 180.1150 if a majority of the voting power of shares
represented at a meeting, including those held by the party seeking
restoration, are voted in favor of such restoration.
In addition, the WBCL sets forth certain fair price provisions
which govern mergers and share exchanges with, or sales of substantially all a
Wisconsin issuing public corporation's assets to, a 10% shareholder, mandating
that any such transaction meet one of two requirements. The first requirement
is that the transaction be approved by 80% of all shareholders and two-thirds
of "disinterested" shareholders, which generally exclude the 10% shareholder.
The second requirement is the payment of a statutory fair price, which is
intended to insure that shareholders in the second step merger, share exchange
or asset sale receive at least what shareholders received in the first step.
Further, the WBCL requires shareholder approval for certain
transactions in the context of a tender offer or similar action for in excess
of 50% of a Wisconsin corporation's stock. Shareholder approval is required
for the acquisition of more than 5% of the corporation's stock at a price above
market value, unless the corporation makes an equal offer to acquire all
shares. Shareholder approval is also required for the sale or option of assets
which amount to at least 10% of the market value of the corporation, but this
requirement does not apply if the corporation meets certain minimum outside
director standards.
DGCL Section 203 (the "Delaware Business Combination Statute")
applies to certain business combinations involving a corporation and certain of
its stockholders. The Delaware Business
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Combination Statute prevents an "interested stockholder" (defined generally as
a person with 15% or more of the corporation's outstanding voting stock) from
engaging in a "business combination" (defined to include a variety of
transactions, including the sale of assets, mergers and almost any related
party transaction) with a Delaware corporation for three years following the
date such person became an interested stockholder, unless (i) before such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination, (ii) upon
consummation of the transaction which resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the corporation and by certain employee stock ownership plans), or (iii)
following the transaction in which such person became an interested
stockholder, the business combination is approved by the board of directors of
the corporation and authorized at a meeting of stockholders by the affirmative
vote of the holders of two-thirds of the outstanding voting stock of the
corporation not owned by the interested stockholder.
DIRECTORS
The Board of Directors of First Colonial consists of a single
class of eleven directors, each of whom serves a term of one year. Holders of
First Colonial Class A Common Stock, voting as a separate class (each share
entitled to one vote), are entitled to elect one director. Holders of First
Colonial Common Stock, voting as a single class, are entitled to elect the
remaining number of directors. Any director may be removed either for or
without cause at any time by the affirmative vote of the holders of a majority
of all the shares of stock outstanding and entitled to vote at a special
meeting of stockholders called for that purpose.
The Board of Directors of Firstar is divided into three
classes as nearly equal in number as possible, with the directors in each class
serving for staggered three-year terms. At each annual meeting of Firstar's
shareholders, the successors to the class of directors whose term expires at
the time of such meeting are elected by a majority of the votes cast, assuming
a quorum is present. A director of Firstar may be removed, with or without
cause, only by the affirmative vote of not less than 75% of the then issued and
outstanding shares taken at a special meeting of shareholders called for that
purpose.
LIABILITY OF DIRECTORS; INDEMNIFICATION
In accordance with the DGCL, First Colonial has indemnified
its directors and officers against liabilities arising because the indemnified
individual is or was a director or officer if the individual acted in good
faith, reasonably believed his or her conduct was in the corporation's best
interests (or in certain cases at least not opposed to the corporation's best
interests) and, in the case of any criminal proceeding, the individual had no
reasonable cause to believe the individual's conduct was unlawful. However,
under the DGCL a corporation cannot indemnify a director or officer in
connection with a proceeding by or in the right of the corporation in which the
director or officer in connection with a proceeding by or in the right of the
corporation in which the director or officer was adjudged liable to the
corporation or in connection with any other proceeding charging improper
personal benefit in which the individual was adjudged liable on the basis that
personal benefit was improperly received. Further, the DGCL allows a
corporation, by amendment to its articles of incorporation, to eliminate or
limit the personal liability of a director to the corporation or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except that the provision cannot eliminate or limit the liability of a director
for a breach of the director's duty of loyalty to the corporation or its
shareholders, for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for a transaction
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from which the director derives an improper personal benefit or with respect to
liability relating to a distribution to shareholders made in violation of law.
First Colonial adopted an amendment to its Restated Certificate of
Incorporation to eliminate personal liability under this provision.
Under Firstar's By-laws and the WBCL, Firstar indemnifies its
directors and officers against liability incurred by the director or officer in
a proceeding to which the indemnified person was a party because he or she is a
director or officer, unless liability was incurred because a director or
officer breached or failed to perform a duty that he or she owes to the
corporation and the breach or failure constitutes a willful failure to deal
fairly with the corporation or its shareholders in connection with a matter in
which the director or officer has a material conflict of interest, a violation
of criminal law (unless the director or officer had reasonable cause to believe
that his or her conduct was lawful or no reasonable cause to believe that his
or her conduct was lawful or no reasonable cause to believe that his or her
conduct was unlawful), a transaction from which the director or officer derived
an improper personal benefit or willful misconduct. In addition, under the
WBCL, a director of Firstar is not liable to the corporation, its shareholders
or any person asserting rights on behalf of the corporation or its shareholders
for liabilities arising from a breach of, or failure to perform, any duty
resulting solely from his or her status as a director, unless the person
asserting liability proves that the breach or failure to perform constitutes
any of the circumstances under which indemnification would not be provided.
ACTION WITHOUT A MEETING
Under the DGCL, any action required or permitted to be taken
at a meeting of shareholders may be taken without a meeting if a consent in
writing, setting forth the action taken, is signed by holders of not less than
the minimum number of shares necessary to authorize or approve such action.
Under the WBCL, such action without a meeting is allowed only if the consent is
signed by all of the shareholders entitled to vote with respect to the subject
matter.
VOTING RIGHTS
The Certificate of Incorporation of First Colonial provides
that, except as otherwise required by law, the holders of First Colonial Class
A Common Stock are entitled to one vote per share on all matters to be voted on
by First Colonial's stockholders, and the holders of First Colonial Class B
Common Stock are entitled to 20 votes per share on all matters to be voted on
by First Colonial's stockholders. The shares of First Colonial Common Stock
vote together as a single class on all matters, except (i) the holders of First
Colonial Class A Common Stock and First Colonial Class B Common Stock are
entitled to vote as separate classes on any merger or similar transaction that
requires the approval of the stockholders and in which the consideration per
share to be received by holders of one class differs in any respect from the
consideration to be received by the holders of the other class, (ii) as
described above in connection with the election of one director by the holders
of First Colonial Class A Common Stock, (iii) the holders of First Colonial
Class A Common Stock are entitled to vote as a separate class on any proposal
to issue any shares of First Colonial Class B Common Stock after December 31,
1994 and (iv) as otherwise required by law. Each share of Firstar Common Stock
is entitled to one vote on any matter requiring shareholder action.
DIVIDEND RIGHTS
First Colonial's Certificate of Incorporation provides that no
dividend, other than a dividend payable in shares of First Colonial Class B
Common Stock, may be declared or paid on shares of First Colonial Class B
Common Stock, unless there is declared or paid, as the case may be, an
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accompanying dividend on the shares of First Colonial Class A Common Stock of
at least 120% of the dividend on the shares of First Colonial Class B Common
Stock. In the event that dividends are declared that are payable in shares of
First Colonial Class A Common Stock or First Colonial Class B Common Stock,
dividends will be declared that are payable at the same rate on both classes of
stock, and the dividends payable in shares of First Colonial Class A Common
Stock will be payable to the holders of such shares, and the dividends payable
in shares of First Colonial Class B Common Stock will be payable to holders of
such shares.
Each share of Firstar Common Stock carries an identical
entitlement to dividend payments.
FIRSTAR CORPORATION
GENERAL
Firstar is a registered bank holding company incorporated in
Wisconsin in 1929. Firstar is the largest bank holding company headquartered
in Wisconsin. Firstar's 17 bank subsidiaries in Wisconsin had total assets of
$10.1 billion at September 30, 1994. Its eleven Iowa banks, four Illinois
banks and one Minnesota bank had total assets of approximately $2.6 billion,
$988 million and $1.2 billion, respectively, as of September 30, 1994. Firstar
has one bank in Phoenix, Arizona, with total assets of $96 million.
Firstar provides banking services throughout Wisconsin and
Iowa and in the Chicago, Minneapolis-St. Paul and Phoenix metropolitan areas.
Its Wisconsin bank subsidiaries operate in 111 locations, with offices in eight
of the ten largest metropolitan population centers of the state, including 47
offices in the Milwaukee metropolitan area. Its Iowa bank subsidiaries operate
in 42 locations; its Illinois bank subsidiaries in 15 locations; its Minnesota
bank subsidiary in 24 locations; and its Arizona bank in 3 locations; and a
trust subsidiary in Florida in 2 locations. Firstar's bank subsidiaries
provide a broad range of financial services for companies based in Wisconsin,
Iowa, Illinois and Minnesota, national business organizations, governmental
entities and individuals. These commercial and consumer banking activities
include accepting demand, time and savings deposits; making both secured and
unsecured business and personal loans; and issuing and servicing credit cards.
The bank subsidiaries also engage in correspondent banking and provide trust
and investment services to individual and corporate customers. Firstar Bank
Milwaukee, N.A., Firstar Bank Cedar Rapids, N.A. and Firstar Bank Madison, N.A.
also conduct international banking services consisting of foreign trade
financing, issuance and confirmation of letters of credit, funds collection and
foreign exchange transactions. Nonbank subsidiaries provide retail brokerage
services, trust and investment services, residential mortgage banking
activities, title insurance, business insurance, consumer and credit related
insurance, and corporate computer and operational services.
At September 30, 1994, Firstar and its subsidiaries employed
7,393 full-time and 2,223 part-time employees, of which approximately 956
full-time employees are represented by a union under a collective bargaining
agreement that expires on August 31, 1996. Management considers its relations
with its employees to be good.
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COMPETITION
Banking and bank-related services is a highly competitive
business. Firstar's subsidiaries compete primarily in Wisconsin and the
Midwestern United States. Firstar and its subsidiaries have numerous
competitors, some of which are larger and have greater financial resources.
Firstar competes with other commercial banks and financial intermediaries, such
as savings banks, savings and loan associations, credit unions, mortgage
companies, leasing companies and a variety of financial services and advisory
companies located throughout the country.
SUPERVISION
Firstar's business activities as a bank holding company are
regulated by the Federal Reserve Board under the BHC Act, which imposes various
requirements and restrictions on its operations. The activities of Firstar and
those of its banking and nonbanking subsidiaries are limited to the business of
banking and activities closely related or incidental to banking.
The business of banking is highly regulated, and there are
various requirements and restrictions in the laws of the United States and the
states in which the subsidiary banks operate, including the requirement to
maintain reserves against deposits and adequate capital to support their
operations, restrictions on the nature and amount of loans which may be made by
the banks, restrictions relating to investment (including loans to and
investments in affiliates), branching and other activities of the banks.
Firstar's subsidiary banks with a national charter are
supervised and examined by the Comptroller of the Currency. The subsidiary
banks with a state charter are supervised and examined by their respective
state banking agencies and either by the Federal Reserve if a member bank of
the Federal Reserve or by the FDIC if a nonmember. All of the Firstar
subsidiary banks are also subject to examination by the Federal Deposit
Insurance Corporation.
In recent years Congress has enacted significant legislation
which has substantially changed the federal deposit insurance system and the
regulatory environment in which depository institutions and their holding
companies operate. The Financial Institutions Reform, Recovery and Enforcement
Act of 1989 ("FIRREA"), the Comprehensive Thrift and Bank Fraud Prosecution and
Taxpayer Recovery Act of 1990 and the Federal Deposit Insurance Corporation
Improvement Act of 1991 ("FDICIA") have significantly increased the enforcement
powers of the federal regulatory agencies having supervisory authority over
Firstar and its subsidiaries. Certain parts of such legislation, most notably
those which increase deposit insurance assessments and authorize further
increases to recapitalize the bank deposit insurance fund, increase the cost of
doing business for depository institutions and their holding companies. FIRREA
also provides that all commonly controlled FDIC insured depository institutions
may be held liable for any loss incurred by the FDIC resulting from a failure
of, or any assistance given by the FDIC, to any of such commonly controlled
institutions. Federal regulatory agencies have implemented provisions of
FDICIA with respect to taking prompt corrective action when a depository
institution's capital falls to certain levels. Under the new rules, five
capital categories have been established which range from "critically
undercapitalized" to "well capitalized." Failure of a depository institution
to maintain a capital level within the top two categories will result in
specific actions from the federal regulatory agencies. These actions could
include the inability to pay dividends, restricting new business activity,
prohibiting bank acquisitions, asset growth limitations and other restrictions
on a case by case basis.
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<PAGE> 75
In addition to the impact of regulation, commercial banks are
affected significantly by the actions of the Federal Reserve Board as it
attempts to control the money supply and credit availability in order to
influence the economy. Changes to such monetary policies have had a
significant effect on operating results of financial institutions in the past
and are expected to have such an effect in the future; however, the effect of
possible future changes in such policies on the business and operations of
Firstar cannot be determined.
The following table sets out the risk-based capital position
of both Firstar Corporation and each of Firstar's bank subsidiaries as of
September 30, 1994. Both Firstar and all of the subsidiaries exceeded the
risk-based capital requirements as of such date.
Firstar Corporation Bank Subsidiaries
Risk-Based Capital Ratios
September 30, 1994
<TABLE>
<CAPTION>
Tier 1 Total
Capital Capital
------- -------
<S> <C> <C>
Minimum Statutory Requirement 4.00% 8.00%
Firstar Bank Milwaukee, N.A. 9.58 11.42
Firstar Bank Appleton 10.25 11.50
Firstar Bank Eau Claire, N.A. 10.59 11.84
Firstar Bank Fond du Lac, N.A. 10.87 12.12
Firstar Bank Grantsburg, N.A. 16.30 17.56
Firstar Bank Green Bay 10.77 12.02
Firstar Bank Lake Geneva, N.A. 14.94 16.20
Firstar Bank Madison, N.A. 12.58 13.84
Firstar Bank Manitowoc 11.25 12.51
Firstar Bank Minocqua 15.32 16.58
Firstar Bank Oshkosh, N.A. 10.10 11.35
Firstar Bank Portage 18.30 19.56
Firstar Bank Rice Lake, N.A. 13.45 14.71
Firstar Bank Sheboygan, N.A. 10.02 11.27
Firstar Bank Wausau, N.A. 15.10 16.39
Firstar Bank Wisconsin Rapids, N.A. 14.17 15.42
Firstar Bank Ames 11.50 12.75
Firstar Bank Burlington, N.A. 13.18 14.44
Firstar Bank Cedar Falls 10.16 11.41
Firstar Bank Cedar Rapids, N.A. 9.88 11.13
Firstar Bank Council Bluffs 10.28 11.53
Firstar Bank Davenport, N.A. 10.95 12.20
Firstar Bank Des Moines, N.A. 10.13 11.39
Firstar Bank Mount Pleasant 11.64 12.89
Firstar Bank Ottumwa 12.02 13.27
Firstar Bank Red Oak, N.A. 12.66 13.91
Firstar Bank Sioux City, N.A. 9.60 10.85
Firstar Bank of Minnesota, N.A. 12.94 14.20
Firstar Bank DuPage 15.75 17.01
Firstar Bank North Shore 17.10 18.36
</TABLE>
67
<PAGE> 76
<TABLE>
<CAPTION>
Tier 1 Total
Capital Capital
------- -------
<S> <C> <C>
Firstar Bank Park Forest 14.36 15.61
Firstar Bank West, N.A. 11.95 13.20
Firstar Metropolitan Bank & Trust 22.55 23.81
</TABLE>
OTHER ACQUISITIONS AND TRANSACTIONS
Since the enactment of interstate banking statutes by
Wisconsin, Minnesota, Illinois and Iowa, Firstar has actively acquired banks
within that four-state area. Firstar has also acquired one bank in Arizona,
primarily to offer trust services to customers in that state.
On August 22, 1994, Firstar announced that it had signed a
definitive agreement to acquire Investors Bank Corp., parent company of
Investors Savings Bank, FSB, a $1 billion savings bank headquartered in
Wayzata, Minnesota. Up to 3.2 million shares of Firstar Common Stock will be
issued, and $8.4 million in cash paid, in the transaction. It is anticipated
that this acquisition will be completed in the first quarter of 1995.
On August 26, 1994, Firstar announced that it had signed a
definitive agreement to acquire First Moline Financial Corp., parent of the $80
million First Federal Savings Bank, of Moline, Illinois. Under the agreement,
Firstar would issue up to 314,000 shares of Firstar Common Stock in exchange
for all the common stock of First Moline Financial Corp. This acquisition is
also expected to close in the first quarter of 1995.
Firstar anticipates that it will acquire additional banks in
the Midwest region in the future. Firstar may pay cash or issue common stock,
debt securities, preferred stock or combinations of the foregoing in connection
with any such acquisitions.
Firstar also will continue to monitor external markets and may
raise additional capital as needed and when financially attractive by issuing
common stock, debt securities, preferred stock or combinations of the
foregoing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Additional information concerning Firstar, including certain
financial information, information regarding voting securities of Firstar and
principal holders thereof, and information concerning directors and executive
officers of Firstar, is included in the documents filed by Firstar with the
Commission under the Exchange Act.
FIRST COLONIAL BANKSHARES CORPORATION
GENERAL
First Colonial is a registered bank holding company,
incorporated in Delaware, with 17 subsidiary banks located in the Chicago
metropolitan area. First Colonial augments the products and services offered
by the subsidiary banks through 5 nonbank subsidiaries engaged in mortgage
origination, trust services, equipment leasing, broker/dealer-investment
services, and data processing and operational
68
<PAGE> 77
services. At September 30, 1994, First Colonial had total assets of
approximately $1.8 billion, total deposits of $1.5 billion and stockholders'
equity of $157.8 million.
First Colonial employs a community bank business philosophy in
serving the diverse banking needs of retail and commercial customers in the
communities in which it operates. Contrary to the industry trend toward branch
banking, this approach maintains the independent status of an individual
subsidiary bank, with the local management and board of directors responsible
for tailoring the loan, deposit and other service mix to meet the needs of the
local community. First Colonial believes that the support from its specialized
staff in the areas of marketing and product development provides a competitive
advantage over smaller, local competitors, while at the same time, its
localized decision making responsibilities for credit extensions and product
pricing are believed to provide faster response time and greater flexibility
than larger competitors. The equipment leasing, brokerage, investment and
trust services offered by the nonbank subsidiaries of First Colonial have
become increasingly important both in the product and service mixes of the
subsidiary banks and as sources of fee income. Cost efficiencies are derived
in the operation of the subsidiary banks through the centralization of support
functions such as data processing, asset/liability management, human resources,
audit, loan review, compliance and strategic planning.
First Colonial has expanded through acquisitions and the
formation of bank and nonbank subsidiaries. In 1983, First Colonial was a
one-bank holding company with one nonbank subsidiary and total assets of
approximately $250 million. Since that time First Colonial has acquired 15
additional subsidiary banks and 2 nonbank subsidiaries and formed 2 de novo
subsidiary banks and 2 nonbank subsidiaries.
First Colonial's executive offices are located at 30 North
Michigan Avenue, Suite 300, Chicago, Illinois 60602, and its telephone number
is (312) 419-9891.
SUBSIDIARY BANKS
The following table identifies First Colonial's bank
subsidiaries and sets out the risk-based capital position of both First
Colonial and of each of the bank subsidiaries as of September 30, 1994. Both
First Colonial and all of the bank subsidiaries exceeded the risk-based capital
requirements as of such date.
69
<PAGE> 78
First Colonial Bankshares Corporation Bank Subsidiaries
Risk-Based Capital Ratios
September 30, 1994
<TABLE>
<CAPTION>
Tier 1 Total
Capital Capital
------- -------
<S> <C> <C>
Minimum Statutory Requirement 4.0 % 8.0 %
First Colonial Bankshares Corporation 9.85% 10.99%
All American Bank 9.34% 10.48%
Colonial Bank 9.96% 10.73%
Community Bank of Edgewater 9.89% 10.99%
Michigan Avenue National Bank 9.36% 10.58%
First Colonial Bank Southwest 14.68% 15.90%
First Colonial Bank of McHenry County 16.02% 16.98%
First Colonial Bank of Downers Grove 13.76% 14.68%
York State Bank 12.40% 13.40%
Fox Lake State Bank 10.18% 11.20%
First Colonial Bank of DuPage County 13.57% 14.56%
First Colonial Bank Northwest 9.86% 10.86%
First Colonial Bank/Northlake 10.54% 11.66%
Avenue Bank of Oak Park 12.27% 13.25%
First Colonial Bank/Rosemont 9.87% 11.07%
First Colonial Bank of Lake County 9.20% 9.98%
First Colonial Bank/Highwood 10.86% 11.99%
First Colonial Bank/Mundelein 12.53% 13.78%
</TABLE>
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Additional information concerning First Colonial, including certain
financial information, information regarding the voting securities of First
Colonial and principal holders thereof, and information concerning the
executive officers and directors of First Colonial, is included in the
documents filed by First Colonial with the Commission under the Exchange Act.
OPINIONS
Certain legal matters in connection with the Merger will be
passed upon for First Colonial by Vedder, Price, Kaufman & Kammholz, 222 North
LaSalle Street, Chicago, Illinois 60601-1003, and for Firstar by Howard H.
Hopwood III, Senior Vice President and General Counsel of Firstar. Mr. Hopwood
is a full-time employee of Firstar and at September 30, 1994, directly or
beneficially owned approximately 20,048 shares of Firstar Common Stock. He
also holds 34,800 options to acquire Firstar Common Stock under Firstar's 1988
Incentive Stock Plan.
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<PAGE> 79
EXPERTS
The consolidated financial statements of Firstar and
subsidiaries as of December 31, 1993 and 1992, and for each of the years in the
three-year period ended December 31, 1993 have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
The consolidated financial statements of First Colonial and
subsidiaries as of December 31, 1993 and 1992, and for each of the years in the
three-year period ended December 31, 1993 have been incorporated by reference
herein and in the registration statement in reliance upon the report of KPMG
Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
STOCKHOLDER PROPOSALS
If the Merger has not been consummated, pursuant to Rule 14a-8
under the Exchange Act, First Colonial stockholders may present proper
proposals for inclusion in First Colonial's proxy statement for consideration
at First Colonial's next annual meeting of its stockholders by submitting their
proposals to First Colonial in a timely manner. As noted in First Colonial's
proxy statement relating to the 1994 annual meeting of First Colonial
stockholders, in order to be so included for the 1995 annual meeting
stockholder proposals must have been received by First Colonial no later than
December 1, 1994.
Pursuant to Rule 14a-8 under the Exchange Act, Firstar
shareholders may present proper proposals for inclusion in Firstar's proxy
statement for consideration at the next annual meeting of its shareholders by
submitting their proposals to Firstar in a timely manner. As noted in
Firstar's proxy statement relating to the 1994 annual meeting of Firstar
shareholders, in order to be so included for the 1995 annual meeting
shareholder proposals must have been received by Firstar no later than November
29, 1994.
71
<PAGE> 80
PRO FORMA COMBINING FINANCIAL STATEMENTS
The following unaudited pro forma combining capitalization, balance sheet and
statements of income are based upon the historical results of Firstar and First
Colonial giving effect to the acquisition accounted for as a pooling of
interests. Pro forma adjustments, and the assumptions on which they are based,
are described in the accompanying footnotes to the pro forma combining
financial statements. The other pending acquisitions refers to and includes
the historical results and pro forma adjustments to effect the acquisitions of
three additional companies as described in the accompanying footnotes. These
financial statements should be read in conjunction with the historical
financial statements of Firstar and First Colonial, incorporated by reference
into this Proxy Statement-Prospectus. The pro forma combining financial
statements are not necessarily indicative of the results that would have
occurred had the companies constituted a single entity during the respective
periods, nor are they indicative of future results of operations.
FIRSTAR CORPORATION
PRO FORMA COMBINING CAPITALIZATION
SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
(thousands of dollars)
Pro Forma Other
Combined Pending
First Firstar & Acquisitions Pro
Firstar Colonial Pro Forma First Pro Forma
Historical Historical Adjustments Colonial Forma(3) Combined
---------- ---------- ----------- --------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
Long-term Debt*
10.25% notes due 5-1-98 $ 78,405 $ $ $ 78,405 $ $ 78,405
10% notes due 6-1-96 43,950 43,950 43,950
11.5% notes due 1-5-96 2,706 2,706 2,706
14% notes due 10-17-96 1,500 1,500 1,500
9.25% notes due 12-15-02 0 23,000 23,000
10% notes due 4-1-96 0 391 391
Other 57 57 57
----------- ------------ ------------ ------------ ------------ -----------
Total 125,118 1,500 0 126,618 23,391 150,009
Stockholders' Equity
Preference stock 19,713 19,713 19,713
Common stock 81,233 13,408 (3,757) 90,884 6,256 97,140
Capital surplus 150,729 56,678 (7,207) 200,200 16,477 216,677
Retained earnings 1,024,825 79,927 1,104,752 55,378 1,160,130
Net unrealized losses
on securities
available for sale (995) (995) (1,976) (2,971)
Treasury stock (15,221) (10,964) 10,964 (15,221) (15,221)
Restricted stock (555) (555) (1,035) (1,590)
----------- ------------ ------------ ------------ ------------ -----------
Total stockholders'
equity 1,241,011 157,767 0 1,398,778 75,100 1,473,878
----------- ------------ ------------ ------------ ------------ -----------
Total capital $ 1,366,129 $ 159,267 $ 0 $ 1,525,396 $ 98,491 $ 1,623,887
=========== ============ ============ ============ ============ ===========
</TABLE>
* Qualifying as secondary capital.
72
<PAGE> 81
FIRSTAR CORPORATION
PRO FORMA COMBINING BALANCE SHEET
SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
(thousands of dollars)
Pro Forma Other
Combined Pending
ASSETS First Firstar & Acquisitions
Firstar Colonial Pro Forma First Pro Pro Forma
Historical Historical Adjustments Colonial Forma(3) Combined
---------- ---------- ----------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Cash and due from
banks $ 945,890 $ 89,964 $ 0 $ 1,035,854 $ 30,528 $ 1,066,382
Short-term investments 362,833 12,366 0 375,199 1,353 376,552
Securities available
for sale 5,502 167,763 0 173,265 111,281 284,546
Securities held to
maturity 3,006,724 363,276 0 3,370,000 89,768 3,459,768
Total loans 9,520,174 1,090,202 (10,524)(2) 10,599,852 1,250,912 11,850,764
Less reserve for loan
losses (171,734) (13,396) 0 (185,130) (9,261) (194,391)
----------- ------------- --------- ----------- ------------ -----------
Loans - net 9,348,440 1,076,806 (10,524) 10,414,651 1,241,651 11,656,373
Bank premises and
equipment 273,988 25,878 0 299,866 29,245 329,111
Other assets 293,842 29,656 0 323,498 30,492 353,990
Deposit base
intangible 18,092 0 0 18,092 0 18,092
Goodwill 70,812 37,232 0 108,044 5,814 113,858
Mortgage servicing
rights 3,081 0 0 3,081 3,993 7,074
----------- ------------ --------- ----------- ------------ -----------
Total assets $14,329,204 $ 1,802,941 $ (10,524) $ 16,121,621 $ 1,544,125 $17,665,746
=========== ============= ========= ============ ============ ===========
LIABILITIES AND EQUITY
Deposits $10,647,946 $ 1,542,589 $ 0 $ 12,190,535 $ 1,045,044 $13,235,579
Short-term borrowed
funds 2,071,589 67,222 0 2,138,811 271,488 2,410,299
Long-term debt
- secondary capital 125,118 1,500 0 126,618 23,391 150,009
- other 150 24,170 (10,524)(2) 13,796 110,687 124,483
Other liabilities 240,853 9,693 0 250,546 18,168 268,714
Minority interest 2,537 0 0 2,537 247 2,784
----------- ------------ -------- ----------- ------------ -----------
Total liabilities 13,088,193 1,645,174 (10,524) 14,722,843 1,469,025 16,191,868
Preferred stock 19,713 0 19,713 0 19,713
Common stock 81,233 13,408 (3,757)(1) 90,844 6,256 97,140
Capital surplus 150,729 56,678 (7,207)(1) 200,200 16,477 216,677
Retained earnings 1,024,825 79,927 0 1,104,752 55,378 1,160,130
Net unrealized losses
on securities
available
for sale (995) 0 (995) (1,976) (2,971)
Treasury stock (15,221) (10,964) 10,964 (15,221) 0 (15,221)
Restricted stock (555) 0 0 (555) (1,035) (1,590)
----------- ------------ -------- ------------ ------------ -----------
Total stockholders'
equity 1,241,011 157,767 0 1,398,778 75,100 1,473,878
----------- ------------ -------- ----------- ------------ -----------
Total liabilities and
stockholders'
equity $14,329,204 $ 1,802,941 $ (10,524) $ 16,121,621 $ 1,544,125 $17,665,746
=========== ============= ========= ============ ============ ===========
</TABLE>
73
<PAGE> 82
FIRSTAR CORPORATION
PRO FORMA COMBINING STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
(thousands of dollars, except per share)
Pro Forma Other
Combined Pending
First Firstar & Acquisitions
Firstar Colonial Pro Forma First Pro Pro Forma
Historical Historical Adjustments Colonial Forma(3) Combined
---------- ---------- ---------- --------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C>
Interest revenue
Loans $ 549,760 $ 65,609 $ (251)(2) $ 615,118 $ 61,894 $ 677,012
Investment securities 121,091 17,677 0 138,768 8,178 146,946
Other 6,969 580 0 7,549 900 8,449
--------- ------------- ---------- ------------ ------------- ----------
Total interest revenue 677,820 83,866 (251) 761,435 70,972 832,407
Interest expense
Deposits 186,242 26,950 0 213,192 25,615 238,807
Short-term borrowed funds 41,832 1,660 0 43,492 8,276 51,768
Long-term debt 9,640 1,385 (251)(2) 10,774 3,795 14,569
--------- ------------- ---------- ------------ ------------- ----------
Total interest expense 237,714 29,995 (251) 267,458 37,686 305,144
--------- ------------- ---------- ------------ ------------- ----------
Net interest revenue 440,106 53,871 0 493,977 33,286 527,263
Provision for loan losses 8,274 1,733 0 10,007 355 10,362
--------- ------------- ---------- ------------ ------------- ----------
Net interest revenue after
loan loss provision 431,832 52,138 0 483,970 32,931 516,901
Other operating revenue
Trust and investment
management fees 88,928 1,926 0 90,854 189 91,043
Service charges on deposit
accounts 54,716 6,781 0 61,497 1,195 62,692
Credit card service revenue 39,622 0 0 39,622 0 39,622
Mortgage banking revenue 12,090 755 0 12,845 9,241 22,086
Gains on the sales of
securities 77 617 0 694 1,293 1,987
Other revenue 54,179 6,892 0 61,071 6,153 67,224
--------- ------------- ---------- ------------ ------------- ----------
Total other operating revenue 249,612 16,971 0 266,583 18,071 284,654
Other operating expense
Salaries and employee benefits 243,726 23,931 0 267,657 17,654 285,311
Net occupancy and equipment
expenses 71,795 8,578 0 80,373 4,775 85,148
Other operating expense 139,144 18,310 0 157,454 11,149 168,603
--------- ------------- ---------- ------------ ------------- ----------
Total other operating expense 454,665 50,819 0 505,484 33,578 539,062
--------- ------------- ---------- ------------ ------------- ----------
Income before income taxes 226,779 18,290 0 245,069 17,424 262,493
Applicable income taxes 75,183 5,918 0 81,101 7,664 88,765
--------- ------------- ---------- ------------ ------------- ----------
Net income $ 151,596 $ 12,372 $ 0 $ 163,968 $ 9,760 $ 173,728
========= ============= ========== ============ ============= ==========
Net income applicable to common $ 151,596 $ 11,323 $ 0 $ 162,919 $ 9,134 $ 172,053
Net income per common share $ 2.36 $ 2.26 $ 2.23
Average number of common
shares outstanding (4) 64,299,467 7,650,650 71,950,117 5,053,934 77,004,051
</TABLE>
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<PAGE> 83
FIRSTAR CORPORATION
PRO FORMA COMBINING STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1993
(UNAUDITED)
<TABLE>
<CAPTION>
(thousands of dollars, except per share)
Pro Forma Other
Combined Pending
First Firstar & Acquisitions
Firstar Colonial First Pro Pro Forma
Historical Historical Colonial Forma(3) Combined
---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
Interest revenue
Loans $ 685,530 $ 82,592 $ 768,122 $ 78,340 $ 846,462
Securities 174,652 18,221 192,873 10,932 203,805
Other 6,772 808 7,580 1,193 8,773
---------- ------------ -------------- ------------ -----------
Total interest revenue 866,954 101,621 968,575 90,465 1,059,040
Interest expense
Deposits 261,634 33,921 295,555 34,317 329,872
Short-term borrowed funds 23,811 1,378 25,189 373 25,562
Long-term debt 13,453 1,549 15,002 12,987 27,989
---------- ------------ -------------- ------------ -----------
Total interest expense 298,898 36,848 335,746 47,677 383,423
---------- ------------ -------------- ------------ -----------
Net interest revenue 568,056 64,773 632,829 42,788 675,617
Provision for loan losses 24,567 3,892 28,459 5,490 33,949
---------- ------------ -------------- ------------ -----------
Net interest revenue after
loan loss provision 543,489 60,881 604,370 37,298 641,668
Other operating revenue
Trust and investment management fees 110,185 2,336 112,521 249 112,770
Service charges on deposit accounts 74,071 8,693 82,764 2,101 84,865
Credit card service revenue 53,316 0 53,316 0 53,316
Mortgage banking revenue 26,774 2,176 28,950 13,628 42,578
Gains on the sales of securities 182 238 420 49 469
Other revenue 77,737 8,909 86,646 5,857 92,503
---------- ------------ -------------- ------------ -----------
Total other operating revenue 342,265 22,352 364,617 21,884 386,501
Other operating expense
Salaries and employee benefits 316,848 28,406 345,254 23,298 368,552
Net occupancy and equipment expenses 96,870 10,855 107,725 5,986 113,711
Other operating expenses 174,026 24,143 198,169 14,830 212,999
---------- ------------ -------------- ------------ -----------
Total other operating expense 587,744 63,404 651,148 44,114 695,262
---------- ------------ -------------- ------------ -----------
Income before income taxes 298,010 19,829 317,839 15,068 332,907
Applicable income taxes 93,716 6,210 99,926 5,403 105,329
---------- ------------ -------------- ------------ -----------
Net income $ 204,294 $ 13,619 $ 217,913 $ 9,665 $ 227,578
========== ============ ============= ============ ============
Net income applicable to common stock $ 201,028 $ 11,824 $ 212,852 $ 8,720 $ 221,572
Net income per common share $ 3.15 2.99 $ 2.91
Average number of common
shares outstanding (4) 63,746,924 7,532,695 71,279,619 4,960,834 76,240,453
</TABLE>
75
<PAGE> 84
FIRSTAR CORPORATION
PRO FORMA COMBINING STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1992
(UNAUDITED)
<TABLE>
<CAPTION>
(thousands of dollars, except per share)
Pro Forma Other
Combined Pending
First Firstar & Acquisitions
Firstar Colonial First Pro Pro Forma
Historical Historical Colonial Forma(3) Combined
---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
Interest revenue
Loans $ 693,594 $ 86,306 $ 779,900 $ 77,601 $ 857,501
Securities 191,736 22,709 214,445 11,563 226,008
Other 13,191 3,313 16,504 839 17,343
---------- ------------ -------------- ------------ -----------
Total interest revenue 898,521 112,328 1,010,849 90,003 1,100,852
Interest expense
Deposits 321,405 44,635 366,040 42,698 408,738
Short-term borrowed funds 23,423 2,029 25,452 295 25,747
Long-term debt 14,541 1,644 16,185 7,567 23,752
---------- ------------ -------------- ------------ -----------
Total interest expense 359,369 48,308 407,677 50,560 458,237
---------- ------------ -------------- ------------ -----------
Net interest revenue 539,152 64,020 603,172 39,443 642,615
Provision for loan losses 44,821 5,043 49,864 1,603 51,467
---------- ------------ -------------- ------------ -----------
Net interest revenue after
loan loss provision 494,331 58,977 553,308 37,840 591,148
Other operating revenue
Trust and investment management fees 95,926 2,370 98,296 178 98,474
Service charges on deposit accounts 66,301 8,752 75,053 2,092 77,145
Credit card service revenue 51,867 0 51,867 0 51,867
Mortgage banking revenue 13,058 2,234 15,292 11,298 26,590
Gains on the sales of securities 981 1,563 2,544 2,151 4,695
Other revenue 72,634 8,456 81,090 3,681 84,771
---------- ------------ -------------- ------------ -----------
Total other operating revenue 300,767 23,375 324,142 19,400 343,542
Other operating expense
Salaries and employee benefits 287,607 25,752 313,359 20,394 333,753
Net occupancy and equipment expenses 93,128 10,182 103,310 5,536 108,846
Other operating expenses 176,831 28,859 205,690 13,258 218,948
---------- ------------ -------------- ------------ -----------
Total other operating expense 557,566 64,793 622,359 39,188 661,547
---------- ------------ -------------- ------------ -----------
Income before income taxes 237,532 17,559 255,091 18,052 273,143
Applicable income taxes 71,547 5,357 76,904 6,385 83,289
---------- ------------ -------------- ------------ -----------
Net income $ 165,985 $ 12,202 $ 178,187 $ 11,667 $ 189,854
========== ============ ============== ============ ===========
Net income applicable to common stock $ 162,238 $ 10,770 $ 173,008 $ 10,699 $ 183,707
Net income per common share $ 2.62 2.50 $ 2.48
Average number of common
shares outstanding (4) 61,879,175 7,317,822 69,196,997 4,793,111 73,990,108
</TABLE>
76
<PAGE> 85
FIRSTAR CORPORATION
PRO FORMA COMBINING STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, 1991
(UNAUDITED)
<TABLE>
<CAPTION>
(thousands of dollars, except per share)
Pro Forma Other
Combined Pending
First Firstar & Acquisitions
Firstar Colonial First Pro Pro Forma
Historical Historical Colonial Forma(3) Combined
---------- ---------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C>
Interest revenue
Loans $ 757,069 $ 94,923 $ 851,992 $ 86,735 $ 938,727
Securities 206,577 29,107 235,684 12,532 248,216
Other 18,033 5,460 23,493 552 24,045
---------- ------------ -------------- ------------ -----------
Total interest revenue 981,679 129,490 1,111,169 99,819 1,210,988
Interest expense
Deposits 438,799 67,796 506,595 59,626 566,221
Short-term borrowed funds 45,434 3,383 48,817 489 49,306
Long-term debt 16,850 1,837 18,687 5,760 24,447
---------- ------------ -------------- ------------ -----------
Total interest expense 501,083 73,016 574,099 65,875 639,974
---------- ------------ -------------- ------------ -----------
Net interest revenue 480,596 56,474 537,070 33,944 571,014
Provision for loan losses 50,276 3,935 54,211 1,977 56,188
---------- ------------ -------------- ------------ -----------
Net interest revenue after
loan loss provision 430,320 52,539 482,859 31,967 514,826
Other operating revenue
Trust and investment management fees 80,813 2,219 83,032 163 83,195
Service charges on deposit accounts 59,368 8,185 67,553 2,098 69,651
Credit card service revenue 54,594 0 54,594 0 54,594
Mortgage banking revenue 7,922 2,268 10,190 6,543 16,733
Gains on the sales of securities 1,619 4,160 5,779 (2,930) 2,849
Other revenue 68,219 6,955 75,174 3,814 78,988
---------- ------------ -------------- ------------ -----------
Total other operating revenue 272,535 23,787 296,322 9,688 306,010
Other operating expense
Salaries and employee benefits 266,757 25,532 292,289 16,967 309,256
Net occupancy and equipment expenses 84,735 9,448 94,183 5,275 99,458
Other operating expenses 164,044 20,974 185,018 11,861 196,879
---------- ------------ -------------- ------------ -----------
Total other operating expense 515,536 55,954 571,490 34,103 605,593
---------- ------------ -------------- ------------ -----------
Income before income taxes 187,319 20,372 207,691 7,552 215,243
Applicable income taxes 52,988 5,324 58,312 3,011 61,323
---------- ------------ -------------- ------------ -----------
Net income $ 134,331 $ 15,048 $ 149,379 $ 4,541 $ 153,920
========== ============ ============== ============ ===========
Net income applicable to common stock $ 130,277 $ 14,567 $ 144,844 $ 4,436 $ 149,280
Net income per common share $ 2.14 2.12 $ 2.05
Average number of common
shares outstanding (4) 60,997,625 7,186,769 68,184,394 4,632,777 72,817,171
</TABLE>
77
<PAGE> 86
FIRSTAR CORPORATION
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS
(UNAUDITED)
1) The acquisition of First Colonial will be accounted for as a pooling
of interests. Firstar will issue 7,720,696 shares of Firstar Common
Stock in exchange for all the outstanding shares of First Colonial
Common Stock based on the .7725 exchange ratio. Firstar will also
issue up to 39,700 shares of Firstar Preferred Stock for all the
outstanding First Colonial Series C Preference Stock. Nonrecurring
expenses associated with the transaction totalling $23 million, or $14
million after tax, are not included in the pro forma financial
statements.
2) Represents the elimination of loans between First Colonial and a bank
subsidiary of Firstar.
3) The acquisition of First Southeast Banking Corp. was completed on
October 18, 1994 and was accounted for as a pooling of interests.
Firstar issued 1,801,577 shares of Firstar Common Stock for all the
outstanding shares of First Southeast Banking Corp. based on the
16.91844 exchange ratio. Intercompany cash and short-term investment
balances between First Southeast and a bank subsidiary of Firstar have
been eliminated.
The acquisition of Investors Bank Corp. will be accounted for as a
pooling of interests. Firstar will issue 3,200,000 shares of Firstar
Common Stock in exchange for all the outstanding shares of Investors
Bank Corp. based on the .8678 exchange ratio. Investors Bank Corp.
will redeem its preferred stock at completion of the merger for a
payment of $8,350,000 and is reflected in the pro forma balance sheet.
The acquisition of First Moline Financial Corp. will be accounted for
as a purchase. Firstar will issue 314,000 shares of Firstar Common
Stock in exchange for all the outstanding shares of First Moline
Financial Corp. for a total purchase price of $9,780,000. Firstar
will repurchase Firstar Common Stock on the open market equal to the
shares issued to acquire First Moline Financial Corp. The excess of
the purchase price over the net assets acquired of $3,940,000 is
allocated to goodwill for these statements. Net income has been
reduced for the amortization of the excess purchase price over a 15
year period and adjustments have been made to interest income on
short-term investments assumed to have been used to fund the
repurchase of shares issued in the transaction. Nonrecurring expenses
associated with these transactions totalling $13 million, or $8
million after tax, are not included in the pro forma financial
statements.
4) Pro forma combined and average shares outstanding data reflects the
exchange ratio of .7725 shares of Firstar Common Stock for each share
of First Colonial Common Stock; the exchange ratio of 16.91844 shares
of Firstar Common Stock for each share of First Southeast Common
Stock; and the exchange ratio of .8676 shares of Firstar Common Stock
for each share of Investors Common Stock.
78
<PAGE> 87
APPENDIX A
SECTION 262 OF THE
DELAWARE GENERAL CORPORATION LAW
Section 262. APPRAISAL RIGHTS. (a) Any stockholder of a
corporation of this State who holds shares of stock on the date of the making
of a demand pursuant to subsection (d) of this section with respect to such
shares, who continuously holds such shares through the effective date of the
merger or consolidation, who has otherwise complied with subsection (d) of this
section and who has neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to Section 228 of this title shall be
entitled to an appraisal by the Court of Chancery of the fair value of his
shares of stock under the circumstances described in subsections (b) and (c) of
this section. As used in this section, the word "stockholder" means a holder
of record of stock in a stock corporation and also a member of record of a
nonstock corporation; the words "stock" and "share" mean and include what is
ordinarily meant by those words and also membership or membership interest of a
member of a nonstock corporation.
(b) Appraisal rights shall be available for the shares of any
class or series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to Section 251, 252, 254, 257, 258, 263
or 264 of this title:
(1) Provided, however, that no appraisal rights under
this section shall be available for the shares of any class or series
of stock which, at the record date fixed to determine the stockholders
entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or consolidation,
were either (i) listed on a national securities exchange or designated
as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii)
held of record by more than 2,000 stockholders; and further provided
that no appraisal rights shall be available for any shares of stock of
the constituent corporation surviving a merger if the merger did not
require for its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of Section 251 of this
title.
(2) Notwithstanding paragraph (1) of this subsection,
appraisal rights under this section shall be available for the shares
of any class or series of stock of a constituent corporation if the
holders thereof are required by the terms of an agreement of merger or
consolidation pursuant to Section 251, 252, 254, 257, 258, 263
and 264 of this title to accept for such stock anything except:
a. Shares of stock of the corporation surviving
or resulting from such merger or consolidation;
b. Shares of stock of any other corporation
which at the effective date of the merger or consolidation
will be either listed on a national securities exchange or
designated as a national market system security on an
interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000
stockholders;
c. Cash in lieu of fractional shares of the
corporations described in the foregoing subparagraphs a. and
b. of this paragraph; or
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<PAGE> 88
d. Any combination of the shares of stock and
cash in lieu of fractional shares described in the foregoing
subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary
Delaware corporation party to a merger effected under Section 253 of
this title is not owned by the parent corporation immediately prior to
the merger, appraisal rights shall be available for the shares of the
subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be available for
the shares of any class or series of its stock as a result of an amendment to
its certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or substantially
all of the assets of the corporation. If the certificate of incorporation
contains such a provision, the procedures of this section, including those set
forth in subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which
appraisal rights are provided under this section is to be submitted
for approval at a meeting of stockholders, the corporation, not less
than 20 days prior to the meeting, shall notify each of its
stockholders who was such on the record date for such meeting with
respect to shares for which appraisal rights are available pursuant to
subsections (b) or (c) hereof that appraisal rights are available for
any or all of the shares of the constituent corporations, and shall
include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of his shares shall deliver to the
corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of his shares. Such
demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends
thereby to demand the appraisal of his shares. A proxy or vote
against the merger or consolidation shall not constitute such a
demand. A stockholder electing to take such action must do so by a
separate written demand as herein provided. Within 10 days after the
effective date of such merger or consolidation, the surviving or
resulting corporation shall notify each stockholder of each
constituent corporation who has complied with this subsection and has
not voted in favor of or consented to the merger or consolidation of
the date that the merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant
to Section 228 or 253 of this title, the surviving or resulting
corporation, either before the effective date of the merger or
consolidation or within 10 days thereafter, shall notify each of the
stockholders entitled to appraisal rights of the effective date of the
merger or consolidation and that appraisal rights are available for
any or all of the shares of the constituent corporation, and shall
include in such notice a copy of this section. The notice shall be
sent by certified or registered mail, return receipt requested,
addressed to the stockholder at his address as it appears on the
records of the corporation. Any stockholder entitled to appraisal
rights may, within 20 days after the date of mailing of the notice,
demand in writing from the surviving or resulting corporation the
appraisal of his shares. Such demand will be sufficient if it
reasonably informs the corporation of the identity of the stockholder
and that the stockholder intends thereby to demand the appraisal of
his shares.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who
has complied with subsections (a) and (d) hereof and who
A-2
<PAGE> 89
is otherwise entitled to appraisal rights, may file a petition in the Court of
Chancery demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days after
the effective date of the merger or consolidation, any stockholder shall have
the right to withdraw his demand for appraisal and to accept the terms offered
upon the merger or consolidation. Within 120 days after the effective date of
the merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting from
the consolidation a statement setting forth the aggregate number of shares not
voted in favor of the merger or consolidation and with respect to which demands
for appraisal have been received and the aggregate number of holders of such
shares. Such written statement shall be mailed to the stockholder within 10
days after his written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration of the
period for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder, service
of a copy thereof shall be made upon the surviving or resulting corporation,
which shall within 20 days after such service file in the office of the
Register in Chancery in which the petition was filed a duly verified list
containing the names and addresses of all stockholders who have demanded
payment for their shares and with whom agreements as to the value of their
shares have not been reached by the surviving or resulting corporation. If the
petition shall be filed by the surviving or resulting corporation, the petition
shall be accompanied by such a duly verified list. The Register in Chancery,
if so ordered by the Court, shall give notice of the time and place fixed for
the hearing of such petition by registered or certified mail to the surviving
or resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal,
the Court shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of the
merger or consolidation, together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court may,
in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to subsection
(f) of this section and who has submitted his certificates of stock to the
Register in Chancery, if such is required, may participate fully in all
proceedings until it is finally determined that he is not entitled to appraisal
rights under this section.
A-3
<PAGE> 90
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple or
compound, as the Court may direct. Payment shall be so made to each such
stockholder, in the case of holders of uncertificated stock forthwith, and in
the case of holders of shares represented by certificates upon the surrender to
the corporation of the certificates representing such stock. The Court's
decree may be enforced as other decrees in the Court of Chancery may be
enforced, whether such surviving or resulting corporation be a corporation of
this State or of any state.
(j) The costs of the proceeding may be determined by the Court and
taxed upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded his appraisal rights as provided
in subsection (d) of this section shall be entitled to vote such stock for any
purpose or to receive payment of dividends or other distributions on the stock
(except dividends or other distributions payable to stockholders of record at a
date which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal of
his demand for an appraisal and an acceptance of the merger or consolidation,
either within 60 days after the effective date of the merger or consolidation
as provided in subsection (e) of this section or thereafter with the written
approval of the corporation, then the right of such stockholder to an appraisal
shall cease. Notwithstanding the foregoing, no appraisal proceeding in the
Court of Chancery shall be dismissed as to any stockholder without the approval
of the Court, and such approval may be conditioned upon such terms as the Court
deems just.
(l) The shares of the surviving or resulting corporation to which
the shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
A-4
<PAGE> 91
APPENDIX B
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
FIRSTAR CORPORATION,
FIRSTAR CORPORATION OF ILLINOIS
AND
FIRST COLONIAL BANKSHARES CORPORATION
<PAGE> 92
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE I
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
1.01. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
1.02. Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
1.03. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
1.04. Form of Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
ARTICLE II
Effect of the Merger on Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2
2.01. Effect on Capital Stock of First Colonial . . . . . . . . . . . . . . . . . . . . . . . . B-2
2.02. Effect on Options to Purchase FCBC Class A Common Stock . . . . . . . . . . . . . . . . . B-3
2.03. Effect on Common Stock of Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3
ARTICLE III
Representations and Warranties of First Colonial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4
3.01. Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4
3.02. First Colonial Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-4
3.03. Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5
3.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
3.05. First Colonial Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . B-7
3.06. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-8
3.07. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9
3.08. Authorizations; Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . B-9
3.09. Litigation and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-10
3.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-11
3.11. Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-12
3.12. Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-12
3.13. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
3.14. Conduct of First Colonial to Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-14
3.15. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-15
3.16. Properties, Leases and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . B-15
3.17. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
3.18. Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
3.19. Accounting and Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
3.20. Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
3.21. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
3.22. Regulatory Impediments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
3.23. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-16
ARTICLE IV
Representations and Warranties of Firstar and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
4.01. Organization, Standing and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
4.02. Firstar Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
4.03. Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-18
4.04. Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-18
4.05. Firstar Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-19
</TABLE>
B-i
<PAGE> 93
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
4.06. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-19
4.07. Information Supplied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-19
4.08. Authorizations; Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . B-20
4.09. Litigation and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-20
4.10. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
4.11. Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
4.12. Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
4.13. Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . B-22
4.14. Properties, Leases and Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . B-22
4.15. Accounting and Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-22
4.16. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
4.17. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
4.18. Regulatory Impediments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
ARTICLE V
Covenants of First Colonial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
5.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-23
5.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-24
5.03. Letter of First Colonial's Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . B-26
5.04. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
5.05. Update Disclosure; Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-27
5.06. Affiliates; Accounting and Tax Treatment; Stock Repurchases . . . . . . . . . . . . . . . B-27
5.07. Dissent Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-28
5.08. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-28
5.09. Delivery of Stockholder List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
5.10. Audited Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
5.11. Bank-Level Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
5.12. Sale of Certain Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
5.13. Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
5.14. Stockholder Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-29
5.15. Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30
5.16. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-30
ARTICLE VI
Covenants of Firstar and Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-31
6.01. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-31
6.02. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32
6.03. Rights Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32
6.04. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32
6.05. Breaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32
6.06. Stock Exchange Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-32
6.07. Firstar Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-33
6.08. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-33
6.09. Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-34
6.10. Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-34
6.11. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-34
6.12. Form S-8 Registration Statement for Firstar Stock Options . . . . . . . . . . . . . . . . B-34
</TABLE>
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6.13. Post-Merger Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-34
6.14. Notice of Anticipated Breach or Failure of Condition . . . . . . . . . . . . . . . . . . . B-34
6.15. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-35
ARTICLE VII
Additional Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-35
7.01. Preparation of S-4 and the Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . B-35
7.02. Legal Conditions to Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-35
7.03. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-36
7.04. Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-36
7.05. Additional Agreements; Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . B-36
ARTICLE VIII
Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-36
8.01. Conditions to Each Party's Obligation to Effect the Merger . . . . . . . . . . . . . . . . B-36
8.02. Conditions of Obligations of Firstar and Sub . . . . . . . . . . . . . . . . . . . . . . . B-37
8.03. Conditions of Obligations of First Colonial . . . . . . . . . . . . . . . . . . . . . . . B-40
ARTICLE IX
Inducement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-41
9.01. Inducement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-41
ARTICLE X
Termination and Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-43
10.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-43
10.02. Environmental Conditions Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . B-45
10.03. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-45
10.04. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-46
10.05. Extension; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-46
ARTICLE XI
General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-46
11.01. Nonsurvival of Representations, Warranties and Agreements . . . . . . . . . . . . . . . . B-46
11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-46
11.03. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-47
11.04. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-47
11.05. Entire Agreement; No Third Party Beneficiaries; Rights of Ownership . . . . . . . . . . . B-47
11.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-48
11.07. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-48
11.08. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-48
11.09. Knowledge of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-48
EXHIBIT A Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-50
</TABLE>
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<S> <C> <C>
EXHIBIT 2.01(b) Firstar Preferred Stock [not included in Appendix]
EXHIBIT 5.06 Affiliate Letter [not included in Appendix]
EXHIBIT 5.15 Assignment and Assumption Agreement [not included in Appendix]
EXHIBIT 10.01 Index Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-58
</TABLE>
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INDEX OF DEFINED TERMS
<TABLE>
<CAPTION> SECTION
-------
<S> <C>
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page B-1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(c)
Articles of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
BHC Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08(b)
Certificate of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Competing Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.15
Competing Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.02(f)
Comptroller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.02
Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08(b)
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08(b)
Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.17
FCBC 1981 Stock Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(b)
FCBC 1988 Stock Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(b)
FCBC Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05(b)
FCBC Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.12(a)
FCBC Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
FCBC Class A Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
FCBC Class B Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
FCBC Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
FCBC Deposit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(d)
FCBC Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02
FCBC Environmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08(b)
FCBC Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05(a)
FCBC Interested Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08(b)
FCBC Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
FCBC Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
FCBC Preference Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(a)
FCBC Preferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(a)
FCBC Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08(b)
FCBC Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
FCBC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
FCBC Series C Preference Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01
FCBC Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
FCBC Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02
</TABLE>
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<S> <C>
FDIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.02
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Final Index Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01(b)(iv)
Final Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01(b)(iii)
First Colonial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page B-1
Firstar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page B-1
Firstar Average Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01(a)(vi)(1)
Firstar Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.11
Firstar Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
Firstar Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Firstar Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.05
Firstar Material Adverse Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.01
Firstar Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.08
Firstar Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(b)
Firstar Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.08(b)
Firstar Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.20
Firstar Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06
Firstar Stock Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.02
Firstar Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
IBCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.01
Illinois Commissioner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.03
Illinois Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
Indemnified Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08(a)
Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.08(a)
Index Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01(b)(i)
Initial Index Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01(b)(ii)
Injunction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.01(d)
Latest Statement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.05(a)
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08
Mandatory Stock Purchase Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(c)
Mary Stock Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(b)
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page B-1
NYSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.06
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(c)
Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page B-1
Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.07
Representatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.03(f)
Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.01(a)
Securities Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Sub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page B-1
Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(c)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.01
Ten-Day Calculation Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.01(b)(v)
Toxic Substances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08(b)
</TABLE>
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<TABLE>
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SECTION
-------
<S> <C>
Transaction Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(c)
Trigger Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.01(b)
Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.04
Voting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.21
Voting Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(e)
WBCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.02
William Stock Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03(b)
</TABLE>
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<PAGE> 99
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION, dated as of July 31,
1994 ("Agreement"), among FIRSTAR CORPORATION, a Wisconsin corporation
("Firstar"), FIRSTAR CORPORATION OF ILLINOIS, an Illinois corporation and a
wholly-owned subsidiary of Firstar ("Sub"), and FIRST COLONIAL BANKSHARES
CORPORATION, a Delaware corporation ("First Colonial").
WHEREAS, the respective Boards of Directors of Firstar, Sub
and First Colonial have approved the merger of First Colonial with and into Sub
(the "Merger") in accordance with the terms and conditions hereof and of the
Plan of Merger in the form attached hereto as Exhibit A executed concurrently
herewith between Sub and First Colonial, and joined in by Firstar for certain
limited purposes (the "Plan of Merger");
WHEREAS, the respective Boards of Directors of Firstar, Sub
and First Colonial believe that such proposed Merger, the exchange of shares of
Firstar Common Stock (as defined in Section 2.01(a) hereof) for shares of FCBC
Common Stock (as defined in Section 2.01 hereof) and the exchange of shares of
Firstar Preferred Stock (as defined in Section 2.01(a) hereof) for shares of
FCBC Series C Preference Stock (as defined in Section 2.01 hereof), pursuant
and subject to the terms of this Agreement and the Plan of Merger (the "Merger
Agreements"), is desirable and in the best short-term and long-term interests
of their respective corporations and stockholders; and
WHEREAS, Firstar, Sub and First Colonial desire to make
certain representations, warranties and agreements in connection with the
Merger and also to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
1.01. The Merger. Subject to the terms and conditions of
this Agreement, Firstar, Sub and First Colonial agree to effect the Merger of
First Colonial with and into Sub in accordance with the Illinois Business
Corporation Act (the "IBCA") and the Delaware General Corporation Law (the
"DGCL").
1.02. Effective Time of the Merger. Subject to the
provisions of the Merger Agreements, (a) articles of merger (the "Articles of
Merger") shall be duly prepared and executed by Sub and First Colonial and
thereafter delivered to the Secretary of State of the State of Illinois for
filing, as provided in the IBCA, on the Closing Date (as defined in Section
1.03) and (b) a certificate of merger (the "Certificate of Merger") shall be
duly prepared and executed by Sub and First Colonial and thereafter delivered
to the Secretary of State of the State of Delaware for filing, as provided in
the DGCL, on the Closing Date. The Merger shall become effective upon the
filing of the Articles of Merger with the Secretary of State of the State of
Illinois and the Certificate of Merger with the Secretary of State of the State
of Delaware (the "Effective Time").
1.03. Closing. The closing of the Merger (the "Closing")
will take place at 10:00 a.m. on a date to be specified by the parties, which
shall be no later than the fifth business day after the later
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to occur of (i) approval of the Merger by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") and the expiration of any waiting
period imposed by law, (ii) approval of the Merger by the Illinois Commissioner
of Banks and Trust Companies (the "Illinois Commissioner") and the expiration
of any waiting period imposed by law and (iii) the date on which the
stockholders meeting of First Colonial called to approve the Merger is held
(the "Closing Date"), at the offices of Firstar, unless another date or place
is agreed to in writing by the parties hereto. Notwithstanding the foregoing,
if the Closing does not take place on the date referred to in the preceding
sentence because any condition to the obligations of Firstar and Sub, on the
one hand, or First Colonial, on the other hand, under this Agreement is not met
on that date, the other party may postpone the Closing from time to time to any
designated subsequent business day not more than ten business days after the
original or postponed date on which the Closing was to occur by delivering
notice of such postponement on the date the Closing was to occur.
1.04. Form of Transaction. Firstar at its reasonable
discretion may restructure the transactions described herein in any format
sufficient to have the effects of the Merger on FCBC Common Stock and FCBC
Series C Preferred Stock provided that there is no effect upon the
consideration to be delivered pursuant to Section 2.01, change in the tax
treatment to the recipients of Firstar Common Stock and Firstar Preferred Stock
to be delivered in the Merger, the holders of options to purchase shares of
First Colonial or any other holder of a security of First Colonial, or change
in the accounting treatment of the transactions contemplated hereby as a
pooling-of-interests. At the request of Firstar, the parties each will take or
perform any necessary or advisable steps to restructure the transaction.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK
2.01. Effect on Capital Stock of First Colonial. As of the
Effective Time, by virtue of the Merger and without any action on the part of
the holder of any shares of First Colonial's Class A Common Stock, $1.25 par
value ("FCBC Class A Common Stock"), First Colonial's Class B Common Stock,
$1.25 par value ("FCBC Class B Common Stock" and, collectively with the FCBC
Class A Common Stock, the "FCBC Common Stock"), or First Colonial's Series C
Convertible Preference Stock, no par value ("FCBC Series C Preference Stock"),
or holders of depositary receipts evidencing depositary shares representing an
interest in the FCBC Series C Preference Stock ("FCBC Receipts"), but subject
to the provisions of Section 262 of the DGCL with respect to the rights of
dissenting stockholders of First Colonial:
(a) Conversion of FCBC Common Stock. Each then issued
and outstanding share of FCBC Common Stock shall be converted into the right to
receive 0.7725 fully paid and nonassessable shares of common stock, $1.25 par
value, of Firstar ("Firstar Common Stock") (the "Exchange Ratio"), including
with each such share one-half of one Firstar Preferred Share Purchase Right
("Right") issued pursuant to the Rights Agreement dated as of January 20, 1989,
between Firstar and Firstar Trust Company, as Rights Agent (the "Rights
Agreement"). Prior to the Distribution Date (as defined in the Rights
Agreement), all references in this Agreement to the Firstar Common Stock to be
received pursuant to the Merger shall be deemed to include the Rights.
(b) Conversion of FCBC Series C Preference Stock. Each
then issued and outstanding share of FCBC Series C Preference Stock shall be
converted into the right to receive one fully paid and nonassessable share of
Series D Convertible Preferred Stock, no par value, of Firstar ("Firstar
Preferred Stock") which Firstar Preferred Stock shall have terms substantially
as set forth on Exhibit 2.01(b) hereto.
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(c) Stock Held by First Colonial. Each then issued and
outstanding share of FCBC Common Stock or FCBC Series C Preference Stock owned
by First Colonial, any direct or indirect subsidiary of First Colonial (other
than shares held in a fiduciary capacity), Firstar or any direct or indirect
subsidiary of Firstar (other than shares held in a fiduciary capacity), and
each share of FCBC Common Stock or FCBC Series C Preference Stock issued and
held in First Colonial's treasury will be cancelled and retired.
(d) Cancellation of Shares. All shares of FCBC Common
Stock and FCBC Series C Preference Stock issued and outstanding immediately
prior to the Effective Time shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the shares of Firstar
Common Stock or Firstar Preferred Stock, as the case may be, to be issued in
consideration therefor upon the surrender of such certificate in accordance
with the Plan of Merger, without interest.
(e) Adjustment. If prior to the Effective Time Firstar
shall declare a stock dividend or distribution upon or subdivide, split up,
reclassify or combine its shares of Firstar Common Stock or declare a dividend
or make a distribution on Firstar Common Stock of any security convertible into
Firstar Common Stock, appropriate adjustment or adjustments will be made in the
conversion rate set forth in subsection (a) and Section 2.02.
2.02. Effect on Options to Purchase FCBC Class A Common
Stock. Each FCBC Stock Option (as defined in Section 3.03(b)) which is
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, become and
represent an option to purchase the number of shares of Firstar Common Stock (a
"Firstar Stock Option") (decreased to the nearest full share) determined by
multiplying (a) the number of shares of FCBC Class A Common Stock subject to
the FCBC Stock Option immediately prior to the Effective Time by (b) the
Exchange Ratio, at an exercise price per share of Firstar Common Stock (rounded
up to the nearest whole cent) equal to the exercise price per share of FCBC
Class A Common Stock under the FCBC Stock Option immediately prior to the
Effective Time divided by the Exchange Ratio. Firstar shall pay cash to
holders of FCBC Stock Options in lieu of issuing fractional shares of Firstar
Common Stock upon exercise of a Firstar Stock Option. After the Effective
Time, and except as provided in this Section 2.02, each Firstar Stock Option
shall be exercisable on the same terms and conditions as were applicable under
the FCBC Stock Option as of the Effective Time, giving effect to the
acceleration of the exercisability of such FCBC Stock Option as a result of the
Merger.
2.03. Effect on Common Stock of Sub. At the Effective
Time, the shares of Sub Common Stock validly issued and outstanding immediately
prior to the Effective Time will continue to evidence 400 shares of common
stock, $2.50 par value, of the Surviving Corporation so that all shares of
capital stock of the Surviving Corporation will continue to be owned by
Firstar. The outstanding certificate(s) representing shares of Sub Common
Stock will, after the Effective Time, continue to represent the same number of
shares of the Surviving Corporation.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FIRST COLONIAL
First Colonial represents and warrants to Firstar and Sub as
follows:
3.01. Organization, Standing and Power. First Colonial is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to have such power or
authority would not have a material adverse effect on the business, operations
or financial condition of First Colonial and its Subsidiaries (as hereinafter
defined) taken as a whole (a "FCBC Material Adverse Effect"). First Colonial
is qualified to do business and is in good standing in each other state or
foreign jurisdiction where its ownership or leasing of property or the conduct
of its business requires it to be so qualified and where the failure to be so
qualified would have a FCBC Material Adverse Effect. First Colonial is
registered as a bank holding company with the Federal Reserve Board under the
Bank Holding Company Act of 1956, as amended (the "BHC Act"). First Colonial
has delivered to Firstar true, accurate and complete copies of the currently
effective certificate of incorporation (the "FCBC Certificate") and by-laws of
First Colonial, including all amendments thereto. As used in this Agreement,
the word "Subsidiary" means any corporation or other organization, whether
incorporated or unincorporated (i) of which such party or any other Subsidiary
of such party is a general partner (excluding partnerships, the general
partnership interest of which held by such party or any Subsidiary of such
party does not have a majority of the voting interest in such partnership) or
(ii) at least a majority of the securities or other interests having by their
terms ordinary voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such corporation or other
organization is directly or indirectly owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and one or more of its
Subsidiaries.
3.02. First Colonial Subsidiaries. Except as set forth in
the FCBC Disclosure Letter (which is a letter of even date herewith delivered
by First Colonial to Firstar and Sub, the receipt thereof having been
acknowledged by Firstar and Sub executing a copy thereof, that identifies, as
to each matter disclosed therein, the section of this Agreement to which the
matter relates), First Colonial beneficially owns, directly or indirectly, all
of the shares of the outstanding capital stock of each of the Subsidiaries
listed on such letter (herein called collectively the "FCBC Subsidiaries" or
individually a "FCBC Subsidiary"), which constitute First Colonial's sole
Subsidiaries. No equity securities of any of the FCBC Subsidiaries are or may
become required to be issued by reason of any option, warrants, calls, rights
or agreements of any character whatsoever; there are outstanding no securities
or rights convertible into or exchangeable for shares of any capital stock of
any FCBC Subsidiary; and there are no other contracts, commitments,
understandings or arrangements by which any FCBC Subsidiary is bound to issue
additional shares of its capital stock or options, warrants, calls, rights or
agreements to purchase or acquire any additional shares of its capital stock.
Except as provided for under any applicable banking statute, all of the shares
of capital stock of each of the FCBC Subsidiaries owned by First Colonial are
fully paid and nonassessable and are owned by it free and clear of any claim,
lien, encumbrance or agreement with respect thereto. Each FCBC Subsidiary is a
banking association or a corporation, in each case duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, and has the corporate power and authority to own or lease its
properties and assets and to carry on its business as it is now being
conducted. Each FCBC Subsidiary that is a national bank is a member of the
Federal Reserve System. Each FCBC Subsidiary that is a banking institution is
identified as such on the FCBC Disclosure Letter. The deposits of each FCBC
Subsidiary that is a banking institution and accepts deposits are insured by
the Federal Deposit Insurance Corporation ("FDIC") to
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the extent provided by law. First Colonial has delivered to Firstar true,
accurate and complete copies of the currently effective charter, certificate or
articles of incorporation and by-laws of the FCBC Subsidiaries, including all
amendments thereto. Except as set forth in the FCBC Disclosure Letter and
except for securities held in its capacity as fiduciary, First Colonial does
not own beneficially, directly or indirectly, more than 5% of any class of
equity securities or similar interests of any corporation, bank, business
trust, association or similar organization. There are no obligations,
contingent or otherwise, of First Colonial or any FCBC Subsidiary to
repurchase, redeem or otherwise acquire any shares of capital stock of any FCBC
Subsidiary or to provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in any FCBC Subsidiary or any other
entity, other than pursuant to commercial loan arrangements and similar
obligations arising in the ordinary course of the business of the FCBC
Subsidiaries.
3.03. Capital Structure. (a) As of the date hereof, the
authorized capital stock of First Colonial consists of 20,000,000 shares of
FCBC Class A Common Stock; 3,000,000 shares of FCBC Class B Common Stock;
100,000 shares of preferred stock, $57 par value ("FCBC Preferred"); and
200,000 shares of preference stock, no par value ("FCBC Preference Stock").
(b) As of the date hereof, (i) 8,400,829 shares of FCBC
Class A Common Stock are issued and outstanding, (ii) no shares of FCBC Class A
Common Stock are reserved for issuance pursuant to First Colonial's 1981
Incentive Stock Option Plan (the "FCBC 1981 Stock Plan"), and options to
purchase no shares of FCBC Class A Common Stock are outstanding under the FCBC
1981 Stock Plan, (iii) 2,019,394 shares of FCBC Class A Common Stock are
reserved for issuance pursuant to First Colonial's 1988 Stock Option Plan, as
amended (the "FCBC 1988 Stock Plan"), and options to purchase 1,444,754 shares
of FCBC Class A Common Stock are outstanding under the FCBC 1988 Stock Plan,
(iv) 22,293 shares of FCBC Class A Common Stock are reserved for issuance
pursuant to the Hi-Bancorp., Inc. Employees' Combined Incentive and
Non-Statutory Stock Option and Stock Appreciation Rights Plan (the "William
Stock Option Plan"), and options to purchase 22,293 shares of FCBC Class A
Common Stock are outstanding under the William Stock Plan, (v) 7,458 shares of
FCBC Class A Common Stock are reserved for issuance pursuant to the GNP
Bancorp, Inc. Employees' Combined Incentive and Non-Statutory Stock Option and
Stock Appreciation Rights Plan (the "Mary Stock Option Plan"), and options to
purchase 7,458 shares of FCBC Class A Common Stock are outstanding under the
Mary Stock Plan (such stock options under such Stock Plans collectively "FCBC
Stock Options"), (vi) 1,102,777 shares of FCBC Class A Common Stock are
reserved for issuance upon conversion of outstanding shares of FCBC Series C
Preferred Stock, (vii) 1,894,687 shares of FCBC Class A Common Stock are
reserved for issuance upon conversion of outstanding shares of FCBC Class B
Common Stock, and (viii) 475,798 shares of FCBC Class A Common Stock are held
in treasury. As of the date hereof, pursuant to the FCBC Certificate, the
price at which shares of FCBC Class A Common Stock are deliverable upon
conversion of FCBC Series C Preference Stock is $18.00 per share of FCBC Class
A Common Stock, and each share of FCBC Series C Preference Stock is convertible
into 27.780 shares of FCBC Class A Common Stock. There is no adjustment in the
conversion price for the FCBC Series C Preference Stock that was not required
to be made by virtue of Section 1.3(c)(viii) of the certificate of
designations, preferences and rights of the FCBC Series C Preference Stock, but
which is required to be carried forward and taken into account in any
subsequent adjustment. The Merger will have the effect on FCBC Stock Options
described in Section 2.02.
(c) As of the date hereof, (i) 1,568,600 shares of FCBC
Class B Common Stock are issued and outstanding, (ii) 326,087 shares of FCBC
Class B Common Stock are reserved for issuance pursuant to Mandatory Stock
Purchase Agreements dated as of October 17, 1984 between First Colonial and
each of the obligors identified in the FCBC Disclosure Letter (the "Mandatory
Stock Purchase
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Agreements") which were entered into in tandem with the issuance of First
Colonial's outstanding 14% Subordinated Capital Notes due October 17, 1996
payable to the obligors identified in the FCBC Disclosure Letter (the
"Subordinated Notes"), and (iii) 281,250 shares of Class B Common Stock are
held in treasury. As of the date hereof, Subordinated Notes in the aggregate
principal amount of $1,500,000 are issued and outstanding, and obligors under
the related Mandatory Stock Purchase Agreements have agreed to purchase shares
of FCBC Class B Common Stock at a variable price that will be $4.60 per share
so long as the market price of the FCBC Class A Common Stock exceeds $4.60 per
share. First Colonial has delivered to Firstar correct and complete copies of
the form(s) of the outstanding Mandatory Stock Purchase Agreements and
Subordinated Notes. Upon execution of the agreements contemplated by Section
5.15, each such agreement will constitute a valid and binding obligation of the
parties thereto other than Firstar, enforceable in accordance with its terms.
(d) As of the date hereof, no shares of FCBC Preferred
are issued and outstanding or reserved for issuance, 39,700 shares of FCBC
Series C Preference Stock are issued and outstanding, all of which have been
deposited under a Deposit Agreement, dated as of April 24, 1992 among First
Colonial, First Chicago Trust of New York, as depositary, and all holders from
time to time of FCBC Receipts issued thereunder (the "FCBC Deposit Agreement"),
and no other shares of FCBC Preference Stock are issued and outstanding or
reserved for issuance. As of the date hereof, 794,000 FCBC Receipts issued and
outstanding under the FCBC Deposit Agreement represent 794,000 issued and
outstanding depositary shares, each of which represents an interest in
one-twentieth of a share of FCBC Series C Preference Stock.
(e) As of the date hereof, other than in connection with
the Subordinated Notes, neither First Colonial nor any Subsidiary of First
Colonial has issued and outstanding bonds, debentures, notes or other
indebtedness having the right to vote (or convertible into securities having
the right to vote) on any matters on which stockholders may vote ("Voting
Debt"). All outstanding shares of First Colonial capital stock are validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any preemptive rights. As of the date of this Agreement, except pursuant to
this Agreement, the FCBC 1981 Stock Plan, the FCBC 1988 Stock Plan, the William
Stock Plan, the Mary Stock Plan, the FCBC Series C Preference Stock and the
Mandatory Stock Purchase Agreements, there are no options, warrants, calls,
rights, or agreements of any character whatsoever to which First Colonial or
any Subsidiary of First Colonial is a party or by which it is bound obligating
First Colonial or any such Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional shares of capital stock or any Voting
Debt of First Colonial or of any Subsidiary of First Colonial or obligating
First Colonial or any Subsidiary of First Colonial to grant, extend or enter
into any such option, warrant, call, right or agreement. Immediately after the
Effective Time, there will be no option, warrant, call, right or agreement
obligating First Colonial or any Subsidiary of First Colonial to issue, deliver
or sell, or cause to be issued, delivered or sold, any shares of capital stock
or any Voting Debt of First Colonial or any Subsidiary of First Colonial, or
obligating First Colonial or any Subsidiary of First Colonial to grant, extend
or enter into any such option, warrant, call, right or agreement.
(f) On September 30, 1993, First Colonial voluntarily
redeemed 68,907 shares of First Colonial's Series A preferred stock, $57 par
value, which constituted all of the issued and outstanding shares of FCBC
Preferred, at a price of $62.00 per share in accordance with the FCBC
Certificate. On March 7, 1994, 7,500 shares of First Colonial's Series B
preference stock, no par value, constituting all of the issued and outstanding
shares of such series of FCBC Preference Stock, were converted into 75,000
shares of FCBC Class A Common Stock in accordance with the FCBC Certificate.
Except in accordance with such redemption of FCBC Preferred Stock and such
conversion of FCBC Preference Stock and as set forth in the FCBC Disclosure
Letter, First Colonial has not purchased,
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redeemed, canceled or otherwise acquired any of its capital stock during the
two years preceding the date hereof. Except as set forth in the FCBC
Certificate, there are no obligations, contingent or otherwise, of First
Colonial or any FCBC Subsidiary to repurchase, redeem or otherwise acquire any
shares of FCBC Common Stock or FCBC Series C Preference Stock.
3.04. Authority. First Colonial has all requisite
corporate power and authority to enter into this Agreement, the Plan of Merger
and the agreements contemplated by Section 5.15 and to consummate the
transactions contemplated hereby and thereby, subject only to approval of this
Agreement and the Plan of Merger by the stockholders of First Colonial. The
execution and delivery of this Agreement, the Plan of Merger and the agreements
contemplated by Section 5.15 and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action on the part of First Colonial, subject to such approval of
this Agreement and the Plan of Merger by the stockholders of First Colonial.
The execution and delivery of this Agreement, the Plan of Merger and the
agreements contemplated by Section 5.15 and the consummation of the
transactions contemplated hereby and thereby received unanimous approval at a
meeting of the Board of Directors of First Colonial duly called and held on
July 31, 1994. Such approval by the Board of Directors of First Colonial is
all action necessary to insure that the restrictions set forth in Section 203
of the DGCL do not or will not apply to the transactions contemplated herein.
This Agreement and the Plan of Merger have been, and when executed and
delivered by First Colonial the agreements contemplated by Section 5.15 will
be, duly executed and delivered by First Colonial, and upon such execution and
delivery each constitutes a valid and binding obligation of First Colonial
enforceable in accordance with its terms. The execution and delivery of this
Agreement, the Plan of Merger and the agreements contemplated by Section 5.15
do not, and the consummation of the transactions contemplated hereby and
thereby will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or the
loss of a material benefit under, or the creation of a lien, pledge, security
interest or other encumbrance on assets (any such conflict, violation, default,
right of termination, cancellation or acceleration loss or creation, a
"Violation"), pursuant to any provision of (a) the FCBC Certificate, the
by-laws of First Colonial or the charter, certificate or articles of
incorporation or by-laws of any FCBC Subsidiary or (b) except (i) as set forth
in the FCBC Disclosure Letter or (ii) as contemplated by the next sentence
hereof, any loan or credit agreement, note, mortgage, indenture, lease, FCBC
Benefit Plan (as defined in Section 3.12) or other agreement, obligation,
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to First Colonial or any
Subsidiary of First Colonial or their respective properties or assets which
Violation pursuant to this clause (b) would have a FCBC Material Adverse
Effect. Other than in connection or in compliance with the provisions of the
DGCL or the IBCA, the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act"), the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder (the "Exchange
Act"), the securities or "blue sky" laws of the various states, and consents,
authorizations, approvals, notices or exemptions required under the BHC Act and
from the Illinois Commissioner, no consent, approval, order or authorization
of, or registration, declaration or filing with, any court, administrative
agency or commission or other governmental authority or instrumentality,
domestic or foreign (a "Governmental Entity"), is required by or with respect
to First Colonial or any of the FCBC Subsidiaries in connection with the
execution and delivery of this Agreement and the Plan of Merger by First
Colonial or the consummation by First Colonial of the transactions contemplated
hereby and thereby, the failure to obtain which would have a FCBC Material
Adverse Effect.
3.05. First Colonial Financial Statements. (a) The
consolidated balance sheets of First Colonial as of December 31, 1993 and 1992
and the related consolidated statements of income, consolidated statements of
cash flows and consolidated statements of changes in stockholders' equity for
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the three years in the period ended December 31, 1993 (the "Latest Statement
Date"), accompanied by the unqualified opinion of KPMG Peat Marwick, copies of
which have been furnished by First Colonial to Firstar; like financial
information included in Forms 10-Q filed with the SEC subsequent to the Latest
Statement Date; and the unaudited consolidated balance sheet of First Colonial
as of June 30, 1994 and the related consolidated statement of income for the
six months then ended, in the form prepared for First Colonial's internal use,
copies of which have been furnished by First Colonial to Firstar (collectively,
the "FCBC Financial Statements"), have been prepared in accordance with
generally accepted accounting principles and practices as utilized in the FCBC
Financial Statements applied on a consistent basis, and present fairly the
consolidated financial condition of First Colonial at the dates, and the
consolidated results of operations, changes in stockholders' equity and cash
flows for the periods, stated therein. In the case of interim fiscal periods,
all adjustments, consisting only of normal recurring items, which management of
First Colonial believes necessary for a fair presentation of such financial
information, have been made, subject to year-end audit adjustments, none of
which will have a material adverse effect on the consolidated financial
position or results of operations of First Colonial.
(b) Except as and to the extent set forth on the consolidated
balance sheet of First Colonial and its Subsidiaries as of December 31, 1993,
including all notes thereto (the "FCBC Balance Sheet"), neither First Colonial
nor any Subsidiary of First Colonial has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on a balance sheet, or in the notes thereto, prepared
in accordance with generally accepted accounting principles, except (i) for
liabilities or obligations incurred in the ordinary course of business since
the Latest Statement Date that would not, in the aggregate, have a FCBC
Material Adverse Effect or (ii) as otherwise reflected in the FCBC Reports
filed prior to the date of this Agreement. Except as disclosed in the FCBC
Disclosure Letter, neither First Colonial nor any Subsidiary of First Colonial
has any liabilities or obligations of any nature (whether accrued, absolute,
contingent or otherwise) that are not required to be reflected on a balance
sheet, or in the notes thereto, except for liabilities or obligations that do
not, in the aggregate, have a FCBC Material Adverse Effect.
(c) Without limitation to the foregoing, First Colonial's
consolidated allowance for loan losses included in the FCBC Financial
Statements as of June 30, 1994 was $13,295,759, representing 1.24% of total
consolidated loans reflected on such statements. The allowance for possible
loan losses shown on First Colonial's consolidated balance sheet as of June 30,
1994 is adequate in all material respects to provide for all losses, net of
recoveries relating to loans previously charged off, on loans outstanding as of
the date of such statement, and First Colonial has no reason to believe that
the loan portfolios of the First Colonial Subsidiaries at such date will incur
losses in excess of such reserves.
3.06. Reports. Since January 1, 1991, First Colonial and
the FCBC Subsidiaries have filed all reports, registrations and statements,
together with any amendments required to be made with respect thereto, that
were and are required to be filed with (i) the SEC, including but not limited
to Forms 10-K, Forms 10-Q, Forms 8-K and proxy statements, (ii) the Federal
Reserve Board, (iii) the United States Comptroller of the Currency (the
"Comptroller"), (iv) the FDIC, (v) the Office of the Illinois Commissioner of
Banks and Trust Companies (the "Illinois Office") and (vi) any other applicable
federal or state securities or banking authorities (all such reports and
statements are collectively referred to herein as the "FCBC Reports"). As of
their respective dates, the FCBC Reports that have been filed complied in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they were filed and did not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
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3.07. Information Supplied. None of the information
supplied or to be supplied by First Colonial for inclusion or incorporation by
reference in (i) the registration statement on Form S-4 to be filed with the
SEC by Firstar in connection with the issuance of shares of Firstar Common
Stock and Firstar Preferred Stock in the Merger (the "S-4") will, at the time
the S-4 is filed with the SEC and at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the proxy statement-prospectus in
definitive form relating to the meeting of First Colonial's stockholders to be
held in connection with the Merger, copies of which will also be sent to
holders of FCBC Receipts (the "Proxy Statement"), will, at the date mailed to
First Colonial's stockholders (including such holders of FCBC Receipts) and at
the time of such meeting of stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading, and (iii) any other
documents to be filed with the SEC, the Federal Reserve Board, the Illinois
Commissioner or any regulatory agency in connection with the transactions
contemplated hereby will, at the time of filing, contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The Proxy Statement, insofar as it
relates to information other than that supplied by Firstar, will comply as to
form in all material respects with the provisions of the Exchange Act and the
rules and regulations thereunder.
3.08. Authorizations; Compliance with Applicable Laws. (a)
First Colonial and its Subsidiaries hold all authorizations, permits, licenses,
variances, exemptions, orders and approvals of all Governmental Entities which
are material to the operations of the businesses of First Colonial and the FCBC
Subsidiaries taken as a whole (the "FCBC Permits"), including appropriate
authorizations from the Comptroller and the Illinois Commissioner. First
Colonial and the Subsidiaries of First Colonial are in compliance with the
terms of the FCBC Permits, except where the failure so to comply would not have
a FCBC Material Adverse Effect. Except as disclosed in the FCBC Reports filed
prior to the date of this Agreement or in the FCBC Disclosure Letter, the
businesses of First Colonial and the FCBC Subsidiaries are not being, and have
not been, conducted in violation of any domestic (federal, state or local) or
foreign law, statute, ordinance or regulation of any Governmental Entity
(collectively "Laws"), including without limitation Regulation O of the Federal
Reserve Board, except for possible violations which in the aggregate do not
and, insofar as reasonably can be foreseen, in the future will not, have a FCBC
Material Adverse Effect. Except as set forth in the FCBC Disclosure Letter, as
of the date hereof, no investigation or review by any Governmental Entity with
respect to First Colonial or any of the FCBC Subsidiaries is pending or, to the
knowledge of First Colonial, threatened, nor has any Governmental Entity
indicated an intention to conduct the same. The provisions of this Section
3.08(a) are not intended to be applicable to those matters expressly governed
by Section 3.08(b) below.
(b) The FCBC Disclosure Letter identifies each parcel of
real estate currently owned, leased or otherwise possessed or controlled by
First Colonial or any FCBC Subsidiary, including, without limitation,
properties held as a result of foreclosure or repossession and other properties
carried on First Colonial's books as "other real estate owned" (collectively,
the "FCBC Property"). Without limiting the foregoing and except as disclosed
in the FCBC Disclosure Letter, to the best knowledge of First Colonial, First
Colonial and its Subsidiaries (i) have obtained all material permits, licenses
and other authorizations which are required of First Colonial and its
Subsidiaries with respect to the operation of their respective businesses and
all FCBC Property under any Environmental Laws (as defined below) (such
permits, licenses and authorizations being hereinafter referred to as "FCBC
Environmental Permits") and (ii) are in compliance in all material respects
with all terms and conditions of all FCBC Environmental Permits. Without
limiting the foregoing, and except as set forth in the FCBC Disclosure Letter,
to the best
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knowledge of First Colonial, there are not now nor have there ever been Toxic
Substances (as hereinafter defined) stored, deposited, treated, recycled, used
or accidentally or intentionally disposed of, discharged, spilled, released,
dumped, emitted or otherwise placed on, under or at, or used in any
construction on, any parcel of FCBC Property (or tanks or other facilities
thereon containing Toxic Substances) in violation of the Environmental Laws.
Without limiting the foregoing, and except as set forth in the FCBC Disclosure
Letter, to the best knowledge of First Colonial, there are no past, present or
known future events, conditions, circumstances, plans, errors or omissions that
have occurred, are occurring or are reasonably expected to occur on or with
respect to FCBC Property, or any other property as to which First Colonial or
any FCBC Subsidiary has held or currently holds ownership or indicia of
ownership ("FCBC Interested Property"), including without limitation (A) the
creation of any federal, state or common law nuisance, (B) the failure to
comply with any federal, state or local environmental laws, including, without
limitation, the Solid Waste Disposal Act, the Hazardous Materials
Transportation Act, the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), any so-called "Superfund" or "Superlien" laws, the
Illinois Responsible Property Transfer Act, as amended, their state and local
law counterparts, all rules and regulations promulgated thereunder, any order,
judgment or injunction issued, entered, promulgated or approved thereunder
(collectively, "Environmental Laws"), or (C) the presence of any petroleum or
petroleum- based substance or waste, solid waste, PCBs, pesticides, herbicides,
lead, radioactive materials, urea formaldehyde foam insulation, or substances
defined as "hazardous substances" or "toxic substances" in any Environmental
Laws (collectively, "Toxic Substances"), as a result of which events,
conditions, circumstances, plans, errors or omissions First Colonial or any
FCBC Subsidiary is subject to or reasonably likely to incur liabilities,
damages, penalties or removal, remediation or other costs that would have a
FCBC Material Adverse Effect. To the best knowledge of First Colonial, there
are no conditions or circumstances in connection with the FCBC Property that
could reasonably be anticipated to (i) cause any FCBC Property to be subject to
any restrictions on ownership, occupancy, use or transferability under any
applicable Environmental Laws or (ii) materially reduce the value of any FCBC
Property. No claim, action, suit, demand, investigation, or proceeding is
pending or known to be threatened against First Colonial or any FCBC Subsidiary
relating to any FCBC Property or FCBC Interested Property or otherwise, or
involving any FCBC Property, before any court or other governmental authority
or arbitration tribunal relating to Toxic Substances, pollution, Environmental
Laws or the environment; there is no outstanding judgment, order, writ,
injunction, decree, or award against or affecting First Colonial or any FCBC
Subsidiary with respect to FCBC Property or, to the knowledge of First
Colonial, FCBC Interested Property; and, to the best knowledge of First
Colonial and its Subsidiaries, neither First Colonial nor any FCBC Subsidiary
has been identified as a potentially responsible party by any Governmental
Entity in a matter arising under any Environmental Laws. The FCBC Disclosure
Letter includes a list of all environmental reports, investigations or audits
relating to any FCBC Property or FCBC Interested Property of which First
Colonial has knowledge, whether conducted by or on behalf of First Colonial or
a FCBC Subsidiary or a third party, and whether done at the initiative of First
Colonial or a FCBC Subsidiary or directed by a Governmental Entity or other
third party. First Colonial has delivered to Firstar complete and accurate
copies of each such report, or the results of each such investigation or audit,
in each case to the extent reasonably available to First Colonial.
3.09. Litigation and Claims. Except as disclosed in the
FCBC Reports filed prior to the date of this Agreement, in the FCBC Disclosure
Letter or the most recent First Colonial consolidated financial statements
delivered by First Colonial to Firstar prior to the date of this Agreement: (a)
neither First Colonial nor any of the FCBC Subsidiaries is subject to any
continuing order of, or written agreement or memorandum of understanding with,
or continuing material investigation by, any federal or state banking or
insurance authority or, to their knowledge, other Governmental Entity, or any
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judgment, order, writ, injunction, decree or award of any Governmental Entity
or arbitrator, including, without limitation, cease-and-desist or other orders
of any bank regulatory authority, (b) there is no claim of any kind, action,
suit, litigation, proceeding, arbitration, investigation, or controversy
("Proceeding") against or affecting First Colonial, any Subsidiary of First
Colonial or any directors, officers, employees or agents of First Colonial or
any Subsidiary of First Colonial (in their respective capacities as directors,
officers, employees or agents) pending or, to the knowledge of First Colonial,
threatened, which would, if adversely determined, have a FCBC Material Adverse
Effect, (c) there is no Proceeding affecting First Colonial, any Subsidiary of
First Colonial or any directors, officers, employees or agents of First
Colonial or any Subsidiary of First Colonial (in their respective capacities as
directors, officers, employees or agents) pending or, to the knowledge of First
Colonial, threatened, except for matters which in the aggregate will not have,
and cannot reasonably be expected to have, a FCBC Material Adverse Effect, and
(d) there are no uncured material violations, or violations with respect to
which material refunds or restitutions may be required, cited in any compliance
report to First Colonial or any FCBC Subsidiary as a result of the examination
by any bank regulatory authority.
3.10. Taxes. (a) First Colonial and each Subsidiary of
First Colonial has filed all tax returns required to be filed by them since
January 1, 1991 and has paid (or First Colonial has paid on its behalf), or has
set up an adequate reserve for the payment of, all taxes required to be paid as
shown on such returns, and the most recent First Colonial consolidated
financial statements contained in the FCBC Reports or otherwise delivered by
First Colonial to Firstar reflect an adequate reserve for all taxes payable by
First Colonial and its Subsidiaries accrued through the date of such financial
statements; provided, however, that the foregoing representation is made only
to the best of First Colonial's knowledge with respect to each FCBC Subsidiary
that has been, directly or indirectly, acquired by First Colonial subsequent to
July 1, 1989. The FCBC Disclosure Letter sets forth, as of the date hereof,
the following information with respect to First Colonial and each Subsidiary of
First Colonial: (a) the most recent tax year through which the United States
Internal Revenue Service ("IRS") has completed its examination of such
corporation, (b) whether there is an examination pending by the IRS with
respect to such corporation and, if so, the tax years involved, (c) whether
such corporation has executed or filed with the IRS any agreement which is
still in effect extending the period for assessment and collection of any
federal tax and, if so, the tax years covered by such agreement and the
expiration date of such extension, and (d) whether there are any existing
material disputes as to foreign, state, or local taxes. There are no liens for
taxes upon the assets of First Colonial or of any FCBC Subsidiary, except for
statutory liens for taxes not yet delinquent or the validity of which is being
contested in good faith by appropriate proceedings and, in either case, only if
adequate reserves therefor have been established on First Colonial's books.
Except as disclosed in the FCBC Disclosure Letter, neither First Colonial nor
any FCBC Subsidiary is a party to any action or proceeding by any governmental
authority for assessment and collection of taxes, and, to the best of the
knowledge of First Colonial, no claim for assessment and collection of taxes
has been asserted against any of them. For the purpose of this Agreement, the
term "tax" (including, with correlative meaning, the terms "taxes" and
"taxable") shall include all federal, state, local and foreign income, profits,
franchise, gross receipts, payroll, sales, employment, use, personal and real
property, withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts. First Colonial and each Subsidiary of First
Colonial has withheld from its employees (and timely paid to the appropriate
governmental agency) proper and accurate amounts for all periods through the
date hereof in material 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 types of
compensation). To the knowledge of First Colonial, except as disclosed in the
FCBC Disclosure Letter, neither First Colonial nor any Subsidiary of First
Colonial has, since January 1, 1986, been a member of an affiliated group of
corporations (within the meaning of Section 1504(a) of the Code) filing
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consolidated federal income tax returns, other than the affiliated group of
which First Colonial is the common parent or an affiliated group all of the
members of which were acquired by First Colonial. Except as disclosed in the
FCBC Disclosure Letter, neither First Colonial nor any FCBC Subsidiary has made
any payments, or been a party to an agreement that under any circumstances
could obligate it to make payments, that are or will not be deductible because
of Section 280G of the Code.
(b) There is no plan or intention by the stockholders of
First Colonial who own five percent or more of the outstanding FCBC Class A
Common Stock, FCBC Class B Common Stock or FCBC Series C Preference Stock and,
to the best of the knowledge of First Colonial, there is no plan or intention
on the part of the remaining stockholders of First Colonial to sell, exchange
or otherwise dispose of a number of shares of Firstar Common Stock and/or
Firstar Preferred Stock received in the Merger that would reduce such
stockholders' ownership of Firstar Common Stock and Firstar Preferred Stock to
a number of shares having a value, as of the Effective Time, of less than 50
percent of the value of all of the formerly outstanding FCBC Class A Common
Stock, FCBC Class B Common Stock or FCBC Series C Preference Stock as of the
Effective Time. For purposes of this representation, shares of FCBC Common
Stock or (if holders of FCBC Series C Preference Stock have dissenters' rights)
FCBC Series C Preference Stock surrendered by dissenters or exchanged for cash
in lieu of fractional shares of Firstar Common Stock will be treated as
outstanding at the Effective Time.
3.11. Certain Agreements. Except as discussed in the FCBC
Reports filed prior to the date of this Agreement or as disclosed in the FCBC
Disclosure Letter, and except for this Agreement, as of the date hereof,
neither First Colonial nor any FCBC Subsidiary is a party to any oral or
written (i) consulting agreement not terminable on 60 days' or less notice or
employment agreement or other agreement providing any term of employment,
compensation guarantee, or severance or supplemental retirement benefit, (ii)
union, guild or collective bargaining agreement, (iii) agreement or plan,
including any stock option plan, stock appreciation right plan, restricted
stock plan or stock purchase plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of the
transactions contemplated by this Agreement, (iv) contract containing covenants
which limit the ability of First Colonial or any FCBC Subsidiary to compete in
any line of business or with any person or which involve any restriction of the
geographical area in which, or method by which, First Colonial or any FCBC
Subsidiary may carry on its business (other than as may be required by law or
applicable regulatory authorities), (v) any contract, agreement or other
instrument or undertaking which is not terminable by First Colonial or any FCBC
Subsidiary without additional payment or penalty within 60 days and obligates
First Colonial or any FCBC Subsidiary for payments or other consideration with
a value in excess of $250,000, or (vi) other executory material agreement as
defined by the instructions to Exhibit 10 under Item 601 of SEC Regulation S-K.
Except as set forth in the FCBC Disclosure Letter, neither First Colonial nor
any of the FCBC Subsidiaries is in Violation of any loan or credit agreement,
note, mortgage, indenture or other agreement, obligation or instrument
applicable to First Colonial or any FCBC Subsidiary or their respective
properties or assets, except for any such Violations that would not,
individually or in the aggregate, have a FCBC Material Adverse Effect.
3.12. Benefit Plans. (a) The FCBC Disclosure Letter lists
(i) each employee bonus, incentive, deferred compensation, stock purchase,
stock appreciation right, stock option and severance pay plan, (ii) each
pension, profit sharing, stock bonus, thrift, savings and employee stock
ownership plan, and (iii) every other employee benefit plan (within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") (collectively "Benefit Plans"), which First Colonial or any
FCBC Subsidiary maintains or to which First Colonial or any FCBC Subsidiary
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contributes on behalf of current or former employees. Except as disclosed in
the FCBC Disclosure Letter, all of the plans and programs listed in the FCBC
Disclosure Letter (collectively, "FCBC Benefit Plans") comply with all
applicable requirements of ERISA and all other applicable federal and state
laws, including without limitation the reporting and disclosure requirements of
Part 1 of Title I of ERISA, except where the failure to so comply could not
reasonably result in a FCBC Material Adverse Effect. Each of the FCBC Benefit
Plans that is intended to be a pension, profit sharing, stock bonus, thrift,
savings or employee stock ownership plan that is qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended (the "Code"), has been
determined by the IRS to qualify under Section 401(a) of the Code, or an
application for the determination of such qualification has been or will be
filed by First Colonial with the IRS prior to the end of the applicable
remedial amendment period under the Code and regulations thereunder, and to the
best knowledge of First Colonial, there exist no circumstances which could
reasonably be expected to adversely affect the qualified status of any such
FCBC Benefit Plan under that section. Except as set forth in the FCBC
Disclosure Letter, each FCBC Benefit Plan that is a defined benefit pension
plan has assets with an aggregate value that exceeds the actuarially determined
present value of its liability for accrued benefits as determined on the basis
of the actuarial assumptions used for the most recent actuarial valuation of
such Plan (which assumptions are set forth in the FCBC Reports and are
reasonable), no such Plan has incurred an accumulated funding deficiency within
the meaning of Section 412(a) of the Code, and no such Plan is a
"multi-employer plan" within the meaning of Section 3(37) of ERISA. Except as
set forth in the FCBC Disclosure Letter, there is no pending or, to the
knowledge of First Colonial, threatened litigation, governmental proceeding or
investigation against or relating to any FCBC Benefit Plan, and to the
knowledge of First Colonial there is no reasonable basis for any material
proceedings, claims, actions or proceedings against any Plan. Except as set
forth in the FCBC Disclosure Letter, no "reportable event" (as defined in
Section 4043(b) of ERISA) has occurred with respect to any FCBC Benefit Plan.
No FCBC Benefit Plan has engaged in a "prohibited transaction" (as defined in
Section 406 of ERISA and Section 4975(c) of the Code) since the date on which
said sections became applicable to such Plan which could reasonably result in a
FCBC Material Adverse Effect. Neither First Colonial nor any FCBC Subsidiary
has incurred any "accumulated funding deficiency" (within the meaning of
Section 412(a) of the Code), whether or not waived, with respect to any Plan
which could reasonably result in a FCBC Material Adverse Effect. All FCBC
Benefit Plans that are group health plans, within the meaning of Section 4980B
of the Code or Section 601 of ERISA, have been operated in material compliance
with the group health plan continuation coverage requirements of Section 4980B
of the Code and Section 601 of ERISA to the extent such requirements are
applicable.
(b) First Colonial has delivered to Firstar copies of (i)
each FCBC Benefit Plan, (ii) current summary plan descriptions of each FCBC
Benefit Plan, (iii) each trust agreement, insurance policy or other instrument
relating to the funding of any FCBC Benefit Plan, (iv) the three most recent
Annual Reports (Form 5500 series) and accompanying schedules filed with the IRS
or United States Department of Labor with respect to each FCBC Benefit Plan,
(v) the most recent determination letter issued by the IRS with respect to each
FCBC Benefit Plan that is intended to qualify under Section 401 of the Code,
(vi) the most recent available financial statements for each FCBC Benefit Plan
that has assets, (vii) the most recent actuarial report for any FCBC Benefit
Plan that is a defined benefit pension plan, and if any such Plan was amended
subsequent to the date of such report, information about the financial effects
of such amendment and (viii) the most recent audited financial statements for
each FCBC Benefit Plan for which audited financial statements are required by
ERISA.
(c) With respect to any FCBC Benefit Plan that is an
"eligible individual account plan" within the meaning of Section 407(d) (3) of
ERISA (including without limitation any employee stock ownership plan described
in Section 4975(e) (7) of the Code), (i) there have been no transactions
involving the purchase or sale by the FCBC Benefit Plan of employer securities
from or to a "disqualified
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person" (within the meaning of Section 4975 of the Code); and (ii) there has
been no loan by any party to such FCBC Benefit Plan, whether or not any portion
of such loan remains unpaid.
(d) The FCBC Disclosure Letter describes any obligation
that First Colonial and/or any Subsidiaries of First Colonial has to provide
health and welfare benefits to retirees and other former employees or their
dependents (other than rights arising solely under Section 601 of ERISA or
Section 4980B of the Code) including information as to the number of retirees,
other former employees and dependents entitled to such coverage and their ages.
3.13. Insurance. First Colonial and each FCBC Subsidiary
is presently insured, and during each of the past five calendar years First
Colonial and, to the knowledge of First Colonial, each FCBC Subsidiary has been
insured, for reasonable amounts with financially sound and reputable insurance
companies against such risks as companies engaged in a similar business would,
in accordance with good business practice, customarily be insured. First
Colonial has delivered to Firstar correct and complete copies of all material
policies of insurance of First Colonial and the FCBC Subsidiaries currently in
effect. Neither First Colonial nor any FCBC Subsidiary has any material
liability for unpaid premiums or premium adjustments not properly reflected on
the FCBC Financial Statements, and no notice of cancellation or termination has
been received by FCBC or any FCBC Subsidiary with respect to any material
insurance policy currently in effect. To the knowledge of First Colonial,
within the last five years, neither First Colonial nor any Subsidiary of First
Colonial has been refused any insurance with respect to any assets or
operations, nor has any coverage been limited in any material respect as to any
assets or operations, by any insurance carrier to which it has applied for any
such insurance or with which it has carried insurance during the last five
years.
3.14. Conduct of First Colonial to Date. Except as
disclosed in FCBC Reports filed prior to the date of this Agreement or in the
FCBC Disclosure Letter, and except as contemplated by this Agreement and the
Plan of Merger, from and after January 1, 1994: (a) First Colonial and the
FCBC Subsidiaries have carried on their respective businesses in the ordinary
and usual course consistent with past practices; (b) First Colonial has not
issued or sold any of its capital stock or made grants of its capital stock, or
issued or sold any corporate debt securities which would be classified as
long-term debt on the balance sheet of First Colonial; (c) First Colonial has
not granted any option for the purchase of its capital stock, effected any
stock split, or otherwise changed its capitalization; (d) First Colonial has
not declared, set aside, or paid any dividend or other distribution in respect
of its capital stock, except for regular quarterly cash dividends of $.15 per
share of FCBC Class A Common Stock and $.125 per share of FCBC Class B Common
Stock and regular quarterly cash dividends on shares of FCBC Series C
Preference Stock as required by the FCBC Certificate, in each case with usual
record and payment dates or, directly or indirectly, redeemed or otherwise
acquired any of its capital stock; (e) First Colonial has not incurred any
obligation or liability (absolute or contingent) material to First Colonial and
the FCBC Subsidiaries taken as a whole, except normal trade or business
obligations or liabilities incurred in the ordinary course of business, and
neither First Colonial nor any FCBC Subsidiary has mortgaged, pledged, or
subjected to any lien, claim, security interest, charge, encumbrance or
restriction that is material to First Colonial and the FCBC Subsidiaries taken
as a whole any of its assets or properties; (f) First Colonial has not
discharged or satisfied any lien, mortgage, pledge, claim, security interest,
charge, encumbrance, or restriction material to First Colonial and the FCBC
Subsidiaries taken as a whole or paid any obligation or liability (absolute or
contingent) material to First Colonial and the FCBC Subsidiaries taken as a
whole, other than in the ordinary course of business; (g) First Colonial has
not sold, assigned, transferred, leased, exchanged, or otherwise disposed of
any of its properties or assets other than for a fair consideration in the
ordinary course of business; (h) neither First Colonial nor any FCBC Subsidiary
has increased the rate of compensation of, or paid any bonus to, any of its
directors, officers, or other
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employees, except merit or promotion increases in accordance with existing
policy; entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance, or other
similar contract; adopted, entered into, terminated, amended or modified any
FCBC Benefit Plan in respect of any of present or former directors, officers or
other employees; made any adjustment pursuant to Section 4(g) of the FCBC 1988
Stock Plan or Section IX.F. of the FCBC 1981 Stock Plan; or agreed to do any of
the foregoing; (i) neither First Colonial nor any FCBC Subsidiary has suffered
any material damage, destruction, or loss material to First Colonial and the
FCBC Subsidiaries taken as a whole, whether as the result of fire, explosion,
earthquake, accident, casualty, labor trouble, requisition or taking of
property by any government or any agency of any government, flood, windstorm,
embargo, riot, act of God or the enemy, or other similar or dissimilar casualty
or event or otherwise, and whether or not covered by insurance; (j) neither
First Colonial nor any FCBC Subsidiary has cancelled or compromised any debt to
an extent exceeding $100,000 owed to First Colonial or any FCBC Subsidiary or
claim to an extent exceeding $100,000 asserted by First Colonial or any FCBC
Subsidiary; (k) neither First Colonial nor any FCBC Subsidiary has entered, or
agreed to enter, into any agreement or arrangement granting any preferential
right to purchase any of its assets, properties or rights material to First
Colonial and the FCBC Subsidiaries taken as a whole or requiring the consent of
any party to the transfer and assignment of any such material assets,
properties or rights; (l) there has not been any other transaction, commitment,
dispute or other event or condition (financial or otherwise) of any character
(whether or not in the ordinary course of business) individually or in the
aggregate having or which, insofar as reasonably can be foreseen, in the future
is reasonably likely to have, a FCBC Material Adverse Effect; and (m) there has
not been any change in the method of accounting or accounting practices of
First Colonial and or any of the FCBC Subsidiaries.
3.15. Material Adverse Change. Since December 31, 1993,
there has been no material adverse change in the financial condition, results
of operations or business of First Colonial and the FCBC Subsidiaries taken as
a whole, other than any changes resulting primarily by reason of changes in
banking laws or regulations (or interpretations thereof), changes in the
general level of interest rates, changes in economic, financial or market
conditions affecting the banking industry generally in the regions in which
First Colonial and the FCBC Subsidiaries operate or changes that may occur as a
consequence of actions that First Colonial is expressly obligated to take under
this Agreement.
3.16. Properties, Leases and Other Agreements. Except as
may be reflected in the FCBC Financial Statements or the FCBC Disclosure
Letter, for any lien for current taxes not yet delinquent, for pledges to
secure deposits and for such other liens, security interests, claims, charges,
options or other encumbrances and imperfections of title which do not
materially affect the value of personal or real property reflected in the FCBC
Financial Statements or acquired since the date of such Statements and which do
not materially interfere with or impair the present and continued use of such
property, First Colonial and its Subsidiaries have good title, free and clear
of any liens, security interests, claims, charges, options or other
encumbrances, to all of the personal and real property reflected in the FCBC
Financial Statements, and all personal and real property acquired since the
date of such Statements, except such personal and real property as has been
disposed of in the ordinary course of business. The FCBC Disclosure Letter
lists all acquisitions or dispositions of capital assets currently planned by
First Colonial or any FCBC Subsidiary, other than individual transactions in
the ordinary course of business and consistent with past practice and in no
event with a value in excess of $250,000. To the best knowledge of First
Colonial and its Subsidiaries, substantially all First Colonial's and each FCBC
Subsidiary's buildings and equipment in regular use (including such buildings
and equipment as are leased) have been well maintained and are in good and
serviceable condition, reasonable wear and tear excepted. First Colonial or
the applicable FCBC Subsidiary, as lessee, has the right under valid and
effective leases to occupy, use, possess or control, as applicable, all real
property or other material
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property leased by First Colonial or any FCBC Subsidiary, qualified only by the
written terms of such leases, true and correct copies of which First Colonial
has delivered to Firstar. There is not, under any of such leases, any material
existing default by First Colonial, its Subsidiaries or, to the best knowledge
of First Colonial, any other party thereto, or any event with notice or lapse
of time or both would constitute such a material default.
3.17. Opinion of Financial Advisor. First Colonial has
received the opinion of Donaldson, Lufkin & Jenrette on the date hereof to the
effect that, as of the date hereof, in the opinion of such firm, the
consideration to be received in the Merger by First Colonial's stockholders is
fair to First Colonial's stockholders from a financial point of view (the
"Fairness Opinion").
3.18. Vote Required. The affirmative vote of a majority of
the votes that holders of the outstanding shares of FCBC Common Stock are
entitled to cast is the only vote of the holders of any class or series of
First Colonial capital stock necessary to approve this Agreement and the
transactions contemplated hereby.
3.19. Accounting and Tax Matters. Neither First Colonial
nor any of its affiliates has taken or agreed to take any action that would
prevent Firstar from accounting for the business combination to be effected by
the Merger as a pooling of interests or would prevent the Merger from
qualifying as a reorganization under Section 368(a)(1)(A) of the Code.
3.20. Dissenters' Rights. Shares of FCBC Class A Common
Stock and FCBC Receipts are currently quoted on the Nasdaq National Market of
the Nasdaq Stock Market. Assuming Firstar Common Stock is listed on the New
York Stock Exchange and depositary receipts evidencing depositary shares
representing an interest in the Firstar Preferred Stock ("Firstar Receipts")
will be listed on the Nasdaq National Market or a national securities exchange
(within the meaning of Section 262(b)(1) of the DGCL) upon official notice of
issuance, holders of shares of FCBC Class A Common Stock and FCBC Series C
Preference Stock will not be entitled to assert dissenters' rights granted
under Section 262 of the DGCL.
3.21. Affiliates. The FCBC Disclosure Letter identifies
persons who are now or may be "Affiliates" of First Colonial for purposes of
Rule 145 under the Securities Act.
3.22. Regulatory Impediments. As of the date hereof, First
Colonial is not aware of the existence of any factor that would materially
delay or materially hinder the issuance of any of the required regulatory
approvals necessary to consummate the Merger and the transactions contemplated
hereby, other than any protests by any nongovernmental parties and information
contained in the Firstar Disclosure Letter.
3.23. Full Disclosure. No statement contained in any
document, certificate or any other writing furnished or to be furnished by or
on behalf of First Colonial to Firstar in or pursuant to the provisions of this
Agreement contains or shall contain any untrue statement of a material fact or
omits or shall omit to state any material fact necessary, in light of the
circumstances in which it was made, in order to make the statements herein or
therein not misleading.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRSTAR AND SUB
Firstar and Sub, jointly and severally, represent and warrant
to First Colonial as follows:
4.01. Organization, Standing and Power. Firstar is a
corporation duly organized, validly existing and in active status under the
laws of the State of Wisconsin and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to have such power or
authority would not have a material adverse effect on the business, operations
or financial condition of Firstar and its Subsidiaries taken as a whole. Sub
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Illinois and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted, except where the failure to have such power or
authority would not have a material adverse effect on the business, operations
or financial condition of Firstar and its Subsidiaries taken as a whole (a
"Firstar Material Adverse Effect"). Each of Firstar and Sub is qualified to do
business and is in good standing in each other state or foreign jurisdiction
where its ownership or leasing of property or the conduct of its business
requires it to be so qualified and where the failure to be so qualified would
have a Firstar Material Adverse Effect. Each of Firstar and Sub is registered
as a bank holding company with the Federal Reserve Board under the BHC Act.
Firstar has delivered to First Colonial true, accurate and complete copies of
the currently effective Restated Articles of Incorporation and By-laws of
Firstar, including all amendments thereto.
4.02. Firstar Subsidiaries. Except as set forth in the
Firstar Disclosure Letter (which is a letter of even date herewith delivered by
Firstar and Sub to First Colonial, the receipt thereof having been acknowledged
by First Colonial executing a copy thereof), Firstar beneficially owns,
directly or indirectly, all of the shares of the outstanding capital stock of
Sub and each of the Subsidiaries listed in the Firstar Disclosure Letter
(herein, including Sub, called collectively the "Firstar Subsidiaries" or
individually a "Firstar Subsidiary"), which constitute Firstar's principal
operating subsidiaries as of the date of this Agreement. No equity securities
of any of the Firstar Subsidiaries are or may become required to be issued by
reason of any option, warrants, calls, rights or agreements of any character
whatsoever; there are outstanding no securities or rights convertible into or
exchangeable for shares of any capital stock of any Firstar Subsidiary; and
there are no other contracts, commitments, understandings or arrangements by
which any Firstar Subsidiary is bound to issue additional shares of its capital
stock or options, warrants, calls, rights or agreements to purchase or acquire
any additional shares of its capital stock. Except as provided for under any
applicable banking statute and except as set forth in the Firstar Disclosure
Letter, all of the shares of capital stock of each of the Firstar Subsidiaries
owned by Firstar are fully paid and nonassessable (except as provided in
Section 180.0622(2)(b) of the Wisconsin Business Corporation Law ("WBCL")) and
are owned by it free and clear of any claim, lien, encumbrance or agreement
with respect thereto. Each Firstar Subsidiary is a banking association or a
corporation, in each case duly organized, validly existing and in good standing
or in active status under the laws of its jurisdiction of incorporation, and
has the corporate power and authority to own or lease its properties and assets
and to carry on its business as it is now being conducted, except where the
failure to have such power or authority would not have a Firstar Material
Adverse Effect. Each Firstar Subsidiary that is a national bank is a member of
the Federal Reserve System. The deposits of each Firstar Subsidiary that is a
banking institution and accepts deposits are insured by the FDIC to the extent
provided by law. Firstar has delivered to First Colonial true, accurate and
complete copies of the currently effective Articles of Incorporation and
By-laws of Sub. Except as set forth in the Firstar Disclosure Letter and
except for securities held in its capacity as fiduciary, Firstar does not own
beneficially, directly or indirectly, more than 5% of any class of equity
securities or similar interests of any corporation, bank,
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business trust, association or similar organization. There are no obligations,
contingent or otherwise, of Firstar or any Firstar Subsidiary material to
Firstar and the Firstar Subsidiaries taken as a whole to repurchase, redeem or
otherwise acquire any shares of capital stock of any Firstar Subsidiary or to
provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any Firstar Subsidiary or any other entity, other
than pursuant to commercial loan arrangements and similar obligations arising
in the ordinary course of the business of the Firstar Subsidiaries.
4.03. Capital Structure. As of the date hereof, the
authorized capital stock of Firstar consists of 120,000,000 shares of Firstar
Common Stock and 2,500,000 shares of preferred stock, par value $1.00. No
shares of such preferred stock are issued and outstanding on the date hereof.
Except as contemplated in the Merger Agreements, as set forth in the Firstar
Disclosure Letter or as set forth in the most recent report of Firstar filed
with the SEC on Form 10-K, there are, as of the date of the Merger Agreements,
no outstanding options, warrants, calls, rights, commitments or agreements of
any character whatsoever to which Firstar or any Firstar Subsidiary is a party
or by which it is bound obligating Firstar or any Firstar Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock or any Voting Debt securities of Firstar or of any Firstar
Subsidiary or obligating Firstar or any Firstar Subsidiary to grant, extend or
enter into any such option, warrant, call, right, commitment or agreement. All
outstanding shares of Firstar capital stock are, and the shares of Firstar
Common Stock and Firstar Preferred Stock to be issued pursuant to or as
specifically contemplated by the Merger Agreements when issued will be, validly
issued, fully paid and nonassessable (except as provided in WBCL Section
180.0622(2)(b)) and not subject to preemptive rights. As of the date hereof,
the authorized capital stock of Sub consists of 10,000 shares of common stock,
$2.50 par value, 400 of which are validly issued, fully paid and nonassessable,
and all such shares are owned by Firstar.
4.04. Authority. Firstar and Sub have all requisite
corporate power and authority to enter into this Agreement, the Plan of Merger
and the agreements contemplated by Section 5.15 and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement, the Plan of Merger and the agreements contemplated by Section
5.15 and the consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary corporate action on the part of
Firstar and Sub. This Agreement and the Plan of Merger have been, and when
executed and delivered by Firstar the agreements contemplated by Section 5.15
will be, duly executed and delivered by Firstar and/or Sub, and upon such
execution and delivery each constitutes a valid and binding obligation of
Firstar and/or Sub enforceable in accordance with its terms. The execution and
delivery of this Agreement, the Plan of Merger and the agreements contemplated
by Section 5.15 do not, and the consummation of the transactions contemplated
hereby and thereby will not, result in any Violation pursuant to any provision
of the Restated Articles of Incorporation or By-laws of Firstar or any Firstar
Subsidiary or, except as set forth in the Firstar Disclosure Letter or as
contemplated by the next sentence hereof, result in any Violation of any loan
or credit agreement, note, mortgage, indenture, lease, Firstar Benefit Plan (as
defined in Section 4.12) or other agreement, obligation, instrument, permit,
concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Firstar or any Firstar Subsidiary
or their respective properties or assets which Violation would have a Firstar
Material Adverse Effect. Other than in connection or in compliance with the
provisions of the WBCL and the IBCA, the Securities Act, the Exchange Act, the
securities or blue sky laws of the various states, and consents,
authorizations, approvals, notices or exemptions required under the BHC Act and
from the Illinois Commissioner, no consent, approval, order or authorization
of, or registration, declaration or filing with, any Governmental Entity is
required by or with respect to Firstar or any Firstar Subsidiary in connection
with the execution and delivery of this Agreement and the Plan
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of Merger by Firstar or the consummation by Firstar of the transactions
contemplated hereby and thereby, the failure to obtain which would have a
Firstar Material Adverse Effect.
4.05. Firstar Financial Statements. The consolidated
balance sheets of Firstar as of December 31, 1993 and 1992 and the related
consolidated statements of income, consolidated statements of cash flows and
consolidated statements of shareholders' equity for the three years in the
period ended December 31, 1993, accompanied by the unqualified opinion of KPMG
Peat Marwick, copies of which have been furnished by Firstar to First Colonial;
the unaudited consolidated balance sheet of Firstar as of June 30, 1994 and the
related consolidated statement of income, consolidated statement of cash flows
and consolidated statement of shareholders' equity for the six months then
ended, in the form prepared for Firstar's internal use, copies of which have
been furnished by Firstar to First Colonial; and like financial information
included in Forms 10-Q filed with the SEC subsequent to the Latest Statement
Date (collectively, the "Firstar Financial Statements"), have been prepared in
accordance with generally accepted accounting principles and practices as
utilized in the Firstar Financial Statements applied on a consistent basis
(except as may be indicated therein or in the notes thereto), and present
fairly the consolidated financial condition of Firstar at the dates, and the
consolidated results of operations and cash flows for the periods, stated
therein. In the case of interim fiscal periods, all adjustments, consisting
only of normal recurring items, which management of Firstar believes necessary
for a fair presentation of such financial information, have been made, subject
to year-end audit adjustments.
4.06. Reports. Since January 1, 1991, Firstar and the
Firstar Subsidiaries have filed all reports, registrations and statements,
together with any amendments required to be made with respect thereto, that
were and are required to be filed with (i) the SEC, including but not limited
to Forms 10-K, Forms 10-Q, Forms 8-K and proxy statements, (ii) the Federal
Reserve Board, (iii) the Comptroller, (iv) the FDIC and (v) any applicable
federal or state securities or banking authorities (all such reports and
statements are collectively referred to herein as the "Firstar Reports"). As
of their respective dates, the Firstar Reports filed prior to the date hereof
complied in all material respects with all of the statutes, rules and
regulations enforced or promulgated by the regulatory authority with which they
were filed and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading.
4.07. Information Supplied. None of the information
supplied by Firstar for inclusion or incorporation by reference in (i) the S-4
will, at the time the S-4 is filed with the SEC and at the time it becomes
effective under the Securities Act, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Proxy
Statement will, at the date mailed to First Colonial stockholders and at the
time of the meeting of stockholders to be held in connection with the Merger,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading and (iii) any other documents to be filed with the SEC, the Federal
Reserve Board, the Illinois Office or any regulatory agency in connection with
the transactions contemplated hereby will, at the time of filing, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The S-4, insofar as
it relates to information other than that supplied by First Colonial, will
comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder.
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4.08. Authorizations; Compliance with Applicable Laws. (a)
Firstar and the Firstar Subsidiaries hold all authorizations, permits,
licenses, variances, exemptions, orders and approvals of all Governmental
Entities which are material to the operation of the businesses of Firstar and
the Firstar Subsidiaries taken as a whole (the "Firstar Permits"). Firstar and
the Firstar Subsidiaries are in compliance with the terms of the Firstar
Permits, except where the failure so to comply would not have a Firstar
Material Adverse Effect. Except as disclosed in the Firstar Reports filed
prior to the date of this Agreement, the businesses of Firstar and the Firstar
Subsidiaries are not being conducted in violation of any Law, except for
possible violations which individually or in the aggregate do not, and, insofar
as reasonably can be foreseen, in the future will not, have a Firstar Material
Adverse Effect. Except as disclosed in the Firstar Reports filed prior to the
date hereof or set forth in the Firstar Disclosure Letter, as of the date of
this Agreement, no investigation or review by any Governmental Entity with
respect to Firstar or any of the Firstar Subsidiaries is pending or, to the
knowledge of Firstar, threatened, nor has any Governmental Entity indicated an
intention to conduct the same, other than, in each case, those the outcome of
which, as far as reasonably can be foreseen, will not have a Firstar Material
Adverse Effect.
(b) Without limiting the foregoing and except as
disclosed in the Firstar Disclosure Letter, to the best knowledge of Firstar,
Firstar and its Subsidiaries (i) have obtained all material permits, licenses
and other authorizations which are required of Firstar and its Subsidiaries
with respect to the operation of their respective businesses and all real
estate currently owned, leased or otherwise possessed or controlled by Firstar
or any Firstar Subsidiary, including, without limitation, properties held as a
result of foreclosure or repossession and other properties carried on Firstar's
books as "other real estate owned" (collectively, the "Firstar Property") under
any Environmental Laws (such permits, licenses and authorizations being
hereinafter referred to as "Firstar Environmental Permits") and (ii) are in
compliance in all material respects with all terms and conditions of all
Firstar Environmental Permits. Without limiting the foregoing, and except as
set forth in the Firstar Disclosure Letter, to the best knowledge of Firstar,
there are no past, present or known future events, conditions, circumstances,
plans, errors or omissions that have occurred, are occurring or are reasonably
expected to occur on or with respect to Firstar Property, or any other property
as to which Firstar or any Firstar Subsidiary has held or currently holds
ownership or indicia of ownership, including without limitation (A) the
creation of any federal, state or common law nuisance, (B) the failure to
comply with any Environmental Laws, or (C) the presence of any Toxic
Substances, as a result of which events, conditions, circumstances, plans,
errors or omissions Firstar or any Firstar Subsidiary is subject to or
reasonably likely to incur liabilities, damages, penalties or removal,
remediation or other costs that would have a Firstar Material Adverse Effect.
4.09. Litigation and Claims. Except as disclosed in the
Firstar Reports filed prior to the date of this Agreement, in the Firstar
Disclosure Letter or the most recent Firstar consolidated financial statements
delivered by Firstar to First Colonial prior to the date of this Agreement: (a)
neither Firstar nor any of the Firstar Subsidiaries is subject to any
continuing order of, or written agreement or memorandum of understanding with,
or continuing material investigation by, any federal or state banking or
insurance authority or, to their knowledge, other Governmental Entity, or any
judgment, order, writ, injunction, decree or award of any Governmental Entity
or arbitrator, including, without limitation, cease-and-desist or other orders
of any bank regulatory authority, (b) there is no Proceeding against or
affecting Firstar, any Subsidiary of Firstar or any directors, officers,
employees or agents of Firstar or any Subsidiary of Firstar (in their
respective capacities as directors, officers, employees or agents) pending or,
to the knowledge of Firstar, threatened, which would, if adversely determined,
have a Firstar Material Adverse Effect, (c) there is no Proceeding affecting
Firstar, any Subsidiary of Firstar or any directors, officers, employees or
agents of Firstar or any Subsidiary of Firstar (in their respective capacities
as directors, officers, employees or agents) pending or, to the knowledge of
Firstar, threatened, except for matters which in the aggregate will not have,
and cannot reasonably be expected to have, a
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Firstar Material Adverse Effect, and (d) there are no uncured material
violations, or violations with respect to which material refunds or
restitutions may be required, cited in any compliance report to Firstar or any
Firstar Subsidiary as a result of the examination by any bank regulatory
authority.
4.10. Taxes. Firstar and each of the Firstar Subsidiaries
has filed all tax returns required to be filed by them since January 1, 1991
and has paid (or Firstar has paid on its behalf), or has set up an adequate
reserve for the payment of, all taxes required to be paid as shown on such
returns, and the most recent consolidated financial statements contained in the
Firstar Reports or otherwise delivered by Firstar to First Colonial reflect an
adequate reserve for all taxes payable by Firstar and the Firstar Subsidiaries
accrued through the date of such financial statements; provided, however, that
the foregoing representation is made only to the best of Firstar's knowledge
with respect to each Firstar Subsidiary that has been, directly or indirectly,
acquired by Firstar subsequent to July 1, 1989. No material deficiencies for
any taxes have been proposed, asserted or assessed against Firstar or any
Firstar Subsidiary.
4.11. Certain Agreements. Except as disclosed in the
Firstar Reports filed prior to the date of this Agreement, and except for this
Agreement, as of the date of this Agreement, neither Firstar nor any Firstar
Subsidiary is a party to any oral or written (i) agreement with any executive
officer or other key employee of Firstar or any Firstar Subsidiary the benefits
of which are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving Firstar or any Firstar Subsidiary of the
nature contemplated by this Agreement or (ii) agreement or plan, including any
stock option plan, stock appreciation right plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Except as set forth in the Firstar Disclosure
Schedule, neither Firstar nor any of the Firstar Subsidiaries is in Violation
of any loan or credit agreement, note, mortgage, indenture or other agreement,
obligation or instrument applicable to Firstar or any Firstar Subsidiary or
their respective properties or assets, except for any such Violations that
would not, individually or in the aggregate, have a Firstar Material Adverse
Effect.
4.12. Benefit Plans. The Benefit Plans that Firstar or any
Firstar Subsidiary maintains or to which Firstar or any Firstar Subsidiary
contributes on behalf of current or former employees that are employee benefit
plans (within the meaning of Section 3(3) of ERISA) (collectively, the "Firstar
Benefit Plans") comply with all applicable requirements of ERISA and all other
applicable federal and state laws, including without limitation the reporting
and disclosure requirements of Part 1 of Title I of ERISA, except where the
failure to so comply could not reasonably result in a Firstar Material Adverse
Effect. Each of the Firstar Benefit Plans that is intended to be a pension,
profit sharing, stock bonus, thrift, savings or employee stock ownership plan
that is qualified under Section 401(a) of the Code has been determined by the
IRS to qualify under Section 401(a) of the Code, or an application for the
determination of such qualification has been or will be filed by Firstar with
the IRS prior to the end of the applicable remedial amendment period under the
Code and regulations thereunder, and to the best knowledge of Firstar, there
exist no circumstances which could reasonably be expected to adversely affect
the qualified status of any such Firstar Benefit Plan under that section.
Except as set forth in the Firstar Disclosure Letter, each Firstar Benefit Plan
that is a defined benefit pension plan has assets with an aggregate value that
exceeds the actuarially determined present value of its liability for accrued
benefits as determined on the basis of the actuarial assumptions used for the
most recent actuarial valuation of such Plan (which assumptions are set forth
in the Firstar Reports and are reasonable), no such Plan has incurred an
accumulated funding deficiency within the meaning of Section 412(a) of the
Code, and no such Plan is a "multi-employer plan" within the meaning of Section
3(37) of ERISA. Except as set forth
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in the Firstar Disclosure Letter, there is no pending or, to the knowledge of
Firstar, threatened litigation, governmental proceeding or investigation
against or relating to any Firstar Benefit Plan, and to the knowledge of
Firstar there is no reasonable basis for any material proceedings, claims,
actions or proceedings against any Plan. Except as set forth in the Firstar
Disclosure Letter, no "reportable event" (as defined in Section 4043(b) of
ERISA) has occurred with respect to any Firstar Benefit Plan. No Firstar
Benefit Plan has engaged in a "prohibited transaction" (as defined in Section
406 of ERISA and Section 4975(c) of the Code) since the date on which said
sections became applicable to such Plan which could reasonably result in a
Firstar Material Adverse Effect. Neither Firstar nor any Firstar Subsidiary
has incurred any "accumulated funding deficiency" (within the meaning of
Section 412(a) of the Code), whether or not waived, with respect to any Plan
which could reasonably result in a Firstar Material Adverse Effect. All
Firstar Benefit Plans that are group health plans, within the meaning of
Section 4980B of the Code or Section 601 of ERISA, have been operated in
material compliance with the group health plan continuation coverage
requirements of Section 4980B of the Code and Section 601 of ERISA to the
extent such requirements are applicable.
4.13. Absence of Certain Changes or Events. Except as
disclosed in the Firstar Reports filed prior to the date of this Agreement or
in the Firstar Disclosure Letter, and except as contemplated by this Agreement
and the Plan of Merger, from and after January 1, 1994 and to the date of this
Agreement: (a) Firstar and the Firstar Subsidiaries have conducted their
respective businesses only in the ordinary and usual course consistent with
past practice, (b) Firstar has not declared, set aside or paid any dividend or
other distribution in respect to any of Firstar's capital stock, except for
regular quarterly cash dividends not exceeding $.30 per share on Firstar Common
Stock with usual record and payment dates for such dividends, (c) there has not
been any transaction, commitment, dispute or other event or condition
(financial or otherwise) of any character (whether or not in the ordinary
course of business) individually or in the aggregate having or which, insofar
as reasonably can be foreseen, in the future is reasonably likely to have, a
Firstar Material Adverse Effect and (d) there has not been any material change
in the method of accounting or accounting practices of Firstar and the Firstar
Subsidiaries.
4.14. Properties, Leases and Other Agreements. Except as
may be reflected in the Firstar Financial Statements, for any lien for current
taxes not yet delinquent, for pledges to secure deposits and for such other
liens, security interests, claims, charges, options or other encumbrances and
imperfections of title which do not materially affect the value of personal or
real property reflected in the Firstar Financial Statements or acquired since
the date of such Statements and which do not materially interfere with or
impair the present and continued use of such property, Firstar and the Firstar
Subsidiaries have good title, free and clear of any liens, security interests,
claims, charges, options or other encumbrances to all of the personal and real
property reflected in the Firstar Financial Statements, and all personal and
real property acquired since the date of such Statements, except such personal
and real property as has been disposed of in the ordinary course of business.
All leases material to Firstar and the Firstar Subsidiaries pursuant to which
Firstar or any of the Firstar Subsidiaries, as lessee, leases real or personal
property are valid and effective in accordance with their respective terms and
there is not, under any of such leases, any material existing default by
Firstar, any of the Firstar Subsidiaries or, to the best knowledge of Firstar,
any other party thereto, or any event with notice or lapse of time or both
would constitute such a material default.
4.15. Accounting and Tax Matters. Neither Firstar nor any
of its affiliates has through the date hereof taken or agreed to take any
action that would prevent Firstar from accounting for the business combination
to be effected by the Merger as a pooling of interests or would prevent the
Merger from qualifying as a reorganization under Section 368(a)(1)(A) of the
Code.
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4.16. Material Adverse Change. Since December 31, 1993,
except as disclosed in the Firstar Disclosure Letter, there has been no
material adverse change in the financial condition, results of operations or
business of Firstar and the Firstar Subsidiaries taken as a whole, other than
any changes resulting primarily by reason of changes in banking laws or
regulations (or interpretations thereof), changes in the general level of
interest rates or changes in economic, financial or market conditions affecting
the banking industry generally in the regions in which Firstar and the Firstar
Subsidiaries operate.
4.17. Full Disclosure. No statement contained in any
document, certificate or other writing furnished or to be furnished by or on
behalf of Firstar to First Colonial in or pursuant to the provisions of this
Agreement contains or shall contain any untrue statement of a material fact or
omits or shall omit to state any material fact necessary, in light of the
circumstances in which it was made, in order to make the statements herein or
therein not misleading.
4.18. Regulatory Impediments. As of the date hereof,
except as set forth in the Firstar Disclosure Letter, Firstar is not aware of
the existence of any factor that would materially delay or materially hinder
issuance of any of the required regulatory approvals necessary to consummate
the Merger and the transactions contemplated hereby, other than any protests by
any nongovernmental parties.
ARTICLE V
COVENANTS OF FIRST COLONIAL
5.01. Affirmative Covenants. First Colonial hereby
covenants and agrees with Firstar that prior to the Effective Time, unless the
prior written consent of Firstar shall have been obtained and except as
otherwise contemplated herein, it will and it will cause its respective
Subsidiaries to:
(a) operate its business only in the usual, regular and
ordinary course consistent with past practices;
(b) use its best efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its officers and key employees (except that it shall have the right
to terminate the employment of any officer or key employee in accordance with
established employment procedures) and maintain its relationships with
customers;
(c) maintain and keep its properties in as good repair
and condition as at present, except for depreciation due to ordinary wear and
tear;
(d) keep in full force and effect insurance and bonds
comparable in amount and scope of coverage to that now maintained by it;
(e) perform in all material respects all obligations
required to be performed by it under all material contracts, leases, and
documents relating to or affecting its assets, properties, and business;
(f) comply with and perform in all material respects all
obligations and duties imposed upon it by all Laws; and
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(g) notify Firstar immediately by telephone, and
thereafter promptly confirm in writing, if any of the matters described in
Section 5.02(f) occurs, whether as a result of action by First Colonial, any
FCBC Subsidiaries or any Representatives (as defined therein) of First
Colonial, or if any person makes any offer or other proposal concerning a
Competing Transaction (as defined in Section 5.02(f)); such notice shall
include the name of any person other than First Colonial, a FCBC Subsidiary and
their Representatives involved in such matter and, after receipt of any written
offer or proposal from such person, a copy of any written offers, proposals,
agreements or other documents with respect to such offer or proposal; as of the
date of this Agreement, First Colonial hereby represents and warrants that
neither it nor any FCBC Subsidiary, nor any of its or their Representatives,
are, directly or indirectly, soliciting, initiating or engaged in any
discussions or other negotiations with, or providing any information to, any
third party concerning any possible proposal regarding a Competing Transaction.
5.02. Negative Covenants. Except as specifically
contemplated by this Agreement, from the date hereof until the Effective Time,
First Colonial shall not do, or permit any of its Subsidiaries to do, without
the prior written consent of Firstar (which consent shall not be unreasonably
withheld) any of the following:
(a) incur any material liabilities or material
obligations, whether directly or by way of guaranty, including any obligation
for borrowed money whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business consistent with
past practice;
(b)(i) grant any general increase in compensation to its
employees as a class, or to its officers or directors, except in accordance
with past practice or as required by law, or increases which are not material,
(ii) effect any change in retirement benefits to any class of employees or
officers (unless any such change shall be required by applicable law) which
would increase its retirement benefit liabilities, (iii) adopt, enter into,
amend or modify any FCBC Benefit Plan (except as may be required by applicable
law), make any adjustments pursuant to Section 4(g) of the FCBC 1988 Stock Plan
or Section IX.F. of the FCBC 1981 Stock Plan or similar sections of the William
Stock Plan or the Mary Stock Plan or make any grants pursuant to such Stock
Plans or (iv) enter into or amend any employment, severance or similar
agreements or arrangements with any directors or officers, except as expressly
permitted hereunder or under the letter contemplated by Section 6.11;
(c)(i) declare or pay any dividend on, or make any other
distribution in respect of, its outstanding shares of capital stock, except for
(A) regular quarterly cash dividends on the FCBC Class A Common Stock at a rate
not in excess of $.15 per share, regular quarterly cash dividends on the FCBC
Class B Common Stock at a rate not in excess of $.125 per share and regularly
quarterly cash dividends on the FCBC Series C Preference Stock as required by
the FCBC Certificate, in each case with usual record and payment dates for such
dividends and (B) dividends by a wholly-owned Subsidiary of First Colonial;
provided, however, that First Colonial shall be entitled to increase the rate
of regular quarterly cash dividends on the FCBC Class A Common Stock and on the
FCBC Class B Common Stock, effective with the fourth regular quarterly cash
dividend payable after the increase in the dividend rate effected in 1994, so
long as the rate of increase does not exceed the rate of increase effected in
1994 with respect to FCBC Class A Common Stock and the FCBC Class B Common
Stock, respectively;
(ii) except as hereinbelow provided, declare or pay any
dividends or make any distributions in any amount on FCBC Common Stock in the
quarter in which the Effective Time shall occur and in which the stockholders
of FCBC Common Stock are entitled to receive dividends on the shares of Firstar
Common Stock into which the shares of FCBC Common Stock have been converted; it
is the intent of this clause (ii) to provide that the holders of FCBC Common
Stock will receive either
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the payment of cash dividends on their shares of FCBC Common Stock or the
payment of cash dividends as the holders of shares of Firstar Common Stock
received in exchange for the shares of FCBC Common Stock for the calendar
quarter during which the Effective Time shall occur, but will not receive and
will not become entitled to receive for the same calendar quarter both the
payment of a cash dividend as shareholders of FCBC Common Stock and the payment
of a cash dividend as the holders of the shares of Firstar Common Stock
received in exchange for the shares of FCBC Common Stock; and if First Colonial
does not declare and pay cash dividends in a particular calendar quarter
because of First Colonial's reasonable expectation that the Effective Time was
to have occurred in such calendar quarter wherein the holders of FCBC Common
Stock would have become entitled to receive cash dividends for such calendar
quarter on the shares of Firstar Common Stock to have been exchanged for the
shares of FCBC Common Stock, and the Effective Time does not in fact occur in
such calendar quarter, then, as a result thereof, First Colonial shall be
entitled to declare and pay a cash dividend (within the limitations of this
Section 5.02) on such shares of FCBC Common Stock for such calendar quarter by
the declaration and payment of such cash dividends as soon as reasonably
practicable;
(d)(i) except as provided in Section 5.06, redeem, purchase
or otherwise acquire any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock, or any options, warrants, conversion or other rights to acquire any
shares of its capital stock or any such securities or obligations, other than
conversions at the option of the holder of FCBC Series C Preference Stock or
shares of FCBC Class B Common Stock in accordance with the FCBC Certificate;
(ii) merge with or into any other corporation or bank, permit any other
corporation or bank to merge into it or consolidate with any other corporation
or bank, or effect any reorganization or recapitalization; (iii) purchase or
otherwise acquire any substantial portion of the assets, or more than 5% of any
class of stock, of any corporation, bank or other business; (iv) liquidate,
sell, dispose of, or encumber any assets or acquire any assets, other than in
the ordinary course of its business consistent with past practice; or (v)
split, combine or reclassify any of its capital stock or issue or authorize or
propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;
(e) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares of its
capital stock of any class (including shares held in treasury), any Voting Debt
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, Voting Debt or convertible securities, other than (i)
the issuance of FCBC Class A Common Stock upon the conversion of FCBC Series C
Preference Stock or FCBC Class B Common Stock or pursuant to the FCBC 1981
Stock Plan, the FCBC 1981 Stock Plan, the William Stock Plan or the Mary Stock
Plan, in each case in accordance with their present terms, (ii) issuances of
FCBC Class B Common Stock pursuant to the Mandatory Stock Purchase Agreements
in accordance with their present terms, and (iii) issuances by a wholly-owned
Subsidiary of its capital stock to its parent;
(f) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal which constitutes, or may
reasonably be expected to lead to, any Competing Transaction (as such term is
defined below), or negotiate with any person in furtherance of such inquiries
or to obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of its officers, directors or employees
or any investment banker, financial advisor (including the firm named in
Section 3.17), attorney, accountant or other representative retained by it or
any of the FCBC Subsidiaries ("Representatives") to take any such action,
provided, however, that nothing contained in this subsection (f) shall prohibit
the Board of Directors of First Colonial from (1) taking any such action or
permitting any of its Representatives to take any such action if (i) the Board
of Directors of First Colonial is
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required to take such action to comply with its fiduciary duties to
stockholders imposed by law and such Board of Directors receives an opinion of
counsel confirming such requirement prior to taking or permitting the action
and (ii) prior to furnishing any information to any person, First Colonial
receives from the person an executed confidentiality agreement in reasonably
customary form or (2) complying with Rules 14d-2 and 14e-2 promulgated under
the Exchange Act with regard to a Competing Transaction; for purposes of this
Agreement, "Competing Transaction" shall mean any of the following involving
First Colonial or any of the FCBC Subsidiaries: any merger, consolidation,
share exchange or other business combination; a sale, lease, exchange,
mortgage, pledge, transfer or other disposition of a substantial portion of
assets; a sale of shares of capital stock (or securities convertible or
exchangeable into or otherwise evidencing, or any agreement or instrument
evidencing, the right to acquire capital stock); a tender offer or exchange
offer for at least 10% of the outstanding shares of FCBC Class A Common Stock,
FCBC Class B Common Stock or FCBC Series C Preference Stock; a solicitation of
proxies in opposition to approval of the Merger by First Colonial's
stockholders; or a public announcement of a bona fide proposal, plan or
intention to do any of the foregoing;
(g) propose or adopt any amendments to its corporate
charter or by-laws in any way adverse to Firstar;
(h) authorize, recommend, propose or announce an
intention to authorize, recommend or propose, or enter into an agreement in
principle with respect to any acquisition of a material amount of assets or
securities or any release or relinquishment of any material contract rights not
in the ordinary course of business;
(i) except in their fiduciary capacities, purchase any
shares of Firstar Common Stock;
(j) change any of its methods of accounting in effect at
December 31, 1993, or change any of its methods of reporting income or
deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year ending
December 31, 1993, except as may be required by law or generally accepted
accounting principles;
(k) take action which would or is reasonably likely to
(i) adversely affect the ability of either of Firstar or First Colonial to
obtain any necessary approvals of governmental authorities required for the
transactions contemplated hereby; (ii) adversely affect First Colonial's
ability to perform its covenants and agreements under this Agreement; or (iii)
result in any of the conditions to the Merger set forth in Article VIII not
being satisfied or in a violation of any provision of the agreements
contemplated by Section 5.15;
(l) change the lending, investment, liability management
and other material policies concerning the banking business of First Colonial
and the FCBC Subsidiaries, unless required by Law or order or unless such
change does not cause a FCBC Material Adverse Effect; or
(m) agree in writing or otherwise to do any of the
foregoing.
5.03. Letter of First Colonial's Accountants. At the
request of Firstar, First Colonial shall use its best efforts to cause to be
delivered to Firstar "cold comfort" letters of KPMG Peat Marwick, First
Colonial's independent public accountants, dated the date on which the S-4
shall become effective and the Effective Time, respectively, and addressed to
Firstar, reasonably customary in form, scope and substance for letters
delivered by independent public accountants in connection with registration
statements similar to the S-4 and transactions such as those contemplated by
the Merger Agreements.
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5.04. Access and Information. (a) Upon reasonable notice,
First Colonial shall (and shall cause its Subsidiaries to) afford to Firstar's
officers, employees, accountants, counsel and other representatives, access,
during normal business hours during the period prior to the Effective Time, to
all its properties, books, contracts, commitments and records. During such
period, First Colonial will cause one or more of its representatives to confer
on a regular and frequent basis with representatives of Firstar, to report on
the general status of its ongoing operations and to consult as to the making of
any decisions or the taking of any actions in matters other than in the
ordinary course of business. During such period, First Colonial shall (and
shall cause each of its Subsidiaries to) furnish promptly to Firstar (i) a copy
of each FCBC Report filed or received by it during such period pursuant to the
requirements of federal securities laws, the BHC Act and any other federal or
state banking laws promptly after such documents are available, (ii) the
monthly financial statements of First Colonial and the FCBC Subsidiaries (as
prepared by First Colonial in accordance with its normal accounting procedures)
promptly after such financial statements are available, (iii) a summary of any
action taken by the Board of Directors, or any committee thereof, of First
Colonial, (iv) the reports of management of First Colonial and each of the
Subsidiaries of First Colonial customarily provided to their respective Boards
of Directors, and (v) all other information concerning its business, properties
and personnel as Firstar may reasonably request.
(b) From the date hereof through the Effective Time,
First Colonial shall (and shall cause its Subsidiaries to) inform Firstar of
the date, time and location of each meeting of each of the Boards of Directors
of First Colonial and the FCBC Subsidiaries and each meeting of the senior
credit committee or similar committee of First Colonial and each of the FCBC
Subsidiaries and permit Firstar to have at least two representatives of Firstar
attend the regular business portion of such meetings. Firstar's
representatives shall not participate in such meetings other than as observers,
shall not be entitled to vote and shall not be counted as an attendee for
purposes of determining the existence of a quorum, but First Colonial shall
insure that such representatives receive all information given by First
Colonial, any FCBC Subsidiary or their respective agents to the members of such
Boards of Directors or committees.
5.05. Update Disclosure; Breaches.
(a) From and after the date hereof until the Effective
Time, First Colonial shall update the FCBC Disclosure Letter on a monthly basis
by notice to Firstar to reflect any matters which have occurred from and after
the date hereof which, if existing on the date hereof, would have been required
to be described therein; provided, however, that no such update shall affect
the conditions to the obligation of Firstar and Sub to consummate the
transactions contemplated hereby, and any and all changes contained in any such
update shall be considered in determining whether such conditions have been
satisfied.
(b) First Colonial shall, in the event it becomes aware
of the impending or threatened occurrence of any event or condition which would
cause or constitute a material breach of any of its representations or
agreements contained or referred to herein, which has a FCBC Material Adverse
Effect or which would cause any of the conditions to the obligations of any
party set forth in Article VIII not to be satisfied, give prompt written notice
thereof to Firstar and use its best efforts to prevent or promptly remedy the
same.
5.06. Affiliates; Accounting and Tax Treatment; Stock
Repurchases. Within 15 days after the date of this Agreement, (a) First
Colonial shall deliver to Firstar a listing of the persons who are then
"Affiliates" of First Colonial for purposes of Rule 145 under the Securities
Act, which shall constitute a representation and warranty of First Colonial to
that effect, (b) First Colonial shall advise the
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persons identified in such listing of the resale restrictions imposed by
applicable securities laws and (c) FCBC shall use its best efforts to obtain
from each such person a written agreement, substantially in the form attached
as Exhibit 5.06 hereto. First Colonial shall cause any person who becomes an
affiliate of First Colonial after the date hereof, and on or prior to the
Closing Date, to deliver to Firstar a written agreement substantially in the
form attached as Exhibit 5.06 hereto as soon as practicable after attaining
such status and advise such person of the restrictions imposed by applicable
securities laws upon the resale of Firstar Common Stock and Firstar Preferred
Stock delivered pursuant to the Merger. First Colonial will use its best
efforts to cause the Merger to qualify (i) for pooling-of-interests accounting
treatment and (ii) as a reorganization under Section 368(a)(1)(A) of the Code.
Prior to the Closing, First Colonial shall use its best efforts to repurchase
FCBC Common Stock in amounts sufficient to satisfy reasonably anticipated
future issuances of shares of FCBC Common Stock prior to the Effective Time
upon the conversion of FCBC Series C Preference Stock, upon the exercise of
FCBC Stock Options or pursuant to the Mandatory Stock Purchase Agreements,
which repurchases will be made, and First Colonial shall be required to make
such repurchases only to the extent that they are made, (a) in compliance with
applicable law, (b) in a manner that will not adversely affect the ability of
the Merger to qualify for such accounting and tax treatment and (c) in a manner
that will not result in First Colonial having "tainted" stock for purposes of
pooling-of-interests accounting treatment in connection with the Merger. As
soon as practicable after the date hereof, First Colonial shall use its best
efforts to obtain any consents necessary to enable it to make such repurchases
of FCBC Common Stock.
5.07. Dissent Process. First Colonial will give to Firstar
prompt notice of its receipt of any written notice relating to the exercise of
dissenters' rights granted under Section 262 of the DGCL including the name of
the dissenting stockholder and the number of shares of FCBC Class B Common
Stock or (if dissenters' rights are available for FCBC Series C Preference
Stock) FCBC Series C Preference Stock to which the dissent relates. Firstar
will have the right to participate in all negotiations and proceedings with
First Colonial stockholders relating to any such notice or the exercise of such
rights, and except as required by law, First Colonial will not make any payment
with respect to, or settle or offer to settle, any dissent demands without the
prior written consent of Firstar.
5.08. Expenses.
(a) First Colonial hereby agrees that (x) if this
Agreement or the transactions contemplated hereby are terminated, other than
pursuant to (A) a termination by First Colonial pursuant to Section
10.01(a)(ii) or Section 10.01(a)(vi), (B) a termination by either party
pursuant to Section 10.01(a)(iii) or Section 10.01(a)(iv), (C) a termination by
mutual consent pursuant to Section 10.01(a)(i), (D) a termination by Firstar
pursuant to Section 10.02 or (E) a termination pursuant to Section 10.01(a)(v)
in which (i) the denial has been issued by the Board of Governors of the
Federal Reserve System or the Illinois Commissioner, (ii) the reasons for such
denial do not include a reason attributable to or relating to actions taken by
First Colonial or any of its Subsidiaries, or attributable to the business or
operations of First Colonial or any of its Subsidiaries, and (iii) at the time
of such termination, a Competing Transaction shall not have occurred, or (y) if
this Agreement or the transactions contemplated hereby are terminated and a
Trigger Event (as defined below) has occurred, then First Colonial shall
promptly (and in any event within two days after such termination) pay Firstar
all Expenses (as defined below) of Firstar, but not to exceed $2.0 million.
(b) "Expenses" as used in this Agreement shall include
all reasonable out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to the party
and its affiliates) incurred by it or on its behalf in connection with the
consummation of the transactions contemplated by this Agreement.
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(c) Except as otherwise provided herein, all Expenses
incurred by Firstar (or Sub) and First Colonial in connection with or related
to the authorization, preparation and execution of this Agreement and the Plan
of Merger, the solicitation of stockholder approval and all other matters
related to the closing of the transactions contemplated hereby, including,
without limitation of the generality of the foregoing, all fees and expenses of
agents, representatives, counsel and accountants employed by either such party
or its affiliates, shall be borne solely and entirely by the party which has
incurred the same, except that the parties shall share equally in the expense
of printing the S-4 and Proxy Statement and the expense of all SEC and other
regulatory filing fees incurred in connection herewith.
5.09. Delivery of Stockholder List. First Colonial shall
arrange to have its transfer agent deliver to Firstar or its designee,
immediately prior to the Closing Date, a true and complete list setting forth
the names and addresses of the First Colonial stockholders (including holders
of FCBC Receipts). From time to time prior to the Closing Date, First Colonial
shall deliver to Firstar such information as Firstar may request regarding the
holdings of stock of persons who may be affiliates of First Colonial and such
other stockholder information as Firstar may reasonably request.
5.10. Audited Financial Statements. First Colonial shall
use reasonable efforts to cause its independent public accountants to deliver
to Firstar, by January 31, 1995, an audited consolidated financial report of
First Colonial as of and for the period ended December 31, 1994, and to make
available to Firstar and its independent public accountants for their review
the working papers of First Colonial's independent public accountants prepared
in connection with such audit prior to and after January 31, 1995.
5.11. Bank-Level Transactions. First Colonial will, and
will cause FCBC Subsidiaries to, cooperate with Firstar and Sub in the
preparation by Firstar or Sub of applications to the Federal Reserve Board, the
Comptroller, the Illinois Commissioner and other appropriate regulatory
authorities to effect, contingent on and as soon as reasonably practicable
after consummation of the Merger, the transfer of certain FCBC Subsidiary
assets and liabilities to and/or the merger of FCBC Subsidiaries with one or
more Subsidiaries of Firstar or Sub; provided, however, that Firstar shall bear
any Expenses incurred by First Colonial and the FCBC Subsidiaries pursuant to
this Section 5.11.
5.12. Sale of Certain Assets. From time to time prior to
the Effective Time, upon the reasonable request of Firstar, First Colonial
shall cause its Subsidiaries to sell such financial instruments as Firstar may
identify.
5.13. Allowance for Loan Losses. Immediately prior to the
Effective Time, and contingent upon the Effective Time, First Colonial's
consolidated allowance for loan losses after all anticipated loan losses have
been charged off shall not be less than an amount requested by Firstar.
5.14. Stockholder Meeting. (a) First Colonial shall call a
meeting of its stockholders to be held as promptly as practicable for the
purpose of voting upon the Merger Agreements and related matters and deliver
notice of such meeting, as part of the Proxy Statement, to First Colonial
stockholders (including holders of FCBC Receipts) in accordance with applicable
law, the FCBC Certificate and the FCBC Deposit Agreement. First Colonial shall
coordinate and cooperate with Firstar with respect to the timing of such
meeting and shall use its best efforts to hold such meeting as soon as
practicable after the date hereof, but in no event later than the latest of (i)
December 1, 1994, (ii) thirty-five days after the S-4 becomes effective under
the Securities Act and (iii) thirty-five days after Firstar's rights to
terminate this Agreement under Section 10.03 have terminated. First Colonial
shall not, at such stockholders'
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meeting, submit any other matter for approval of its stockholders (except with
the prior written consent of Firstar).
(b) First Colonial will, through its Board of Directors,
(i) unanimously recommend to its stockholders approval of such matters, (ii)
not withdraw, modify or amend such recommendations, and (iii) use its best
efforts to obtain such stockholder approval; provided, however, that nothing
contained in this sentence shall prohibit the Board of Directors of First
Colonial from failing to recommend such approval or withdrawing, modifying or
amending its recommendation if (A) the Board of Directors of First Colonial is
required to take such action to comply with its fiduciary duties to
stockholders imposed by law as a result of the receipt of such Board of
Directors of a bona fide proposal from a third party not affiliated with First
Colonial to acquire control of First Colonial or substantially all of the
assets of First Colonial (whether by means of a tender offer, exchange offer,
merger, sale of assets or other transaction) after the date hereof (a
"Competing Proposal"), (B) the Board of Directors of First Colonial obtains an
opinion of counsel confirming such requirement prior to taking such action, and
(C) the Board of Directors of First Colonial takes such action as is necessary
to allow the stockholders of First Colonial to vote upon the Merger Agreements
in accordance with the DGCL.
5.15. Certain Agreements. Within 15 days after the date of
this Agreement, First Colonial shall cause each of the holders of Subordinated
Notes and obligors under the Mandatory Stock Purchase Agreements to duly
execute and deliver to Firstar a written agreement with First Colonial and
Firstar in the form attached hereto as Exhibit 5.15 pursuant to which, as of
the Effective Time, each of the then outstanding Mandatory Stock Purchase
Agreements shall thereafter represent the right and obligation to purchase
shares of Firstar Common Stock rather than shares of FCBC Class B Common Stock
and Firstar will assume the obligations of First Colonial under the then
outstanding Subordinated Notes.
5.16. Environmental Matters.
(a) Phase I. Firstar shall engage a mutually acceptable
environmental consultant to conduct a preliminary ("Phase I") environmental
assessment of customary scope of each of the parcels of FCBC Property, other
than residential real property. Firstar and First Colonial will use reasonable
efforts to agree upon the consultant within five business days after the date
hereof, and Firstar will engage such consultant as soon as practicable after
such agreement. The fees and expenses of the consultant with respect to the
Phase I assessments shall be shared equally by Firstar and First Colonial. The
consultant shall complete and deliver the Phase I assessments not later than 55
days after the date the consultant for the Phase I assessments is chosen. If
any environmental conditions are found, suspected, or would tend to be
indicated by the report of the consultant which, if known by First Colonial to
be existing on the date hereof, may be contrary to the representations and
warranties set forth in Section 3.08(b), then the parties shall obtain from one
or more mutually acceptable consultants or contractors, as appropriate,
recommendations as to any further environmental investigation, sampling,
analysis, remediation, or other follow-up work that may be necessary to address
those conditions in a manner sufficient to obtain a "no further action letter"
or similar letter from state environmental authorities and estimates of the
cost thereof.
(b) Mutual Agreement. Upon receipt of the estimates of
the costs of all follow-up work to the Phase I assessments or any subsequent
investigation phases that may be conducted, the parties shall attempt to agree
upon a course of action for further investigation and remediation of any
environmental condition suspected, found to exist, or that would tend to be
indicated by the report of the consultant. All work plans for any post-Phase I
assessments or remediation, and any removal or
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remediation actions that may be performed, shall be mutually satisfactory to
Firstar and First Colonial, except that (i) Firstar shall be entitled to cause
to be performed such "Phase II" assessments as Firstar shall reasonably
request, in each case having a scope reasonable under the circumstances, taking
into account among other things the recommendations set forth in the Phase I
assessments and (ii) First Colonial shall bear the costs of any measures taken
under this Section 5.16 other than as provided in subsection (a). Firstar and
First Colonial shall thereafter cooperate in the review, approval, and
implementation of all work plans. If the work plans or removal or remediation
actions with respect to all FCBC Property would entail an aggregate cost to
complete that would be reasonably likely to exceed $3,000,000 in the aggregate,
Firstar and First Colonial shall discuss a mutually acceptable modification to
this Agreement under the standards of fair dealing and objective good faith.
(c) Termination Right. If (i) the parties are unable to
agree upon a course of action for further investigation and remediation of all
environmental conditions and/or issues raised by environmental assessments with
respect to all FCBC Property and/or a mutually acceptable modification of this
Agreement within 85 days after the consultant for the Phase I assessments is
chosen and (ii) the conditions and/or issues are not such that it can be
determined to a reasonable degree of certainty within such 85-day period, based
upon information then available to Firstar and First Colonial, that the risk
and expense to which Firstar and its subsidiaries would be subject as the owner
and/or operator of the FCBC Property involved can be quantified and limited to
an amount that would not be reasonably likely to exceed $3,000,000 in the
aggregate (including costs incurred by First Colonial or any FCBC Subsidiary
prior to the Effective Time), then Firstar may terminate this Agreement
pursuant to Section 10.02.
(d) Cooperation. The specified time limitations on the
rights of Firstar under this Section 5.16 and under Section 10.02 shall be
conditioned upon the prompt and full cooperation of First Colonial and its
representatives in connection with the matters herein involving the choice of
mutually acceptable environmental consultants or contractors.
(e) Other Action. During the period prior to the
Effective Time, First Colonial shall cause each FCBC Subsidiary that proposes
to acquire ownership or possession of any real property, through foreclosure or
repossession or otherwise, to conduct a Phase I environmental assessment of
such real property and any further environmental investigation, sampling or
analysis reasonably required to ensure that such FCBC Subsidiary shall not
acquire ownership or possession of any real property that is reasonably likely
to cause the FCBC Subsidiary to be subject to or incur any liabilities,
damages, penalties or removal, remediation or other costs as a result of its
ownership or control of the property that will exceed the value of the
property.
ARTICLE VI
COVENANTS OF FIRSTAR AND SUB
6.01. Affirmative Covenants. Firstar hereby covenants and
agrees with First Colonial that prior to the Effective Time, unless the prior
written consent of First Colonial shall have been obtained (which consent shall
not be unreasonably withheld) and except as otherwise contemplated herein, it
will:
(a) maintain its corporate existence in good standing and
maintain all books and records in accordance with accounting principles and
practices as utilized in the Firstar Financial Statements applied on a
consistent basis, except as may be required to implement changes in generally
accepted accounting principles; and
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(b) conduct its business in a manner that does not
violate any Law, except for possible violations which individually or in the
aggregate do not, and, insofar as reasonably can be foreseen, in the future
will not, have a Firstar Material Adverse Effect.
6.02. Negative Covenants. Except as specifically
contemplated by this Agreement, from the date hereof until the Effective Time,
Firstar shall not do, or agree or commit to do, or permit any of its
Subsidiaries to do, without the prior written consent of First Colonial (which
shall not be unreasonably withheld) any of the following:
(a) propose or adopt any amendments to its corporate
charter or by-laws in any way adverse to First Colonial; provided, however,
that any amendment to the bylaws of Firstar to increase the size of its Board
of Directors shall not be deemed adverse to First Colonial and any amendment to
the Restated Articles of Incorporation of Firstar effected solely by action of
the Board of Directors of Firstar shall not be deemed adverse to First
Colonial;
(b) take action which would or is reasonably likely to
(i) adversely affect the ability of either of Firstar or First Colonial to
obtain any necessary approvals of governmental authorities required for the
transactions contemplated hereby; (ii) adversely affect Firstar's ability to
perform its covenants and agreements under this Agreement; or (iii) result in
any of the conditions to the Merger set forth in Article VIII not being
satisfied; or
(c) agree in writing or otherwise to do any of the
foregoing.
6.03. Rights Plan. Nothing herein shall be deemed to
prohibit Firstar from (a) redeeming the Rights or (b) if the Rights are so
redeemed, entering into a new rights agreement similar to the Rights Agreement
which shall take effect immediately following the Effective Time.
6.04. Access and Information. For no more than fifteen
days in total after the date hereof and prior to the Closing Date, upon
reasonable notice, Firstar shall (and shall cause each of its respective
Subsidiaries to) afford to the officers, employees, accountants, counsel and
other representatives of First Colonial, access, during normal business hours
to all its properties, books, contracts, commitments and records. During the
period prior to the Effective Time, Firstar shall (and shall cause each of its
respective Subsidiaries to) furnish promptly to First Colonial (i) a copy of
each Firstar Report filed by it during such period pursuant to the requirements
of federal securities laws promptly after such documents are available and (ii)
all other information concerning its business, properties and personnel as
First Colonial may reasonably request.
6.05. Breaches. Firstar shall, in the event it becomes
aware of the impending or threatened occurrence of any event or condition which
would cause or constitute a material breach (or would have caused or
constituted a breach had such event occurred or been known prior to the date
hereof) of any of its representations or agreements contained or referred to
herein, which has a Firstar Material Adverse Effect or which would cause any of
the conditions to the obligations of any party set forth in Article VIII not to
be satisfied, give prompt written notice thereof to First Colonial and use its
best efforts to prevent or promptly remedy the same.
6.06. Stock Exchange Listing. Firstar shall use its best
efforts to cause the shares of Firstar Common Stock to be issued in the Merger,
pursuant to the Firstar Stock Options and under the Mandatory Stock Purchase
Agreements to be approved for listing on the New York Stock Exchange ("NYSE"),
subject to official notice of issuance, prior to the Closing Date. Firstar
shall use all
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reasonable efforts to cause the Firstar Receipts to be approved, prior to the
mailing of the Proxy Statement, for listing on the Nasdaq National Market or a
national securities exchange (within the meaning of Section 262(b)(1) of the
DGCL), subject to official notice of issuance.
6.07. Firstar Board. Promptly after the Effective Time,
Firstar shall cause the number of directors on its Board of Directors to be
increased by one and the vacancy thus created to be filled by the election of
C. Paul Johnson.
6.08. Indemnification.
(a) From and after the Effective Time, Firstar shall
indemnify, defend and hold harmless each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Effective Time, an
officer or director of First Colonial or any of the FCBC Subsidiaries (the
"Indemnified Parties") against (i) all losses, claims, damages, costs,
expenses, liabilities or judgments or amounts that are paid in settlement with
the approval of the indemnifying party (which approval shall not be
unreasonably withheld) of or in connection with any claim, action, suit,
proceeding or investigation based in whole or in part on or arising in whole or
in part out of the fact that such person is or was a director or officer of
First Colonial or any FCBC Subsidiary, whether pertaining to any matter
existing or occurring at or prior to the Effective Time and whether asserted or
claimed prior to, or at or after, the Effective Time ("Indemnified
Liabilities") and (ii) all Indemnified Liabilities based in whole or in part
on, or arising in whole or in part out of, or pertaining to this Agreement or
the transactions contemplated hereby, in each case to the full extent a
corporation is permitted under the DGCL to indemnify its own directors and
officers, as the case may be (and Firstar will pay expenses in advance of the
final disposition of any such action or proceeding to each Indemnified Party to
the full extent permitted by law upon receipt of any undertaking contemplated
by Section 8.05(a) of the Bylaws of Firstar). Without limiting the foregoing,
in the event any such claim, action, suit, proceeding or investigation is
brought against any Indemnified Party (whether arising before or after the
Effective Time), (i) the Indemnified Parties may retain counsel satisfactory to
them and Firstar; (ii) after the Effective Time, Firstar shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received; and (iii) after the Effective
Time, Firstar will use all reasonable efforts to assist in the vigorous defense
of any such matter, provided that Firstar shall not be liable for any
settlement of any claim effected without its written consent, which consent
shall not be unreasonably withheld. Any Indemnified Party wishing to claim
indemnification under this Section 6.08, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify Firstar (but the
failure so to notify Firstar shall not relieve it from any liability which it
may have under this Section 6.08 except to the extent such failure prejudices
such party), and shall deliver to Firstar the undertaking contemplated by
Section 8.05(a) of the Bylaws of Firstar. The Indemnified Parties as a group
may retain only one law firm to represent them with respect to each such matter
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Parties.
(b) Notwithstanding subsection (a) of this Section 6.08,
Firstar shall ensure that all rights to indemnification and all limitations of
liability existing in favor of the Indemnified Parties and employees of First
Colonial and each FCBC Subsidiary as provided in First Colonial's Certificate
of Incorporation and By-laws or similar governing documents of any of its
Subsidiaries, as in effect as of the date hereof, with respect to claims or
liabilities arising from facts or events existing or occurring prior to the
Effective Time, shall survive the Merger and shall continue in full force and
effect, without any amendment to such rights, for a period of five (5) years
from the Effective Time; provided, however, that all rights to indemnification
in respect of any claim asserted or made within such period shall continue
until the final disposition of such claim. From and after the Effective Time,
Firstar will
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maintain or cause Sub to maintain First Colonial's current insurance policy for
directors' and officers' liabilities or an equivalent policy having terms and
conditions no less favorable than those in effect on the date of this Agreement
for all present and former directors and officers of First Colonial who are
covered by such current insurance policy; provided, however, that Firstar's
obligation under this subsection (b) shall be completely satisfied at such time
as Firstar and/or Sub shall have satisfied either of the following conditions:
(i) Firstar or Sub shall have maintained an insurance policy in accordance with
this subsection for a period of three years from and after the Effective Time
or (ii) Firstar and Sub shall have incurred aggregate costs to maintain
insurance in accordance with this subsection equal to $250,000.
(c) The provisions of this Section 6.08 are intended to
be for the benefit of, and shall be enforceable by, each Indemnified Party and
his or her heirs and representatives.
6.09. Accounting and Tax Treatment. Firstar and Sub will
use their best efforts to cause the Merger to qualify (i) for
pooling-of-interests accounting treatment and (ii) as a reorganization under
Section 368(a)(1)(A) of the Code.
6.10. Regulatory Filings. Firstar will (a) proceed as
expeditiously as possible to prepare any and all necessary regulatory
applications, notices and requests for waivers for submission to the Federal
Reserve Board, the Illinois Commissioner and any other regulatory agency to
obtain such approvals as may be necessary to facilitate the Merger, (b) no
later than sixty (60) days from the date hereof, submit for filing all such
applications, notices or requests for waivers and (c) provide First Colonial
and its counsel with an opportunity to review the portions of drafts of all
such applications that contain information regarding First Colonial and all
nonconfidential portions and to comment on such portions. The obligation of
Firstar to submit applications, notices or requests referred to in this Section
6.10 within the specified time limit shall be conditioned upon the prompt and
full cooperation of First Colonial and its representatives in providing
information with regard to First Colonial and the FCBC Subsidiaries required
therein and in commenting upon the drafts provided First Colonial and its
counsel. Firstar will provide First Colonial and its counsel with copies of
the public portions of all such applications as filed, together with
nonconfidential portions of correspondence to or from the Federal Reserve Board
and Illinois Commissioner with respect thereto.
6.11. Employee Benefits. Effective as of and after the
Effective Time, Firstar will comply with its agreements to provide employee
benefits set forth in the letter of even date herewith between Jon H. Stowe and
C. Paul Johnson.
6.12. Form S-8 Registration Statement for Firstar Stock
Options. On or prior to the Effective Time, Firstar shall cause to be prepared
and filed with the SEC, and to have become effective, a Registration Statement
on Form S-8 relating to the shares of Firstar Common Stock that may be issued
under the Firstar Stock Options after the Effective Time.
6.13. Post-Merger Financial Statements. Not later than 150
days after the Effective Date, Firstar will publish financial results covering
at least 30 days of combined operations of the parties to the Merger within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies.
6.14. Notice of Anticipated Breach or Failure of Condition.
Firstar shall, in the event it becomes aware of any event or condition which
would cause or constitute a material breach of any of First Colonial's
representations or agreements contained or referred to herein, or which would
cause any
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of the conditions to the obligations of Firstar set forth in Article VIII not
to be satisfied, use its best efforts to give prompt written notice thereof to
First Colonial; provided, however, that the rights and obligations of Firstar
and First Colonial hereunder shall not be affected by Firstar's failure to give
such notice or delay in giving such notice.
6.15 Expenses. Firstar agrees that if this Agreement or
the transactions contemplated hereby are terminated by First Colonial pursuant
to Section 10.01(a)(ii), Firstar shall promptly (and in any event within two
days after such termination) pay First Colonial all Expenses of First Colonial,
but not to exceed $2.0 million.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.01. Preparation of S-4 and the Proxy Statement. First
Colonial shall promptly prepare and file with the SEC the Proxy Statement, and
Firstar shall promptly prepare and file with the SEC the S-4, in which the
Proxy Statement will be included as a prospectus. Each of Firstar and First
Colonial shall use its best efforts to have the S-4 declared effective under
the Securities Act as promptly as practicable after such filing. Firstar shall
also take any action (other than qualifying to do business in any jurisdiction
in which it is now not so qualified) required to be taken under any applicable
state securities laws in connection with the issuance of Firstar Common Stock
and Firstar Preferred Stock in the Merger, and First Colonial shall furnish all
information concerning First Colonial, the holders of FCBC Common Stock and the
holders of FCBC Series C Preference Stock as may be reasonably requested in
connection with any such action.
7.02. Legal Conditions to Merger. Each of First Colonial,
Firstar and Sub will take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on itself with respect to the
Merger (including furnishing all information required by the Federal Reserve
Board or in connection with approvals of or filings with any other Governmental
Entity) and will promptly cooperate with and furnish information to each other
in connection with any such requirements imposed upon any of them or any of
their Subsidiaries in connection with the Merger. Each of First Colonial,
Firstar and Sub will, and will cause its Subsidiaries to, take in a prompt
manner all reasonable actions necessary to obtain (and will cooperate with each
other in obtaining) any consent, authorization, order or approval of, or any
exemption by, any Governmental Entity or other public or private third party,
required to be obtained or made by Firstar, First Colonial or any of their
Subsidiaries in connection with the Merger or the taking of any action
contemplated thereby or by this Agreement or the Plan of Merger. The
obligation to take all reasonable actions shall not be construed as including
an obligation to accept any terms of or conditions to a consent, authorization,
order or approval of, or any exemption by, any party that (i) are not
customarily contained in approvals of similar transactions granted by such
regulators, (ii) would, as determined by Firstar in good faith, have a material
adverse effect on the business or financial condition of Firstar and its
Subsidiaries, or (iii) would, as determined by Firstar in good faith,
materially detract from the value of First Colonial and its Subsidiaries to
Firstar. In the event of a restraining order or injunction which prevents the
Closing by reason of the operation of Section 8.01(d), First Colonial, Firstar
and Sub shall use their respective best efforts to cause such order or
injunction to be lifted and the Closing consummated as soon as reasonably
practicable.
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7.03. Reports.
(a) Prior to the Effective Time, (i) First Colonial shall
prepare and file as and when required all FCBC Reports and (ii) Firstar shall
prepare and file as and when required all Firstar Reports.
(b) First Colonial and Firstar shall prepare such FCBC
Reports and Firstar Reports, respectively, such that (i) they comply in all
material respects with all of the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they are filed and do not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (ii) with respect to any FCBC Reports or Firstar Reports
containing financial information of the type included in the FCBC Financial
Statements or the Firstar Financial Statements, respectively, the financial
information (A) is prepared in accordance with generally accepted accounting
principles and practices as utilized in the FCBC Financial Statements or the
Firstar Financial Statements, as the case may be, applied on a consistent basis
(except as stated therein or in the notes thereto), (B) presents fairly the
consolidated financial condition of First Colonial or Firstar, as the case may
be, at the dates, and the consolidated results of operations and cash flows for
the periods, stated therein and (C) in the case of interim fiscal periods,
reflects all adjustments, consisting only of normal recurring items, subject to
year-end audit adjustments.
7.04. Brokers or Finders. Each of Firstar and First
Colonial represents, as to itself, its Subsidiaries and its affiliates, that no
agent, broker, investment banker, financial advisor or other firm or person is
or will be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement, except Donaldson, Lufkin & Jenrette, whose fees and expenses will be
paid by First Colonial in accordance with First Colonial's agreement with such
firm (a copy of which has been delivered by First Colonial to Firstar prior to
the date of this Agreement), and Merrill Lynch & Co., whose fees and expenses
will be paid by Firstar in accordance with Firstar's agreements with such firm,
and each of Firstar and First Colonial respectively agree to indemnify and hold
the other harmless from and against any and all claims, liabilities or
obligations with respect to any other fees, commissions or expenses asserted by
any person on the basis of any act or statement alleged to have been made by
such party or its affiliate.
7.05. Additional Agreements; Reasonable Efforts. Subject
to the terms and conditions of this Agreement, each of the parties hereto
agrees to use all reasonable efforts to take, or cause to be taken, all action
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, subject to the appropriate vote of
stockholders of First Colonial described in Section 8.01(a), including
cooperating fully with the other party.
ARTICLE VIII
CONDITIONS PRECEDENT
8.01. Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction prior to the Closing Date of the following
conditions:
(a) Corporate Approval. The Merger Agreements shall have
been approved and adopted by the requisite vote of the holders of the
outstanding shares of FCBC Common Stock.
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(b) Federal Reserve Board and Illinois Commissioner. The
Merger Agreements and the transactions contemplated hereby shall have been
approved by the Federal Reserve Board and the Illinois Commissioner with no
terms or conditions that Firstar both does not accept and is not obligated
under Section 7.02 to accept, all conditions required to be satisfied prior to
the Effective Time imposed by the terms of such approvals shall have been
satisfied and all waiting periods relating to such approvals shall have
expired.
(c) S-4; Securities Laws. The S-4 shall have become
effective under the Securities Act and shall not be the subject of any stop
order or proceedings seeking a stop order. Firstar shall have received all
state securities or "blue sky" permits and other authorizations necessary to
issue the Firstar Common Stock and Firstar Preferred Stock in exchange for the
FCBC Common Stock and FCBC Series C Preference Stock and to consummate the
Merger.
(d) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition (an
"Injunction") preventing the consummation of the Merger shall be in effect.
(e) Listing of Firstar Common Stock. The Firstar Common
Stock issuable in the Merger, pursuant to the Firstar Stock Options and under
the Mandatory Stock Purchase Agreements shall have been authorized for listing
on the New York Stock Exchange, upon official notice of issuance.
(f) Opinion of Financial Adviser. As of the date of the
mailing of the Proxy Statement, the Fairness Opinion may not be included in the
Proxy Statement because Donaldson, Lufkin & Jenrette shall have withdrawn or
modified in any material respect the Fairness Opinion due to a determination by
such firm that the Fairness Opinion was erroneous.
8.02. Conditions of Obligations of Firstar and Sub. The
obligations of Firstar and Sub to effect the Merger are subject to the
satisfaction of the following conditions unless waived in writing by Firstar
and Sub:
(a) Representations and Warranties. Each of the
representations and warranties of First Colonial set forth in this Agreement,
without giving effect to any update to the FCBC Disclosure Letter or notice to
Firstar under Section 5.05, shall be true and correct in all material respects
(except that where any statement in a representation or warranty expressly
includes a standard of materiality, such statement shall be true and correct in
all respects) as of the date of this Agreement and (except to the extent such
representations and warranties speak as of an earlier date) as of the Closing
Date as though made on and as of the Closing Date, except for changes expressly
contemplated by this Agreement, and Firstar and Sub shall have received a
certificate signed on behalf of First Colonial by the chief executive officer
and by the chief financial officer of First Colonial to such effect.
(b) Performance of Obligations of First Colonial. First
Colonial shall have performed in all material respects each of the obligations
required to be performed by it under this Agreement and the Plan of Merger at
or prior to the Closing Date, and Firstar and Sub shall have received a
certificate signed on behalf of First Colonial by the chief executive officer
and by the chief financial officer of First Colonial to such effect.
(c) Letters from FCBC Affiliates. Firstar shall have
received from each person named in the FCBC Disclosure Letter or otherwise
referred to in Section 5.06 an executed copy of an agreement substantially in
the form of Exhibit 5.06 hereto.
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(d) Tax Opinion. An opinion of Vedder, Price, Kaufman &
Kammholz, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code,
and that Firstar, Sub and First Colonial will each be a party to that
reorganization within the meaning of Section 368(b) of the Code, dated on or
about the date that is two business days prior to the date the Proxy Statement
is first mailed to stockholders of First Colonial, shall have been delivered
and shall not have been withdrawn or modified in any material respect.
(e) Consents Under Agreements. First Colonial shall have
obtained the consent or approval of each person whose consent or approval shall
be required in order to permit the succession by Sub pursuant to the Merger to
any obligation, right or interest of First Colonial or any FCBC Subsidiary
under any loan or credit agreement, note, mortgage, indenture, lease or other
agreement or instrument, except those for which failure to obtain such consents
and approvals would not, individually or in the aggregate, have a FCBC Material
Adverse Effect, whether prior to or following the consummation of the
transactions contemplated hereby.
(f) Pooling Opinions. Firstar shall have received an
opinion from KPMG Peat Marwick, as independent public accountants of Firstar,
and an opinion from KPMG Peat Marwick, as independent public accountants of
First Colonial, to the effect that the Merger qualifies for
pooling-of-interests accounting treatment if consummated in accordance with the
Merger Agreements.
(g) No Amendments to Resolutions. Neither the Board of
Directors of First Colonial nor any committee thereof shall have amended,
modified, rescinded or repealed the resolutions adopted by the Board of
Directors at a meeting duly called and held on July 31, 1994 (accurate and
complete copies of which have been provided to Firstar) and shall not have
adopted any other resolutions in connection with this Agreement and the
transactions contemplated hereby inconsistent with such resolutions.
(h) No Material Adverse Change. There shall have been no
material adverse change since the Latest Statement Date in the financial
condition, results of operations or business of First Colonial and the FCBC
Subsidiaries taken as a whole, other than any changes resulting primarily by
reason of changes in banking laws or regulations (or interpretations thereof),
changes in the general level of interest rates, changes in economic, financial
or market conditions affecting the banking industry generally in the regions in
which First Colonial and the FCBC Subsidiaries operate or changes that may
occur as a consequence of actions that First Colonial is expressly obligated to
take under this Agreement.
(i) No Proceeding or Litigation. No material action,
suit or proceeding before any court or any governmental or regulatory authority
shall be pending against Firstar, First Colonial or any affiliate, associate,
officer or director of either of them (other than litigation commenced by
Firstar or any of its affiliates so long as no order or injunction of a court
of competent jurisdiction is in effect in such litigation on the Closing Date
that does restrain, enjoin or prevent the Closing), seeking to restrain,
enjoin, prevent, change or rescind the transactions contemplated hereby or
questioning the validity or legality of any such transactions which action,
suit or proceeding Firstar reasonably determines does not involve only
frivolous claims.
(j) Accountant's Review Letters. Firstar shall have
received the letters described in Section 5.03 regarding the financial
statements of First Colonial.
(k) Opinion of Counsel. First Colonial shall have
delivered to Firstar an opinion of its counsel, Vedder, Price, Kaufman &
Kammholz, dated as of the Closing Date and in form and
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substance satisfactory to the counsel of Firstar, to the effect that: (i) First
Colonial is a corporation validly existing and in good standing under the laws
of its jurisdiction of incorporation with full corporate power and authority to
enter into this Agreement and the Plan of Merger and to consummate the
transactions contemplated thereby; (ii) all corporate proceedings on the part
of First Colonial necessary to be taken in connection with the Merger and
(except for the filing of the Articles of Merger and Certificate of Merger)
necessary to make same effective have been duly and validly taken; (iii) this
Agreement and the Plan of Merger have been duly and validly authorized,
executed and delivered on behalf of First Colonial and constitute (subject to
standard exceptions to enforceability arising from the bankruptcy laws and
rules of equity) valid and binding agreements of First Colonial; (iv) the
execution of the Articles of Merger and Certificate of Merger by First Colonial
has been duly and validly authorized; and (v) in the course of the preparation
of the S-4 and the Proxy Statement such counsel has considered the information
set forth therein in light of the matters required to be set forth therein, and
has participated in conferences with officers and representatives of First
Colonial and Firstar, including their respective counsel and independent public
accountants, during the course of which the contents of the S-4 and the Proxy
Statement and related matters were discussed. Such counsel has not
independently checked the accuracy or completeness of, or otherwise verified,
and accordingly is not passing upon, and does not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the S-4
or the Proxy Statement; and such counsel has relied as to materiality, to a
large extent, upon the judgment of officers and representative of First
Colonial and Firstar. However, as a result of such consideration and
participation, nothing has come to such counsel's attention which causes such
counsel to believe that the S-4 (other than the financial statements, financial
data, statistical data and supporting schedules included therein, and
information relating to or supplied by Firstar as to which such counsel
expresses no belief), at the time it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Proxy Statement (other than the financial statements, financial data,
statistical data and supporting schedules included therein, and information
relating to or supplied by Firstar, as to which such counsel expresses no
belief), at the time the S-4 became effective, included any untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(l) Fractional Shares; Dissenters. The aggregate of (i)
the fractional share interests in Firstar Common Stock to be paid in cash
pursuant to Section 2.02(e) of the Plan of Merger, (ii) the shares of Firstar
Common Stock that would be issuable by virtue of the Merger with respect to
shares of FCBC Class B Common Stock outstanding on the record date for the
meeting of First Colonial stockholders to consider the Merger that will not be
converted into Firstar Common Stock due, directly or indirectly, to the
exercise of dissenters' rights granted under Section 262 of the DGCL, and (iii)
the shares of Firstar Common Stock that would be issuable upon conversion of
Firstar Preferred Stock that would be issuable by virtue of the Merger with
respect to shares of FCBC Series C Preference Stock outstanding on the record
date for the meeting of First Colonial stockholders to consider the Merger that
will not be converted into Firstar Preferred Stock due, directly or indirectly,
to the exercise of such dissenters' rights (if any), shall not be more than 10%
of the maximum aggregate number of shares of Firstar Common Stock which could
be issued at the Effective Time as a result of the Merger.
(m) Allowance of Loan Losses. As of the Effective Time,
and contingent upon the Effective Time, First Colonial's consolidated allowance
for loan losses after all anticipated loan losses have been charged off shall
not be less an amount requested by Firstar.
(n) Outstanding FCBC Common Stock. As of the Closing
Date, the number of outstanding shares of FCBC Common Stock shall not be
greater than 9,994,429.
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8.03. Conditions of Obligations of First Colonial. The
obligation of First Colonial to effect the Merger is subject to the
satisfaction of the following conditions unless waived in writing by First
Colonial:
(a) Representations and Warranties. Each of the
representations and warranties of Firstar and Sub set forth in this Agreement,
without giving effect to any notice to First Colonial pursuant to Section 6.05,
shall be true and correct in all material respects (except that where any
statement in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct in all respects) as of
the date of this Agreement and (except to the extent such representations speak
as of an earlier date) as of the Closing Date as though made on and as of the
Closing Date, except for changes expressly contemplated by this Agreement, and
First Colonial shall have received a certificate signed on behalf of Firstar by
the Chief Executive Officer and by the chief financial officer of Firstar to
such effect.
(b) Performance of Obligations of Firstar and Sub.
Firstar and Sub shall have performed in all material respects each of the
obligations required to be performed by them under this Agreement and the Plan
of Merger at or prior to the Closing Date, and First Colonial shall have
received a certificate signed on behalf of Firstar by the Chief Executive
Officer and by the chief financial officer of Firstar to such effect.
(c) Tax Opinion. An opinion of Vedder, Price, Kaufman &
Kammholz, to the effect that the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of the Code,
and that Firstar, Sub and First Colonial will each be a party to that
reorganization within the meaning of Section 368(b) of the Code, dated on or
about the date that is two business days prior to the date the Proxy Statement
is first mailed to stockholders of First Colonial, shall have been delivered
and shall not have been withdrawn or modified in any material respect.
(d) Consents Under Agreements. Firstar shall have
obtained the consent or approval of each person whose consent or approval shall
be required in connection with the transactions contemplated hereby under any
loan or credit agreement, note, mortgage, indenture, lease or other agreement
or instrument, except those for which failure to obtain such consents and
approvals would not, in the reasonable opinion of First Colonial, individually
or in the aggregate, have a Firstar Material Adverse Effect or upon the
consummation of the transactions contemplated hereby.
(e) No Amendments to Resolutions. Neither the Board of
Directors of Firstar nor any committee thereof shall have amended, modified,
rescinded or repealed the resolutions adopted by the Board of Directors of
Firstar at a meeting duly called and held on July 29, 1994 (accurate and
complete copies of which have been provided to First Colonial) and shall not
have adopted any other resolutions in connection with this Agreement and the
transactions contemplated hereby inconsistent with such resolutions.
(f) Opinion of Counsel. Firstar shall have delivered to
First Colonial an opinion of Howard H. Hopwood III, Senior Vice President and
General Counsel of Firstar, dated as of the Closing Date and in form and
substance reasonably satisfactory to the counsel of First Colonial, to the
effect that: (i) each of Firstar and Sub is a corporation validly existing
under the laws of its jurisdiction of incorporation with full corporate power
and authority to enter into this Agreement and the Plan of Merger and to
consummate the transactions contemplated thereby; (ii) all corporate
proceedings on the part of Firstar and Sub necessary to be taken in connection
with the Merger and (except for the filing of the Articles of Merger and
Certificate of Merger) necessary to make same effective have been duly and
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validly taken; (iii) this Agreement has been duly and validly authorized,
executed and delivered on behalf of Firstar and constitutes (subject to
standard exceptions to enforceability arising from the bankruptcy laws and
rules of equity) a valid and binding agreement of Firstar; (iv) the execution
of the Articles of Merger and Certificate of Merger by Firstar and Sub has been
duly and validly authorized; (v) the shares of Firstar Common Stock and Firstar
Preferred Stock to be issued in the Merger will, when issued, be duly
authorized, validly issued, fully paid and non-assessable (except as provided
in Section 180.0622(2)(b) of the WBCL) and not have been issued in violation of
any preemptive rights; and (vi) in the course of the preparation of the S-4 and
the Proxy Statement such counsel has considered the information set forth
therein in light of the matters required to be set forth therein, and has
participated in conferences with officers and representatives of First Colonial
and Firstar, including their respective counsel and independent public
accountants, during the course of which the contents of the S-4 and the Proxy
Statement and related matters were discussed. Such counsel has not
independently checked the accuracy or completeness of, or otherwise verified,
and accordingly is not passing upon, and does not assume responsibility for,
the accuracy, completeness or fairness of the statements contained in the S-4
or the Proxy Statement; and such counsel has relied as to materiality, to a
large extent, upon the judgment of officers and representative of First
Colonial and Firstar. However, as a result of such consideration and
participation, nothing has come to such counsel's attention which causes such
counsel to believe that the S-4 (other than the financial statements, financial
data, statistical data and supporting schedules included therein, and
information relating to or supplied by First Colonial as to which such counsel
expresses no belief), at the time it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
that the Proxy Statement (other than the financial statements, financial data,
statistical data and supporting schedules included therein, and information
relating to or supplied by First Colonial, as to which such counsel expresses
no belief), at the time the S-4 became effective, included any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(g) No Material Adverse Change. Except as disclosed in
the Firstar Disclosure Letter, there shall have been no material adverse change
since the Latest Statement Date in the financial condition, results of
operations or business of Firstar and the Firstar Subsidiaries taken as a
whole, other than any changes resulting primarily by reason of changes in
banking laws or regulations (or interpretations thereof), changes in the
general level of interest rates or changes in economic, financial or market
conditions affecting the banking industry generally in the regions in which
Firstar and the Firstar Subsidiaries operate.
ARTICLE IX
INDUCEMENT
9.01. Inducement. (a) Subject to subsection (d), As a
condition and inducement to Firstar's willingness to enter into and perform
this Agreement, in the event that a Trigger Event (as hereinafter defined) has
occurred, then First Colonial shall pay to Firstar a fee of $7,500,000, which
payment shall be in addition to that contemplated by Section 5.08(a). Such fee
shall be payable in immediately available funds within two days following the
occurrence of a Trigger Event.
(b) As used herein, "Trigger Event" shall mean the
occurrence of one or more of the following events:
(i) A Transaction Proposal (as defined below)
shall have occurred;
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(ii) Termination of this Agreement following a
wilful and material breach thereof by First Colonial; or
(iii) (A) The Board of Directors of First Colonial
(1) shall have withdrawn, modified or amended in any respect its
approval or recommendation of this Agreement or the transactions
contemplated thereby, or (2) shall not at the appropriate time have
recommended or shall have withdrawn, modified or amended in any
respect its recommendation that its stockholders vote in favor of this
Agreement, or (3) shall not have included such recommendation in the
Proxy Statement, or (B) the Board of Directors of First Colonial shall
have resolved to do any of the foregoing.
(c) As used in this Agreement, "Person" shall mean any
individual, firm, corporation, or other entity and shall include any syndicate
or group of persons deemed to be a "person" by Section 13(d)(3)(e) of the
Exchange Act. As used in this Agreement,
(i) "Transaction Proposal" shall mean (A) a bona fide
tender offer or exchange offer for at least 25% of the then
outstanding shares of any class of capital stock of First Colonial
shall have been made by any Person (excluding Firstar or any of its
Subsidiaries or Affiliates), (B) any Person (other than Firstar or any
Subsidiary or Affiliate thereof) shall have filed an application under
the Bank Holding Company Act of 1956, as amended, or the Change in
Bank Control Act, as amended, with respect to the acquisition by such
person of any shares of the capital stock of First Colonial, (C) a
merger, consolidation or other business combination with First
Colonial, or with any Subsidiary of First Colonial, shall have been
effected by any Person, or an agreement relating to any such
transaction shall have been entered into, (D) any sale, lease,
exchange, mortgage, pledge, transfer or other disposition (whether in
one transaction or a series of related transactions) involving a
substantial part of First Colonial's consolidated assets (including
stock of any of First Colonial's Subsidiaries), or all or a
substantial part of the assets of any of First Colonial's
Subsidiaries, to any Person shall have been effected, or any agreement
relating to such transaction shall have been entered into, (E) the
acquisition by any Person, other than (1) Firstar or any Subsidiary or
Affiliate of Firstar (other than in a fiduciary capacity) or (2) any
of First Colonial's Subsidiaries in a fiduciary capacity for third
parties, none of whom beneficially owns 10% or more of the outstanding
shares of any class of the capital stock of First Colonial, of
beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, which will be deemed for purposes hereof to provide that
such Person beneficially owns any shares of the capital stock of First
Colonial that may be acquired by such person pursuant to any right,
option, warrant or other agreement, regardless of when such
acquisition would be permitted by the terms thereof) of 10% or more of
the outstanding shares of any class of the capital stock of First
Colonial (including capital stock currently beneficially owned by such
Person) or, if such Person currently beneficially owns 10% or more of
the outstanding shares of any class of capital stock of First
Colonial, of any additional shares of the capital stock of First
Colonial (other than pursuant to such Person's rights and obligations
as of the date hereof under FCBC Stock Options, Mandatory Stock
Purchase Agreements, FCBC Series C Preference Stock and/or FCBC Class
B Common Stock) (and other than, as to all of thisclause (E),
transfers of securities of First Colonial contemplated by, and solely
among the parties to, that certain "Restatement of Stockholder
Agreement and Stockholder Insurance Agreement dated October 17, 1984,"
dated as of February 18, 1987, as amended by an amendment dated
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March 6, 1994), (F) any reclassification of securities or
recapitalization of First Colonial or other transaction that has the
effect, directly or indirectly, of increasing the proportionate share
of any class of equity security (including securities convertible into
equity securities) of First Colonial which is owned by any Person
(excluding Firstar or any of its Subsidiaries or Affiliates) shall
have been effected, or any agreement relating to such transaction
shall have been entered into or plan with respect thereto adopted, (G)
any transaction having an effect similar to those described in (A)
through (F) above, or (H) a public announcement with respect to a
proposal, plan or intention by First Colonial or another Person
(excluding Firstar or any of its Subsidiaries or Affiliates) to effect
any of the foregoing transactions;provided, however, that in the case
of the events described in clauses (A), (B) and (H) in this
definition, and events described inclause (G) having an effect similar
to those described in clauses (A) and (B) (the "Events"), such Events
shall not constitute a "Transaction Proposal" hereunder unless after
the occurrence of any such Event, either (x) the Board of Directors of
First Colonial (1) recommends such Event to its stockholders for
acceptance; (2) fails to undertake such acts as Firstar reasonably
requests to oppose such Event (provided that First Colonial not incur
significant legal expense);or (3) fails to recommend approval of this
Agreement to First Colonial's stockholders; or (y) First Colonial's
stockholders shall have failed to approve this Agreement at a meeting
duly called for such purpose; andprovided, further, that any
transaction contemplated by this Agreement (other than transactions
contemplated by Section 5.01(g), Section 5.02(f) or the proviso to
Section 5.14(b)) shall be specifically exempt from the definition of
"Transaction Proposal"; and
(ii) "Affiliate" shall mean a person that directly
or indirectly, through one or more intermediaries, (A) owns
beneficially, directly or indirectly, in excess of 10% of the voting
capital stock of any other Person or (B) controls, is controlled by,
or is under common control with, another person.
(d) The rights of Firstar hereunder shall terminate upon
the earliest to occur of (i) the Effective Time, (ii) the termination of this
Agreement by First Colonial pursuant to Section 10.01(a)(ii), (iii) the
termination of this Agreement by mutual agreement of the parties or (iv) the
expiration of one year after the termination of this Agreement (other than
terminations described in clause (ii) or (iii)).
ARTICLE X
TERMINATION AND AMENDMENT
10.01. Termination. (a) This Agreement and the Plan of
Merger may be terminated at any time prior to the Effective Time, whether
before or after approval of the matters presented in connection with the Merger
by the shareholders of First Colonial or Firstar:
(i) by mutual consent of the Board of Directors of
Firstar and the Board of Directors of First Colonial;
(ii) by either Firstar or First Colonial (A) if there has
been a material breach (except that where any statement in a
representation or warranty expressly includes a standard of
materiality, such statement shall have been breached in any respect)
of any representation, warranty, covenant or agreement on the part of
First Colonial, on the one hand, or Firstar and Sub, on the other
hand, respectively, set forth in this Agreement, or (B) if any
representation or
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warranty of First Colonial, on the one hand, or Firstar and Sub, on
the other hand, respectively, shall be discovered to have become
materially untrue (except that where any statement in a representation
or warranty expressly includes a standard of materiality, such
statement shall have become untrue in any respect), in either case
which breach or other condition has not been cured within 10 business
days following receipt by the nonterminating party of notice of such
breach or other condition;
(iii) by either Firstar or First Colonial if any permanent
Injunction preventing the consummation of the Merger shall have become
final and nonappealable;
(iv) by either the Board of Directors of Firstar or the Board
of Directors of First Colonial if the Merger shall not have been
consummated before July 31, 1995, for a reason other than the failure
of the terminating party to comply with its obligations under this
Agreement;
(v) by the Board of Directors of either of Firstar or First
Colonial if the Federal Reserve Board or the Illinois Commissioner has
denied approval of the Merger and, if such denial is appealable,
neither Firstar nor First Colonial has, within 30 days after the entry
of the Federal Reserve Board's or the Illinois Commissioner's order
denying such approval, filed a petition seeking review of such order
as provided by Section 9 of the BCH Act or applicable Illinois law;
(vi) by First Colonial, on either of the two trading days
immediately after the Ten-Day Calculation Period, as defined below, if
both of the following conditions are satisfied:
(1) the average of the daily closing prices of a
share of Firstar Common Stock as reported on the consolidated
tape of the NYSE during the Ten-Day Calculation Period (the
"Firstar Average Price") is less than $29.00; and
(2) the number obtained by dividing the Firstar
Average Price by the closing price of Firstar Common Stock as
reported on the consolidated tape of the NYSE on the trading
day immediately preceding the public announcement of this
Agreement is less than the number obtaining by dividing the
Final Index Price (as defined in subsection (b) below) by the
Initial Index Price (as defined in subsection (b) below) and
subtracting .125 from such quotient.
(b) For purposes of this Section 10.01:
(i) The "Index Group" shall mean all of those companies
listed on Exhibit 10.01 the common stock of which is publicly traded
and as to which there is no pending publicly announced proposal at any
time during the Ten-Day Calculation Period for such company to acquire
another company or companies in transactions with a value exceeding
10% of the acquiror's market capitalization or for such company to be
acquired. In the event that any such company or companies are so
removed from the Index Group, the weights attributed to the remaining
companies shall be adjusted proportionately.
(ii) The "Initial Index Price" shall mean the weighted
average (weighted in accordance with the factors listed on Exhibit
10.01) of the per share closing prices of the common stock of the
companies comprising the Index Group, as reported on the consolidated
transactions reporting system for the market or exchange on which such
common stock is principally traded, on the trading day immediately
preceding the public announcement of this Agreement.
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(iii) The "Final Price" of any company belonging to the Index
Group shall mean the average of the daily closing sale prices of a
share of common stock of such company, as reported in the consolidated
transaction reporting system for the market or exchange on which such
common stock is principally traded, during the Ten-Day Calculation
Period.
(iv) The "Final Index Price" shall mean the weighted average
(weighted in accordance with the factors listed on Exhibit 10.01) of
the Final Prices for all of the companies comprising the Index Group.
(v) The "Ten-Day Calculation Period" shall mean the ten (10)
consecutive trading days commencing on the first business day
following the date the Federal Reserve Board issues an order approving
consummation of the Merger.
If Firstar or any company belonging to the Index Group declares a stock
dividend or effects a reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between the date of this
Agreement and the Meeting Date, the closing prices for the common stock of such
company shall be appropriately adjusted for the purposes of the definitions
above so as to be comparable to the price on the date of this Agreement.
10.02. Environmental Conditions Termination. Subject to the
next following sentence, Firstar may terminate this Agreement within 95 days of
the date that a consultant is chosen pursuant to Section 5.16 if, and only if,
(a) any environmental conditions are found, suspected, or indicated by the
environmental assessments obtained pursuant to the investigation under Section
5.16 which, if known by First Colonial to be existing on the date hereof, would
be contrary to First Colonial's representations and warranties set forth in
Section 3.08(b); (b) the parties are unable to agree upon a course of action
for further investigation and remediation of all environmental conditions
and/or issues raised by environmental assessments with respect to all FCBC
Property and/or a mutually acceptable modification to this Agreement within 85
days of the date that a consultant is chosen pursuant to Section 5.16(a); (c)
the conditions and/or issues are not such that it can be determined to a
reasonable degree of certainty within such 85 day period, based upon
information then available to Firstar and First Colonial, that the risk and
expense to which Firstar and its subsidiaries would be subject as owner and/or
operator of the FCBC Property involved can be quantified and limited to an
amount that would not be reasonably likely to exceed $3,000,000 in the
aggregate (including costs incurred by First Colonial or any FCBC Subsidiary
prior to the Effective Time); and (d) Firstar gives First Colonial written
notice of its intent to terminate this Agreement pursuant hereto not less than
five days prior to the effective date of such termination. Notwithstanding the
foregoing, Firstar may, pursuant to a written instrument signed by it (which
shall not be deemed to be an amendment or modification to this Agreement)
terminate its rights to terminate this Agreement pursuant to this Section as of
any date specified in such written instrument that is prior to the date such
rights would otherwise expire. Notwithstanding any other provision of this
Agreement to the contrary, Firstar shall not be entitled to terminate this
Agreement by virtue of any environmental matter relating to FCBC Property on
which any assessment is conducted pursuant to Section 5.16(a), including but
not limited to a breach of Section 3.08(b), effective at any time that is later
than the date 95 days after the date a consultant is chosen pursuant to Section
5.16(a).
10.03. Effect of Termination. In the event of termination
of this Agreement by either First Colonial or Firstar as provided in Section
10.01 or Section 10.02, this Agreement and the Plan of Merger shall forthwith
become void and there shall be no liability or obligation on the part of
Firstar or First Colonial or their respective officers or directors except (x)
with respect to Sections 5.08, 6.15, 7.04
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and 9.01, and (y) to the extent that such termination results from the willful
breach by a party hereto of any of its representations, warranties, covenants
or agreements set forth in this Agreement.
10.04. Amendment. Subject to the next following sentence,
this Agreement and the Plan of Merger may be amended by the parties hereto by
action taken or authorized by their respective Boards of Directors at any time
before or after approval of the matters presented in connection with the Merger
by the stockholders of First Colonial, but after any such approval by the
stockholders of First Colonial, no amendment shall be made which has any of the
effects described in Section 251(d) of the DGCL. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto.
10.05. Extension; Waiver. At any time prior to the
Effective Time, Firstar and Sub, on the one hand, and First Colonial, on the
other hand, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(ii) waive any inaccuracies in the representations and warranties of the other
contained herein or in any document delivered by the other pursuant hereto, and
(iii) waive compliance by the other with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument
signed on behalf of such party.
ARTICLE XI
GENERAL PROVISIONS
11.01. Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties and agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for the agreements contained in Sections
2.01, 6.07, 6.08, 6.11, 6.12 and 6.13, the last sentence of Section 10.04 and
Article XI, and the agreements delivered pursuant to Section 5.06 and Section
5.15.
11.02. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with receipt confirmed) or mailed by registered or
certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Firstar and/or Sub, to
Firstar Corporation
Attention: Jon H. Stowe,
Executive Vice President
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy: (414) 765-4349
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with a copy to:
Firstar Corporation
Attention: Howard H. Hopwood III,
Senior Vice President & General Counsel
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy: (414) 765-6111
(b) if to First Colonial to:
First Colonial Bankshares Corporation
Attention: C. Paul Johnson,
Chairman and Chief Executive Officer
30 North Michigan Avenue, Suite 300
Chicago, Illinois 60602-0493
Telecopy: (312) 641-0493
with a copy to:
Vedder, Price, Kaufman & Kammholz
Attention: Daniel O'Rourke, Esq.
222 North LaSalle Street
Chicago, Illinois 60601-1003
Telecopy: (312) 609-5005
11.03. Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be deemed to
be followed by the words "without limitation." The phrase "made available" in
this Agreement shall mean that the information referred to has been made
available if requested by the party to whom such information is to be made
available.
11.04. Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
11.05. Entire Agreement; No Third Party Beneficiaries;
Rights of Ownership. This Agreement (including the documents and the
instruments referred to herein, including the Plan of Merger) (a) constitutes
the entire agreement and supersedes all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, except for the rights and obligations of Firstar and First Colonial
under the confidentiality letter agreements to Firstar, dated April 20, 1994,
and to First Colonial, dated July 11, 1994, which shall survive except as
modified hereby, and (b) except as provided in Section 6.07, Section 6.08,
Section 6.11 and Section 6.12, is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder. The parties hereby
acknowledge that, except as otherwise hereinafter agreed to in writing, no
party shall have the right to
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acquire or shall be deemed to have acquired shares of common stock of the other
party pursuant to the Merger until consummation thereof.
11.06. Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Wisconsin, except as the
IBCA and the DGCL is expressly applicable to the Merger.
11.07. Publicity. The parties hereto agree that they will
consult with each other concerning any proposed press release or public
announcement pertaining to the Merger and use their best efforts to agree upon
the text of such press release or public announcement prior to the publication
of such press release or the making of such public announcement.
11.08. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
11.09. Knowledge of the Parties. Wherever in this Agreement
any representation or warranty is made upon the knowledge of a party hereto
that is not an individual, such knowledge shall include the actual knowledge,
after due inquiry, of any executive officer of such party.
IN WITNESS WHEREOF, Firstar, Sub and First Colonial have
caused this Agreement to be signed by their respective officers thereunto duly
authorized, all as of the date first written above.
FIRSTAR CORPORATION
By: /s/ Jon H. Stowe
--------------------------
Its: Executive Vice President
Attest:
/s/ John A. Kielich
- --------------------------
Its: First Vice President
FIRSTAR CORPORATION OF ILLINOIS
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By: /s/ Jon H. Stowe
--------------------
Its: Vice President
Attest:
/s/ John A. Kielich
- --------------------------
Its: First Vice President
FIRST COLONIAL BANKSHARES CORPORATION
By: /s/ C. Paul Johnson
----------------------------------
Its: Chairman and Chief Executive
Officer
Attest:
/s/ Robert F. Sherman
-------------------
Its: President
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EXHIBIT A
PLAN OF MERGER
PLAN OF MERGER, dated as of July 31, 1994 ("Plan of Merger"),
by and between Firstar Corporation of Illinois, an Illinois corporation
("Sub"), and First Colonial Bankshares Corporation, a Delaware corporation
("First Colonial"), and joined in by Firstar Corporation, a Wisconsin
corporation ("Firstar"), for certain limited purposes.
WHEREAS, First Colonial is a corporation with authorized
capital stock consisting of (i) 20,000,000 shares of Class A Common Stock,
$1.25 par value ("FCBC Class A Common Stock"), of which 8,400,829 shares are
validly issued and outstanding on the date hereof; (ii) 3,000,000 shares of
Class B Common Stock, $1.25 par value ("FCBC Class B Common Stock" and,
collectively with the FCBC Class A Common Stock, the "FCBC Common Stock"), of
which 1,568,600 shares are validly issued and outstanding on the date hereof;
(iii) 100,000 shares of preferred stock, $57 par value ("FCBC Preferred"), of
which no shares are validly issued and outstanding on the date hereof; and (iv)
200,000 shares of preference stock, no par value ("FCBC Preference Stock"), in
respect of which there are issued and outstanding 39,700 shares of Series C
Convertible Preference Stock, no par value ("FCBC Series C Preference Stock");
WHEREAS, Sub is a corporation with authorized capital stock of
10,000 shares of common stock, $2.50 par value ("Sub Common Stock"), 400 of
which are validly issued and outstanding and are owned by Firstar;
WHEREAS, Firstar is a corporation duly organized and existing
under the laws of Wisconsin;
WHEREAS, concurrently with the execution and delivery of this
Plan of Merger, Firstar, Sub and First Colonial have entered into an Agreement
and Plan of Reorganization (the "Agreement" and, together with this Plan of
Merger, the "Merger Agreements") that contemplates the merger of First Colonial
with and into Sub (the "Merger") upon the terms and conditions provided in this
Plan of Merger and the Agreement and pursuant to the Illinois Business
Corporation Act (the "IBCA") and the Delaware General Corporation Law (the
"DGCL");
WHEREAS, the Boards of Directors of Sub and First Colonial
deem it fair and equitable to, and in the best short-term and long-term
interests of, their respective corporations and stockholders that First
Colonial be merged with and into Sub with Sub being the surviving corporation,
and each such Board of Directors has approved this Plan of Merger, has
authorized its execution and delivery and has directed that this Plan of Merger
and the Merger be submitted to its respective stockholders for approval; and
WHEREAS, the Board of Directors of Firstar has authorized the
execution and delivery of this Plan of Merger and, subject to approval by the
Board of Directors of Firstar, the issuance of Firstar Common Stock (as defined
in Section 2.01(a)) and Firstar Preferred Stock (as defined in Section 2.01(b))
pursuant hereto.
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NOW, THEREFORE, in consideration of the premises and the
agreements herein contained, the parties hereto adopt and agree to the
following agreements, terms and conditions relating to the Merger and the mode
of carrying the same into effect:
ARTICLE I
THE MERGER
1.01. The Merger. Subject to the terms and conditions of
the Merger Agreements, First Colonial will be merged with and into Sub, which
will be the surviving corporation, in accordance with and with the effect
provided in the IBCA and the DGCL.
1.02. Effective Time of the Merger. Subject to the
provisions of the Merger Agreements, (a) articles of merger (the "Articles of
Merger") shall be duly prepared and executed by Sub and First Colonial and
thereafter delivered to the Secretary of State of the State of Illinois for
filing, as provided in the IBCA, on the Closing Date (as defined in the
Agreement) and (b) a certificate of merger (the "Certificate of Merger") shall
be duly prepared and executed by Sub and First Colonial and thereafter
delivered to the Secretary of State of the State of Delaware for filing, as
provided in the DGCL, on the Closing Date. The Merger shall become effective
upon the filing of the Articles of Merger with the Secretary of State of the
State of Illinois and the Certificate of Merger with the Secretary of State of
the State of Delaware (the "Effective Time").
1.03. Effects of the Merger. (a) At the Effective Time,
(i) the separate existence of First Colonial shall cease and First Colonial
shall be merged with and into Sub as provided in Section 5/11.35 of the IBCA
and Sections 251 and 252 of the DGCL (Sub and First Colonial are sometimes
referred to herein as the "Constituent Corporations" and Sub is sometimes
referred to herein as the "Surviving Corporation"), (ii) the Articles of
Incorporation of Sub in effect as of the Effective Time (the "Articles") shall
be the Articles of Incorporation of the Surviving Corporation, (iii) the
By-laws of Sub in effect as of the Effective Time (the "By-laws") shall be the
By-laws of the Surviving Corporation and (iv) the members of the Board of
Directors and committees thereof and the officers of Sub immediately prior to
the Effective Time shall be the members of the Board of Directors and
committees thereof and the officers of the Surviving Corporation, respectively.
(b) At and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises of
a public as well as of a private nature, and be subject to all the
restrictions, disabilities and duties of each of the Constituent Corporations;
and all and singular rights, privileges, powers and franchises of each of the
Constituent Corporations, and all property, real, personal and mixed and all
debts due to either of the Constituent Corporations on whatever account, as
well as for stock subscriptions and all other things in action or belonging to
each of the Constituent Corporations, shall be vested in the Surviving
Corporation; and all property, rights, privileges, powers and franchises, and
all and every other interest shall be thereafter as effectually the property of
the Surviving Corporation as they were of the Constituent Corporations, and the
title to any real estate vested by deed or otherwise, in either of the
Constituent Corporations, shall not revert or be in any way impaired; but all
rights of creditors and all liens upon any property of either of the
Constituent Corporations shall be preserved unimpaired, and all debts,
liabilities and duties of the Constituent Corporations shall thenceforth attach
to the Surviving Corporation, and may be enforced against it to the same extent
as if said debts and liabilities had been incurred by it. Any action or
proceeding, whether civil, criminal or administrative, pending by or against
either Constituent Corporation shall be prosecuted as if the Merger had not
taken
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place, and the Surviving Corporation may be substituted as a party in such
action or proceeding in place of any Constituent Corporation.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
2.01. Effect on Capital Stock. As of the Effective Time,
by virtue of the Merger and without any action on the part of the holder of any
shares of FCBC Class A Common Stock, FCBC Class B Common Stock or FCBC Series C
Convertible Preference Stock, or holders of depositary receipts evidencing
depositary shares representing an interest in the FCBC Series C Preference
Stock, but subject to the provisions of Section 262 of the DGCL with respect to
the rights of dissenting stockholders of First Colonial:
(a) Conversion of FCBC Common Stock. Each then issued
and outstanding share of FCBC Common Stock shall be converted into the right to
receive 0.7725 fully paid and nonassessable shares of common stock, $1.25 par
value, of Firstar ("Firstar Common Stock"), including with each such share
one-half of one Firstar Preferred Share Purchase Right ("Right") issued
pursuant to the Rights Agreement dated as of January 20, 1989, between Firstar
and Firstar Trust Company, as Rights Agent (the "Rights Agreement"). Prior to
the Distribution Date (as defined in the Rights Agreement), all references in
this Plan of Merger to the Firstar Common Stock to be received pursuant to the
Merger shall be deemed to include the Rights.
(b) Conversion of FCBC Series C Preference Stock. Each
then issued and outstanding share of FCBC Series C Preference Stock shall be
converted into the right to receive one fully paid and nonassessable share of
Series D Convertible Preferred Stock, no par value, of Firstar ("Firstar
Preferred Stock") which Firstar Preferred Stock shall have terms substantially
as set forth on Exhibit 2.01(b) hereto.
(c) Stock Held by First Colonial. Each then issued and
outstanding share of FCBC Common Stock or FCBC Series C Preference Stock owned
by First Colonial or any direct or indirect subsidiary of First Colonial (other
than shares held in a fiduciary capacity) and each share of FCBC Common Stock
or FCBC Series C Preference Stock issued and held in First Colonial's treasury
will be cancelled and retired.
(d) Cancellation of Shares. All shares of FCBC Common
Stock and FCBC Series C Preference Stock issued and outstanding immediately
prior to the Effective Time shall no longer be outstanding and shall
automatically be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares shall cease to have any
rights with respect thereto, except the right to receive the shares of Firstar
Common Stock or Firstar Preferred Stock, as the case may be, to be issued in
consideration therefor upon the surrender of such certificate in accordance
with the Plan of Merger, without interest.
(e) Adjustment. If, prior to the Effective Time, Firstar
shall declare a stock dividend or distribution upon or subdivide, split up,
reclassify or combine its shares of Firstar Common Stock or declare a dividend
or make a distribution on Firstar Common Stock of any security convertible into
Firstar Common Stock, appropriate adjustment or adjustments will be made in the
conversion rate set forth in subsection (a).
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(f) Each outstanding share of FCBC Class B Common Stock
as to which dissenters' rights have been asserted in accordance with the
procedures of the DGCL and not withdrawn shall be accorded the rights provided
by the DGCL and shall not be converted into or represent rights to receive the
shares of Firstar Common Stock or cash hereunder unless and until the holder
shall have failed to perfect or effectively withdrawn or lost such dissenters'
rights.
2.02. Exchange of Certificates. (a) Exchange Agent. As
of the Effective Time, Firstar shall deposit with Firstar Trust Company or such
other bank or trust company designated by Firstar (and reasonably acceptable to
First Colonial) (the "Exchange Agent") for the benefit of the holders of shares
of FCBC Common Stock and FCBC Series C Preference Stock, for exchange in
accordance with this Article II through the Exchange Agent, certificates
representing the shares of Firstar Common Stock and Firstar Preferred Stock
(such shares of Firstar Common Stock and Firstar Preferred Stock, together with
any dividends or distributions with respect thereto, being hereinafter referred
to as the "Exchange Fund") issuable pursuant to Section 2.01 in exchange for
shares of FCBC Common Stock and FCBC Series C Preference Stock outstanding
immediately prior to the Effective Time. To the extent Firstar owns shares of
Firstar Common Stock as treasury stock, such shares may be deposited into the
Exchange Fund.
(b) Exchange Procedures. As soon as reasonably
practicable after the Effective Time, the Exchange Agent shall mail to each
holder of record of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of FCBC Common Stock and FCBC
Series C Preference Stock (the "Certificates") whose shares were converted into
the right to receive shares of Firstar Common Stock or Firstar Preferred Stock
pursuant to Section 2.01 (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon delivery of the Certificates to the Exchange Agent and
shall be in such form and have such other provisions as Firstar and First
Colonial may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for certificates representing shares
of Firstar Common Stock or Firstar Preferred Stock, as the case may be. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by Firstar, together with such letter
of transmittal, duly executed, the holder of such Certificate shall be entitled
to receive in exchange therefor a certificate representing that number of whole
shares of Firstar Common Stock or Firstar Preferred Stock, as the case may be,
which such holder has the right to receive pursuant to the provisions of this
Article II, and the Certificate so surrendered shall forthwith be cancelled. In
the event of a transfer of ownership of FCBC Common Stock which is not
registered in the transfer records of First Colonial, a certificate
representing the proper number of shares of Firstar Common Stock may be issued
to a transferee if the Certificate representing such FCBC Common Stock is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this
Section 2.02, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the certificate
representing shares of Firstar Common Stock or Firstar Preferred Stock, as the
case may be, and cash in lieu of any fractional shares of Firstar Common Stock
as contemplated by this Section 2.02.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to Firstar Common Stock or Firstar Preferred Stock with a record date
after the Effective Time shall be paid to the holder of any unsurrendered
Certificate with respect to the shares of Firstar Common Stock or Firstar
Preferred Stock represented thereby and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 2.02(e) until the
holder of record of such Certificate shall surrender such Certificate. Subject
to the effect of applicable laws, following surrender of any such Certificate,
there shall be paid
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to the record holder of the certificates representing whole shares of Firstar
Common Stock or Firstar Preferred Stock issued in exchange therefor, without
interest, (i) at the time of such surrender, the amount of any cash payable in
lieu of a fractional share of Firstar Common Stock to which such holder is
entitled pursuant to Section 2.02(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Firstar Common Stock or Firstar Preferred
Stock, and (ii) at the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
surrender and a payment date subsequent to surrender payable with respect to
such whole shares of Firstar Common Stock or Firstar Preferred Stock.
(d) No Further Ownership Rights in FCBC Common Stock.
All shares of Firstar Common Stock and Firstar Preferred Stock issued upon the
surrender for exchange of shares of FCBC Common Stock or FCBC Series C
Preference Stock in accordance with the terms hereof (including any cash paid
pursuant to Section 2.02(c) or 2.02(e)) shall be deemed to have been issued in
full satisfaction of all rights pertaining to such shares of FCBC Common Stock
or FCBC Series C Preference Stock, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which may have been declared or
made by First Colonial on such shares of FCBC Common Stock or FCBC Series C
Preference Stock in accordance with the terms of the Agreement or prior to the
date hereof and which remain unpaid at the Effective Time, and there shall be
no further registration of transfers on the stock transfer books of the
Surviving Corporation of the shares of FCBC Common Stock or FCBC Series C
Preference Stock which were outstanding immediately prior to the Effective
Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or Firstar for any reason, they shall be cancelled and
exchanged as provided in this Plan of Merger.
(e) No Fractional Shares. Notwithstanding any other
provision of this Plan of Merger to the contrary, neither certificates nor
scrip representing fractional shares of Firstar Common Stock shall be issued
upon the surrender for exchange of Certificates, and such fractional share
interests will not entitle the owner thereof to vote or to any rights of a
stockholder of Firstar. Each holder of shares of FCBC Common Stock who would
otherwise have been entitled to a fraction of a share of Firstar Common Stock
shall receive in lieu thereof cash (without interest) in an amount determined
by multiplying the fractional share interest to which such holder would
otherwise be entitled by the closing price per share of Firstar Common Stock at
the Effective Time on the New York Stock Exchange Composite Transaction Tape.
From time to time at the request of the Exchange Agent after the determination
of amounts of cash to be paid to holders of FCBC Common Stock in lieu of any
fractional share interests, Firstar shall make available such amounts to the
Exchange Agent.
(f) Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the stockholders of First Colonial
for six months after the Effective Time shall be delivered to Firstar, upon
demand, and any stockholders of First Colonial who have not theretofore
complied with this Section 2.02 shall thereafter look only to Firstar for
payment of their claim for Firstar Common Stock or Firstar Preferred Stock, any
cash in lieu of fractional shares of Firstar Common Stock and any dividends or
distributions with respect to Firstar Common Stock or Firstar Preferred Stock.
(g) No Liability. None of Firstar, Sub and First
Colonial shall be liable to any holder of shares of FCBC Common Stock or FCBC
Series C Preference Stock or Firstar Common Stock or Firstar Preferred Stock,
as the case may be, for such shares (or dividends or distributions with respect
thereto) or cash from the Exchange Fund delivered to a public official pursuant
to any applicable abandoned property, escheat or similar law.
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(h) Withholding Rights. Firstar and Sub shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to the Agreements to any former holder of shares of FCBC Common Stock
or FCBC Series C Preference Stock such amounts as Firstar or Sub is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by Firstar or Sub,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the former holder of the shares of FCBC Common Stock or
FCBC Series C Preference Stock in respect of which such deduction and
withholding was made by Firstar or Sub.
2.03. Effect on Common Stock of Sub. At the Effective
Time, the shares of Sub Common Stock validly issued and outstanding immediately
prior to the Effective Time will continue to evidence 1,000 shares of common
stock, no par value, of the Surviving Corporation so that all shares of capital
stock of the Surviving Corporation will continue to be owned by Firstar. The
outstanding certificates representing shares of Sub Common Stock will, after
the Effective Time, continue to represent the same number of shares of the
Surviving Corporation.
ARTICLE III
CONDITIONS; TERMINATION; AMENDMENT
3.01. Conditions to the Merger. Consummation of the Merger
is conditional upon the fulfillment or waiver of the conditions precedent set
forth in Article VIII of the Agreement.
3.02. Termination. This Plan of Merger may be terminated
and the Merger abandoned by mutual consent of the respective Boards of
Directors of First Colonial and Sub at any time prior to the Effective Time or
otherwise in accordance with Article X of the Agreement. If the Agreement is
terminated in accordance with Article X thereof, then this Plan of Merger will
terminate simultaneously and the Merger will be abandoned without further
action by First Colonial or Sub.
3.03. Amendment. Subject to the next following sentence,
this Plan of Merger may be amended by the parties hereto by action taken or
authorized by their respective Boards of Directors at any time before or after
approval of the matters presented in connection with the Merger by the
stockholders of First Colonial or of Firstar, but after any such approval by
the stockholders of First Colonial, no amendment shall be made which has any of
the effects described in Section 251(d) of the DGCL. This Plan of Merger may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto.
3.04. Extension; Waiver. At any time prior to the
Effective Time, Firstar and Sub, on the one hand, and First Colonial, on the
other hand, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other party hereto
and (ii) waive compliance by the other with any of the agreements or conditions
contained herein. Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in a written instrument on
behalf of such party.
ARTICLE IV
GENERAL PROVISIONS
4.01. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with receipt confirmed) or mailed by registered
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or certified mail (return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Firstar and/or Sub, to
Firstar Corporation
Attention: Jon H. Stowe,
Executive Vice President
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy: (414) 765-4349
with a copy to:
Firstar Corporation
Attention: Howard H. Hopwood III,
Senior Vice President & General Counsel
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy: (414) 765-6111
(b) if to First Colonial to:
First Colonial Bankshares Corporation
Attention: C. Paul Johnson,
Chairman and Chief Executive Officer
30 North Michigan Avenue, Suite 300
Chicago, Illinois 60602-0493
Telecopy: (312) 641-0493
with a copy to:
Vedder, Price, Kaufman & Kammholz
Attention: Daniel O'Rourke, Esq.
222 North LaSalle Street
Chicago, Illinois 60601-1003
Telecopy: (312) 609-5005
4.02. Interpretation. When a reference is made in this
Plan of Merger to Sections, such reference shall be to a Section of this Plan
of Merger unless otherwise indicated. The headings contained in this Plan of
Merger are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Plan of Merger.
4.03. Counterparts. This Plan of Merger may be executed in
two or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when two or more counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
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4.04. Governing Law. This Plan of Merger shall be governed
and construed in accordance with the laws of the State of Wisconsin, except as
the IBCA and DGCL are expressly applicable to the Merger.
IN WITNESS WHEREOF, Sub, First Colonial and Firstar have
caused this Plan of Merger to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
FIRSTAR CORPORATION
By: /s/ Jon H. Stowe
------------------------------
Its: Executive Vice President
Attest:
/s/ John A. Kielich
- --------------------------
Its: First Vice President
FIRSTAR CORPORATION OF ILLINOIS
By: /s/ Jon H. Stowe
------------------------------
Its: Vice President
Attest:
/s/ John A. Kielich
- --------------------------
Its: First Vice President
FIRST COLONIAL BANKSHARES CORPORATION
By: /s/ C. Paul Johnson
----------------------------------
Its: Chairman and Chief Executive
Officer
Attest:
/s/ Robert F. Sherman
- ---------------------
Its: President
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EXHIBIT 10.01
INDEX GROUP
<TABLE>
<CAPTION>
WEIGHTING
COMPANY FACTOR
------- ----------
<S> <C>
Banc One Corporation 12.70656%
Norwest Corporation 10.46989
Key Corp. 8.10532
NBD Bancorp, Inc. 5.26878
National City Corporation 4.98062
Comerica Incorporated 3.93034
First Bank System, Inc. 3.78827
Boatmen's Bancshares, Inc. 3.47521
Huntington Bancshares, Inc. 3.44211
U.S. Bancorp 3.31781
Marshall & Ilsley Corporation 3.16064
First Chicago Corporation 2.87707
South Trust Corporation 2.65273
State Street Boston Corp. 2.53637
Fifth Third Bancorp 2.05093
First of America Bank Corp. 1.96361
AmSouth Bancorporation 1.95540
Meridian Bancorp, Inc. 1.91819
Signet Banking Corporation 1.88712
Northern Trust Corporation 1.79402
Midlantic Corporation 1.73911
UJB Financial Corp. 1.72744
First Security Corporation 1.63194
Mercantile Bancorporation, Inc. 1.43184
Bancorp Hawaii, Inc. 1.40692
Regions Financial Corp. 1.39113
Old Kent Financial Corporation 1.34771
Crestar Financial Corporation 1.25164
Union Bank 1.17684
Integra Financial Corp. 1.11261
BanPonce Corporation 1.08796
First Tennessee National Corp. 1.05782
BayBanks, Inc. 0.62505
Michigan National Corporation 0.50751
First Empire State Corporation 0.22350
</TABLE>
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APPENDIX C
FORM OF OPINION OF
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
______________ , 1994
Board of Directors
First Colonial Bankshares Corporation
30 North Michigan Avenue
Chicago, Illinois 60602
Members of the Board:
You have requested our opinion as to the fairness, from a
financial point of view, to the holders of the outstanding shares of Class A
Common Stock, par value $1.25 per share and Class B Common Stock, par value
$1.25 per share (the Class A Common Stock and Class B Common Stock together,
the "First Colonial Common Stock"), of First Colonial Bankshares Corporation
("First Colonial") of the Exchange Ratio (as defined in the Merger Agreement)
set forth in the Agreement and Plan of Reorganization dated July 31, 1994 among
First Colonial, Firstar Corporation ("Firstar") and Firstar Corporation of
Wisconsin, the successor by merger of Firstar Corporation of Illinois and a
wholly-owned subsidiary of Firstar (the "Merger Agreement").
At the time the Merger (as defined in the Merger Agreement)
becomes effective (the "Effective Time"), each share of First Colonial Common
Stock issued and outstanding at the Effective Time shall be converted into the
right to receive 0.7725 fully paid and nonassessable shares of common stock,
par value $1.25 per share, of Firstar ("Firstar Common Stock"), including with
each such share one-half of one Firstar Preferred Share Purchase Right issued
pursuant to the Rights Agreement, dated as of January 20, 1989, between Firstar
and Firstar Trust Company.
The Merger Agreement provides that First Colonial may
terminate the Merger Agreement on either of the two trading days immediately
after the Ten-Day Calculation Period (as defined below) if both of the
following conditions are satisfied: (1) the average of the daily closing
prices of a share of Firstar Common Stock (the "Firstar Average Price") as
reported on the consolidated tape of the New York Stock Exchange (the "NYSE")
during the period of ten consecutive trading days (the "Ten-Day Calculation
Period") commencing on the first business day following the date the Board of
Governors of the Federal Reserve System issues an order approving consummation
of the Merger is less than $29.00; and (2) the number obtained by dividing the
Firstar Average Price by the closing price of Firstar Common Stock as reported
on the consolidated tape of the NYSE on the trading day immediately preceding
the public announcement of the Merger is less than the number obtained by
dividing the Final Index Price (as defined in the Merger Agreement) by the
Initial Index Price (as defined in the Merger Agreement) and subtracting 0.125
from such quotient.
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Board of Directors
First Colonial Bankshares Corporation
______________, 1994
Page 2
The Merger is subject to, among other things, approvals of the
Board of Governors of the Federal Reserve System, the Office of the Comptroller
of the Currency and the Illinois Commissioner of Banks and Trust Companies,
majority approval by the holders of First Colonial Common Stock, and receipt of
opinions to the effect that the Merger will qualify for treatment as a tax-free
reorganization and a pooling of interests. The Merger Agreement also provides
that, in the event that a Trigger Event (as defined in the Merger Agreement)
has occurred, then First Colonial shall pay to Firstar a fee of $7.5 million
within two days following the occurrence of a Trigger Event. Each of First
Colonial and Firstar has agreed, under certain circumstances, to reimburse, up
to a maximum of $2 million each, the expenses incurred by the other in
connection with the Merger in the event the Merger is not consummated.
For purposes of this opinion and in connection with our review
of the proposed transaction, we have, among other things:
1. Participated in discussions and negotiations among
representatives of First Colonial and their legal
advisor and representatives of Firstar and their
financial and legal advisors that resulted in the
Merger Agreement;
2. Reviewed the Merger Agreement and the proxy
statement-prospectus dated _______, 1994 relating to
the Merger to be sent to the holders of First
Colonial Common Stock in connection with the proposed
transaction (the "Proxy Statement- Prospectus");
3. Reviewed certain publicly available financial
statements, both audited and unaudited, for First
Colonial and Firstar, including those included in the
Annual Reports on Form 10-K for the five years ended
December 31, 1993, the Quarterly Reports on Form 10-Q
for the periods ended September 30, 1994, and the
most recent regular annual proxy statement available
as of the date hereof for First Colonial and Firstar;
4. Reviewed certain financial statements and other
financial and operating data concerning First
Colonial and Firstar prepared by their respective
managements;
5. Reviewed certain financial projections of First
Colonial and Firstar, both on a stand-alone and on a
combined basis, prepared by their respective
managements;
6. Discussed certain aspects of the past and current
business operations, results of regulatory
examinations, financial condition and future
prospects of First Colonial and Firstar with certain
members of the management of First Colonial and
Firstar;
7. Reviewed reported market prices and historical
trading activity of First Colonial Common Stock and
Firstar Common Stock;
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Board of Directors
First Colonial Bankshares Corporation
______________, 1994
Page 3
8. Reviewed certain aspects of the financial performance
of First Colonial and Firstar and compared such
financial performance of First Colonial and Firstar,
together with the stock market data relating to First
Colonial Common Stock and Firstar Common Stock, with
similar data available for certain other financial
institutions and certain of their publicly traded
securities;
9. Reviewed certain of the financial terms, to the
extent publicly available, of certain recent business
combinations involving other financial institutions;
and
10. Conducted such other studies, analyses, and
examinations as we deemed appropriate.
We have relied upon and assumed without independent
verification the accuracy and completeness of all of the financial and other
information that has been provided to us by First Colonial, Firstar and their
respective representatives and of the publicly available information that was
reviewed by us. At your direction, we have also relied upon the managements of
both First Colonial and Firstar as to the reasonableness and achievability of
the financial and operating forecasts provided to us (and the assumptions and
bases therefor). In that regard, we have assumed with your permission that
such forecasts, including without limitation projected costs savings and
operating synergies resulting from the Merger, reflect the best currently
available estimates and judgments of such respective managements and that such
projections and forecasts will be realized in the amounts and in the time
periods currently estimated by the managements of both First Colonial and
Firstar. We have not independently verified and have relied on and assumed
that the aggregate allowances for loan losses set forth in the balance sheets
of each of First Colonial and Firstar at September 30, 1994 are adequate to
cover such losses and complied fully with applicable law, regulatory policy and
sound banking practice as of the date of such financial statements. With your
permission, we did not independently verify the carrying values of other real
estate owned and loans classified as in-substance foreclosures of each of First
Colonial and Firstar in their respective September 30, 1994 balance sheets, and
we have assumed that such carrying values complied fully with applicable law,
regulatory policy and sound banking practice as of such date. We were not
retained to and we did not conduct a physical inspection of any of the
properties or facilities of First Colonial or Firstar, nor did we make any
independent evaluation or appraisal of the assets, liabilities or prospects of
First Colonial or Firstar, were not furnished with any such evaluation or
appraisal, and did not review any individual credit files. With your
permission and that of your counsel, in rendering this opinion we have relied
on the general advice of your counsel as to all legal matters. We have also
assumed with your permission that the Merger is, and will be, in compliance
with all laws and regulations that are applicable to First Colonial and
Firstar. With your permission, we have assumed for purposes of our opinion
that the Merger will be recorded as a pooling of interests under generally
accepted accounting principles and will qualify as a tax-free reorganization.
In rendering our opinion, we have been advised by Firstar and
First Colonial and have assumed with your permission that there are no other
factors that would impede any necessary regulatory or governmental approval for
the Merger and we have further assumed with your permission that, in the course
of obtaining the necessary regulatory and governmental approvals for the
proposed Merger, no
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Board of Directors
First Colonial Bankshares Corporation
______________, 1994
Page 4
restriction will be imposed on Firstar or the surviving corporation in the
Merger that would have a material adverse effect on Firstar or the contemplated
benefits of the Merger. We have also assumed with your permission that there
would not occur any change in the applicable law or regulation that would cause
a material adverse change in the prospects or operations of Firstar.
Donaldson, Lufkin & Jenrette Securities Corporation, as part
of its investment banking business, is regularly engaged, with respect to bank
holding companies and other corporations, in the valuation of businesses and
their securities in connection with mergers and acquisitions, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements, and valuations for corporate and other
purposes. We were retained by First Colonial to act as its financial advisor
with respect to any sale, merger, consolidation, or other business combination,
in one or a series of transactions, involving all or a substantial amount of
the business, securities or assets of First Colonial. We have received and
will receive compensation from First Colonial in connection with our services,
a significant portion of which is contingent upon the consummation of the
Merger.
At your direction, we solicited a limited number of
institutions, including Firstar, to determine their interest in a possible
business combination with First Colonial. In addition to the Firstar proposal,
another indication of interest was received which is described below. You
subsequently instructed us that, based on considerations identified by you, you
determined to negotiate with Firstar on an exclusive basis. Accordingly, at
your direction, we ceased discussions with parties other than Firstar. The
ensuing negotiations with Firstar led to execution of the Merger Agreement.
In expressing the opinion below, it should be understood that
we are not expressing an opinion on the relative financial merits of the
Exchange Ratio compared to the value holders of First Colonial Common Stock
might receive in connection with a possible alternative transaction. In
particular, we note that a possible alternative transaction involving part-cash
and part-stock at a nominal value of $27.00 was proposed to the Board prior to
its determination to negotiate on an exclusive basis with Firstar. (As noted
in the Proxy Statement-Prospectus, subsequent to the execution of the Merger
Agreement, the proposed terms of the possible alternative transaction were
modified as described in such Proxy Statement-Prospectus.) We are not
expressing an opinion as to the relative value of the Firstar Common Stock
which would be received in the Merger (either before, or on a pro forma basis
giving effect to, the Merger) compared to the value of the securities and cash
which might have been received in the possible alternative transaction.
In the ordinary course of our business we may actively trade
the debt and equity securities of companies, including First Colonial and
Firstar, for our own account and for the accounts of customers and may hold a
long or short position in such securities at any time.
Our opinion is based solely upon the information available to
us and the economic, market, and other circumstances as they exist as of the
date hereof. Events occurring after the date hereof could materially affect
the assumptions used in preparing this opinion. We have not undertaken to
reaffirm or revise this opinion or otherwise comment upon any events occurring
after the date hereof.
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Board of Directors
First Colonial Bankshares Corporation
______________, 1994
Page 5
We are not expressing any opinion herein as to the prices at
which shares of Firstar Common Stock issued in the Merger may trade if and when
they are issued or at any future time, nor does our opinion constitute a
recommendation to any holder of First Colonial Common Stock as to how such
holder should vote with respect to the Merger Agreement at any meeting of
holders of First Colonial Common Stock.
This letter is for the information of the Board of Directors
of First Colonial and is not to be used, circulated, quoted or otherwise
referred to for any other purpose, except in each case with our prior written
consent which shall not be unreasonably withheld; provided, however, that this
letter may be filed with or included in any registration statement, proxy
statement, information statement or tender offer document to be delivered to
the holders of First Colonial Common Stock if set forth in its entirety
therein, unless it has been withdrawn prior to the date of such document.
Subject to the foregoing and based on our experience as
investment bankers, our activities as described above, and other factors we
have deemed relevant, we are of the opinion as of the date hereof that the
Exchange Ratio is fair, from a financial point of view, to the holders of First
Colonial Common Stock.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By _________________________________
C. Douglas Mercer II
Managing Director
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Pursuant to the provisions of Wisconsin Business Corporation
Law, Sections 180.0850 through 180.0859, inclusive, directors and officers of
Firstar are entitled to mandatory indemnification from Firstar against certain
liabilities and expenses (i) to the extent such officers or directors are
successful in the defense of a proceeding; and (ii) in proceedings in which the
director or officer is not successful in defense thereof, unless it is
determined that the director or officer breached or failed to perform his or
her duties to Firstar and such breach or failure constituted: (a) a willful
failure to deal fairly with Firstar or its shareholders in connection with a
matter in which the director or officer had a material conflict of interest;
(b) a violation of the criminal law unless the director or officer had
reasonable cause to believe his or her conduct was lawful or had no reasonable
cause to believe his or her conduct was unlawful; (c) a transaction from which
the director or officer derived an improper personal profit; or (d) willful
misconduct. Additionally, under Section 180.0828 of the Wisconsin Business
Corporation Law, directors of Firstar are not subject to personal liability to
Firstar, its shareholders or any person asserting rights on behalf thereof for
certain breaches or failures to perform any duty resulting solely from their
status as directors, except in circumstances paralleling those outlined above.
Firstar's Bylaws contain similar indemnification provisions as
to directors and officers of Firstar. In addition, Firstar has entered into
individual indemnity agreements with all of its current directors. The
indemnity agreements are virtually identical in all substantive respects to
Firstar's Bylaws.
Expenses for the defense of any action for which
indemnification may be available may be advanced by Firstar under certain
circumstances.
Firstar maintains a liability insurance policy for officers
and directors which extends to, among other things, liability arising under the
Securities Act of 1933, as amended.
In addition, Firstar's Pension Plan and Thrift and Sharing
Plan provide for indemnification of members of the plan committees and
directors of Firstar as follows:
The Company shall indemnify each member of the Plan Committee
and the Board and hold each of them harmless from the
consequences of his acts or conduct in his official capacity,
if he acted in good faith and in a manner he reasonably
believed to be solely in the best interests of the
Participants and their Beneficiaries, and with respect to any
criminal action or proceeding had no reasonable cause to
believe his conduct was unlawful. Such indemnification shall
cover any and all attorneys' fees and expenses, judgments,
fines and amounts paid in settlement, but only to the extent
such amounts are not paid to such person(s) under the
Company's fiduciary insurance policy and to the extent that
such amounts are actually and reasonably incurred by such
person(s).
S-1
<PAGE> 163
Item 21. Exhibits and Financial Statement Schedules.
(a) The following exhibits have been filed (except where
otherwise indicated) as part of this Registration Statement:
Exhibit No. Exhibit
2(a) Agreement and Plan of Reorganization dated
as of July 31, 1994, among Firstar
Corporation, Firstar Corporation of
Illinois and First Colonial Bankshares
Corporation (Included as Appendix B of the
Proxy Statement-Prospectus; Registrant
agrees to furnish supplementally a copy of
any omitted schedule to the Commission upon
request.)
2(b) Plan of Merger dated as of July 31, 1994,
between First Colonial Bankshares
Corporation and Firstar Corporation of
Illinois and joined in by Firstar
Corporation for certain limited purposes
(Included as Exhibit A of Appendix B of the
Proxy Statement-Prospectus)
3(a) Restated Articles of Incorporation, as
amended, of Firstar
3(b) Form of the Articles of Amendment to
Firstar's Restated Articles of
Incorporation creating the Series D
Convertible Preferred Stock
4(a) Indenture dated as of June 1, 1986,
between Firstar Corporation and Chemical
Bank, as Trustee, relating to Firstar
Corporation's 10% Notes due 1996 (Exhibit
4(b) to Amendment No. 1 to Registration No.
33-5932; incorporated herein by reference)
4(b) Indenture dated as of May 1, 1988,
between Firstar Corporation and Chemical
Bank, as Trustee, relating to Firstar
Corporation's 10-1/4% Notes due 1998
(Exhibit 4(a) to Amendment No. 1 to
Registration No. 33-21527; incorporated
herein by reference)
4(c) Shareholder Rights Plan of Firstar
Corporation (Exhibit 4 of Form 8-K dated
January 19, 1989; incorporated herein by
reference)
4(d) Form of Mandatory Stock Purchase Agreement
dated as of October 17, 1984 (Exhibit 10.1
to Registration Statement No. 2-61745;
incorporated herein by reference)
4(e) Form of 14% Subordinated Capital Note due
October 17, 1996 (Exhibit 10.2 to
Registration Statement No. 2-61745;
incorporated herein by reference)
4(f) Form of Assignment and Assumption Agreement
among First Colonial, Firstar and each of
the obligors named on the signature pages
thereof
4(g) Form of Amended and Restated Deposit
Agreement among Firstar, Firstar Trust
Company, as depositary and the holders from
time to time of the Depositary Receipts
issued thereunder (to be filed by amendment)
4(h) Form of Depositary Receipt (to be filed by
amendment)
5 Opinion of Howard H. Hopwood III, Esq.
8 Form of Tax Opinion of Vedder, Price,
Kaufman & Kammholz
12 Statement Regarding Computation of Ratios
23(a) Consent of KPMG Peat Marwick LLP
addressed to Board of Directors of First
Colonial Bankshares Corporation
23(b) Consent of KPMG Peat Marwick LLP addressed
to Board of Directors of Firstar Corporation
23(c) Consent of Howard H. Hopwood III, Esq.
(included in Exhibit 5)
23(d) Consent of Vedder, Price, Kaufman & Kammholz
(included in Exhibit 8)
23(e) Consent of Donaldson, Lufkin & Jenrette (to
be filed by amendment)
24 Powers of Attorney
S-2
<PAGE> 164
Exhibit No. Exhibit
- ----------- -------
99 Form of Proxy for the First Colonial Special
Meeting of Stockholders
(b) No financial statement schedules are required to be
filed with regard to Firstar or First Colonial.
Item 22. Undertakings.
(1) Firstar hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of the Registrant's Special report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated
by reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(2) Firstar hereby undertakes 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.
(3) Firstar undertakes that every Prospectus (i) that is
filed pursuant to paragraph (2) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, as amended, 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.
(4) Insofar as indemnification for liabilities arising
under the Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of Firstar pursuant to the foregoing
provisions, or otherwise, Firstar has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by Firstar of expenses incurred or paid by a director, officer or
controlling person or Firstar 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, Firstar 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 is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
(5) Firstar hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through
the date of responding to the request.
S-3
<PAGE> 165
(6) Firstar hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
(7) Firstar hereby undertakes to remove from registration
by means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
S-4
<PAGE> 166
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereunto duly authorized in the City of Milwaukee
and State of Wisconsin on November 21, 1994.
FIRSTAR CORPORATION
By: /s/ Roger L. Fitzsimonds
------------------------------
Roger L. Fitzsimonds
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Roger L. Fitzsimonds Chairman of the Board, Chief November 21, 1994
---------------------------------- Executive Officer and
Roger L. Fitzsimonds Director
/s/ John A. Becker President, Chief Operating November 21, 1994
---------------------------------- Officer and Director
John A. Becker
/s/ William H. Risch Senior Vice President-Finance November 21, 1994
----------------------------------
William H. Risch and Treasurer
/s/ Michael E. Batten * Director November 21, 1994
---------------------------------
Michael E. Batten
Director
----------------------------------
Robert C. Buchanan
/s/ George M. Chester, Jr. * Director November 21, 1994
---------------------------------
George M. Chester, Jr.
/s/ Roger H. Derusha * Director November 21, 1994
---------------------------------
Roger H. Derusha
/s/ James L. Forbes * Director November 21, 1994
---------------------------------
James L. Forbes
/s/ Holmes Foster * Director November 21, 1994
---------------------------------
Holmes Foster
</TABLE>
S-5
<PAGE> 167
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Joseph F. Heil, Jr. * Director November 21, 1994
---------------------------------
Joseph F. Heil, Jr.
Director
----------------------------------
John H. Hendee, Jr.
/s/ Jerry M. Hiegel * Director November 21, 1994
---------------------------------
Jerry M. Hiegel
Director
----------------------------------
Joseph F. Hladky, III
/s/ James H. Keyes * Director November 21, 1994
---------------------------------
James H. Keyes
/s/ Sheldon B. Lubar * Director November 21, 1994
---------------------------------
Sheldon B. Lubar
/s/ Daniel F. McKeithan, Jr. * Director November 21, 1994
---------------------------------
Daniel F. McKeithan, Jr.
/s/ George W. Mead, II Director November 21, 1994
----------------------------------
George W. Mead, II
/s/ Guy A. Osborn Director November 21, 1994
----------------------------------
Guy A. Osborn
/s/ Judith D. Pyle * Director November 21, 1994
---------------------------------
Judith D. Pyle
Director
----------------------------------
Clifford V. Smith, Jr.
/s/ William W. Wirtz * Director November 21, 1994
---------------------------------
William W. Wirtz
</TABLE>
By: /s/ Howard H. Hopwood III
--------------------------
Howard H. Hopwood III
Attorney-in-Fact
__________________________
*Pursuant to authority granted by powers of attorney filed with
the Registration Statement.
S-6
<PAGE> 168
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequential
Exhibit No. Exhibit Page Number
----------- ------- -----------
<S> <C> <C>
2(a) Agreement and Plan of Reorganization dated as of July 31, 1994, among
Firstar Corporation, Firstar Corporation of Illinois and First
Colonial Bankshares Corporation (Included as Appendix B of the Proxy
Statement-Prospectus; Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Commission upon request.)
2(b) Plan of Merger dated as of July 31, 1994, between First Colonial
Bankshares Corporation and Firstar Corporation of Illinois and joined
in by Firstar Corporation for certain limited purposes (Included as
Exhibit A of Appendix B of the Proxy Statement-Prospectus)
3(a) Restated Articles of Incorporation, as amended, of Firstar
3(b) Form of the Articles of Amendment to Firstar's Restated Articles of
Incorporation creating the Series D Convertible Preferred Stock
4(a) Indenture dated as of June 1, 1986, between Firstar Corporation and
Chemical Bank, as Trustee, relating to Firstar Corporation's 10%
Notes due 1996 (Exhibit 4(b) to Amendment No. 1 to Registration No.
33-5932; incorporated herein by reference)
4(b) Indenture dated as of May 1, 1988, between Firstar Corporation and
Chemical Bank, as Trustee, relating to Firstar Corporation's 10-1/4%
Notes due 1998 (Exhibit 4(a) to Amendment No. 1 to Registration No.
33-21527; incorporated herein by reference)
4(c) Shareholder Rights Plan of Firstar Corporation (Exhibit 4 of Form 8-K
dated January 19, 1989; incorporated herein by reference)
4(d) Form of Mandatory Stock Purchase Agreement dated as of October 17,
1984 (Exhibit 10.1 to Registration Statement No. 2-61745;
incorporated herein by reference)
4(e) Form of 14% Subordinated Capital Note due October 17, 1996 (Exhibit
10.2 to Registration Statement No. 2-61745; incorporated herein by
reference)
4(f) Form of Assignment and Assumption Agreement among First Colonial,
Firstar and each of the obligors named on the signature pages thereof
4(g) Form of Amended and Restated Deposit Agreement among Firstar, Firstar
Trust Company, as depositary and the holders from time to time of the
Depositary Receipts issued thereunder (to be filed by amendment)
4(h) Form of Depositary Receipt (to be filed by amendment)
5 Opinion of Howard H. Hopwood III, Esq.
8 Form of Tax Opinion of Vedder, Price, Kaufman & Kammholz
12 Statement Regarding Computation of Ratios
23(a) Consent of KPMG Peat Marwick LLP addressed to Board of Directors of
First Colonial Bankshares Corporation
</TABLE>
<PAGE> 169
<TABLE>
<CAPTION>
Sequential
Exhibit No. Exhibit Page Number
----------- ------- -----------
<S> <C> <C>
23(b) Consent of KPMG Peat Marwick LLP addressed to Board of Directors of
Firstar Corporation
23(c) Consent of Howard H. Hopwood III, Esq. (included in Exhibit 5)
23(d) Consent of Vedder, Price, Kaufman & Kammholz (included in Exhibit 8)
23(e) Consent of Donaldson, Lufkin & Jenrette (to be filed by amendment)
24 Powers of Attorney
99 Form of Proxy for the First Colonial Special Meeting of Stockholders
</TABLE>
2
<PAGE> 1
EXHIBIT 3(a)
FIRSTAR CORPORATION
RESTATED ARTICLES OF INCORPORATION
RESTATED AS OF MAY 7, 1981
(As Amended and in Effect September 9, 1992)
This Corporation, being organized under the laws of Wisconsin and being
subject to the provisions of Chapter 180 of the Wisconsin Statutes, hereby
amends its restated articles of incorporation in their entirety and as so
amended adopts the following Restated Articles of Incorporation, which
supersede and take the place of its heretofore existing restated articles of
incorporation and all amendments thereto:
ARTICLE I
NAME
The name of the Corporation is "FIRSTAR CORPORATION".
ARTICLE II
PURPOSE
The purposes for which the Corporation is organized are to engage in any
lawful activity within the purposes for which corporations may be organized
under the Wisconsin Business Corporation Law (Chapter 180, Wisconsin Statutes);
provided, however, that the Corporation shall not engage in any activities
prohibited by the Bank Holding Company Act of 1956, as amended.
ARTICLE III
CAPITAL STOCK
(1) The number of shares of which the Corporation shall have authority to
issue is 122,500,000, divided into the following classes:
(a) 120,000,000 shares of the par value of $1.25 each, designated as
"Common Stock"; and
(b) 2,500,000 shares of the par value of $1.00 each, designated as
"Preferred Stock".
<PAGE> 2
(2) The Preferred Stock may be issued from time to time in one or more
series, with such designations, preferences, limitations, and relative
rights as shall be stated and expressed in the resolution or
resolutions providing for the issuance of such series and adopted by
the board of directors pursuant to the authority given as provided by
the Wisconsin Business Corporation Law and not inconsistent with the
provisions hereof. All shares of Preferred Stock shall be identical
except as to the following relative rights and preferences, in respect
of any or all of which there may be variations between different
series as fixed and determined by the board of directors in the
resolution or resolutions providing for the issuance of such series:
(a) rate of dividend; (b) price at and terms and conditions on which
shares may be redeemed; (c) amount payable upon shares in event of
voluntary or involuntary liquidation; (d) sinking fund provisions for
the redemption or purchase of shares; (e) terms and conditions on
which shares may be converted, if the shares of any series are issued
with the privilege of conversion; and (f) voting rights, if any.
(3) The holders of Preferred Stock shall be entitled to receive, if and
when declared by the board of directors out of the funds of the
Corporation legally available therefor, dividends at, but not
exceeding, the rate established by the board of directors in the
resolution or resolutions providing for the issuance of any series of
Preferred Stock, and such dividends shall be paid or set apart before
any dividends (other than dividends payable in Common Stock of the
Corporation) shall be paid upon or set apart for the Common Stock.
The dividends on the Preferred Stock shall be cumulative, so if at any
time the full amount of dividends accrued and in arrears on the
Preferred Stock shall not be paid, the deficiency (without interest)
shall be payable before any dividends shall be paid upon or set apart
on the Common Stock. Dividends on the Preferred Stock shall accrue
and be cumulative from the date of issue and shall be without priority
as between series. Any dividends paid upon the Preferred Stock in an
amount less than full cumulative dividends accrued and in arrears upon
all Preferred Stock shall, if more than one series be outstanding, be
distributed among the different series in proportion to the aggregate
amounts which would be distributed to the Preferred Stock of each
series if full cumulative dividends were declared and paid thereon.
Whenever all dividends accrued and in arrears on the Preferred Stock
shall have been declared and shall have been paid or set apart, the
board of directors may declare dividends on the Common Stock out of
the funds of the Corporation legally available therefor.
(4) In the event of the liquidation or winding up of the Corporation,
whether voluntary or involuntary, the holders of Preferred Stock,
shall be entitled to receive the fixed liquidation amount per share,
plus accrued dividends, all as provided in the resolution or
resolutions adopted by the board of directors providing for the
issuance of any series of Preferred Stock, and no more, before any
amount shall be paid to the holders of Common Stock. As used in this
paragraph "accrued dividends" means, in respect to each share of
Preferred Stock, an amount equal to the fixed dividend rate per annum
for each share (without interest thereon), from the date from which
dividends commence to accrue in respect of such share to the date as
of which the computation is to be
-2-
<PAGE> 3
made, less the aggregate amount (without interest thereon) of all
dividends theretofore paid or declared and set aside for payment in
respect thereof. If, upon any such voluntary or involuntary
liquidation, the assets of the Corporation shall be insufficient to
permit payment to the holders of Preferred Stock of the full
preferential amounts aforesaid, then the entire assets of the
Corporation available for distribution to shareholders shall be
distributed ratably among the holders of Preferred Stock in proportion
to the full preferential amounts to which they are respectively
entitled. The holders of Preferred Stock shall not otherwise be
entitled to participate in any distribution of assets of the
Corporation which assets shall be divided and distributed among the
holders of Common Stock according to their respective rights and
preferences. No consolidation or merger of the Corporation with or
into another corporation or corporations and no sale by the
Corporation of all or substantially all of its assets shall be deemed
a liquidation or winding up of the Corporation within the meaning of
this paragraph.
(5) The holders of Preferred Stock shall have only such voting rights as
shall be stated in the resolution or resolutions of the board of
directors providing for the issuance of any series of Preferred Stock.
(6) The Common Stock shall be junior to the Preferred Stock and shall be
subject to all the rights and preferences of the Preferred Stock.
(7) No holder of any shares of the Corporation shall have any preemptive
right to acquire any unissued shares of this Corporation, now or
hereafter authorized, or other securities whether or not convertible
into shares of the Corporation or carrying a right to subscribe to or
acquire such shares.
(8) The Corporation is authorized by action of the board of directors
without further consent of shareholders to purchase, take, receive or
otherwise acquire shares of the Corporation, subject only to the
provisions of Sections 180.385(1)(a) and (b) of the Wisconsin
Statutes.
(9) The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the owner thereof for all purposes, and
shall not be bound to recognize any equitable or other claim to or
interest in any such share or shares on the part of any other person,
whether or not it shall have express or other notice thereof.
ARTICLE IV
BOARD OF DIRECTORS
(1) Subject to the terms of any series of Preferred Stock as may be issued
from time to time pursuant to the provisions of Section (2) of Article
III, as such terms are stated and expressed in the resolution or
resolutions of the board of directors providing for the issuance of
such Preferred Stock,
-3-
<PAGE> 4
(a) The board of directors shall consist of such number of directors
as is fixed from time to time by a majority of the board of
directors in the manner provided in the By-Laws.
(b) The number of directors may be increased or decreased from time to
time by a majority of the board of directors in the manner
provided in the By-Laws, but no decrease shall have the effect
of shortening the term of any incumbent director.
(2) The board of directors shall be divided into three (3) classes, as
nearly equal in number as possible, as shall be provided in the By-
Laws.
(3) Subject to the terms of any series of Preferred Stock as may be issued
from time to time pursuant to the provisions of Section (2) of Article
III, as such terms are stated and expressed in the resolution or
resolutions of the board of directors providing for the issuance of
such Preferred Stock,
(a) Any vacancy occurring in the board of directors resulting from
death, resignation, removal, disqualification or any other cause,
including a vacancy created by an increase in the number of
directors, may be filled only by the affirmative vote of not
less than a majority of the directors then in office, although
less than a quorum.
(b) If there shall be no directors then in office, the shareholders
shall be entitled to fill the vacancies on the board of directors.
(c) Directors appointed to newly created directorships resulting from
any increase in the authorized number of directors or to fill any
vacancies in the board of directors resulting from death,
resignation, removal, disqualification or any other cause shall
hold office for a term expiring at the next annual meeting of
shareholders at which the term of the class to which they have
been appointed expires.
(4) Subject to the terms of any series of Preferred Stock as may be issued
from time to time pursuant to the provisions of Section (2) of Article
III, as such terms are stated and expressed in the resolution or
resolutions of the board of directors providing for the issuance of
such Preferred Stock, a director may be removed from office only by
the affirmative vote of not less than 75% of the outstanding shares
entitled to vote for the election of such director, voting together as
a single class, taken at a special meeting of shareholders called for
that purpose.
(5) Notwithstanding the provisions of Article VI, the affirmative vote of
not less than 75% of the outstanding shares entitled to vote generally
for the election of directors, voting together as a single class,
shall be required to amend or repeal this Article IV, or to adopt any
provision of the Restated Articles of Incorporation or By-Laws
inconsistent with the purpose or intent of this Article IV.
-4-
<PAGE> 5
ARTICLE V
REGISTERED OFFICE AND AGENT
At the time of adoption of these Restated Articles of Incorporation the
address of the registered office of the Corporation is 777 East Wisconsin
Avenue, Milwaukee, Wisconsin 53202, and the name of the registered agent at that
address is William J. Schulz.
ARTICLE VI
ELECTION OF MAJORITY AFFIRMATIVE VOTING REQUIREMENTS
The Corporation expressly elects the majority affirmative voting
requirements pursuant to Subsection 180.25(2) of the Wisconsin Business
Corporation Law (or any successor provision to such subsection) with respect to
all subjects referenced in such subsection (or such successor provision, as the
case may be).
-5-
<PAGE> 6
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES C PREFERRED STOCK
Pursuant to Section 180.12(4) of the Wisconsin Business Corporation Law,
We, Roger L. Fitzsimonds and William J. Schulz, President and
Chief Operating Officer, and Secretary, respectively, of Firstar Corporation, a
corporation organized and existing under the Wisconsin Business Corporation
Law, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Articles of Incorporation of the Corporation, as
amended, the Board of Directors on January 19, 1989 adopted the following
resolution creating a series of 600,000 shares of Preferred Stock, par value
$1.00 per share, designated as Series C Preferred Stock:
NOW, THEREFORE, BE IT RESOLVED, That pursuant to the authority
vested in the Board of Directors of this Corporation in accordance with the
provisions of its Restated Articles of Incorporation, as amended, a series of
Preferred Stock, par value $1.00 per share, of the Corporation be and it hereby
is created, and that the designation and amount and relative rights,
limitations and preferences thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series C Preferred Stock"; the number of shares
constituting such series shall be Six Hundred Thousand (600,000). Such number
of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series C Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation into Series C Preferred Stock.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series C Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first business days of January, April, July and October
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series C Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all noncash
dividends or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, $1.25 par value
per share, of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Payment Date, since the first issuance of any share or fraction of a
share of Series C Preferred Stock. In the event the corporation shall at any
time after January 19, 1989 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series C Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount
<PAGE> 7
by a fraction the numerator of which is the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately prior
to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share
on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series C
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series C
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series C Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series C Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the shareholders of
the Corporation. In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of shares
of Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
resolution of the Board of Directors creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series C Preferred Stock
and the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of shareholders of the Corporation.
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<PAGE> 8
(C) Except as set forth herein, holders of Series C
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series C Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
C Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Preferred Stock, except dividends paid ratably on the Series C
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
to or on a parity with (both as to dividends or upon dissolution,
liquidation or winding up) the Series C Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series C Preferred Stock, or any shares of stock ranking on a
parity with the Series C Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any corporation of
which an amount of voting securities sufficient to elect at least a majority of
the directors of such corporation is beneficially owned, directly or
indirectly, by the Corporation or otherwise controlled by the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series C
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock, par value $1.00 per share, and may be
reissued as part of a new series of
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<PAGE> 9
Preferred Stock, par value $1.00 per share, to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series C Preferred Stock unless, prior thereto, the
holders of shares of Series C Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, provided that
the holders of shares of Series C Preferred Stock shall be entitled to receive
an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Preferred Stock,
except distributions made ratably on the Series C Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series C Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the shares of Series C Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series C Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock that are outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series C Preferred
Stock shall not be redeemable.
Section 9. Fractional Shares. Series C Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting
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<PAGE> 10
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series C Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and to affirm the foregoing as true this 30th day of January, 1989.
[Corporate Seal]
/s/ Roger L. Fitzsimonds
--------------------
President and Chief
Operating Officer
Attest:
/s/ William J. Schulz
-----------------
Secretary
This document was drafted by Harry V. Carlson, Foley &
Lardner, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, and should be
recorded in the Office of the Register of Deeds of Milwaukee County, Wisconsin,
the County in which the registered office of Firstar Corporation is located.
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<PAGE> 1
EXHIBIT 3(b)
FORM OF
ARTICLES OF AMENDMENT
RELATING TO
SERIES D CONVERTIBLE PREFERRED STOCK
OF
FIRSTAR CORPORATION
__________________________________________
Pursuant to Sections 180.0602 and 180.1002
of the Wisconsin Business Corporation Law
__________________________________________
I, [name] , [title] of
Firstar Corporation, a corporation organized and existing under the Wisconsin
Business Corporation Law (the "Corporation"), in accordance with the provisions
of Sections 180.0602 and 180.1002 thereof, DO HEREBY CERTIFY THAT:
A. Pursuant to the authority conferred upon the Board of
Directors by the Restated Articles of Incorporation, as amended, of the
Corporation and in accordance with Sections 180.0602 and 180.1002 of the
Wisconsin Business Corporation Law, the Board of Directors of the Corporation
adopted a resolution on July 29, 1994, but which was not effective until the
date hereof, creating a series of shares of Preferred Stock, $1.00 par value,
of the Corporation, designated as Series D Convertible Preferred Stock.
B. Said resolution of the Board of Directors of the Corporation
creating the series designated as Series D Convertible Preferred Stock provides
that said series shall have such designation and number of shares and such
preferences, limitations and relative rights as are set forth in the paragraphs
below:
Series D Convertible Preferred Stock
1. Designation and Amount. The shares of such series
shall be designated "Series D Convertible Preferred Stock" and the number
of shares constituting such series shall be limited to 39,700. The
liquidation value shall be $500 per share.
2. Dividends.
(a) The holders of shares of Series D Convertible
Preferred Stock shall be entitled to receive, out of the assets of the
Corporation legally available therefor and as and if declared by the Board
of Directors, cash dividends at the rate of $35 per share per annum,
payable quarterly on the last day of the months of March, June, September
and December in each year, commencing _______________, 1995 [insert
date that is the last day of the calendar quarter in which the Effective
Time occurs, unless a dividend with a record date during such quarter and
prior to or on the Effective Time is declared on the FCBC Series C
Preference Stock, in which case the commencement date will be the last day
of the calendar quarter following the quarter in which the Effective Time
occurs]. Each such dividend shall be paid to the holders of record of
shares of Series D Convertible Preferred Stock on the applicable record
date, not exceeding 30 days
<PAGE> 2
preceding the payment date thereof, as shall be fixed by the Board of
Directors. Dividends on account of arrears for any past dividend periods
may be declared and paid at any time, without reference to any regular
dividend payment date, to holders of record on such date as may be fixed
by the Board of Directors, which shall not exceed 45 days preceding
such dividend payment date. Such dividends shall be cumulative (whether or
not in any quarterly dividend period there shall be funds of the
Corporation legally available for the payment of such dividends),
commencing on the date of original issuance.
(b) No full dividends shall be declared or paid or set
apart for payment on any class or series of stock of the Corporation
ranking, as to dividends, on a parity with the Series D Convertible
Preferred Stock for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the
Series D Convertible Preferred Stock for all dividend payment periods
terminating on or prior to the date of payment of such full cumulative
dividends. When dividends are not paid in full, as aforesaid, upon the
shares of the Series D Convertible Preferred Stock and any class or series
of stock of the Corporation ranking on a parity as to dividends with the
Series D Convertible Preferred Stock, all dividends declared upon shares
of the Series D Convertible Preferred Stock and any class or series of
stock of the Corporation ranking on a parity as to dividends with the
Series D Convertible Preferred Stock shall be declared pro rata so that
the amount of dividends declared per share on the Series D Convertible
Preferred Stock and such other stock shall in all cases bear to each other
the same ratio that accrued dividends per share on the shares of the
Series D Convertible Preferred Stock and such other stock bear to each
other. Holders of shares of the Series D Convertible Preferred Stock
shall not be entitled to any dividend, whether payable in cash, property
or stock, in excess of full cumulative dividends, as herein provided, on
the Series D Convertible Preferred Stock. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series D Convertible Preferred Stock which may be in
arrears.
(c) So long as any shares of the Series D Convertible
Preferred Stock are outstanding, no dividend (other than a dividend in
Common Stock, par value $1.25 per share, of the Corporation ("Common
Stock") or in any other class or series of stock of the Corporation
ranking junior to the Series D Convertible Preferred Stock as to dividends
and upon liquidation and other than as provided in paragraph (b) of this
Section 2) shall be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock or upon any other
class or series of stock of the Corporation ranking junior to or on a
parity with the Series D Convertible Preferred Stock as to dividends or
upon liquidation, nor shall any Common Stock or any class or series of
stock of the Corporation ranking junior to or on a parity with the Series
D Convertible Preferred Stock as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration by the
Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to the Series D Convertible Preferred Stock as
to dividends and upon liquidation) unless, in each case, the full
cumulative dividends on all outstanding shares of the Series D Convertible
Preferred Stock shall have been paid for all past dividend payment
periods.
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<PAGE> 3
3. Conversion. Each holder of shares of Series D
Convertible Preferred Stock shall have the right, at his option, to
convert all or any part of such shares into shares of Common Stock of
the Corporation at any time on and subject to the following terms and
conditions:
(a) The shares of Series D Convertible Preferred Stock shall
be convertible at the office of the transfer agent for such series (the
"Transfer Agent"), and at such other place or places, if any, as the Board
of Directors of the Corporation may designate, into fully paid and
nonassessable (except as otherwise provided by the Wisconsin Business
Corporation Law) shares (calculated as to each conversion to the nearest
1/100th of a share) of Common Stock. The number of shares of Common Stock
issuable upon conversion of eachshare of Series D Convertible Preferred
Stock shall be equal to $500 divided by the conversion price in effect at
the time of conversion determined as hereinafter provided. The price at
which shares of Common Stock shall be delivered upon conversion (herein
called the "conversion price") shall be initially $23.30 per share of
Common Stock; provided, however, that such conversion price shall be
subject to adjustment from time to time in certain instances as
hereinafter provided. No payment or adjustment shall be made in respect
of dividends on Common Stock or Series D Convertible Preferred Stock upon
conversion of shares of Series D Convertible Preferred Stock. Shares of
Series D Convertible Preferred Stock surrendered for conversion after the
record date next preceding a dividend payment date for the Series D
Convertible Preferred Stock and before the dividend payment date must be
accompanied by payment of an amount equal to the dividend thereon which is
to be paid on such dividend payment date (unless the shares of Series D
Convertible Preferred Stock surrendered for conversion have been called
for redemption prior to such dividend payment date). If the Corporation
calls for redemption any shares of Series D Convertible Preferred Stock
such right of conversion shall cease and terminate, as to the shares
designated for redemption, at the close of business on the redemption
date, unless the Corporation defaults in the payment of the redemption
price. No fractional shares of Common Stock will be issued, and a cash
payment will be made in lieu of any fractional share in an amount equal to
the same fraction of the last sale price of the Common Stock (determined
as provided in sub-paragraph (c) (iv) of this Section 3) at the close of
business on the business day which next precedes the day of conversion.
(b) Before any holder of shares of Series D Convertible
Preferred Stock shall be entitled to convert the same into Common Stock,
he shall surrender the certificate or certificates therefor, duly endorsed
to the Corporation or in blank, at the office of the Transfer Agent for
such series or at such other place or places, if any, as the Board of
Directors of the Corporation has designated, and shall give written notice
to the Corporation at said office or place that he elects to convert
the same and shall state in writing therein the name or names (with
addresses) in which he wishes the certificate or certificates for Common
Stock to be issued. The Corporation will, as soon as practicable
thereafter, issue and deliver at said office or place to such holder of
shares of Series D Convertible Preferred Stock or to his nominee or
nominees, certificates for the number of full shares of Common Stock to
which he shall be entitled as aforesaid, together with cash in lieu of any
fraction of a share. Shares of Series D Convertible Preferred Stock shall
be deemed to have been converted as of the close of business on the date
of the surrender of such shares for conversion as provided above, and the
person or persons
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<PAGE> 4
entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such
Common Stock as of the close of business on such date.
(c) The conversion price in effect at any time shall be subject to
adjustment as follows:
(i) In case the Corporation shall (A) declare and pay a
dividend on its Common Stock in shares of its capital stock, (B) subdivide
its outstanding shares of Common Stock, (C) combine its outstanding shares
of Common Stock into a smaller number of shares, or (D) issue by
reclassification of its Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing corporation) any shares of its capital
stock, the conversion price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted so that the holder of
any share of Series D Convertible Preferred Stock surrendered for
conversion after such time shall be entitled to receive the kind and
amount of shares which he would have owned or have been entitled to
receive had such share of Series D Convertible Preferred Stock been
converted immediately prior to such time. Such adjustment shall be made
successively whenever any event listed above shall occur.
(ii) In case the Corporation shall issue rights or warrants
to all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below in paragraph (iv) of this Section 3(c)), on
the date fixed for the determination of shareholders entitled to receive
such rights or warrants the conversion price shall be reduced by
multiplying the conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination; provided,
however, in the event that all the shares of Common Stock offered for
subscription or purchase are not delivered upon the exercise of such
rights or warrants, upon the expiration of such rights or warrants the
conversion rate shall be readjusted to the conversion rate which would
have been in effect had the numerator and the denominator of the foregoing
fraction and the resulting adjustment been made based upon the number of
shares of Common Stock actually delivered upon the exercise of such rights
or warrants rather than upon the number of shares of Common Stock offered
for subscription or purchase, such adjustment to become effective
immediately after the opening of business on the day following the
expiration of such rights or warrants. For the purposes of this paragraph
(ii), the number of shares of Common Stock at any time outstanding shall
not include shares held in the treasury of the Corporation but shall
include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock.
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<PAGE> 5
(iii) In case the Corporation shall distribute to all holders
of its Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Corporation is the continuing
corporation) evidences of its indebtedness or assets (excluding
dividends or other distributions paid out of earned surplus) or
subscription rights or warrants excluding those referred to in paragraph
(ii) above), the conversion price shall be adjusted so that the same shall
equal the price determined by multiplying the conversion price in effect
immediately prior to the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per
share of the Common Stock on the date fixed for such determination less
the then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a resolution filed with
the Transfer Agent for such series) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of Common
Stock and the denominator shall be such Current Market Price per share of
the Common Stock, such adjustment to become effective immediately prior to
the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such distribution. Such
adjustment shall be made successively whenever any such distribution is
made and shall become effective retroactively after such record date.
(iv) For the purpose of any computation under paragraphs
(ii) and (iii) above, the "Current Market Price" on any date shall be
deemed to be the average of the daily closing prices per share of Common
Stock for 30 consecutive business days selected by the Corporation
commencing 45 business days before such date. The closing price for
each day shall be the last sale price regular way or, in case no such sale
takes place on such day, the average of the closing bid and asked prices
regular way, in either case on the New York Stock Exchange, or, if the
Common Stock is not listed or admitted to trading on such Exchange, on the
principal national securities exchange or national market system on which
the Common Stock is listed or admitted to trading, or if it is not listed
or admitted to trading on any national securities exchange or national
market system, the average of the closing bid and asked prices as
furnished by any member of the National Association of Securities Dealers,
Inc. selected from time to time by the Corporation for that purpose.
(v) All calculations under this Section 3 (c) shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the
case may be.
(vi) In case of any consolidation or merger of the
Corporation with or into any other corporation (other than a consolidation
or merger in which the Corporation is the continuing corporation), or in
case of any sale or transfer of all or substantially all of the assets of
the Corporation, the holder of each share of Series D Convertible
Preferred Stock shall, after such consolidation, merger, sale or transfer,
have the right to convert such share of Series D Convertible Preferred
Stock into the kind and amount of shares of stock and other securities and
property which such holder would have been entitled to receive upon such
consolidation, merger, sale or transfer if he had held the Common Stock
issuable upon the conversion of such share of Series D Convertible
Preferred Stock immediately prior to such consolidation, merger, sale or
transfer. In any such event, effective provision shall be made, in the
articles or
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<PAGE> 6
certificate of incorporation of the resulting or surviving corporation or
other corporation issuing or delivering such shares, other securities,
cash or other property or otherwise, so that the provisions set forth
herein for the protection of the conversion rights of the Series D
Convertible Preferred Stock shall thereafter be applicable, as nearly as
reasonably may be, to any such other shares of stock and other securities,
cash and other property deliverable upon conversion of the Series D
Convertible Preferred Stock remaining outstanding or other convertible
stock or securities received by the holders in place thereof; and any such
resulting or surviving corporation or other corporation issuing or
delivering such shares, other securities, cash or other property shall
expressly assume the obligation to deliver, upon the exercise of the
conversion privilege, such shares, securities, cash or other property as
the holders of the Series D Convertible Preferred Stock remaining
outstanding, or other convertible stock or securities received by the
holders in place thereof, shall be entitled to receive, pursuant to the
provisions hereof, and to make provision for the protection of the
conversion rights as above provided.
(vii) In the event that at any time, as a result of an
adjustment made pursuant to paragraph (i) above, the holder of any share
of Series D Convertible Preferred Stock thereafter surrendered for
conversion shall become entitled to receive any securities other than
shares of Common Stock, thereafter the amount of such other securities so
receivable upon conversion of any share of Series D Convertible
Preferred Stock shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in paragraph (i) to (vi),
inclusive, above, and the provisions of this Section 3(c) with respect to
the Common Stock shall apply on like terms to any such other securities.
(viii) No adjustment in the conversion price shall be
required unless such adjustment would require a change of at least 1% in
such price; provided, however, that any adjustments which by reason of
this paragraph (viii) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
(d) Whenever the conversion price is adjusted as herein provided:
(i) the Corporation shall promptly file with the Transfer
Agent for such series a certificate of the Treasurer of the Corporation
setting forth the adjusted conversion price and showing in reasonable
detail the facts upon which such adjustment is based, including a
statement of the consideration received or to be received by the
Corporation for any shares of Common Stock issued or deemed to have been
issued; and
(ii) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall forthwith
be required, and as soon as practicable after it is required, such notice
shall be mailed by the Corporation to the holders of record of Series D
Convertible Preferred Stock; provided, however, that if within ten
days after the mailing of such notice, an additional notice is required,
such additional notice shall be deemed to be required pursuant to this
paragraph (ii) as of the opening of business on the tenth day after such
mailing and shall set forth the conversion price as adjusted at such
opening of business, and upon the mailing of such additional notice no
other notice need be given of any adjustment in the conversion price
occurring
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<PAGE> 7
at or prior to such opening of business and after the time that the next
preceding notice given by mailing became required.
(e) In case:
(i) the Corporation shall authorize the distribution to
all holders of its Common Stock of evidences of its indebtedness or
assets (other than dividends or other distributions paid out of earned
surplus); or
(ii) the Corporation shall authorize the granting to the
holders of its Common Stock of rights to subscribe for or purchase any
shares of capital stock of any class or of any other rights; or
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of
the Corporation is required, or of the sale or transfer of all or
substantially all of the assets of the company; or
(iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in each case, the Corporation shall cause to be filed with the
Transfer Agent for the Series D Convertible Preferred Stock and shall
cause to be mailed, first class postage prepaid, to the holders of record
of the outstanding shares of Series D Convertible Preferred Stock at least
10 days prior to the applicable record date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the
purpose of such distribution or rights, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be
entitled to such distribution or rights are to be determined, or (y) the
date on which such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding
up.
(f) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, solely for the purpose of effecting the conversion of the
shares of Series D Convertible Preferred Stock, the full number of shares
of Common Stock then issuable upon the conversion of all outstanding
shares of Series D Convertible Preferred Stock. For the purpose of this
Section 3(f) the full number of shares of Common Stock issuable upon the
conversion of all outstanding shares of Series D Convertible Preferred
Stock shall be computed as if at the time of computation of such number of
shares of Common Stock all outstanding shares of Series D Convertible
Preferred Stock were held by a single holder. The Corporation shall from
time to time, in accordance with the Wisconsin Business Corporation Law,
increase the authorized amount of its Common Stock if at any time the
authorized amount of its Common Stock remaining unissued shall not be
sufficient to
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<PAGE> 8
permit the conversion of all shares of Series D Convertible Preferred
Stock at the time outstanding. If any shares of Common Stock required to
be reserved for issuance upon conversion of shares of Series D Convertible
Preferred Stock hereunder require registration with or approval of any
governmental authority under any Federal or State law before such
shares may be issued upon such conversion, the Corporation will in good
faith and as expeditiously as possible endeavor to cause such shares
to be so registered or approved.
(g) The Corporation will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of shares of Series D Convertible Preferred Stock pursuant
hereto. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
transfer and delivery of shares of Common Stock in a name other than
that in which the shares of Series D Convertible Preferred Stock so
converted were registered, and no such issue or delivery shall be made
unless and until the person requesting such issue has paid to the
Corporation the amount of any such tax or has established to the
satisfaction of the Corporation that such tax has been paid.
(h) Before taking any action which would cause an
adjustment reducing the conversion price below the then par value of the
Common Stock, the Corporation will take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable (except as
otherwise provided by the Wisconsin Business Corporation Law) shares of
Common Stock at the conversion price as so adjusted.
4. Liquidation Rights.
(a) Upon the voluntary dissolution, liquidation or winding-up
of the Corporation, the holders of the shares of Series D Convertible
Preferred Stock then outstanding shall be entitled to receive out of the
assets of the Corporation (whether representing capital or surplus),
before any payment or distribution shall be made on the Common Stock or
any other class or series of stock of the Corporation ranking junior
to the Series D Convertible Preferred Stock as to dividends or as to
distribution upon liquidation, dissolution or winding-up, cash in an
amount of $500 per share, plus an amount equal to all dividends cumulated
and unpaid thereon, to the date of final distribution to the holders of
the Series D Convertible Preferred Stock.
(b) Upon the involuntary dissolution, liquidation or winding-
up of the Corporation, the holders of the shares of the Series D
Convertible Preferred Stock then outstanding shall be entitled to receive
out of the assets of the Corporation (whether representing capital or
surplus), before any payment or distribution shall be made on the Common
Stock or any other class or series of stock of the Corporation ranking
junior to the Series D Convertible Preferred Stock as to dividends
or as to distribution upon liquidation, dissolution or winding-up, cash in
the amount equal to $500 per share, plus an amount equal to all dividends
cumulated and unpaid thereon, to the date of final distribution to the
holders of the Series D Convertible Preferred Stock.
-8-
<PAGE> 9
(c) After the payment to the holders of the shares of the
Series D Convertible Preferred Stock of the full preferential amounts
provided for in this Section 4, the holders of the Series D Convertible
Preferred Stock as such shall have no right or claim to any of the
remaining assets of the Corporation.
(d) In the event the assets of the Corporation available for
distribution to the holders of shares of the Series D Convertible
Preferred Stock upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, shall be insufficient to
pay in full all amounts to which such holders are entitled pursuant to
paragraph (a) or (b) of this Section 4, no distribution shall be made
on account of any shares of any class or series of stock of the
Corporation ranking on a parity with the shares of the Series D
Convertible Preferred Stock upon such dissolution, liquidation or winding
up unless proportionate distributive amounts shall be paid on account of
the shares of the Series D Convertible Preferred Stock, ratably, in
proportion to the full distributable amounts to which such holders and the
holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
(e) Upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of the Series D Convertible Preferred
Stock then outstanding shall be entitled to be paid out of the assets of
the Corporation available for distribution to its stockholders all amounts
to which such holders are entitled pursuant to paragraph (a) or (b) of
this Section 4 before any payment shall be made to the holders of any
class or series of stock of the Corporation ranking junior upon
liquidation to the Series D Convertible Preferred Stock.
(f) Upon the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation, cumulated dividends shall not include
fractional periods between records dates.
5. Optional Redemption. The shares of Series D Convertible
Preferred Stock are not redeemable prior to June 30, 1997. Thereafter the
shares of Series D Convertible Preferred Stock are redeemable in whole at
any time or in part from time to time at the option of the Corporation at
a redemption price of $500 per share, plus an amount equal to any
arrearage in dividends thereon. In the case of a redemption in part of
the shares of Series D Convertible Preferred Stock, the shares to be
redeemed shall be selected pro rata or by lot or in such other manner as
the Board of Directors may determine.
Notice of redemption shall be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of shares of
Series D Convertible Preferred Stock to be redeemed at the address shown
on the stock books of the Corporation (but no failure to mail such notice
or any defect therein or in the mailing thereof shall affect the validity
of the proceedings for such redemption except as to the holder to whom the
Corporation has failed to mail such notice or except as to the holder
whose notice was defective). On and after the redemption date, dividends
shall cease to accumulate on shares of Series D Convertible Preferred
Stock called for redemption (unless the Corporation defaults in the
payment of the redemption price).
-9-
<PAGE> 10
6. Voting Rights.
(a) Holders of shares of Series D Convertible Preferred Stock shall
not be entitled to vote on any matter, except as otherwise provided by law
or by the Restated Articles of Incorporation, as amended, and except that:
(i) The affirmative vote of the holders of a majority of the
outstanding shares of Series D Convertible Preferred Stock, voting
separately as a single class, shall be required to amend the Restated
Articles of Incorporation of the Corporation to create or
authorize, or increase the authorized amount of, any class or series of
stock ranking prior to the Series D Convertible Preferred Stock in respect
of dividends or distribution of assets on liquidation, dissolution or
winding up of the Corporation or otherwise alter or abolish the
liquidation preferences or any other preferential right of the Series D
Convertible Preferred Stock, alter or abolish the conversion rights of the
Series D Convertible Preferred Stock, reduce the redemption price or
otherwise alter any redemption rights of the Series D Convertible
Preferred Stock, alter or abolish any right of the Series D Convertible
Preferred Stock to receive dividends, or exclude or limit the voting
rights as to these matters.
(ii) If at any time the Corporation falls in arrears
in the payment of dividends on the Series D Convertible Preferred Stock
in an aggregate amount at least equal to the full accrued dividends for
six (6) quarterly dividend periods (a "voting event"), the number of
directors of the Corporation shall be increased by two and the holders of
the Series D Convertible Preferred Stock, voting separately as a
single class, shall have the right to elect two directors to fill the
positions so created. Until such voting event shall have been terminated
by payment of all dividends for all past dividend periods, any director
who has been so elected by the holders of Series D Convertible Preferred
Stock may be removed at any time, either with or without cause, only by
the affirmative vote of the holders of a majority of the votes entitled to
be cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may only
be filled by the vote of such holders. If and when such voting event
shall have been terminated, the holders of Series D Convertible Preferred
Stock shall be divested of the foregoing special voting rights, subject to
revesting upon the further occurrence of a voting event. Upon termination
of such voting event, the terms of office of all persons who may have been
elected directors by vote of the holders of Series D Convertible Preferred
Stock pursuant to the foregoing special voting rights shall immediately
terminate. Upon the occurrence of a voting event, the Corporation shall
immediately call special meeting of the holders of Series D Convertible
Preferred Stock entitled to vote upon the occurrence of such voting event
by mailing, by first-class mail, postage prepaid, to each holder of record
of such shares, at such holder's address as the same appears on the books
of the Corporation, a notice of special meeting to be held not less than
20 days nor more than 60 days after the date such notice is given. If the
Corporation does not call such special meeting, such special meeting may
be called by any holder or holders of 10 percent or more of such class, on
like notice. The record date for determining the holders entitled to
notice of and to vote at such meeting shall be the business day
immediately preceding the day on which such notice is mailed. The holders
of the Series D Convertible Preferred Stock, at the time entitled to cast
one-third of the votes entitled to be cast for the election of directors
at such special meeting,
-10-
<PAGE> 11
present in person or by proxy, shall constitute a quorum for the election
of directors at such special meeting. At any such meeting or adjournment
thereof in the absence of a quorum, subject to the provisions of any
applicable law, the holders of a majority of the shares of Series D
Convertible Preferred Stock, present in person or by proxy at such
meeting, shall have the power to adjourn the meeting for the election of
such directors without notice, other than an announcement at the
meeting, until a quorum is present. If such voting event shall have
been terminated after the notice of a special meeting provided for in this
paragraph has been given but before such special meeting shall have been
held, the Corporation shall, as soon as practicable after such
termination, mail notice of such termination to the holders of the Series
D Convertible Preferred Stock that would have been entitled to vote at
such special meeting.
(b) The foregoing voting provisions shall not apply if, at or
prior to the time when the act with respect to which such voting would
otherwise be required shall be effected, all outstanding Series D
Convertible Preferred Stock shall have been (i) redeemed or called for
redemption and sufficient funds shall have been deposited, in trust, to
effect such redemption in accordance with the provisions hereof, or (ii)
purchased or otherwise acquired by the Corporation and cancelled, or
converted into Common Stock of the Corporation.
7. Rank. The Series D Convertible Preferred Stock shall, as to
dividends and distributions upon liquidation, dissolution (whether
voluntary or involuntary) or winding up of the Corporation:
(a) rank in parity with any class or series of Preferred Stock of
the Corporation, without preference or priority as among holders of
such stock and the Series D Convertible Preferred Stock; and
(b) have preference and priority in ranking to the Common Stock and
any other class or series of common stock of the Corporation.
* * *
C. None of the shares of Series D Convertible Preferred Stock have
been issued.
D. The amendment creating the Series D Convertible Preferred Stock
was adopted by the Board of Directors of the Corporation in accordance with
section 180.1002 of the Wisconsin Business Corporation Law and shareholder
action was not required.
IN WITNESS WHEREOF, the undersigned has executed and subscribed
these Articles of Amendment on behalf of the Corporation and does affirm the
foregoing as true this _____ day of ______________, 1995.
By: ________________________________
[Name]
[Title]
________________
This instrument was drafted by, and should be returned to,____________________.
-11-
<PAGE> 1
EXHIBIT 4(f)
FORM OF
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Agreement among First Colonial Bankshares Corporation, a Delaware
corporation ("First Colonial"), Firstar Corporation, a Wisconsin corporation
("Firstar"), and each of the obligors named on the signature pages hereto (each
an "Obligor" and collectively the "Obligors") is entered into as of August __,
1994.
WHEREAS, First Colonial and each of the Obligors are parties to
Mandatory Stock Purchase Agreements each dated as of October 17, 1984 (the
"Mandatory Stock Purchase Agreements") which were entered into in tandem with
the issuance of First Colonial's outstanding 14% Subordinated Notes due October
17, 1996 payable to the Obligors (the "Subordinated Notes"); and
WHEREAS, Firstar, First Colonial and Firstar Corporation of Illinois
("Sub") have entered into an Agreement and Plan of Reorganization dated as of
July 31, 1994 (the "Acquisition Agreement") providing for the merger of First
Colonial into Sub and the conversion of all outstanding capital stock of First
Colonial into shares of capital stock of Firstar; and
WHEREAS, capitalized terms not otherwise defined herein are used as
defined in the Acquisition Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereunder set
forth and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Assignment of Mandatory Stock Purchase Agreements. As of the
Effective Time, First Colonial assigns to Firstar all of its rights and
obligations under the Mandatory Stock Purchase Agreements. From and after the
Effective Time, each of the Mandatory Stock Purchase Agreements shall represent
the right and obligation to purchase and sell shares of Firstar Common Stock
rather than FCBC Class B Common Stock, and in order to effect such change, each
of the Mandatory Stock Purchase Agreements shall automatically be amended as
follows:
a. All references to "FCBC" therein shall become references to
Firstar;
b. The term "Shares" used therein shall refer to Firstar Common
Stock;
c. The first paragraph of Section 1 of each Mandatory Stock
Purchase Agreement is hereby amended to read in its entirety as follows:
1. Purchase and Sale Obligation. Subject to the conditions
hereinafter set forth, the Obligor agrees to purchase, and Firstar
agrees to sell, on or before October 17, 1996 (the "Purchase Date"), an
aggregate of
<PAGE> 2
$[amount for each Obligor set forth on signature page] (the "Aggregate
Purchase Obligation") of Common Stock, $1.25 par value (the "Shares"), of
Firstar. The purchase price per share of the Shares (the "Purchase
Price") is equal to the Market Price (as defined below) of the Shares as
of the Purchase Date, divided by 0.7725, but in no event will the purchase
price per share be less than $4.40 nor more than $5.95. No fractional
Shares shall be issued or sold pursuant to this Agreement. The number of
Shares to be issued to each Obligor on account of such Obligor's Aggregate
Purchase Obligation shall be rounded down to the nearest whole number of
Shares, and such Obligor's Aggregate Purchase Obligation shall be
proportionately reduced by the amount attributable to any such fractional
Shares.
d. For purposes of determining the "Market Price" in the
second paragraph in Section 1, all references to "Class A Common"
shall become references to Firstar Common Stock.
e. In the event of any change in the Shares by reason of a
declaration of a stock dividend, spin-off, merger, consolidation,
recapitalization, or split-up, combination or exchange of shares, or
otherwise, the Market Price of the shares as of the Purchase Date,
the minimum and maximum limitations on the Purchase Price and the
shares of stock issuable hereunder shall be appropriately adjusted by
the Board of Directors of Firstar, whose determination shall be
conclusive.
2. Assumption of Subordinated Notes. As of the Effective Time,
Firstar assumes all of the obligations of First Colonial under the Subordinated
Notes. From and after the Effective Time, each of the Subordinated Notes shall
automatically be amended as follows:
a. All references therein to "FCBC" shall become references
to Firstar;
b. The description of the Mandatory Stock Purchase Agreement
in each Subordinated Note shall be amended to the extent necessary
to conform with the amendments set forth in Section 1 of this
Agreement;
c. The paragraph headed "Subordination" in each Subordinated
Note is amended to read in its entirety as follows:
Subordination. This Note is subordinated in right of payment
to all Senior Indebtedness (as defined below) of Firstar and
shall not constitute a claim of any kind against the
deposits held by any banking subsidiary of Firstar. "Senior
Indebtedness" shall include (i) Firstar's 10 1/4% notes issued
under an indenture dated as of May 1, 1988, (ii) Firstar's 10%
notes issued under an indenture dated as of June 1, 1986, (iii)
all other outstanding indebtedness of Firstar as of July 31,
1994, and (iv) all other indebtedness of Firstar evidenced by
-2-
<PAGE> 3
instruments acknowledged by Firstar to be, and specifically
denominated, as "Senior Indebtedness." Without in any way limiting the
general nature of this subordination provision, Firstar and the Holder
expressly agree that no payment of principal or interest shall be made
or accepted at any time an event of default exists under any Senior
Indebtedness.
3. Agreement and Consent of Obligors. By their execution hereof, each
of the Obligors consents to the foregoing provisions of this Agreement.
4. Further Assurances. Each of the parties to this Agreement agrees
to execute and deliver, at the request of Firstar, such further agreements and
instruments and take all such further action as may be necessary or appropriate
in the opinion of Firstar to carry out the intent of this Agreement. Without
limitation of the foregoing, at the Closing, the parties will execute and
deliver new Mandatory Stock Purchase Agreements and Subordinated Notes giving
effect to the amendments set forth in this Agreement in replacement of the
existing Mandatory Stock Purchase Agreements and the outstanding Subordinated
Notes.
5. Restriction on Transfer. Each Obligor agrees not to transfer or
otherwise dispose of such Obligor's interest in any Mandatory Stock Purchase
Agreement or the Subordinated Notes to a third party transferee unless as a
condition of such transfer the third party transferee shall execute an
assignment and assumption agreement in form acceptable to Firstar (and
substantially in the form of this Agreement), and such agreement shall be
deemed a supplement to this Agreement to which all Mandatory Stock Purchase
Agreements and Subordinated Notes then or thereafter acquired by the third
party transferee shall be subject. First Colonial shall use all reasonable
efforts to ensure that each Obligor complies with the foregoing restriction on
transfer.
6. Termination. If the Acquisition Agreement is terminated in
accordance with Article X thereof, then this Agreement will terminate
simultaneously and the provisions hereof shall have no further force or effect.
7. No Prohibition. Nothing in this Agreement shall be deemed to
restrict an Obligor from fulfilling its obligations under a Mandatory Stock
Purchase Agreement prior to the Effective Time or prohibit First Colonial from
reducing the principal amount of any Subordinated Note in full or partial
satisfaction of the purchase price for shares of FCBC Class B Common Stock
issued pursuant to any Mandatory Stock Purchase Agreement prior to the
Effective Time.
8. Miscellaneous. The headings in this Agreement are for convenience
of reference only and shall not alter or otherwise affect the meaning hereof.
This Agreement may be executed in any number of counterparts which together
shall constitute one instrument and shall be governed by and construed in
accordance with the laws of the State of Wisconsin and shall bind and inure to
the benefit of the parties hereto and their respective successors and assigns.
-3-
<PAGE> 4
IN WITNESS WHEREOF the parties have executed this Agreement as
of the date first above written.
FIRST COLONIAL BANKSHARES CORPORATION
By: _________________________________
Title:
FIRSTAR CORPORATION
By: _________________________________
Title:
Accepted and Agreed to as of
the date first above written:
_____________________________
[Name of Obligor]
Aggregate Purchase Obligation: ________________________
[Add separate signature
line for each Obligor]
-4-
<PAGE> 1
EXHIBIT 5
November 21, 1994
Firstar Corporation
777 East Wisconsin Avenue
Milwaukee, WI 53202
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-4 (the
"Registration Statement") to be filed by Firstar Corporation (the
"Corporation") with the Securities and Exchange Commission (the "Commission")
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), with
respect to shares of Common Stock of the Corporation, $1.25 par value ("Common
Stock"), the associated rights to purchase Series C Preferred Stock of the
Corporation (the "Preferred Share Purchase Rights"), and the Series D
Convertible Preferred Stock, $1.00 par value, of the Corporation ("Preferred
Stock"), issuable in connection with the merger (the "Merger") of Firstar
Corporation of Wisconsin ("FCW"), and First Colonial Bankshares Corporation
("First Colonial"), as described in the Proxy Statement-Prospectus included in
the Registration Statement.
As Senior Vice President and General Counsel of the Corporation, I am
familiar with the restated Articles of Incorporation and the Bylaws of the
Corporation and with its affairs. I also have examined, or caused to be
examined, such other documents and instruments and have made, or caused to be
made, such further investigation as I have deemed necessary or appropriate to
enable me to render this opinion.
Based upon the foregoing, it is my opinion that:
(1) The Corporation is duly incorporated and validly existing as a
corporation under the laws of the State of Wisconsin.
(2) The shares of Common Stock of the Corporation when issued upon the
effectiveness of the Merger and delivered to the holders of common stock
of First Colonial will be legally issued, fully-paid and non-assessable,
except that Section 180.0622 of the Wisconsin Business Corporation Law,
and judicial interpretations thereof, impose liability upon shareholders
for unpaid wage claims of the Corporation's employees, not exceeding six
months' service in any one case.
<PAGE> 2
Firstar Corporation
November 21, 1994
Page 2
(3) The shares of Preferred Stock of the Corporation when issued upon the
effectiveness of the Merger and delivered to the holders of Series C
Preference stock of First Colonial will be legally issued, fully-paid
and non-assessable, except that Section 180.0622 of the Wisconsin
Business Corporation Law, and judicial interpretations thereof, impose
liability upon shareholders for unpaid wage claims of the Corporation's
employees, not exceeding six months' service in any one case.
(4) The issuance of the Preferred Share Purchase Rights with the Common
Stock as set forth above has been duly and validly authorized by all
necessary corporate action.
I hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement and I further consent to the use of my name in the Registration
Statement under the caption "OPINIONS." In giving this consent, I do not admit
that I am in the category of persons whose consent is required under Section 7
of the Securities Act or the Rules and Regulations of the Commission issued
thereunder.
Very truly yours,
/s/ Howard H. Hopwood III
--------------------------
Howard H. Hopwood III
Senior Vice President
and General Counsel
<PAGE> 1
EXHIBIT 8
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, Illinois 60601-1003
312/609-7500
<TABLE>
<S> <C> <C>
VEDDER, PRICE, KAUFMAN, KAMMHOLZ & DAY VEDDER, PRICE, KAUFMAN & KAMMHOLZ VEDDER, PRICE, KAUFMAN, KAMMHOLZ & DAY
805 Third Avenue 4615 East State Street, Suite 201 1600 M Street, N.W.
New York, New York 10022-2203 Rockford, Illinois 61108-2100 Washington, D.C. 20036-3208
212/407-7700 815/226-7700 202/296-0500
</TABLE>
, 1994
[Form of Tax Opinion]
Board of Directors Board of Directors
First Colonial Bankshares Corporation Firstar Corporation
30 North Michigan Avenue, Suite 300 777 East Wisconsin Avenue
Chicago, Illinois 60602-0493 Milwaukee, Wisconsin 53202
Gentlemen:
In connection with the solicitation of proxies relating to the proposed
merger ("Merger") of First Colonial Bankshares Corporation, a Delaware
corporation ("First Colonial"), into Firstar Corporation of Wisconsin, a
Wisconsin corporation ("FCW") and a wholly-owned subsidiary of Firstar
Corporation, a Wisconsin corporation ("Firstar"), you have requested our
opinion with respect to certain federal income tax consequences of the Merger.
The Merger contemplates the acquisition by FCW of all the assets and
liabilities of First Colonial in exchange for common stock, $1.25 par value, of
Firstar, and associated Firstar preferred share purchase rights, and Series D
convertible preferred stock, $1.00 par value, of Firstar pursuant to an
Agreement and Plan of Reorganization, dated as of July 31, 1994 (the
"Agreement"), and a related Plan of Merger, dated as of July 31, 1994 (together
with the Agreement referred to herein as the "Merger Agreements"), entered into
by First Colonial, Firstar and Firstar Corporation of Illinois, an Illinois
corporation and wholly-owned subsidiary of Firstar ("FCI"), as predecessor to
FCW.
The opinion expressed in this letter is based on the Internal Revenue Code of
1986, as amended (the "Code"), the Income Tax Regulations promulgated by the
Treasury Department thereunder and judicial authority reported as of the date
hereof. We have also considered the position of the Internal Revenue Service
(the "Service") reflected in published and private rulings. Although we are
not aware of any pending changes to these authorities that would alter
<PAGE> 2
Board of Directors
, 1994
Page 2
our opinions, there can be no assurance that future legislative or
administrative changes, court decisions or Service interpretations will not
significantly modify the statements or opinions expressed herein. Although the
discussion herein is based upon our best interpretation of existing sources of
law and expresses what we believe a court would properly conclude if presented
with these issues, no assurance can be given that such interpretations would be
followed if they were to become the subject of judicial or administrative
proceedings. We express no opinion herein as to any issue of federal law other
than those specifically considered herein. We also do not express any opinion
as to any issue of state or local law.
For the purposes indicated above, and based upon our review, the conditions
set forth below, and representations made to us by First Colonial, Firstar and
FCI, it is our opinion that:
Provided the Merger qualifies as a statutory merger under applicable law, the
Merger of First Colonial into FCW, pursuant to the Merger Agreements, will
constitute a reorganization within the meaning of section 368(a)(1)(A) and
section 368(a)(2)(D) of the Code. First Colonial, FCW and Firstar will each
be considered "a party to a reorganization" within the meaning of section
368(b) of the Code for purposes of this reorganization.
In rendering this opinion, we have examined the Merger Agreements and such
other documents as we have deemed necessary or appropriate. We have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as copies, the
authenticity of the originals of such copies, and that the Merger will be
consummated pursuant to the applicable states' laws in the manner set forth in
the Merger Agreements. We have also assumed that any written representations
and covenants of First Colonial, Firstar and FCI made in connection with
rendering our opinion will be accurate and complete in all respects as of the
time they are provided to us and as of the closing and that the obligations and
rights of FCI under the Merger Agreements will be assumed by FCW pursuant to a
statutory merger of FCI into FCW prior to the closing of the Merger. Any
changes in these facts, or in the accuracy of these assumptions,
representations or covenants, may necessitate reconsideration of our opinion
and possibly result in different conclusions.
Our opinion is limited to those federal income tax issues specifically
considered herein and is addressed to and is only for the benefit of First
Colonial and Firstar. The opinion is furnished to you pursuant to sections
8.02(d) and 8.03(c) of the Agreement and may not be used or relied upon for any
other purpose and may not be circulated or otherwise referred to for any other
purpose without our express written consent.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement relating to the Merger and to the use of our name under
the captions "Proposed Merger - Certain
<PAGE> 3
Board of Directors
, 1994
Page 3
Federal Income Tax Consequences of the Merger" and "Opinions" in the Joint
Proxy Statement - Prospectus contained in such Registration Statement. In
giving such consent, we do not thereby concede that we are within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
<PAGE> 1
EXHIBIT 12
FIRSTAR CORPORATION AND FIRST COLONIAL BANKSHARES
COMBINED RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30 Years Ended December 31
----------------- -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS
Firstar
Net income before taxes $ 226,779 $ 221,819 $ 298,010 $ 237,532 $ 187,319 $ 164,294 $ 156,753
Fixed charges 9,640 10,234 13,453 14,541 16,850 18,560 17,695
---------- ---------- --------- ---------- ---------- ---------- -----------
Subtotal 236,419 232,053 311,463 252,073 204,169 182,854 174,448
First Colonial
Net income before taxes 18,290 15,914 19,829 17,559 20,372 16,801 15,595
Fixed charges 1,385 1,223 1,549 1,644 1,837 2,691 2,058
---------- ---------- --------- ---------- ---------- ---------- -----------
Subtotal 19,675 17,137 21,378 19,203 22,209 19,492 17,653
Total earnings $ 256,094 $ 249,190 $ 332,841 $ 271,276 $ 226,378 $ 202,346 $ 192,101
========== ========== ========= ========== ========== ========== ===========
FIXED CHARGES
Firstar
Interest expense on long-
term debt $ 9,640 $ 10,234 $ 13,453 $ 14,541 $ 16,850 $ 18,560 $ 17,695
First Colonial
Interest expense on long-
term debt 1,385 1,223 1,549 1,644 1,837 2,691 2,058
---------- ---------- --------- ---------- ---------- ---------- -----------
Total fixed charges $ 11,025 $ 11,457 $ 15,002 $ 16,185 $ 18,687 $ 21,251 $ 19,753
========== ========== ========= ========== ========== ========== ===========
PREFERRED STOCK DIVIDENDS
Firstar
Dividends on Preferred
stock $ -- $ 2,519 $ 3,266 $ 3,747 $ 4,054 $ 6,072 $ 7,517
Pre-tax adjustment -- 1,163 1,498 1,615 1,599 2,421 3,085
---------- ---------- --------- ---------- ---------- ---------- -----------
Subtotal -- 3,682 4,764 5,362 5,653 8,493 10,602
First Colonial
Dividends on Preference
stock 1,049 1,417 1,795 1,432 481 481 473
Pre tax adjustment 502 663 819 629 170 162 151
---------- ---------- --------- ---------- ---------- ---------- -----------
Subtotal 1,551 2,080 2,614 2,061 651 643 624
Total preferred stock
dividends $ 1,551 $ 5,762 $ 7,328 $ 7,423 $ 6,304 $ 9,136 $ 11,226
========== ========== ========= ========== ========== ========== ===========
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS 20.36 x 14.47 x 14.87 x 11.49 x 9.06 x 6.66 x 6.20 x
</TABLE>
<PAGE> 1
EXHIBIT 23(a)
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
First Colonial Bankshares Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-4 of Firstar Corporation of our report dated February 18, 1994, relating to
the consolidated balance sheet of First Colonial Bankshares Corporation and
Subsidiaries as of December 31, 1993 and 1992, and the related consolidated
statements of income, changes in stockholders' equity, and cash flows for each
of the years in the three-year period ended December 31, 1993, which report
appears in the December 31, 1993 annual report on Form 10-K of First Colonial
Bankshares Corporation and to the reference to our firm under the heading
"Experts" in the Proxy Statement-Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Chicago, Illinois
November 18, 1994
<PAGE> 1
EXHIBIT 23(b)
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Firstar Corporation:
We consent to incorporation by reference in the Registration Statement on Form
S-4 of Firstar Corporation of our report dated January 20, 1994, relating to
the consolidated balance sheets of Firstar Corporation and subsidiaries as of
December 31, 1993 and 1992, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 1993, which report appears in the December 31, 1993
annual report on Form 10-K of Firstar Corporation and to the reference to our
firm under the heading "Experts" in the Proxy Statement-Prospectus.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
November 18, 1994
<PAGE> 1
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
2nd day of November, 1994.
/s/ Michael E. Batten
<PAGE> 2
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
3rd day of November, 1994.
/s/ George M. Chester
<PAGE> 3
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
4th day of November, 1994.
/s/ Roger H. Derusha
<PAGE> 4
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
2nd day of November, 1994.
/s/ James L. Forbes
<PAGE> 5
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
3rd day of November, 1994.
/s/ Holmes Foster
<PAGE> 6
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
4th day of November, 1994.
/s/ Joseph F. Heil, Jr.
<PAGE> 7
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
4th day of November, 1994.
/s/ Jerry M. Hiegel
<PAGE> 8
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
5th day of November, 1994.
/s/ James H. Keyes
<PAGE> 9
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
4th day of November, 1994.
/s/ Sheldon B. Lubar
<PAGE> 10
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
2nd day of November, 1994.
/s/ Daniel F. McKeithan, Jr.
<PAGE> 11
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
3rd day of November, 1994.
/s/ George W. Mead, II
<PAGE> 12
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
8th day of November, 1994.
/s/ Guy A. Osborn
<PAGE> 13
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
6th day of November, 1994.
/s/ Judith D. Pyle
<PAGE> 14
EXHIBIT 24
FIRSTAR CORPORATION
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENTS
COVERING SECURITIES OF FIRSTAR CORPORATION
(FIRST COLONIAL BANKSHARES CORPORATION)
KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director
of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L.
Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J.
Schulz, and each of them, severally, his or her true and lawful attorney and
agent at any time and from time to time to do any and all acts and things and
execute, in his or her name (whether on behalf of Firstar Corporation, or as an
officer or director of Firstar Corporation, or otherwise) any and all
instruments which said attorney and agent may deem necessary, appropriate or
desirable to enable Firstar Corporation to comply with the Securities Act of
1933, as amended, and any requirements of the Securities and Exchange
Commission in respect thereof, in connection with one or more Registration
Statements and any and all amendments (including post-effective amendments) to
each such Registration Statement relating to the issuance of common stock,
$1.25 par value, and associated preferred stock purchase rights; preferred
stock, $1 par value; options, warrants and rights to purchase common or
preferred stock; and other debt or convertible securities of Firstar
Corporation in connection with the acquisition by Firstar Corporation (or a
subsidiary thereof) of First Colonial Bankshares Corporation pursuant to and in
accordance with an Agreement and Plan of Reorganization and related Plan of
Merger entered into by Firstar Corporation, including specifically but without
limitation thereto, power and authority to sign his or her name (whether on
behalf of Firstar Corporation, or as an officer or director of Firstar
Corporation or by attesting the seal of Firstar Corporation, or otherwise) to
each such Registration Statement and to such amendments (including
post-effective amendments) to each Registration Statement to be filed with the
Securities and Exchange Commission, or any of the exhibits, financial
statements and schedules, or the Proxy Statements-Prospectuses, filed
therewith, and to file the same with the Securities and Exchange Commission;
and the undersigned does hereby ratify and confirm all that said attorneys and
agents, and each of them, shall do or cause to be done by virtue hereof. Any
one of said attorneys and agents shall have, and may exercise, all the powers
hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the
7th day of November, 1994.
/s/ William W. Wirtz
<PAGE> 1
EXHIBIT 99
[FRONT]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
FIRST COLONIAL BANKSHARES CORPORATION
30 N. MICHIGAN AVENUE
CHICAGO, ILLINOIS 60602-3496
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald J. Aronberg, Robert J. Leander and Alan
G. Schwartz, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated below all the
shares of Class A common stock of First Colonial Bankshares Corporation held of
record by the undersigned on December 12, 1994 at the special meeting of
stockholders to be held on January 18, 1994, or any adjournment thereof.
--------------------------
[BACK]
[X] Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR Proposal #1.
1. Proposal to approve and adopt an Agreement and Plan of Reorganization
and a Plan of Merger, each dated as of July 31, 1994, that provide for,
among other things, the merger of First Colonial Bankshares Corporation
with and into Firstar Corporation of Wisconsin, a wholly owned
subsidiary of Firstar Corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name(s) appears to the left.
When shares are held by joint tenants, both should
sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
--------------------------------------------------
--------------------------------------------------
SIGNATURE(S) DATE
<PAGE> 2
EXHIBIT 99
[FRONT]
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
FIRST COLONIAL BANKSHARES CORPORATION
30 N. MICHIGAN AVENUE
CHICAGO, ILLINOIS 60602-3496
CLASS A COMMON STOCK
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Ronald J. Aronberg, Robert J. Leander and Alan
G. Schwartz, as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote as designated below all the
shares of Class A common stock of First Colonial Bankshares Corporation held of
record by the undersigned on December 12, 1994 at the special meeting of
stockholders to be held on January 18, 1994, or any adjournment thereof.
--------------------------
[BACK]
[X] Please mark your votes as in this example.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted FOR Proposal #1.
1. Proposal to approve and adopt an Agreement and Plan of Reorganization
and a Plan of Merger, each dated as of July 31, 1994, that provide for,
among other things, the merger of First Colonial Bankshares Corporation
with and into Firstar Corporation of Wisconsin, a wholly owned
subsidiary of Firstar Corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Please sign exactly as name(s) appears to the left.
When shares are held by joint tenants, both should
sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give
full title as such. If a corporation, please sign
in full corporate name by President or other
authorized officer. If a partnership, please sign
in partnership name by authorized person.
--------------------------------------------------
--------------------------------------------------
SIGNATURE(S) DATE
