FIRSTAR CORPORATION
777 EAST WISCONSIN AVENUE
MILWAUKEE, WI U.S.A. 53202
May 23, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D. C. 20549
Re: Firstar Corporation Registration Statement on Form S-4
Ladies and Gentlemen:
On behalf of Firstar Corporation, a Wisconsin corporation
("Firstar"), pursuant to Regulation S-T, we are transmitting
herewith for filing Firstar's Registration Statement on Form
S-4 ("Registration Statement"), including all exhibits filed as
a part thereof. The Registration Statement covers the issuance
of up to 1,801,577 shares of Common Stock, $1.25 par value, of
Firstar and 900,789 associated Preferred Stock Purchase Rights
to be issued in the proposed merger of First Southeast Banking
Corp., a non-public company, into Firstar Corporation of
Wisconsin, a wholly owned subsidiary of Firstar.
Comments and questions regarding the enclosed should be
communicated to the undersigned at (414) 765-5479 or to Joan M.
Fagan, Assistant General Counsel, at (414) 765-5618.
Very truly yours,
William J. Schulz
First Vice President, Secretary
and Deputy General Counsel
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)
Wisconsin
(State or other jurisdiction of incorporation or organization)
6022
(Primary Standard Industrial Classification Code No.)
39-0711710
(I.R.S. Employer Identification No.)
777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
(414) 765-4321
(Address, including ZIP Code, and telephone number, including
area code, of registrant's principal executive officers)
Howard H. Hopwood III, Esq.
Senior Vice President & General Counsel
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 765-5977
(Name, address, including ZIP Code, and telephone
number, including area code, of agent for service)
Copy to: Robert J. Kalupa, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
(414) 277-5329
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. / /
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered:
Common Stock ($1.25 par value)
Preferred Share Purchase Rights
Amount to be Registered(1):
1,801,577 shares (Common Stock)
900,789 rights (Rights)
Proposed Maximum Offering Price Per Unit:
$289.32(2) (Common Stock)
(3) (Rights)
Proposed Maximum Aggregate Offering Price:
$30,809,000(2) (Common Stock)
(3) (Rights)
Amount of Registration Fee:
$10,623.87 (Common Stock)
(3) (Rights)
(1) The amount being registered represents the number of
shares of Firstar Corporation Common Stock and associated
Preferred Stock Purchase Rights that will be issued in
connection with the conversion and exchange of all
outstanding shares of Common Stock of First Southeast
Banking Corp. as described herein.
(2) Estimated solely for purposes of calculating the
registration fee pursuant to Rule 457(f)(2) based upon the
book value per share of First Southeast Banking Corp.
Common Stock on March 31, 1994 ($289.32) and the 106,486
shares of First Southeast Banking Corp. Common Stock that
are outstanding and which are to be received by the
Registrant or cancelled in the transaction discussed
herein.
(3) The value attributable to the Preferred Stock Purchase
Rights is reflected in the market price of the Firstar
Common Stock to which the Rights are attached.
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.
FIRSTAR CORPORATION
Cross-Reference Sheet to
Proxy Statement-Prospectus Pursuant to
Rule 501(b) of Regulation S-K
Location
in Proxy
Statement-
Item of Form S-4 Prospectus
A. INFORMATION ABOUT THE TRANSACTION
1. Forepart of Registration Statement Facing Page of
and Outside Front Cover Page of Registration
Prospectus ....................... Statement; Cross
Reference Sheet;
Cover Page of
Proxy Statement-
Prospectus
2. Inside Front Cover and Outside Inside Front
Back Cover Pages of Prospectus ... Cover Page of
Proxy Statement-
Prospectus
3. Risk Factors, Ratio of Earnings
to Fixed Charges and Other
Information ...................... Summary
4. Terms of the Transaction ......... Summary; Meeting
Information; The
Proposed Merger
5. Pro Forma Financial Information .. *
6. Material Contacts with the
Company Being Acquired ........... The 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 .................. *
------------------
*Omitted since the answer is negative or Item is not applicable.
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3
Registrants ...................... Firstar
Corporation
11. Incorporation of Certain Incorporation of
Information by Reference ......... Certain
Information by
Reference
12. Information with Respect to S-2
or S-3 Registrants ............... *
13. Incorporation of Certain
Information by Reference ......... *
14. Information with Respect to
Registrants other than S-3 or
S-2 Registrants .................. *
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information with Respect to S-3
Companies ........................ *
16. Information with Respect to S-2
or S-3 Companies ................. *
17. Information with Respect to
Companies other than S-3 or First Southeast
S-2 Companies .................... Banking Corp.
and the Banks
D. VOTING AND MANAGEMENT INFORMATION
18. Information if Proxies, Consents Outside Front
or Authorizations are to be Cover Page of
Solicited ........................ Proxy Statement-
Prospectus;
Summary; Meeting
Information; The
Proposed Merger
19. Information if Proxies, Consents
or Authorizations are not to
be Solicited or in an Exchange
Offer ............................ *
------------------
*Omitted since the answer is negative or Item is not applicable.
FIRST SOUTHEAST BANKING CORP.
303 Center Street
Lake Geneva, Wisconsin 53147
___________________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY ____, 1994
___________________________
To the Shareholders of First Southeast Banking Corp.:
NOTICE IS HEREBY GIVEN that a special meeting
("Special Meeting") of the shareholders of First Southeast
Banking Corp. ("First Southeast"), a Wisconsin corporation,
pursuant to action of the Board of Directors, will be held at
the offices of First Southeast, 303 Center Street, Lake Geneva,
Wisconsin, on July ____, 1994 at 9:00 a.m. local time, for the
purpose of considering and voting upon the following matters:
1. The approval and adoption of an Agreement and
Plan of Reorganization and a Plan of Merger, each dated as
of February 10, 1994, that provide for, among other
things, the merger of First Southeast with and into
Firstar Corporation of Wisconsin, a wholly owned
subsidiary of Firstar Corporation, and for the conversion
of the outstanding shares of First Southeast Common Stock
into the right to receive shares of Firstar Corporation
Common Stock and associated Preferred Stock Purchase
Rights, as described and set forth in the Proxy
Statement-Prospectus accompanying this notice (the
"Merger"); and
2. Such other matters as may properly be brought
before the Special Meeting or any adjournment or
adjournments thereof.
First Southeast shareholders have the statutory right
to assert dissenters' rights under Sections 180.1301 to
180.1331 of the Wisconsin Business Corporation Law. In order
to perfect this right, a First Southeast shareholder must not
vote in favor of the Merger (this may be done by marking the
proxy either to vote against the Merger or to abstain from
voting thereon or by not voting at all) and must take such
other action as is required by such statute, including delivery
of, prior to the vote upon the Merger, written notice of intent
to demand the "fair value" of the shareholder's First Southeast
Common Stock. A copy of Section 180.1301 et seq. of the
Wisconsin Business Corporation Law is attached as Exhibit 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 SOUTHEAST BELIEVES
THE PROPOSED MERGER IS IN THE BEST INTERESTS OF FIRST SOUTHEAST
AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF FIRST SOUTHEAST VOTE "FOR" PROPOSAL NUMBER ONE
(1) ABOVE.
The affirmative vote of the holders of a majority of
the shares of common stock of First Southeast outstanding on
the record date of May 31, 1994, is required to approve the
above proposal. If you are unable to attend the Special
Meeting in person, please complete, date and sign the enclosed
proxy, which is solicited by First Southeast's Board of
Directors, and return it promptly to First Southeast, so that
your shares may be voted in accordance with your wishes. 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 by later
proxy received by, or by giving written notice to First
Southeast or by attending the Special Meeting and voting in
person.
By Order of the Board of Directors
_________________________________
David A. Straz, Jr., President
June ____, 1994
PROSPECTUS
OF
FIRSTAR CORPORATION
____________________
PROXY STATEMENT
OF
FIRST SOUTHEAST BANKING CORP.
____________________
This Proxy Statement-Prospectus relates to shares of
Common Stock of Firstar Corporation ("Firstar"), a Wisconsin
corporation, to be issued pursuant to an Agreement and Plan of
Reorganization, dated as of February 10, 1994 (the
"Reorganization Agreement"), providing for the merger of First
Southeast Banking Corp. ("First Southeast"), a Wisconsin
corporation, into Firstar Corporation of Wisconsin ("FCW"), a
Wisconsin corporation and a wholly owned subsidiary of
Firstar. This Proxy Statement-Prospectus also serves as a
proxy statement for the special meeting of shareholders of
First Southeast to be held on July ____, 1994, and any
adjournments or postponements thereof (the "Special Meeting").
A description of the proposed merger is included herein.
This Proxy Statement-Prospectus is being furnished to
the shareholders of First Southeast in connection with the
solicitation of proxies by the Board of Directors of First
Southeast for use at the Special Meeting. At the Special
Meeting, holders of First Southeast Common Stock will consider
and vote upon the approval and adoption of the Reorganization
Agreement and a related Plan of Merger dated as of February 10,
1994 by and between First Southeast 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 Southeast
with and into FCW (the "Merger").
Under the Merger Agreements, each outstanding share
of common stock of First Southeast, $1.00 par value ("First
Southeast Common Stock"), (other than shares held by any
shareholder who properly exercises and preserves his statutory
dissenter's rights) will be converted into the right to receive
16.91844 shares of common stock of Firstar, $1.25 par value,
and associated Preferred Stock Purchase Rights (collectively
referred to herein as "Firstar Common Stock"), subject to
certain adjustments as provided in the Merger Agreements in
connection with changes in Firstar Common Stock.
Firstar Common Stock is traded on the New York Stock
Exchange and the Chicago Stock Exchange, Incorporated. The
composite closing price of Firstar Common Stock on such
exchanges on ___, 1994 was $__________.
Firstar has filed a Registration Statement on Form
S-4 pursuant to the provisions of Rule 145 under the Securities
Act of 1933, as amended, covering the shares of Firstar Common
Stock to be issued in connection with the Merger. This Proxy
Statement-Prospectus also constitutes a prospectus of Firstar
filed as part of such Registration Statement. All information
herein with respect to Firstar and FCW has been furnished by
Firstar and all information with respect to First Southeast and
the Banks has been furnished by First Southeast.
This Proxy Statement-Prospectus does not cover any
resale of the securities to be received by shareholders of
First Southeast upon consummation of the Merger and no person
is authorized to make any use of this Proxy
Statement-Prospectus in connection with any such resale.
Copies of this Proxy Statement-Prospectus will be
mailed to shareholders on or about June ___, 1994.
__________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSIONER NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONER PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Proxy Statement-Prospectus is June ___, 1994.
__________________
AVAILABLE INFORMATION
Firstar is subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in accordance therewith, files 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 60621-2511; and 26 Federal Plaza, Room 1228, New York,
New York 10007. Copies of such material may also be obtained
at prescribed rates by writing to the Public Reference Section
of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549. In addition, reports, proxy statements and other
information filed by Firstar with the New York Stock Exchange
and the Chicago Stock Exchange, Incorporated 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.
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 Southeast. 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 Southeast 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 THESE DOCUMENTS (OTHER THAN
EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH INCORPORATED DOCUMENTS) 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). IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
____________________________, 1994.
[insert date 5 business days
before shareholder meeting]
The following documents filed by Firstar 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 Report on Form 10-Q for the
quarter ended March 31, 1994; and
(c) the description of Firstar Common Stock
(including the Preferred Stock 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.
All documents subsequently filed by Firstar pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date hereof and prior to the Closing Date
referred to herein 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 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
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.
FIRSTAR CORPORATION
AND
FIRST SOUTHEAST BANKING CORP.
PROXY STATEMENT-PROSPECTUS
TABLE OF CONTENTS
Page
SUMMARY ...............................................
Firstar Corporation and Firstar Corporation of
Wisconsin ......................................
First Southeast Banking Corp. ....................
The Proposed Merger ..............................
The Meeting ......................................
Vote Required ....................................
Recommendation of the Board of Directors .........
Dissenters' Rights ...............................
Certain Federal Income Tax Consequences ..........
Accounting Treatment .............................
Date of the Proposed Merger ......................
Terms and Conditions of the Merger;
Regulatory Approval ............................
Management and Operations After the Merger .......
Waivers and Amendments to the Merger Agreements ..
Termination ......................................
Interests of Certain Persons in the Merger .......
Resales of Firstar Common Stock by Affiliates ....
Preferred Stock Purchase Rights ..................
Markets and Dividends ............................
Selected Consolidated Financial Data of Firstar
Corporation ....................................
Selected Consolidated Financial Data of
First Southeast Banking Corp. ..................
Comparative Per Common Share Data ................
Historical and Pro Forma Selected Financial
Contributions ..................................
MEETING INFORMATION ...................................
General ..........................................
Date, Place and Time .............................
Record Date; Vote Required .......................
Voting and Revocation of Proxies .................
Solicitation of Proxies ..........................
THE PROPOSED MERGER ...................................
Background of and Reasons for the Merger .........
First Southeast Board Recommendation .............
Terms ............................................
Voting and Stock Purchase Agreements of
First Southeast's Shareholders .................
Material Contacts Between Firstar and
First Southeast ................................
Conduct of Business Until the Merger .............
Date of the Merger ...............................
Conditions to the Merger .........................
Regulatory Approval ..............................
Termination, Amendment and Waiver of
Merger Agreements ..............................
Management and Operations of First Southeast
After the Merger; Interests of First Southeast
Management in the Merger .......................
Certain Federal Income Tax Consequences ..........
Certain Differences in Rights of Shareholders ....
Accounting Treatment of the Merger ...............
Resale of Firstar Common Stock ...................
Rights of Dissenting Shareholders ................
FIRSTAR CORPORATION ...................................
General ..........................................
Competition ......................................
Supervision ......................................
Other Acquisitions and Transactions ..............
Incorporation of Certain Information by Reference
FIRST SOUTHEAST BANKING CORP. AND THE BANKS ...........
General ..........................................
Services .........................................
Competition ......................................
Properties .......................................
Regulation .......................................
Management .......................................
Share Ownership ..................................
Markets and Dividends ............................
Management's Discussion and Analysis of
Operations and Financial Condition - Tables ....
Management's Discussion and Analysis of
Operations and Financial Condition .............
OPINIONS ..............................................
EXPERTS ...............................................
SHAREHOLDER PROPOSALS .................................
INDEX TO FIRST SOUTHEAST BANKING CORP. CONSOLIDATED
FINANCIAL STATEMENTS ................................
EXHIBIT
Exhibit A - Section 180.1301 et seq. of the Wisconsin
Business Corporation Law
SUMMARY
The following is a brief summary of certain
information with respect to matters to be considered at the
special meeting (the "Special Meeting") of shareholders of
First Southeast Banking Corp. ("First Southeast"). This
summary includes information presented in connection with the
proposed acquisition by Firstar Corporation ("Firstar") of all
of the outstanding common stock of First Southeast, $1.00 par
value ("First Southeast Common Stock"). 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 Southeast and Prospectus of
Firstar, including the Exhibit hereto (this "Proxy
Statement-Prospectus"), and the documents incorporated in this
Proxy Statement-Prospectus by reference. Shareholders are
urged to review carefully the entire Proxy Statement-Prospectus.
Firstar Corporation and Firstar Corporation of Wisconsin:
Firstar, a Wisconsin corporation whose
common stock, $1.25 par value, and
associated Preferred Stock Purchase
Rights (collectively referred to herein as
"Firstar Common Stock"), are traded on the
New York Stock Exchange and the Chicago
Stock Exchange, is a multi-bank holding
company organized in 1929. The principal
assets of Firstar are its investments in
Firstar Bank Milwaukee, N.A. and 34 other
banks with offices located in the states of
Wisconsin, Minnesota, Illinois, Iowa and
Arizona. On March 31, 1994, Firstar had
consolidated total assets of $13.9 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."
Additional information concerning Firstar
is included in the Firstar documents
incorporated herein by reference. See
"FIRSTAR CORPORATION--Incorporation of
Certain Information by Reference."
Firstar Corporation of Wisconsin ("FCW"), a
Wisconsin corporation and a wholly owned
subsidiary of Firstar, is a multi-bank
holding company. The principal assets of
FCW are its investments in Firstar's 18
banks with offices located in Wisconsin.
FCW's principal executive offices are
located at 777 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202
(telephone: (414) 765-5848).
First Southeast Banking Corp.:
First Southeast, a Wisconsin corporation,
is a bank holding company. On March 31,
1994, First Southeast had consolidated
total assets of $422.3 million and
stockholders' equity of $30.8 million.
First Southeast's principal executive
offices are located at 303 Center Street,
Lake Geneva, Wisconsin 53147 (telephone
(414) 248-9116). First Southeast, together
with bank directors, owns all of the
240,000 issued and outstanding shares of
common stock of First Bank Southeast, N.A.
("First Bank Southeast"), a national bank
which is headquartered in Milwaukee,
Wisconsin, and 81,478 of the 83,000 issued
and outstanding shares of common stock of
First Bank Southeast of Lake Geneva, N.A.
("First Bank Lake Geneva," and, together
with First Bank Southeast, the "Banks"), a
national bank which is headquartered in
Lake Geneva, Wisconsin. See "FIRST
SOUTHEAST BANKING CORP. AND THE BANKS."
The Proposed Merger:
Firstar, First Southeast and FCW have
entered into an Agreement and Plan of
Reorganization dated as of February 10,
1994 (the "Reorganization Agreement") and a
related Plan of Merger dated as of
February 10, 1994 (the "Plan of Merger"
and, together with the Reorganization
Agreement, the "Merger Agreements"),
providing, among other things, for the
merger (the "Merger") of First Southeast
with and into FCW, as a result of which
Firstar will directly own 100% of the stock
of the surviving corporation, FCW, and
indirectly own all of the issued and
outstanding shares of common stock of the
Banks. See "THE PROPOSED MERGER." Subject
to certain limitations and dissenters'
rights provided by law and certain
adjustments set forth in the Merger
Agreements which relate to changes in
Firstar Common Stock, upon consummation of
the Merger each outstanding share of First
Southeast Common Stock will be converted
into the right to receive 16.91844 shares
of common stock of Firstar, $1.25 par
value, and associated Preferred Stock
Purchase Rights (collectively referred to
herein as "Firstar Common Stock," unless
otherwise required by context). Upon the
Merger, the rights of First Southeast
shareholders will be governed by Wisconsin
law and the Restated Articles of
Incorporation and Bylaws of Firstar. See
"THE PROPOSED MERGER--Terms."
The Meeting:
A special meeting of the shareholders of
First Southeast (the "Special Meeting")
will be held at the offices of First
Southeast, 303 Center Street, Lake Geneva,
Wisconsin, on July ____, 1994 at 9:00 a.m.,
local time. The close of business on May
31, 1994 is the record date (the "Record
Date") for determining the holders of
record of First Southeast Common Stock
entitled to notice of and 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 Wisconsin Business Corporation Law
requires that the Merger Agreements be
approved by the affirmative vote of a
majority of the outstanding shares of
common stock of First Southeast. As of the
Record Date, there were outstanding and
entitled to vote 106,486 shares of First
Southeast Common Stock, of which 105,886
were held by directors and executive
officers of First Southeast. Neither
Firstar nor any of its or FCW's directors
or executive officers own any shares of
First Southeast Common Stock. In order to
induce Firstar to enter into the Merger
Agreements, all the shareholders of First
Southeast (the "Shareholders") have agreed
to vote all of their shares of First
Southeast Common Stock in favor of the
Merger Agreements, pursuant to the terms of
certain Voting and Stock Purchase
Agreements with Firstar (the "Voting
Agreements"). The Shareholders own 100% of
the total outstanding shares of First
Southeast Common Stock on the Record Date;
thus, First Southeast is assured of
approval of the Merger Agreements. The
Voting Agreements also grant Firstar an
option to purchase the Shareholders' First
Southeast Common Stock, subject to certain
conditions. See "MEETING
INFORMATION--Record Date; Vote Required"
and "THE PROPOSED MERGER--Voting and Stock
Purchase Agreements of First Southeast's
Shareholders."
Recommendation of the Board of Directors:
The Board of Directors of First Southeast
recommends that First Southeast
shareholders vote for approval of the
Merger Agreements. The Board believes that
the terms of the Merger Agreements are fair
and that the Merger is in the best interest
of First Southeast and its shareholders.
In making its recommendation, the Board has
not sought the advice of an independent
financial advisor. See "THE PROPOSED
MERGER--Background of and Reasons for the
Merger; First Southeast Board
Recommendation."
Dissenters' Rights:
Under the provisions of Wisconsin law, any
shareholders of First Southeast who assert
dissenters' rights will have a statutory
right to demand payment of the "fair value"
of their First Southeast Common Stock in
cash. To perfect this right, an First
Southeast shareholder 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 Sections 180.1301 to
18.1331 of the Wisconsin Business
Corporation Law, including delivering
written notice of intent to demand the
"fair value" of First Southeast Common
Stock. See "THE PROPOSED MERGER--Rights of
Dissenting Shareholders" and Exhibit A
hereto.
Certain Federal Income Tax Consequences:
It is expected that the Merger will
constitute a tax-free reorganization within
the meaning of Sections 368(a)(1)(A) and
368(a)(2)(D) of the Internal Revenue Code
(the "Code"), and, therefore, that holders
of First Southeast Common Stock who receive
Firstar Common Stock in the Merger will not
recognize gain or loss for federal income
tax purposes as a result of the Merger
(except upon the receipt of cash in lieu of
fractional shares of Firstar Common Stock
or upon the receipt of cash pursuant to
dissenting shareholders' right of
appraisal). Receipt by First Southeast of
an opinion of tax counsel to that effect is
a condition to First Southeast's
obligations under the Merger Agreements.
IT IS RECOMMENDED THAT EACH FIRST SOUTHEAST
SHAREHOLDER CONSULT HIS OR HER OWN TAX
ADVISER CONCERNING THE FEDERAL INCOME TAX
CONSEQUENCES OF THE MERGER, AS WELL AS ANY
APPLICABLE STATE, LOCAL OR FOREIGN TAX
CONSEQUENCES, BASED UPON SUCH SHAREHOLDER'S
OWN PARTICULAR FACTS AND CIRCUMSTANCES.
See "THE PROPOSED MERGER--Certain Federal
Income Tax Consequences."
Accounting Treatment:
Firstar anticipates that the Merger will be
accounted for as a pooling of interests.
See "THE PROPOSED MERGER--Accounting
Treatment of the Merger."
Date of the Proposed Merger:
The Merger Agreements provide that the
Merger will be consummated within five
business days of the satisfaction or waiver
of the conditions to the Merger Agreements,
including the receipt of all necessary
approvals of governmental agencies and
authorities and expiration of the statutory
30-day waiting period after approval by the
Board of Governors of the Federal Reserve
System (the "Federal Reserve Board") or on
another mutually agreed upon date. It is
presently anticipated that the Merger will
be consummated in July, 1994. See "THE
PROPOSED MERGER--Date of the Merger;
Conditions to the Merger."
Terms and Conditions of the Merger; Regulatory Approval:
The Merger is conditioned upon approval by
the shareholders of First Southeast and the
Federal Reserve Board and upon the
satisfaction of other terms and conditions
of the Merger Agreements, including
treatment of the Merger as a pooling of
interests for accounting purposes. On
May ___, 1994, the Federal Reserve Board
accepted Firstar's application for approval
of the Merger under the Bank Holding
Company Act of 1956, as amended (the
"BHCA"). Firstar anticipates that the
Federal Reserve Board will act on such
application in June, 1994. 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
concerning the date of any such approval.
See "THE PROPOSED MERGER--Date of the
Merger; Regulatory Approval; Conditions to
the Merger."
Management and Operations After the Merger:
Following the Merger, the successor to
First Southeast and FCW will be a wholly
owned subsidiary holding company of
Firstar, and the Banks will be controlled
by Firstar. The officers and directors of
FCW prior to the Merger will continue as
officers and directors of the surviving
corporation. David A. Straz, Jr. ("Mr.
Straz"), who is the principal shareholder
of First Southeast, one of its directors,
and its President, CEO and Treasurer, will
be appointed to the Board of Directors of
Firstar's lead bank, Firstar Bank
Milwaukee, N.A. Following the Merger,
Firstar and FCW intend to manage and direct
the operations of the Banks as they manage
and direct their present bank
subsidiaries. Immediately following the
date on which the Merger occurs (the
"Closing Date"), one or more management
representatives of Firstar will be added to
the board of each Bank. Within several
months of the Closing Date, Firstar and FCW
intend to merge First Bank Southeast with
Firstar Bank Milwaukee, N.A., merge First
Bank Lake Geneva with Firstar's subsidiary,
Firstar Bank Lake Geneva, N.A., close
certain branches of the Banks and transfer
one of First Bank Southeast's branches to
Firstar Bank Lake Geneva, N.A. The dates
for the bank-level branch closings, mergers
and purchase and assumption transactions,
which are subject to regulatory approval,
have not been determined at this time. At
the time of the bank-level mergers, the
officers of the Banks will become officers
of the surviving banks and certain Lake
Geneva bank directors may be invited to
join the Board of Directors of the
surviving bank. See "THE PROPOSED MERGER--
Management and Operations of First
Southeast After the Merger; Interests of
First Southeast Management in the Merger."
Waivers and Amendments to the Merger Agreements:
Firstar and First Southeast may amend,
modify or waive certain terms and
conditions of the Merger Agreements.
Any such action taken by First Southeast
following a favorable vote by its
shareholders may be taken only if, in the
opinion of the Board of Directors of First
Southeast, the action will not have a
material adverse effect on the benefits
intended for its shareholders. See "THE
PROPOSED MERGER--Termination, Amendment and
Waiver of Merger Agreements."
Termination:
The Merger Agreements may be terminated and
the Merger may be abandoned at any time
before the Closing Date (i) by mutual
written consent of Firstar and First
Southeast at any time before the Merger
takes place, (ii) by either Firstar or
First Southeast if (a) any condition set
forth in Articles VII, VIII or IX of the
Reorganization Agreement has not been
substantially satisfied or waived in
writing by October 31, 1994, (b) any
warranty or representation made by the
other party in the Merger Agreements is
discovered to have become untrue,
incomplete or misleading in any material
respect, where such change has not been
cured within ten business days of notice,
or (c) the other party commits one or more
material breaches of the Merger Agreements
considering all such breaches in the
aggregate, where such breach has not been
cured within ten business days of notice,
or (iii) by First Southeast if the average
of the daily closing prices of a share of
Firstar Common Stock during a specified ten
trading days before the Closing Date is
less than $27.00. See "THE PROPOSED
MERGER--Termination, Amendment and Waiver
of Merger Agreements."
Interests of Certain Persons in the Merger:
Directors and executive officers of First
Southeast and the Bank have an interest in
the Merger to the extent that it will
affect their stock of First Southeast.
Further, Firstar and FCW currently intend
to retain the current officers of the Bank
after the Merger and have agreed to ask Mr.
Straz, a director and executive officer of
First Southeast, to join the Board of
Firstar's and FCW's subsidiary, Firstar
Bank Milwaukee, N.A. See "THE PROPOSED
MERGER--Management and Operations of First
Southeast after the Merger; Interests of
First Southeast Management in the Merger."
Resales of Firstar Common Stock by Affiliates:
Resales of Firstar Common Stock issued to
"affiliates" of First Southeast have not
been registered 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
Southeast and Firstar with respect to
dispositions of First Southeast Common
Stock and Firstar Common Stock 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 "THE PROPOSED
MERGER--Resale of Firstar Common Stock."
Preferred Stock 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 Stock 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 "THE
PROPOSED MERGER--Certain Differences in
Rights of Shareholders."
Markets and Dividends:
There is no established public trading
market for First Southeast 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 on the dates set forth,
which include February 9, 1994, the last
trading day preceding public announcement
of the Merger, and June ___, 1994, as well
as the equivalent per share prices for
First Southeast Common Stock. The
equivalent per share price of First
Southeast Common Stock at each specified
date represents the closing price of a
share of Firstar Common Stock on such date
multiplied by the unadjusted Merger
conversion factor of 16.91844. See "THE
PROPOSED MERGER--Terms."
Equivalent
First
Firstar Southeast
Common Per Share
Stock Price
Market Value Per Share at:
December 31, 1993 $30.75 $520.24
February 9, 1994 $30.75 $520.24
March 31, 1994 $33.00 $558.31
June ___, 1994 $ $
Because the market price of Firstar Common
Stock is subject to fluctuation and the
conversion ratio is fixed, the market value
of the shares of Firstar Common Stock that
holders of First Southeast Common Stock
will receive in the Merger may increase or
decrease prior to the Merger. First
Southeast shareholders are advised to
obtain current market quotations for
Firstar Common Stock.
In 1992, First Southeast paid dividends of
$9.35 per share; in 1993 no dividends were
paid; in 1994 prior to execution of the
Merger Agreements, First Southeast paid
dividends of $9.35 per share. Between
execution of the Merger Agreements and the
Closing Date, First Southeast can pay
aggregate cash dividends in amounts not to
exceed the cash dividends that shareholders
of First Southeast would have received from
Firstar had they owned 1,801,577 shares of
Firstar Common Stock after February 15,
1994. There can be no assurance as to the
amount of future dividends on First
Southeast Common Stock, because the
dividend policy of First Southeast is
subject to the discretion of the Board of
Directors of First Southeast, cash needs
and general business conditions.
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>
Three Months Ended
March 31 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 $144,015 $139,752 $568,056 $539,152 $480,596 $429,954 $413,102
Provision for loan losses 2,958 6,334 24,567 44,821 50,276 49,161 52,362
-------- -------- -------- -------- -------- -------- --------
Net interest revenue after
loan loss provision 141,057 133,418 543,489 494,331 430,320 380,793 360,740
Other operating revenue 83,113 79,325 342,265 300,767 272,535 248,301 225,521
Other operating expense 144,203 141,739 587,744 557,566 515,536 464,800 429,508
-------- -------- -------- -------- -------- -------- --------
Income before income taxes
& extraordinary item 79,967 71,004 298,010 237,532 187,319 164,294 156,753
Provision for income tax 26,745 20,978 93,716 71,547 52,988 46,837 45,618
-------- -------- -------- -------- -------- -------- --------
Net income $ 53,222 $ 50,026 $204,294 $165,985 $134,331 $117,457 $111,135
======== ======== ======== ======== ======== ======== ========
Per common share:
Net income $ 0.83 $ 0.78 $ 3.15 $ 2.62 $ 2.14 $ 1.82 $ 1.72
Dividends 0.26 0.22 1.00 0.80 .705 .635 .545
Selected Period-End Balances
(Millions of dollars)
Total assets $ 13,908 $ 12,880 $ 13,794 $ 13,169 $ 12,309 $ 12,020 $ 11,163
Loans 9,000 8,107 8,984 8,111 7,545 7,346 6,871
Deposits 10,771 10,518 11,164 10,884 10,063 9,721 8,931
Long-term debt 126 132 126 158 144 185 166
Stockholders' equity 1,190 1,092 1,156 1,048 916 844 790
Selected Financial Ratios
Net income as a %
of average assets 1.62 % 1.61 % 1.59 % 1.36 % 1.16 % 1.06 % 1.07 %
Net income as a % of average
common equity 18.37 19.48 18.61 17.43 15.85 14.83 15.65
Net interest margin % 5.11 5.21 5.21 5.27 5.00 4.76 4.88
Total capital to risk-adjusted
assets 13.57 13.80 13.18 13.20 11.92 11.94 12.09
Nonperforming assets as a % of
period-end loans and other
real estate 0.89 1.14 0.72 1.09 1.43 1.87 1.61
Reserve for loan losses as a %
of period-end loans 1.95 2.12 1.95 2.08 2.00 1.83 1.69
Net charge-offs as a % of
average loans 0.11 0.21 0.25 0.43 0.47 0.48 0.66
</TABLE>
SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST SOUTHEAST
- ------------------------------------------------------------------------------
The following table sets forth in summary form certain consolidated financial
data of First Southeast. This summary should be read in conjunction with
Management's Discussion and Analysis and consolidated financial statements
included in this Proxy Statement-Prospectus.
<TABLE>
<CAPTION>
Three Months Ended
March 31 Years Ended December 31
------------------ ----------------------------
1994 1993 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Summary
(Thousands of dollars)
Net interest revenue $ 3,876 $ 3,518 $ 15,505 $ 15,361 $ 14,626
Provision for loan losses - 1,137 4,800 600 600
-------- -------- -------- -------- --------
Net interest revenue after
loan loss provision 3,876 2,381 10,705 14,761 14,026
Other operating revenue 634 743 2,844 4,774 (472)
Other operating expense 3,664 3,316 15,319 14,616 13,722
-------- -------- -------- -------- --------
Income (loss) before income
taxes and cumulative effect of
change in accounting principle 846 (192) (1,770) 4,919 (168)
Income tax expense (benefit) 214 (114) (1,061) 982 (224)
-------- -------- -------- -------- --------
Income (loss) before cumulative
effect of change in accounting
principle 632 (78) (709) 3,937 56
Cumulative effect of change
in accounting principle - 325 325 - -
-------- -------- -------- -------- --------
Net income (loss) $ 632 $ 247 $ (384) $ 3,937 $ 56
======== ======== ======== ======== ========
Per common share:
Net income (loss) before
cumulative effect of change
in accounting principle $ 5.93 $ (0.74) $ (6.65) $ 36.97 $ 0.53
Cumulative effect of change
in accounting principle - 3.05 3.05 - -
Net income (loss) 5.93 2.31 (3.60) 36.97 0.53
Dividends 9.35 - - 9.35 5.53
Selected Period-End Balances
(Thousands of dollars)
Total assets $422,306 $413,517 $423,882 $426,715 $435,339
Loans, net 237,016 242,476 241,201 249,677 287,726
Deposits 374,285 368,367 381,859 381,696 391,634
Long-term debt 6,000 7,500 6,000 9,100 11,000
Stockholders' equity 30,809 30,781 30,250 30,634 29,692
</TABLE>
COMPARATIVE PER COMMON SHARE DATA
- ---------
The following table presents selected comparative unaudited per share
data for Firstar Common Stock and First Southeast Common Stock on a
historical and pro forma combined basis and for First Southeast 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>
Quarter
Ended Years Ended December 31
March 31 -------------------------
1994 1993 1992 1991
-------- ------- ------- -------
<S> <C> <C> <C> <C>
Firstar Corporation - Historical:
Net income $ 0.83 $ 3.15 $ 2.62 $ 2.14
Cash dividend declared 0.26 1.00 0.80 .705
Book value (at period end) 18.51 17.96 15.94 14.17
First Southeast Banking Corp - Historical
Net income $ 5.93 $ (3.60) $ 36.97 $ 0.53
Cash dividend declared 9.35 - 9.35 5.53
Book value (at period end) 289.32 284.08 287.68 260.06
Firstar-First Southeast - Pro Forma Combined:
Net income (1) $ 0.81 $ 3.06 $ 2.61 $ 2.08
Cash dividend declared(2) 0.26 1.00 0.80 .705
Book value (at period end)(3) 18.47 17.93 15.97 14.21
First Southeast Banking Corp. Common Stock -
Equivalent Pro Forma Combined(4):
Net income (1) $ 13.70 $ 51.77 $ 44.16 $ 35.19
Cash dividend declared 4.40 16.92 13.53 11.93
Book value (at period end) 312.48 303.35 270.19 240.41
</TABLE>
(1) The pro forma combined net income per share (based on weighted average
shares outstanding) is based upon the combined historical net income
for Firstar and First Southeast reduced for dividend payments on
Firstar's outstanding Series B Preferred Stock divided by the average
pro forma common shares of the combined entity.
(2) The pro forma combined dividends declared assume no changes in
historical dividends declared per share by Firstar.
(3) The pro forma combined book values per share of Firstar Common Stock
are based upon the historical total common equity for Firstar and First
Southeast divided by total pro forma common shares of the combined
entity assuming conversion of the First Southeast Common Stock as
stated in the Merger Agreements.
(4) The equivalent pro forma combined income, dividends and book value per
share of Firstr Southeast Common Stock represent the pro forma combined
amounts multiplied by the assumed exchange ratio of 16.91844, which
is based on the terms of the Merger Agreements.
HISTORICAL AND PRO FORMA SELECTED FINANCIAL CONTRIBUTIONS
- --
The following table sets forth certain consolidated financial data of
Firstar as of and for the quarter ended March 31, 1994 and the data on
a pro forma combined basis after giving effect to the acquisition of
First Southeast.
<TABLE>
<CAPTION>
First
Firstar Southeast Pro Forma
Historical Historical Combined
----------- ----------- -----------
For the quarter ended March 31, 1994: (thousands of dollars)
<S> <C> <C> <C>
Total revenue
Amount $ 297,762 $ 7,188 $ 304,950
Percentage of total 97.64% 2.36%
Net income
Amount $ 53,222 $ 632 $ 53,854
Percentage of total 98.83% 1.17%
At March 31, 1994:
Total assets
Amount $ 13,908,410 $ 422,306 $ 14,330,716
Percentage of total 97.05% 2.95%
Stockholders' equity
Amount $ 1,190,386 $ 30,809 $ 1,221,195
Percentage of total 97.48% 2.52%
Shares of Common Stock
Amount 64,318,011 1,801,577 66,119,588
Percentage of total 97.28% 2.72%
</TABLE>
MEETING INFORMATION
General
This Proxy Statement of First Southeast and
Prospectus of Firstar is being furnished in connection with the
solicitation by the Board of Directors of First Southeast of
proxies to be voted at the Special Meeting of shareholders of
First Southeast to be held on July ___, 1994, and any
adjournment thereof. The purpose of the Special Meeting and of
the solicitation is (i) to obtain approval of the holders of
First Southeast Common Stock of the Merger of First Southeast
with and into FCW pursuant to 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
Southeast Common Stock is accompanied by a form of proxy for
use at the First Southeast Special Meeting.
The Merger Agreements provide for the acquisition of
First Southeast by Firstar, to be accomplished through the
statutory merger of First Southeast with and into FCW. Each of
the outstanding shares of First Southeast Common Stock, except
shares with respect to which the holders have exercised and
preserved in accordance with law their statutory dissenters'
rights, will be converted into the right to receive 16.91844
shares of Firstar Common Stock. See "THE PROPOSED
MERGER--Terms."
This Proxy Statement-Prospectus is also furnished by
Firstar to First Southeast shareholders as a prospectus in
connection with the issuance by Firstar of shares of Firstar
Common Stock upon consummation of the Merger. This Proxy
Statement-Prospectus, the attached Notice, and the form of
proxy enclosed herewith are first being mailed to shareholders
on or about June ___, 1994.
Date, Place and Time
The First Southeast Special Meeting will be held at
the offices of First Southeast, 303 Center Street, Lake Geneva,
Wisconsin, on July ___, 1994, at 9:00 a.m. (local time).
Record Date; Vote Required
The close of business on May 31, 1994, has been fixed
by the Board of Directors of First Southeast as the Record Date
for the determination of shareholders entitled to notice of and
to vote at the Special Meeting. On that date there were
outstanding and entitled to vote 106,486 shares of First
Southeast Common Stock, of which 105,886 were held by directors
or executive officers of First Southeast. Neither Firstar nor
any of its or FCW's directors or executive officers own any
shares of First Southeast Common Stock. Each outstanding share
of First Southeast stock entitles the record holder thereof to
one vote on all matters to be acted upon at the Special
Meeting. The affirmative vote of a majority of the issued and
outstanding shares of First Southeast Common Stock entitled to
vote is required to approve the Merger Agreements.
In order to induce Firstar to enter into the Merger
Agreements, all the shareholders of First Southeast entered
into the Voting Agreements with Firstar and First Southeast.
Pursuant to the Voting Agreements, all the outstanding shares
of First Southeast Common Stock on the Record Date will be
voted in favor of the Merger Agreements, thereby assuring
approval of the Merger Agreements at the Special Meeting. The
Shareholders have also agreed not to vote their shares in favor
of any acquisition of First Southeast by anyone other than
Firstar or its affiliates.
Voting and Revocation of Proxies
For the reasons described in more detail below under
"THE PROPOSED MERGER--Background of and Reasons for the
Merger," it is the opinion of the Board of Directors of First
Southeast that the Merger is in the best interests of the
holders of First Southeast Common Stock. ACCORDINGLY, THE
BOARD OF DIRECTORS OF FIRST SOUTHEAST UNANIMOUSLY RECOMMENDS
THAT HOLDERS OF FIRST SOUTHEAST COMMON STOCK VOTE "FOR"
APPROVAL OF THE MERGER AGREEMENTS.
Wisconsin law affords dissenters' rights to holders
of First Southeast Common Stock who object to the Merger
Agreements in accordance with statutory procedures. See "THE
PROPOSED MERGER--Rights of Dissenting Shareholders."
All properly executed proxies not revoked will be
voted at the Special Meeting in accordance with the
instructions contained therein. Proxies containing no
instructions will be voted "FOR" approval of the Merger
Agreements. If any other matters are properly brought before
the Special Meeting and submitted to a vote, all proxies will
be voted in accordance with the judgment of the persons voting
the proxies. Any shareholder executing and returning a proxy
may revoke it by later proxy received by, or by giving written
notice to, First Southeast or by attending the Special Meeting
and voting in person. However, the mere presence of a holder
of First Southeast Common Stock at the Special Meeting will not
operate to revoke a proxy previously executed and returned.
Failure to submit a proxy or to vote at the Special Meeting has
the same effect as a negative vote for purposes of approving or
disapproving the Merger Agreements. See "THE PROPOSED MERGER--
Rights of Dissenting Shareholders."
Solicitation of Proxies
The expenses incurred in connection with the
solicitation of proxies for the Special Meeting will be borne
by First Southeast. However, because this Proxy
Statement-Prospectus constitutes part of the Registration
Statement filed by Firstar under the Securities Act of 1933,
Firstar will bear the expense of preparing, filing and
duplicating this Proxy Statement- Prospectus. First Southeast
expects to solicit proxies primarily by mail; however,
directors of First Southeast who will not be specifically
compensated for such services, may also solicit proxies
personally or by telephone or other forms of communication. It
is not anticipated that anyone will be specifically engaged to
solicit proxies.
THE PROPOSED MERGER
The following description of the Merger is qualified
in its entirety by reference to the Merger Agreements, which
are incorporated by reference into this Proxy
Statement-Prospectus.
Background of and Reasons for the Merger
For many years, First Southeast has operated as a
corporation controlled by David A. Straz, Jr., First
Southeast's chief executive officer, who together with two
members of his family owns all of First Southeast's common
stock. During that period, First Southeast took actions which
the Board of Directors believed would be prudent to continue
First Southeast as an independent operation, although Mr. Straz
and First Southeast periodically received indications of
interest from other financial institutions as to their interest
in a possible combination transaction with First Southeast.
Because of Mr. Straz' substantial experience in the banking
field and his majority ownership of First Southeast, Mr. Straz
would generally evaluate the offers to determine whether they
represented an attractive opportunity.
In February 1992, First Southeast entered into a
conditional agreement with an unrelated bank holding company
for the acquisition of First Southeast. Because certain
conditions specified in the agreement were not met, the
agreement was terminated in March 1992. After the termination
of that agreement, Mr. Straz and First Southeast continued to
receive expressions of interest in the acquisition of First
Southeast by other financial institutions, including Firstar.
Although First Southeast held serious discussions with several
of these institutions, only the discussions with Firstar
progressed to a point where Mr. Straz believed that a firm
offer, acceptable to him, would likely be forthcoming.
After the initial discussions with Firstar, Firstar
was invited to conduct more intensive due diligence with
respect to First Southeast. After that due diligence, officers
of Firstar and Mr. Straz, on behalf of First Southeast, engaged
in negotiations regarding the terms of a possible acquisition.
Those discussions resulted in execution and announcement of the
Merger Agreements in February, 1994.
First Southeast Board Recommendation
The First Southeast Board believes that the Merger
represents an opportunity for holders of First Southeast Common
Stock to exchange their shares of First Southeast Common stock
at an attractive exchange ratio for a security with a greater
market liquidity. The Board of Directors also believes that
ownership of Firstar Common Stock presents an opportunity for
future appreciation, and represents a diminution of risk
because of the broader base of Firstar operations.
THEREFORE, THE BOARD OF DIRECTORS OF FIRST SOUTHEAST
HAS UNANIMOUSLY APPROVED THE MERGER AND RECOMMENDS APPROVAL OF
THE MERGER BY SHAREHOLDERS.
In making its recommendation, the First Southeast
Board has not sought the advice of an independent financial
advisor. Because of the controlling interest of Mr. Straz and
his family members, Mr. Straz' experience in the banking
industry, and his satisfaction with the terms and conditions of
the transaction, the Board does not believe that the expense of
such an advisor is warranted.
Terms
The Merger Agreements provide that First Southeast
will be merged with and into FCW, which will be the surviving
corporation.
Upon consummation of the Merger, all the issued and
outstanding shares of First Southeast Common Stock, except any
Dissenting Shares, will be acquired in exchange for Firstar
Common Stock or cash in lieu of any fractional shares of
Firstar Common Stock. Each of the shares of First Southeast
Common Stock that are to be converted into Firstar Common Stock
will be converted into the number of shares of Firstar Common
Stock that is equal to the quotient produced by dividing
(i) the purchase price per share, $558.31, by (ii) $33.00.
Therefore, the Merger exchange ratio will be 16.91844 shares of
Firstar Common Stock for each share of First Southeast Common
Stock.
No fractional shares of Firstar Common Stock will be
issued in the Merger. Each holder of First Southeast Common
Stock who would otherwise be entitled to receive a fractional
share will receive cash in an amount equal to the cash value of
the fraction, which cash value will be based upon the market
value of Firstar Common Stock as described above.
Voting and Stock Purchase Agreements of First Southeast's
Shareholders
The Shareholders entered into the Voting Agreements,
which provide that (a) the Shareholders will vote all their
shares of First Southeast Common Stock in favor of the Merger
at any shareholder meeting or, if their consent is sought by
First Southeast, consent to the Merger; (b) the Shareholders
will not vote in favor of or consent to the acquisition of
First Southeast by any party other than Firstar or its
affiliates prior to the termination of the Voting Agreements;
and (c) the subject shares will generally not be transferred.
Each Voting Agreement also provides that Firstar has
the exclusive right to purchase any or all of the shares of
First Southeast Common Stock owned by each Shareholder for
$558.31 per share, payable in cash, subject to any necessary
regulatory approval, after any events or circumstances that
lead Firstar reasonably to believe that First Southeast is
likely to materially breach the Merger Agreements. The
purchase price per share under the Voting Agreements is equal
to the Dollar Purchase Price Per Share specified in the Merger
Agreements. The Voting Agreements will terminate if the Merger
Agreements terminate.
Material Contacts Among Firstar and First Southeast
In 1990 and 1991 First Southeast and Firstar had
engaged in preliminary merger discussions but had determined
not to proceed at that time.
First Southeast's conditional merger agreement with
an unrelated bank holding company terminated in 1992. In
September 1993, Firstar and First Southeast again commenced
merger discussions; these ultimately resulted in execution of
the Merger Agreement. Since the commencement of these
negotiations, except for the Merger Agreements and the related
agreements entered into between the parties at the same time,
no material contracts or other similar arrangements have been
entered into between Firstar or its affiliates and First
Southeast or its affiliates.
Neither Firstar nor FCW nor any of their respective
directors or executive officers holds directly or indirectly
any shares of First Southeast Common Stock.
Conduct of Business Until the Merger
The Merger Agreements provide that First Southeast
and Firstar will take or refrain from taking certain actions
prior to the Closing Date.
After execution of the Merger Agreements, First
Southeast cannot pay any dividends or make any distributions on
First Southeast Common Stock other than cash dividends in
amounts not to exceed in the aggregate an amount equal to the
cash dividends that the shareholders of First Southeast would
have received from Firstar had they owned, after February 15,
1994, 1,801,577 shares of Firstar Common Stock on the record
dates in such quarters for the determination of Firstar
shareholders entitled to receive dividends. The Merger
Agreements also provide that First Southeast will not permit
the Banks to declare or pay any dividends or make any
distributions on their capital stock, except cash dividends in
an aggregate amount equal to the amount necessary to
(i) service existing indebtedness of First Southeast, (ii) fund
First Southeast's payment of cash dividends as described above,
(iii) pay ordinary and necessary operating expenses of First
Southeast on a basis consistent with prior years, and (iv) pay
expenses expressly contemplated by the Reorganization Agreement.
Under the Merger Agreements, First Southeast cannot
effect any change in its capitalization or that of the Banks
(except in connection with the Bank-level Merger discussed) or
any change in its corporate structure or methods of accounting
or tax reporting. First Southeast has also agreed not to
initiate, solicit or encourage any transactions competing with
the proposed Merger with FCW.
The Merger Agreements also provide that First
Southeast will, and will cause each of the Banks to, conduct
its business in substantially the same manner as conducted
prior to the date of the Merger Agreements and use its best
efforts to maintain and preserve its business organization
intact, retain its present employees and maintain its
relationships with customers. First Southeast will not, nor
will it permit the Banks to, enter into any transactions or
take any other action other than in the ordinary course of
business or as contemplated by the Merger Agreements, except
with the prior written consent of Firstar.
First Southeast and the Banks will cooperate with
Firstar and FCW to effect the bank mergers and the branch
transfer described in "THE PROPOSED MERGER--Management and
Operations of First Southeast after the Merger; Interests of
First Southeast Management in the Merger," contingent on the
Closing. First Southeast, pursuant to the Merger Agreements,
has agreed to withdraw its applications to the Wisconsin
Commissioner of Banking for approval of the Banks' charter
conversions and merger with each other. First Southeast has
agreed to cooperate with Firstar and FCW in effecting the
bank-level mergers and the closings of three bank branches
specified in the Reorganization Agreement, after the Closing.
Prior to the Closing, First Southeast and the Banks
must sell their life insurance policies on Mr. Straz, First
Southeast's investments in common stock of Southern Exchange
Bank and Wisconsin Energy Corp., and the Banks' out-of-state
loan participations. Mr. Straz or entities under his control
will purchase the life insurance policies and stock of Southern
Exchange Bank and may purchase the loan participations; these
assets have a value of approximately $5.5 million in the
aggregate. The stock of Wisconsin Energy Corp. has been sold.
Firstar has agreed to indemnify First Southeast from
certain damages it may incur under plant closing laws.
Firstar, as the sole shareholder of FCW, has approved
the Merger Agreements.
Date of the Merger
Under the BHCA, the Merger requires the prior
approval of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"). It is anticipated that
the Federal Reserve Board will act on Firstar's application in
June, 1994. The Merger cannot take effect before the 30th
calendar day or, absent an extension granted by the Federal
Reserve Board, later than three months following the date of
approval by the Federal Reserve Board. See "THE PROPOSED
MERGER--Conditions to the Merger; Regulatory Approval."
Under the Merger Agreements, the Merger will occur
within five days of satisfaction of all of the conditions to
the Merger, including the expiration of the statutory waiting
period after Federal Reserve Board approval, or on such date as
Firstar and First Southeast may both agree to, and will take
effect upon the date FCW and First Southeast file Articles of
Merger with the Wisconsin Secretary of State. It is
anticipated that the Closing Date will be July ___, 1994.
Conditions to the Merger
The Merger Agreements provide that consummation of
the Merger is subject to certain conditions unless waived to
the extent waiver is permitted by applicable law. Such
conditions include the following, which are all the material
conditions:
a. The Merger Agreements must have been approved by the
requisite vote of the holders of a majority of the
issued and outstanding shares of First Southeast
Common Stock and holders of no more than 5% of the
issued and outstanding shares of First Southeast
Common Stock shall have asserted Dissenter's Rights.
See "MEETING INFORMATION--Record Date; Vote Required"
and "THE PROPOSED MERGER--Voting and Stock Purchase
Agreements of First Southeast's Shareholders."
b. The Firstar Common Stock to be issued in the Merger
must have been qualified or exempted under all
applicable state securities laws and there must have
been no stop order issued that suspends the
effectiveness of the Registration Statement of which
this Proxy Statement-Prospectus is a part.
c. The Merger must have been approved by the Federal
Reserve Board. See "THE PROPOSED MERGER--Date of the
Merger; Regulatory Approval."
d. There must not have been any material adverse change
in the financial condition, assets, liabilities,
prospects, results of operation or business of First
Southeast or either Bank from February 10, 1994, to
the Closing Date.
e. Continued accuracy of representations and warranties
by Firstar and First Southeast regarding, among other
things, the organization of the parties, financial
statements, capitalization, pending and threatened
litigation, enforceability of the Merger Agreements,
compliance with law, and tax matters.
f. As of the Closing Date, (a) there must not be any
litigation that was not disclosed prior to execution
of the Merger Agreements, pending or overtly
threatened before any court or other governmental
agency by the federal or any state government seeking
to restrain or prohibit the Merger, and (b) there
must not be any litigation that was not disclosed
prior to the execution of the Merger Agreements,
pending or overtly threatened nor any liability or
claim asserted against First Southeast or either Bank
that might result in a material adverse change in its
financial condition, results of operations or
business prospects.
g. Any review or examination of the financial condition
of First Southeast by Firstar and/or KPMG Peat
Marwick must not have disclosed material breaches of
the Merger Agreements.
h. Firstar must have received confirmation from KPMG
Peat Marwick, its certified public accountants,
approving the accounting treatment of the Merger as a
pooling of interests. See "THE PROPOSED
MERGER--Accounting Treatment of the Merger."
i. Firstar shall have had the opportunity to conduct an
audit of any First Southeast employee benefit plans.
j. As of the Closing Date, the allowance for loan losses
of each of the Banks must not be less than an amount
equal to 2.0% of its gross loans outstanding.
k. Firstar and FCW, on the one hand, and First
Southeast, on the other hand, shall each have
received opinions from Foley & Lardner that the
Merger will be treated as a tax-free reorganization
under the Code. See "THE PROPOSED MERGER--Certain
Federal Income Tax Consequences."
l. It is a condition to Firstar's obligation to close
that the Federal Reserve Bank of Chicago shall have
agreed that a formal agreement and a Memorandum of
Understanding regulating First Southeast shall not
apply to Firstar or FCW after the Closing. Firstar
has requested such an agreement by the Federal
Reserve Bank of Chicago. See "THE PROPOSED
MERGER--Regulatory Approvals."
m. Firstar shall have had an opportunity to conduct
environmental audits of the Banks' real property.
It is anticipated that all of the foregoing
conditions will be met.
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. See "THE PROPOSED MERGER--Conduct of Business Until
the Merger."
Regulatory Approval
The Merger is subject to prior approval by the
Federal Reserve Board under the BHCA, which requires that the
Federal Reserve Board take into consideration the financial and
managerial resources and future prospects of the respective
institutions and the convenience and needs of the communities
to be served. The BHCA prohibits the Federal Reserve Board
from approving the Merger if it would result 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 substantially to 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.
Under the BHCA, the Merger may not be consummated
until the 30th day 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 BHCA 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 and FCW submitted an application for filing
with the Federal Reserve Bank of Chicago on April 27, 1994.
The application was accepted for filing on May ___, 1994.
Firstar anticipates that the Federal Reserve Board will act on
the application in June, 1994.
In conjunction with the application for approval of
Merger, Firstar submitted a written request that the Federal
Reserve Bank of Chicago agree that the agreement among the
Reserve Bank, First Southeast and Mr. Straz dated August 14,
1984 (the "Formal Agreement"), and the Memorandum of
Understanding between the Reserve Bank and First Southeast
dated November 6, 1991 (the "MOU"), will not apply to Firstar
or FCW after the Closing. Firstar has had discussions with a
representative of the Reserve Bank who stated that the
requested termination of the Formal Agreement and the MOU is
likely to be granted.
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. Finally, there can be no
assurance that the requested formal approval of the Federal
Reserve Bank of Chicago of termination of the Formal Agreement
and the MOU on the Closing Date will be granted.
Termination, Amendment and Waiver of Merger Agreements
Firstar and First Southeast may each waive, as to the
other, performance of any of the obligations and compliance
with any of the covenants or conditions of the Merger
Agreements (other than items (a), (b) and (c) in the
"Conditions to the Merger" section above) and may amend or
modify the Merger Agreements. Any such action by First
Southeast taken following a favorable vote on or consent to the
Merger by its shareholders may be taken only if, in the opinion
of the Board of Directors of First Southeast, the action would
not have a material adverse effect on the benefits intended for
its shareholders under the Merger Agreements.
The Merger Agreements may be terminated and the
Merger abandoned by the mutual written consent of the Board of
Directors of First Southeast and the Board of Directors or
Interstate Banking and Acquisitions Committee of Firstar at any
time prior to the Closing Date. In addition, the Merger may be
abandoned by (a) either First Southeast or Firstar if (i) any
condition set forth in Articles VII, VIII or IX of the
Reorganization Agreement has not been substantially satisfied
or waived in writing by October 31, 1994, (ii) any warranty or
representation made by the other party in the Merger Agreements
is discovered to have become untrue, incomplete or misleading,
where any such breach is likely to have a material adverse
impact on the other party and is not cured within ten business
days of notice, (iii) the other party commits one or more
material breaches of the Merger Agreements considering all such
breaches in the aggregate, where such breach has not been cured
within ten business days of notice, or (b) First Southeast if
the average composite closing prices per share of Firstar
Common Stock on the New York Stock Exchange and the Chicago
Stock Exchange on the ten consecutive trading days immediately
preceding the Closing Date is less than $27.00.
The obligations of each party to keep confidential
information received from the other under the Merger
Agreements, to coordinate the public release of information
about the Merger, and to pay its respective fees and expenses,
survive the termination of the Merger Agreements.
If the proposed Merger does not take place, other
than by reason of a breach by any party to the Merger
Agreements, there will be no liability on the part of First
Southeast or Firstar except that (a) each party will pay its
own fees and expenses incurred in connection with the
preparation and performance of the Merger Agreements, (b) in
connection with the preparation and filing of the Registration
Statement and compliance with state securities laws, Firstar
will bear the cost of preparation, filing and duplication of
the Registration Statement, (c) Firstar will reimburse First
Southeast and the Banks for any out-of-pocket fees and expenses
they incurred at the request and direction of Firstar, as
specified in the Reorganization Agreement, and (d) First
Southeast agrees to reimburse Firstar for the costs of the
environmental audits discussed in "THE PROPOSED
MERGER--Conditions to the Merger." In the event of termination
of the Merger Agreements caused by (a) willful breach of any
agreement or covenant contained therein, (b) any material
misrepresentation or breach of warranty, which was known to be
a misrepresentation or breach of warranty by First Southeast or
Firstar on February 10, 1994, or (c) the failure of any
condition precedent to the consummation of the Merger which has
failed because the non-terminating party did not exercise good
faith and best efforts toward the fulfillment of such
condition; then the terminating party shall be entitled to all
its legal and equitable remedies.
Management and Operations of First Southeast after the Merger;
Interests of First Southeast Management in the Merger
The Merger Agreements provide that, on the Closing
Date, First Southeast will be merged with and into FCW. The
surviving entity will be FCW and the separate corporate
existence of First Southeast will terminate. As a result of
the Merger, the surviving corporation will be wholly owned by
Firstar, and the Banks, which are now owned by First Southeast,
will be controlled by Firstar.
The officers and directors of FCW immediately prior
to the Merger will continue as the officers and directors of
the surviving corporation following the Merger. Following the
Merger, Firstar and FCW will manage and direct the operations
of the Banks as they manage and direct their present bank
subsidiaries. Immediately following the Closing Date, one or
more management representatives of Firstar will be added to the
Boards of the Banks.
Within a few months of the Closing Date, Firstar and
FCW intend to a) merge First Bank Southeast with FCW's
subsidiary, Firstar Bank Milwaukee, N.A., b) merge First Bank
Lake Geneva with FCW's subsidiary, Firstar Bank Lake Geneva,
N.A., c) close three Bank branches (transferring the loans and
deposits to other Firstar branches), and d) transfer one of
First Bank Southeast's former branches to Firstar Bank Lake
Geneva, N.A. Pursuant to the proposed Agreement to Merge
between First Bank Lake Geneva and Firstar Bank Lake Geneva,
N.A., Firstar will offer to purchase all of the outstanding
minority shares of First Bank Lake Geneva for at least $287.27
in cash per share. The dates for the bank-level mergers,
branch closings and purchase and assumption, which are subject
to regulatory approval, have not been determined at this time.
At the time of the bank-level mergers and purchase and
assumption, the officers of the Banks will become officers of
the surviving banks.
Firstar and Firstar Bank Milwaukee, N.A. have agreed,
in a letter to Mr. Straz dated February 10, 1994, to cause him
to be appointed to the Board of Directors of Firstar Bank
Milwaukee as soon as reasonably practicable following the
Closing Date.
It is presently anticipated that there will be no
other changes in management or other principal relationships
for Firstar, FCW, First Southeast or the Banks that will result
from this transaction.
Firstar, when reasonably practicable following the
Closing Date, intends to cause coverage under the Firstar
Corporation Pension Plan and the Firstar Corporation Thrift and
Sharing Plan to be extended to eligible employees of the Bank.
Certain Federal Income Tax Consequences
Firstar and First Southeast expect that the Merger
will be treated as a tax-free reorganization and that for
federal income tax purposes no gain or loss will be recognized
by any First Southeast shareholder upon receipt of Firstar
Common Stock pursuant to the Merger (except upon the receipt of
cash in lieu of fractional shares of Firstar Common Stock).
This discussion of tax consequences of the Merger assumes that
none of the Shareholders will exercise dissenters' rights. The
Internal Revenue Service has not been asked to rule upon the
tax consequences of the Merger and such request will not be
made. Instead, Firstar and First Southeast will rely upon the
opinion of Foley & Lardner, their joint counsel, as to certain
federal income tax consequences of the Merger. The opinion of
Foley & Lardner 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 HOLDER OF FIRST SOUTHEAST
COMMON STOCK 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 Foley & Lardner, which in
turn is based upon various representations and subject to
various assumptions and qualifications, the following federal
income tax consequences to the First Southeast shareholders
will result from the Merger:
(i) Provided that the Merger of First Southeast
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
Southeast, Firstar and FCW will each be a party to
the reorganization within the meaning of Section
368(b) of the Code.
(ii) No gain or loss will be recognized by the
holders of First Southeast Common Stock upon the
exchange of First Southeast Common Stock solely for
Firstar Common Stock pursuant to the Merger.
(iii) The First Southeast shareholder's basis in
the Firstar Common Stock received in the exchange
(including any fractional share interest to which he
or she may be entitled) will be the same as the basis
of the First Southeast Common Stock surrendered.
(iv) The holding period of the First Southeast
Common Stock received by a shareholder of First
Southeast pursuant to the Merger will include the
period during which the First Southeast Common Stock
surrendered was held, provided that the First
Southeast Common Stock surrendered was a capital
asset on the date of the Merger.
(v) A First Southeast shareholder receiving
cash in lieu of fractional share interests of First
Southeast 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 Southeast shareholder
receives will be treated as having been received as
full payment in exchange for stock redeemed as
provided in Section 302(a) of the Code.
The foregoing is only a general description of
certain anticipated federal income tax consequences of the
Merger without regard to the particular facts and circumstances
of the tax situation of each shareholder of First Southeast.
It does not discuss all of the consequences that may be
relevant to First Southeast shareholders entitled to special
treatment under the Code (such as insurance companies, dealers
in securities, 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.
Certain Differences in Rights of Shareholders
Firstar and First Southeast are both incorporated
under the laws of the State of Wisconsin and, accordingly, the
rights of both groups of shareholders are governed by Wisconsin
law, as well as such corporations' respective Articles of
Incorporation and Bylaws. Upon consummation of the Merger,
First Southeast shareholders will become Firstar shareholders
and their rights will be governed by Wisconsin law and
Firstar's Articles of Incorporation and Bylaws. Although it is
impractical to note all of the differences between statutory
and other rights of Firstar shareholders and First Southeast
shareholders, certain material differences are summarized below.
Takeover Statutes. Wisconsin law regulates a broad
range of "business combinations" between a Wisconsin
corporation with registered stock, such as Firstar, 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. In such cases, business combinations
after the three-year restricted period are permitted only if
(i) the business combination is approved by a majority of the
outstanding voting stock not owned by the interested
stockholder and (ii) the consideration to be received by
shareholders meets certain requirements of the statute with
respect to form and amount. Under Section 180.1143(1) of the
Wisconsin Business Corporation Law, the restrictions on
business combinations do not apply to companies like First
Southeast which do not have voting stock registered or traded
on a national securities exchange or registered under the
Exchange Act.
Section 180.1150 of the Wisconsin Business
Corporation Law 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.
Firstar is, and First Southeast is not, an "issuing
public corporation" under Wisconsin law.
In addition, Section 180.1132 of the Wisconsin
Business Corporation Law 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, Section 180.1134 of the Wisconsin Business
Corporation Law requires shareholder approval for certain
transactions in the context of a tender offer or similar action
for in excess of 50% of a Wisconsin issuing public
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.
Preferred Stock. 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, Firstar has reserved 600,000
shares of Series C Preferred Stock for issuance upon exercise
of the Preferred Stock Purchase Rights, as further described
below.
First Southeast has no authorized shares of Preferred
Stock and, accordingly, the rights of holders of First
Southeast Common Stock to receive dividends or payment in the
event of voluntary or involuntary dissolution, liquidation or
winding up of First Southeast are not subject to the prior
satisfaction of the rights of any other shareholders.
Directors. 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.
All the directors of First Southeast are elected at
the annual meeting of shareholders by the majority of the votes
cast, assuming a quorum is present. A director of First
Southeast may be removed, with or without cause, by the
affirmative vote of the holders of a majority of the then
issued and outstanding stock of First Southeast cast at a
special meeting of shareholders called for that purpose.
Dissenters' Rights. Under Wisconsin law, dissenting
shareholders generally are entitled to receive payment of the
fair value of any of their shares in connection with a merger,
consolidation or sale of substantially all of the assets of a
corporation, other than in the regular course of business.
However, no dissenters' rights are available to any class of
stock listed on a national securities exchange or quoted on
NASDAQ on the applicable record date. Because Firstar Common
Stock is listed on the New York Stock Exchange, Firstar's
shareholders do not have rights of appraisal. Because First
Southeast Common Stock is not listed on a national securities
exchange or quoted on NASDAQ, First Southeast's shareholders
have the statutory appraisal rights described. See "THE
PROPOSED MERGER--Rights of Dissenting Shareholders" and Exhibit
A hereto.
Preferred Stock Purchase Rights. Firstar has adopted
a Shareholder Rights Plan, pursuant to which each share of
Firstar Common Stock entitles its holder to one-half of a
Preferred Stock Purchase Right. Under certain conditions, each
Preferred Stock Purchase 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 Preferred Stock Purchase Right per share of Firstar
Common Stock. The description of the terms of the Preferred
Stock Purchase Rights are set forth in a Rights Agreement dated
as of January 19, 1989 (the "Rights Agreement") between Firstar
and Firstar Trust Company, as Rights Agent. The description of
the Preferred Stock Purchase 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 Common Stock.
Under certain circumstances, including the existence of a 20%
acquiring party, each holder of a Preferred Stock Purchase
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 Firstar Common Stock, each
holder of a Preferred Stock Purchase Right is entitled to
receive 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
common share per right prior to the existence of a 50%
acquiring party. The Preferred Stock Purchase 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
plan, the Board of Directors of Firstar may reduce the
thresholds applicable to the rights from 20% to not less than
10%.
First Southeast does not have a shareholder rights
plan.
Accounting Treatment of the Merger
It is anticipated that the acquisition of First
Southeast will be treated as a "pooling of interests" for
accounting purposes. Accordingly, under generally accepted
accounting principles, the assets and liabilities of First
Southeast will be recorded in the financial statements of
Firstar at their carrying values as of the Closing Date. See
"THE PROPOSED MERGER--Conditions to the Merger."
Resale of Firstar Common Stock
The shares of Firstar Common Stock to be issued in
the Merger to holders of First Southeast Common Stock have been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), and thus could be freely traded if there
were any holders of First Southeast Common Stock, who are not
"affiliates" of First Southeast (and are not affiliates of
Firstar at the time of the proposed resale). All three
shareholders of First Southeast are affiliates of First
Southeast. Pursuant to the Merger Agreements, Firstar has
received a written undertaking from each affiliate of First
Southeast to the effect that (a) the affiliate will not sell or
dispose of Firstar Common Stock acquired by such affiliate in
the Merger, except (i) under a separate registration for
distribution (which Firstar has not agreed to provide), or
(ii) pursuant to Rule 145 promulgated under the Securities Act,
or (iii) pursuant to some other exemption from registration;
and (b) the affiliate will not otherwise dispose of the Firstar
Common Stock or otherwise reduce his or her risk relative to
the Firstar Common Stock prior to the publication by Firstar of
an earnings statement covering at least 30 days of combined
operations after the Closing Date.
Rights of Dissenting Shareholders
Under the provisions of Section 180.1301 et seq. of
the Wisconsin Business Corporation Law, a copy of which is
attached to this Proxy Statement-Prospectus as Exhibit A, any
holder of record or beneficial shareholder of First Southeast
Common Stock has the statutory right to dissent from the Merger
and obtain payment of the fair value of his or her shares in
cash.
However, each of the shareholders of First Southeast
has contractually agreed with Firstar to vote in favor of the
Merger. See "THE PROPOSED MERGER--Voting and Stock Purchase
Agreements of First Southeast's Shareholders." Any holder
electing to exercise his or her statutory dissenters' rights in
breach of the Voting Agreements must deliver written notice of
his or her intent to demand payment for his or her shares to
First Southeast and not vote in favor of the Merger
Agreements. Such notice must be delivered to First Southeast
before the vote on the Merger Agreements is taken. A
shareholder may object as to less than all of the shares
registered in his name subject to the provisions of Section
180.1303 of the Wisconsin Business Corporation Law. A PROXY OR
VOTE AGAINST THE MERGER AGREEMENTS WILL NOT, OF ITSELF, BE
REGARDED AS A WRITTEN NOTICE OF INTENT TO DEMAND PAYMENT FOR
PURPOSES OF ASSERTING DISSENTERS' RIGHTS.
Within 10 days of the Merger, FCW will give a written
dissenters' notice to each dissenting shareholder who has made
demand in accordance with Section 180.1321(1), containing a
form for demanding payment, a statement indicating where the
holder must send the payment demand, an explanation of the
extent to which the transfer of shares will be restricted after
the payment demand is received and a date by which the payment
demand must be received by First Southeast. A holder to whom a
dissenters' notice is sent, must demand payment in writing and
certify whether he or she acquired beneficial ownership of the
shares before the date specified in the dissenters' notice.
As soon as the Merger is effected or upon receipt of
a demand for payment, whichever is later, FCW will pay each
holder who has complied with the provisions of Section 180.1301
et seq. the amount that the corporation estimates to be the
fair value of the holder's shares, plus accrued interest. Such
payment will be accompanied by a copy of FCW's latest available
financial statement, a statement of the corporation's estimate
of the fair value of the shares, an explanation of how the
interest was calculated, a statement of the dissenter's right
to demand payment under Section 180.1328 of the Wisconsin
Business Corporation Law if he or she is dissatisfied with the
payment and a copy of Sections 180.1301 to 180.1331 of the
Wisconsin Business Corporation Law.
FCW may elect to withhold the payment required by
Section 180.1325 from a dissenter unless the dissenter was the
beneficial owner of the shares before the date specified in the
dissenter's notice under Section 180.1322(2)(c) as the date of
the first announcement to news media or to shareholders of the
terms of the Merger. To the extent FCW makes such an election,
it must estimate the fair value of the shares, plus accrued
interest and pay that amount to each dissenter who agrees to
accept it in full satisfaction of his or her demand. FCW will
send with its offer a statement of its estimate of the fair
value of the shares, an explanation of how the interest was
calculated and a statement of the dissenter's right to demand
payment under Section 180.1328 if the dissenter is dissatisfied
with the offer.
Any dissenter may notify the corporation of his or
her estimate of the fair value of his or her shares and demand
payment of such estimate less any payment received from the
corporation or reject the corporation's payment or offer of
payment for any one of the following reasons: the dissenter
believes that the amount paid or offered by the corporation is
less than the fair value of his or her shares or that the
accrued interest is incorrectly calculated; the corporation
fails to make the payment within 60 days after the date for
demanding payment set out in the dissenters' notice; or First
Southeast fails to effect the Merger and does not return the
deposited shares within 60 days of the date set for demand of
payment.
In the event any holder of First Southeast Common
Stock fails to comply strictly with the applicable statutory
requirements, he or she will be bound by the terms of the
Merger Agreements and will not be entitled to payment for his
or her shares under such statute. If a shareholder complies
strictly with the applicable statutory requirements to perfect
a dissent, he or she will be entitled to payment under Section
180.1301 et seq. of the Wisconsin Business Corporation Law but
will be subject to contractual liability for breach of his or
her Voting Agreement with Firstar. Any holder of First
Southeast Common Stock who wishes to object to the Merger and
demand payment for his or her shares of First Southeast Common
Stock should consider consulting his or her own legal advisor.
Since an executed proxy relating to First Southeast
Common Stock on which no voting direction is made will be voted
at the Special Meeting in favor of the Merger Agreements, an
objecting shareholder who wishes to have his or her shares of
First Southeast Common Stock represented by proxy at the
Special Meeting but preserve his or her rights of appraisal
must mark his proxy either to vote against the Merger
Agreements or to abstain from voting thereon, make the required
objection and demand, and make the required submission of stock
certificates as described herein.
The foregoing, while a summary of all material
provisions of Section 180.1301 et seq. of the Wisconsin
Business Corporation Law, is qualified in its entirety by
reference to the text of such statutory provision, which is set
forth in Exhibit A hereto.
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 18 bank
subsidiaries in Wisconsin had total assets of $9.7 billion at
March 31, 1994. Its eleven Iowa banks, four Illinois banks and
one Minnesota bank had total assets of approximately $2.5
billion, $949 million and $1.1 billion, respectively, as of
March 31, 1994. Firstar has one bank in Phoenix, Arizona, with
total assets of $99 million. Firstar's principal subsidiary,
Firstar Bank Milwaukee, N.A., had total assets of $5.7 billion,
which represented 41 percent of Firstar's consolidated assets
at March 31, 1994, and is the largest commercial bank in
Wisconsin.
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 112 locations, with offices in eight of the ten
largest metropolitan population centers of the state, including
45 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 three locations; and a
trust subsidiary in Florida in two 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 March 31, 1994, Firstar and its subsidiaries
employed 7,376 full-time and 2,125 part-time employees, of
which approximately 943 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.
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
Bank Holding Company Act of 1956, as amended, 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.
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 March 31, 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
March 31, 1994
Tier 1 Total
Capital Capital
Minimum Statutory Requirement 4.00% 8.00%
Firstar Corporation 11.48% 13.57%
Firstar Bank Milwaukee, N.A. 9.96 11.84
Firstar Bank Appleton 9.94 10.99
Firstar Bank Eau Claire, N.A. 10.81 12.07
Firstar Bank Fond du Lac, N.A. 10.68 11.94
Firstar Bank Grantsburg, N.A. 16.15 17.41
Firstar Bank Green Bay 11.34 12.60
Firstar Bank Lake Geneva, N.A. 14.63 15.89
Firstar Bank Madison, N.A. 12.49 13.74
Firstar Bank Manitowoc 12.05 13.31
Firstar Bank Minocqua 16.10 17.37
Firstar Bank Oshkosh, N.A. 9.96 11.21
Firstar Bank Portage 17.55 18.81
Firstar Bank Racine 14.50 15.76
Firstar Bank Rice Lake, N.A. 13.34 14.59
Firstar Bank Sheboygan, N.A. 10.02 11.28
Firstar Bank Wausau, N.A. 15.36 16.64
Firstar Bank Wisconsin Rapids, N.A. 13.69 14.94
Firstar Bank Ames 12.14 13.40
Firstar Bank Burlington, N.A. 12.55 13.81
Firstar Bank Cedar Falls 9.50 10.75
Firstar Bank Cedar Rapids, N.A. 9.93 11.18
Firstar Bank Council Bluffs 10.46 11.71
Firstar Bank Davenport, N.A. 10.67 11.93
Firstar Bank Des Moines, N.A. 11.60 12.85
Firstar Bank Mount Pleasant 11.66 12.91
Firstar Bank Ottumwa 12.78 14.03
Firstar Bank Red Oak, N.A. 12.86 14.05
Firstar Bank Sioux City, N.A. 9.25 10.46
Firstar Bank of Minnesota, N.A. 13.41 14.67
Firstar Bank DuPage 14.94 17.27
Firstar Bank North Shore 14.90 16.20
Firstar Bank Park Forest 12.11 16.15
Firstar Bank West, N.A. 13.41 13.36
Firstar Metropolitan Bank & Trust 17.64 18.87
Other Acquisitions and Transactions
Since the enactment of interstate banking statutes in
1986 by Wisconsin, Minnesota and Illinois, Firstar has actively
acquired banks within that three-state area. Following the
January 1, 1991 effective date of the interstate banking
statute in Iowa, Firstar completed the acquisition of eleven
banks in that state. Firstar has also acquired one bank in
Arizona, primarily to offer trust services to customers in that
state.
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 SOUTHEAST BANKING CORP. AND THE BANKS
General
First Southeast Banking Corp. ("First Southeast"), a
Wisconsin corporation, is a bank holding company registered
under the federal Bank Holding Company Act of 1956, as
amended. First Southeast was formed as a Wisconsin corporation
in 1974 to acquire and hold shares of a predecessor bank of
First Bank Southeast of Lake Geneva, N.A. (f/k/a First National
Bank of Lake Geneva) ("First Bank Lake Geneva"). In 1981,
First Southeast acquired the first predecessor bank of First
Bank Southeast, N.A. ("First Bank Southeast"), which was
previously owned by First Southeast's principal shareholder.
First Bank Southeast is headquartered in Milwaukee,
Wisconsin, and operates 13 full-service offices. Of these
offices, five are in Kenosha County, seven in Racine County and
one in Milwaukee County, all in southeastern Wisconsin. The
market area of First Bank Southeast is generally approximated
by counties in which it maintains offices and immediately
surrounding areas. First Bank Southeast is the product of the
mergers of five predecessor banks, which were acquired by First
Bank Southeast or its principal shareholder from 1969 through
1987. First Bank Southeast is wholly-owned by First Southeast,
except for First Bank Southeast directors' qualifying shares
which First Bank Southeast has the right to acquire.
First Bank Lake Geneva is headquartered in Lake
Geneva, Wisconsin, and operates ten full-service offices, of
which six are in Walworth County and four are in western
Kenosha County, all in Wisconsin. The market area for First
Bank Lake Geneva is Walworth County and western Kenosha County,
Wisconsin, and the immediately surrounding areas. First Bank
Lake Geneva is the product of the mergers of four predecessor
banks, which were acquired by First Southeast or its principal
shareholders from 1970 through 1987. First Bank Lake Geneva is
98.2% owned by First Southeast, including 0.7% owned by First
Bank Lake Geneva directors as directors' qualifying shares
which First Southeast has the right to acquire. The remaining
1.8% of First Bank Lake Geneva's capital stock is owned by 45
shareholders.
Services
First Southeast's subsidiary banks provide a wide
range of commercial and consumer banking services within their
markets. The Banks provide various types of loans, including
business loans, long and short term residential and commercial
real estate mortgage loans, and consumer lending. Agricultural
loans are part of First Bank Southeast's portfolio.
The Banks also provide a full range of deposit
products, including checking and savings accounts, certificates
of deposits and money market accounts and instruments. The
Banks also offer other financial-related services, including
safe deposit boxes, investment and brokerage services.
Competition
The subsidiary banks of First Southeast encounter
substantial competition from other commercial banks which
maintain offices in their market areas. Southeastern Wisconsin
markets are highly competitive. Most communities in which the
Banks maintain offices have at least one (and, in most cases,
many) other commercial banks which maintain full-service
offices there.
In addition to competition from commercial banks, the
banks compete with savings and loan associations, savings
banks, credit unions and other providers of financial services
which maintain offices in their communities, and many of which
offer substantially the same services as the subsidiary banks.
In addition, many other providers of financial services, such
as insurance companies, securities brokerage firms and
investment management firms also offer competition for many of
the particular services provided by the banks.
Properties
First Southeast's offices are located at 303 Center
Street, Lake Geneva, Wisconsin 53147, in a facility owned by
First Bank Lake Geneva. First Bank Southeast owns ten of its
facilities and leases the remaining three facilities. First
Bank Lake Geneva owns all ten of its facilities.
Regulation
First Southeast, as a bank holding company, and First
Bank Southeast and First Bank Lake Geneva, as national banks,
are subject to substantial regulation under federal law. Such
regulation and supervision is substantially similar to that to
which Firstar is subject. See "FIRSTAR
CORPORATION--Supervision" above.
Management
Directors
The following table sets forth information regarding
the directors of First Southeast. The directors are elected
annually.
Director
Name Principal Occupation Since
David A. Straz, Jr. Banker; President of First 1977
(1) Southeast; Chairman of First
Bank Southeast and First Bank
Lake Geneva
David A. Straz Vice President of First Southeast 1977
(1) and First Bank Southeast
________________________
(1) David A. Straz, Jr. is the son of David A. Straz
Executive Officers
The following table set forth information as to the
executive officers of First Southeast. The executive officers
are elected annually by First Southeast's Board of Directors.
The table also sets forth information as to certain key
executive officers of First Bank Southeast First Bank Lake
Geneva.
Officer
Name Office(s) Since
David A. Straz, Jr. * President (CEO) and Treasurer; 1969**
Chairman of First Bank Southeast
and First Bank Lake Geneva
David A. Straz* Vice President and Secretary 1977
Thomas E. Daniels President (CEO) of First Bank 1992
Southeast
Robert Fahey President (CEO) of First Bank 1993
Lake Geneva
At December 31, 1993, First Southeast and its
subsidiaries had 285 full-time equivalent employees.
________________________
* Designates executive officers of First Southeast
** Includes service as officer of a predecessor of one of the
Banks
Share Ownership
The following table sets forth information as to the
shares of First Southeast Common Stock which are owned by the
directors of First Southeast and by the directors and executive
officers of First Southeast as a group. There are no other
persons who own more than 5% of First Southeast's common stock.
Name Number of Shares Percent
David A. Straz, Jr. (1) 102,807 96.6%
David A. Straz (2) 3,079 2.9%
Directors and Executive
Officers as a Group (2) 105,886 99.5%
________________________
(1) Mr. Straz, Jr.'s address is 540 Gulf Boulevard, Belleair
Shore, Florida 34635.
(2) Excludes 600 shares beneficially owned by the spouse of
Mr. Straz.
Markets and Dividends
At May 31, 1994, First Southeast had three
shareholders of record. Because of the closely-held nature of
First Southeast securities, there has not been any market with
respect to shares of First Southeast Common Stock. Management
of First Southeast is unaware of any transactions in First
Southeast Common Stock since 1990.
The following table presents the annual dividend
payments per share of First Southeast Common Stock:
Calendar Year Dividends Paid Per Share
1991 $5.53
1992 $9.35
1993 $0.00
1994 (through May 31) $9.35
<TABLE>
First Southeast Banking Corp.
Composition of Loans
<CAPTION>
March 31, December 31,
-1994- -1993- -1992- -1991-
Amount Percent Amount Percent Amount Percent Amount Percent
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial 113,222 46.7% 117,879 47.8% 124,926 49.4% 149,246 51.9%
Real estate 1-4 family first mortgage 75,561 31.2% 77,027 31.2% 86,540 34.2% 99,345 34.5%
Other real estate mortgage 41,183 17.0% 38,310 15.5% 28,713 11.4% 23,198 8.1%
Installment and other 12,476 5.1% 13,360 5.4% 12,671 5.0% 15,937 5.5%
242,442 100.0% 246,576 100.0% 252,850 100.0% 287,726 100.0%
</TABLE>
<TABLE>
First Southeast Banking Corp.
Summary of Loan Loss Experience
<CAPTION>
Three Months
Ended March 31, Year Ended December 31,
1994 1993 1992 1991
<S> <C> <C> <C> <C>
Balance at beginning of period 5,375 3,173 3,246 3,093
Charge-offs:
Commercial 8 1,744 685 394
Real estate 4 813 64 3
Installment 6 53 66 57
Credit card 4 49 40 40
Total charge-offs 22 2,659 855 494
Loan recoveries:
Commercial 63 31 154 3
Real estate 0 0 0 0
Installment 8 22 13 37
Credit card 2 8 15 7
Total recoveries 73 61 182 47
Net loan charge-offs -51 2,598 673 447
Provision for loan losses 0 4,800 600 600
Balance at end of year 5,426 5,375 3,173 3,246
Ratio of net charge-offs to
average loans outstanding
during the period -0.02% 1.04% 0.25% 0.15%
Allowance for loan losses
to period-end loans 2.24% 2.18% 1.25% 1.13%
</TABLE>
<TABLE>
FIRST SOUTHEAST BANKING CORP.
CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS
NET INTEREST MARGIN AND RATE ANALYSIS
<CAPTION>
Year ended December 31, 1993 Year Ended December 31, 1992
Avg Balance Income/Expense Yield Avg Balance Income/Expense Yield
----------- -------------- ----- ----------- -------------- -----
<S> <C> <C> <C> <C> <C> <C>
Interest Earning Assets:
Federal fund sold and other
short-term investments 16,313,383 211,121 1.29% 14,706,426 250,158 1.70%
Taxable investment securities 73,887,739 4,845,241 6.56% 68,987,596 6,193,365 8.98%
Nontaxable investment securities 38,792,061 1,816,230 4.68% 30,131,117 1,130,478 3.75%
Loans 249,712,858 20,401,249 8.17% 270,288,024 23,919,650 8.85%
___________ __________ _____ ___________ __________ _____
Average Earning Assets 378,706,040 27,273,841 7.20% 384,113,161 31,493,651 8.20%
___________ __________ _____ ___________ __________ _____
Interest Bearing Liabilities:
Time deposits 270,703,355 11,387,557 4.21% 281,683,834 15,336,769 5.44%
Securities sold under repurchase
agreements 657,500 13,821 2.10% 713,000 35,940 5.04%
Long-term debt 7,296,000 367,290 5.03% 10,045,000 759,872 7.56%
___________ __________ _____ ___________ __________ _____
Avg int bearing 278,656,855 11,768,668 4.22% 292,441,834 16,132,581 5.52%
___________ __________ _____ ___________ __________ _____
Net interest/margin 15,505,173 4.09% 15,361,070 4.00%
========== ===== ========== =====
Year ended December 31, 1991
Avg Balance Income/Expense Yield
----------- -------------- -----
Interest Earning Assets:
Federal fund sold and other
short-term investments 5,975,000 269,130 4.50%
Taxable investment securities 69,841,392 6,521,694 9.34%
Nontaxable investment securities 23,942,970 1,209,223 5.05%
Loans 302,058,726 30,399,223 10.06%
___________ __________ _____
Average Earning Assets 401,818,088 38,399,270 9.56%
___________ __________ _____
Interest Bearing Liabilities:
Time deposits 297,679,366 22,041,803 7.40%
Securities sold under repurchase
agreements 5,487,000 396,982 7.23%
Long-term debt 10,000,000 1,334,139 13.34%
___________ __________ _____
Avg int bearing 313,166,366 23,772,924 7.59%
___________ __________ _____
Net interest/margin 14,626,346 3.64%
========== =====
Three Months Three Months
Ended March 31, 1994 Ended March 31, 1993
Avg Balance Income/Expense Yield Avg Balance Income/Expense Yield
----------- -------------- ----- ----------- -------------- -----
Interest Earning Assets:
Federal fund sold and other
short-term investments 12,708,947 74,032 2.36% 10,879,637 69,400 2.59%
Taxable investment securities 80,840,253 1,130,291 5.67% 74,014,496 1,280,906 7.02%
Nontaxable investment securities 39,099,875 407,947 4.23% 37,797,013 424,428 4.55%
Loans 244,508,939 4,942,059 8.20% 249,546,557 4,900,771 7.96%
___________ __________ _____ ___________ __________ _____
Average Earning Assets 377,158,014 6,554,329 7.05% 372,237,702 6,675,505 7.27%
___________ __________ _____ ___________ __________ _____
Interest Bearing Liabilities:
Time deposits 267,294,036 2,573,512 3.90% 273,752,339 3,050,919 4.51%
Securities sold under repurchase
agreements 3,586,500 36,569 4.14% 1,250,000 12,259 3.98%
Long-term debt 6,000,000 68,278 4.62% 8,300,000 94,156 4.60%
___________ __________ _____ ___________ __________ _____
Avg int bearing 276,880,536 2,678,359 3.92% 283,302,339 3,157,334 4.52%
___________ __________ _____ ___________ __________ _____
Net interest/margin 3,875,970 4.17% 3,518,171 3.83%
========== ===== ========== =====
</TABLE>
<TABLE>
First Southeast Banking Corp.
Non-performing Assets
<CAPTION>
March 31 December 31,
-------- -----------------------------
1994 1993 1992 1991
----- ----- ----- ------
<S> <C> <C> <C> <C>
Nonaccrual loans 5,267 4,298 7,682 6,861
Loans past due 90 days or more 41 85 250 2,792
----- ----- ----- ------
Total non-performing loans 5,308 4,383 7,932 9,653
Other real estate owned 1,078 1,142 1,516 811
----- ----- ----- ------
Total non-performing assets 6,386 5,525 9,448 10,464
===== ===== ===== ======
Nonperforming assets as a percentage of:
Loans and other real estate 2.62% 2.23% 3.71% 3.63%
Total assets 1.52% 1.30% 2.21% 2.40%
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES
GENERAL
The following discussion and analysis provides
information regarding the historical results of operations and
financial condition of First Southeast Banking Corp. and
subsidiaries (First Southeast) for the three months ended March
31, 1994 and 1993 and for the years ended December 31, 1993,
1992 and 1991. This discussion and analysis should be read in
conjunction with the related consolidated financial statements
and notes thereto and the other financial information included
herein.
THREE MONTHS ENDED MARCH 31, 1994 COMPARED WITH THE THREE
MONTHS ENDED MARCH 31, 1993
Results of Operations
For the three months ended March 31, 1994, net income
increased from the same period in 1993 by $385,000 to
$632,000. Excluding the impact of adopting Statement of
Financial Accounting Standards No. 109 (SFAS 109) in 1993
discussed below, income before the cumulative effect of change
in accounting principle increased $710,000.
Net Interest Revenue
Net interest revenue increased by $358,000 or 10.2%
to $3,876,000 principally from a decrease in rates paid on
deposits from an average of 4.51% to 3.90% and an increase in
net average earning assets of $11,342,000. These changes were
partially offset by a decline in rates earned on average
interest earning assets from 7.27% to 7.05%.
Provision for Loan Losses
The amount charged to provision for loan losses is
based on management's evaluation of the loan portfolio.
Management determines the adequacy of the allowance for loan
losses based on past loan loss experience, current economic
conditions, composition of the loan portfolio and the potential
for future loss. First Southeast provided $1,138,000 in
provisions for loan losses in 1993 while no provisions were
made in 1994. The decrease in such provisions between 1993 and
1994 reflects, to some extent, a decrease in total
nonperforming loans at March 31, 1994 from a year earlier and a
decrease in loans outstanding at March 31, 1994 from
December 31, 1993. Nonperforming loans totalled $5,308,000 at
March 31, 1994 and $9,385,000 at March 31, 1993. The allowance
for loan losses stood at 2.24% of loans as of March 31, 1994 as
compared with 2.18% at December 31, 1993 and 1.25% at March 31,
1993. The increase in the allowance as a percentage of loans
primarily reflects additional provisions made throughout 1993
and net recoveries of $51,000 in the three months ended
March 31, 1994 compared with net charge-offs of $543,000 in the
same period of 1993.
Other Operating Revenue and Expenses
Other operating revenue decreased $109,000, or 14.7%,
to $634,000 from 1993 to 1994. This decline primarily relates
to proceeds of $175,000 from settlement of a lawsuit in 1993,
offset by increases in trust and investment management fees as
a result of increased trust assets under management from which
fees are derived, service charges and higher mortgage banking
revenue in 1994 resulting from gains on loans sold to Freddie
Mac. Other operating expenses increased $348,000 or 10.5% to
$3,664,000. Included in the increase in other operating
expenses were increases in supervisory examination expenses by
$69,000 resulting from an examination in the current period,
$94,000 in processing and other losses, and $58,000 in
occupancy and maintenance costs due principally from
depreciation on additions and increased expenses of snow
removal which occurred in 1994.
Income Taxes
Income tax expense was $214,000 as compared to a
benefit of $114,000 in 1993. The increase is due to the
corresponding increase in income before income taxes and the
cumulative effect of the adoption of SFAS 109.
Financial Condition
Total assets of $422,306,000 at March 31, 1994
decreased slightly from $423,882,000 at December 31, 1993.
During the same period, total deposits fell $7,574,000, or 2%,
to $374,285,000. Most of this decrease occurred primarily
within non interest-bearing accounts.
Capital
Total stockholders' equity decreased from $30,250,000
to $30,809,000 at March 31, 1994 resulting from year to date
income and adoption of SFAS 115, "Accounting for Certain
Investments in Debt and Equity Securities." The increase was
partially offset by the payment of a common stock dividend of
$996,000. SFAS 115 revises the accounting for investments in
debt and equity securities with readily determinable fair
values. SFAS 115 requires that securities available for sale,
as defined in the statement, be reported at fair value, with
unrealized gains or losses excluded from earnings and reported
as a separate component of stockholders' equity. This
accounting differs from First Southeast's policy in 1993 under
which such securities were accounted for at the lower of
amortized cost or market, with unrealized losses, if any,
included in earnings. First Southeast adopted SFAS 115 on
January 1, 1994. Adoption of SFAS 115 resulted in an increase
of stockholders' equity of approximately $1,173,000 after
providing for deferred taxes. During the period, an increase
in the interest rate environment resulted in a corresponding
decrease in the market value of securities available-for-sale.
The total amount of net appreciation on securities
available-for-sale at March 31, 1994 totalled $922,000, net of
deferred taxes.
Capital requirements set by federal regulatory
agencies establish minimum capital levels for First Bank
Southeast N.A. and First Bank Southeast of Lake Geneva, N.A.,
subsidiaries of First Southeast. These guidelines require
minimum Tier I capital of 4%, a Tier I leverage ratio of 3% and
total risk-based capital of 8% of risk-weighted assets. The
subsidiary banks and First Southeast, on a consolidated basis,
are in compliance with all such minimum capital guidelines.
Liquidity
The management of assets and liabilities provides for
the availability of funds to meet loan commitments, deposit
withdrawals and other maturing liabilities. Liquidity to
service these requirements is generated from maturing short and
long term assets, internally generated earnings and from new
deposits and borrowings. Management of First Southeast has
tended to rely on the maturity structure of loans, investments
available for sale, and transactions in federal funds to meet
liquidity needs. First Southeast does not rely on brokered
deposits as a source of liquidity. First Southeast's liquidity
management is not only as of a point in time, but also involves
the future estimated needs of the market area served by First
Southeast. First Southeast has maintained a high liquidity
ratio of rate sensitive assets to rate sensitive liabilities in
recent years. Such ratio has ranged between 128% and 136%
between 1990 and 1994, and at the same time, the ratio of total
loans to total deposits has ranged between 65% and 74%.
Recent Accounting Development
The Financial Accounting Standards Board (FASB)
recently issued SFAS 114, "Accounting by Creditors for
Impairment of a Loan." SFAS 114, which for First Southeast is
effective for 1995 financial reporting, specifies the
methodology to be used by creditors in establishing valuation
allowances for impaired loans. The adoption of SFAS 114 is not
expected to have a material effect on First Southeast.
1993 COMPARED WITH 1992 AND 1991
Results of Operations
For the year ended December 31, 1993, net loss was
($384,000), a decrease of $4,321,000 from 1992. Net income in
1993 included the cumulative effect of change in accounting
principle of adopting SFAS 109 amounting to $325,000.
Excluding this item, income before cumulative effect of change
in accounting principle decreased $4,646,000 to ($709,000) in
1992.
For the year ended December 31, 1992, net income was
$3,937,000, an increase of $3,881,000 from $56,000 a year
earlier.
Net Interest Revenue
Net interest revenue increased by $144,000 or 0.9% to
$15,505,000 in 1993. Although First Southeast experienced
decreases in both interest earning assets and interest bearing
liabilities, the decline in total interest bearing liabilities
was larger between years resulting in reduced interest
expense. This was accompanied by an overall decrease in
interest rates with a more rapid decrease in interest rates on
deposits and borrowed funds than on interest earning assets.
Average interest earning assets fell $5,407,000 to
$378,706,000. Average rates on interest earning assets
declined from 8.20% to 7.20% during the same timeframe.
Interest bearing liabilities decreased $13,785,000 to
$278,657,000. Average rates paid on such balances fell from
5.52% to 4.22%.
Net interest revenue increased by $735,000 or 5% to
$15,361,000 in 1992. This increase was attributable to an
overall decrease in interest rates paid on deposits and
borrowed funds. The average rate paid on such interest bearing
liabilities declined from 7.79% to 5.52% between 1991 and 1992;
the average rate on interest earning assets decreased from
9.56% to 8.20% during the same period.
Provision for Loan Losses
The amount charged to provision for loan losses is
based on management's evaluation of the loan portfolio.
Management determines the adequacy of the allowance for loan
losses based on past loan loss experience, current economic
conditions, composition of the loan portfolio and the potential
for future loss. The provision for loan losses increased from
$600,000 in 1992 to $4,800,051 in 1993 in recognition of
certain identified credit concerns, increased charge-offs,
levels of nonperforming loans above First Southeast's peer
group, and management's decision to increase the allowance for
loan losses to a level which is believed to be in line with
peer group averages.
The provision for loan losses was unchanged at
$600,000 between 1992 and 1991.
Other Operating Revenue And Expenses
Other operating revenue decreased by $1,930,000 to
$2,844,000 in 1993. Such decrease was primarily due to
$2,151,000 in gains recognized on securities in 1992.
Securities gains totalled $49,000 in 1993. Management of First
Southeast opted to sell securities in 1992 to recognize
significant appreciation and utilize certain tax carryforwards
from the previous year. Excluding the impact of these security
transactions, other operating revenue increased 6.5% or
$172,000 to $2,795,000 in 1993. Such increase was attributable
to approximately $71,000 in additional trust and investment
management fees as a result of increased trust assets under
management from which fees are derived, and mortgage banking
revenue of $66,000 including mortgage servicing fees, loan
origination fees and gains on loan sales which collectively
rose due to increased volume in response to low interest rates.
Other operating revenue increased by $5,245,000 to
$4,774,000 in 1992. Such increase was primarily due securities
gains of $2,150,000 recognized in 1992 when losses of
$2,930,000 were realized in 1991. Excluding security
transactions, other operating revenue increased $164,000 or
6.7% to $2,623,000 in 1992. Such increase in other operating
revenue was due to additional mortgage banking revenue
resulting from servicing and loan origination fees and
increased fee levels assessed to deposit customers.
Other operating expenses increased by $703,000 or
4.8% to $15,319,000 in 1993 due to a net increase of $885,000
of expense related to foreclosed properties resulting from
additional writedowns and costs incurred to dispose of selected
properties, offset by a $205,000 decrease in legal and
collection costs consistent with a decrease in nonperforming
loans.
Other operating expenses increased $843,000 or 6.1%
to $14,615,000 in 1992 due to increases in salaries and
employee benefits of $315,000 which relates to normal increases
in compensation and staffing levels; other real estate expense
of $318,000 resulting from increased writedowns and costs to
dispose of selected properties compared to the year earlier,
$259,000 related to legal and collection expenses associated
with the levels of nonperforming loans, and $194,000 attributed
to increased occupancy costs due to higher rental expenses,
real estate taxes and insurance costs. The increase in other
operating expenses was partially offset by a decrease in
miscellaneous expense, which included costs related to a claim
settlement which occurred in 1991.
Income Taxes
SFAS 109, "Accounting for Income Taxes," was issued
by the FASB in February 1992 and required a change from the
deferred method to the asset and liability method of accounting
for income taxes. Under the asset and liability method of SFAS
109, deferred income taxes are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under
SFAS 109, the effect on deferred taxes of a change in tax rates
is recognized in income in the period that includes the
enactment date. First Southeast adopted SFAS 109 in 1993
without restating prior years' financial statements. The
adoption of SFAS 109 resulted in the recognition of a reduction
in 1993 net loss by $325,000, as the cumulative effect of the
change in accounting.
Financial Condition
At December 31, 1993, total assets of $423,882,000
declined slightly from $426,715,000 a year earlier. During
1993, total loans decreased $6,275,000, or 2.5%, which was
offset by increases in investment securities. Total deposits
remained substantially unchanged from a year earlier. The
balance of the long-term debt decreased $3,100,000 between 1992
and 1993 to $6,000,000 as a result of principal paydowns.
Capital
Total stockholders' equity decreased $384,000 to
$30,250,000 from 1992 to 1993 as a result of First Southeast's
net loss. Stockholders' equity increased $2,942,000 from 1991
to 1992, primarily to a retention of earnings, after payment of
common stock dividends.
OPINIONS
Certain legal matters in connection with the Merger
will be passed upon for First Southeast by Quarles & Brady, 411
East Wisconsin Avenue, Milwaukee, Wisconsin 53202, and for
Firstar by Howard H. Hopwood III, Esq., Senior Vice President
and General Counsel of Firstar. Mr. Hopwood is a full-time
employee of Firstar and at March 31, 1994, directly or
beneficially owned approximately 20,049 shares of Firstar
Common Stock. He also holds 34,800 options to acquire Firstar
Common Stock under Firstar's 1988 Incentive Stock Plan.
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,
incorporated by reference herein and elsewhere in the
registration statement have been incorporated by reference
herein and in the registration statement in reliance upon the
report of KPMG Peat Marwick, 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
Southeast as of and for the year ended December 31, 1993,
included herein and elsewhere in the registration statement
have been included herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick, independent
certified public accountants, appearing elsewhere herein, and
upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of First
Southeast as of December 31, 1992, and for each of the years in
the two-year period ended December 31, 1992, included herein
and elsewhere in the registration statement have been included
herein and in the registration statement in reliance upon the
report of James M. Harmon & Co., Ltd., independent certified
public accountants, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing.
SHAREHOLDER PROPOSALS
If the Merger Agreements are approved, shareholders
of First Southeast will become shareholders of Firstar on the
Closing Date. Firstar welcomes comments or suggestions from
its shareholders. Firstar shareholders may submit proposals
for formal consideration at the 1995 annual meeting to Firstar
at the principal executive offices of Firstar, 777 East
Wisconsin Avenue, Milwaukee, Wisconsin 53202, prior to the
close of business on November 29, 1994. Firstar's Bylaws
establish advance notice procedures as to (1) business to be
brought before an annual meeting of shareholders other than by
or at the direction of the Board of Directors, (2) the
nomination, other than by or at the direction of the Board of
Directors, of candidates for election as directors and (3) the
request to call a special meeting of the shareholders. Any
shareholder who wishes to take such action should obtain a copy
of these Bylaws and may do so by written request addressed to
the Secretary of Firstar at the principal executive offices of
Firstar.
INDEX TO FIRST SOUTHEAST BANKING CORP.
CONSOLIDATED FINANCIAL STATEMENTS
Audited Consolidated Financial Statements:
KPMG Peat Marwick Independent Auditor's Report ......... F-1
James M. Harmon & Co., Ltd. Independent
Auditor's Report .................................... F-2
Consolidated Balance Sheets as of December 31,
1993 and 1992 ....................................... F-3
Consolidated Statements of Income for Each of the
Three Years in the Period Ended December 31, 1993 ... F-4
Consolidated Statements of Changes in Stockholders'
Equity for Each of the Three Years in the
Period Ended December 31, 1993 ...................... F-5
Consolidated Statements of Cash Flows for Each of the
Three Years in the Period Ended December 31, 1993 ... F-7
Notes to Consolidated Financial Statements ............. F-9
Unaudited Interim Financial Statements
Condensed Consolidated Balance Sheet ................ F-30
Condensed Consolidated Statements of Operations ..... F-31
Consolidated Statements of Cash Flows ............... F-32
Notes to Condensed Consolidated Financial Statements. F-33
Independent Auditors' Report
Board of Directors
First Southeast Banking Corp.:
We have audited the accompanying consolidated balance sheet of First Southeast
Banking Corp. and subsidiaries (Corporation) as of December 31, 1993 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the year then ended. These consolidated financial statements are
the responsibility of the Corporation's management. Our responsibility
is to express an opinion on these consolidated financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of First Southeast Banking Corp. and subsidiaries at December 31, 1993
and the results of their operations and their cash flows
for the year ended December 31,1993, in conformity with generally accepted
accounting principles.
As discussed in note 8 to the consolidated financial statements, the
Corporation adopted the provisions of Statement of Financial Accounting
Standard 109 Accounting for Income Taxes in 1993.
February 4, 1994
INDEPENDENT AUDITORS' REPORT
March 8, 1993
To the Board of Directors
First Southeast Banking Corp. and subsidiaries
We have audited the accompanying consolidated balance sheet of First
Southeast Banking Corp. and subsidiaries (Corporation) as of December 31,
1992, and the related consolidated statements of operations, stockholder's
equity, and cash flows for each of the years in the two-year period ended
December 31, 1992. These consolidated financial statements are the
responsibility of the Corporation's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of First Southeast Banking Corp. and subsidiaries at December 31,
1992, and the results of their operations and their cash flows for each of
the years in the two-year period ended December 31, 1992 in conformity with
generally accepted accounting principles.
JAMES M. HARMON & CO., LTD.
Certified Public Accountants
/s/ James M. Harmon, CPA
James M. Harmon, CPA
<TABLE>
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1993 and 1992
<CAPTION>
Assets 1993 1992
<S> <C> <C>
Cash and due from banks $ 27,414,914 29,282,632
Federal funds sold 10,100,000 10,150,000
Other short-term investments 5,063,914 7,312,851
Securities held for sale
(market value of $70,719,000
in 1993) (note 2) 68,619,058 -
Investment securities (market value
of $50,069,850 in 1993 and
$109,841,850 in 1992)
(note 2) 49,282,903 107,457,637
Loans (note 3) 246,575,508 252,850,208
Allowance for loan losses (note 4) 5,374,578 3,173,125
Loans, net 241,200,930 249,677,083
Bank premises and equipment,
net (note 5) 12,148,704 11,027,704
Foreclosed properties 1,142,427 1,516,031
Goodwill, net of amortization of
$2,288,542 and $2,007,850 2,083,996 2,364,688
Accrued interest receivable and
other assets (note 8) 6,824,836 7,925,947
Total assets $ 423,881,682 426,714,573
Liabilities and Stockholders' Equity
Deposits:
Demand $ 114,986,821 107,161,280
Time (note 6) 266,872,021 274,534,688
Total deposits 381,858,842 381,695,968
Securities sold under repurchase
agreements (note 2) 985,000 330,000
Long-term debt (note 7) 6,000,000 9,100,000
Other liabilities 4,474,602 4,555,536
Total liabilities 393,318,444 395,681,504
Minority interest 312,832 399,126
Stockholders' equity (notes 9 and 11):
Common stock, $1 par value;
200,000 shares authorized;
119,633 shares issued 119,633 119,633
Additional paid-in capital 12,613,397 12,613,397
Retained earnings 19,927,652 20,311,189
Treasury stock
13,147 shares at cost (2,410,276) (2,410,276)
Total stockholders' equity 30,250,406 30,633,943
Commitments and contingent
liabilities (notes 5, 13, 14,
15 and 16)
Total liabilities and stockholders'
equity $ 423,881,682 426,714,573
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
FIRST SOUTHEAST BANKING CORP.
AND SUBSIDIARIES
Consolidated Statements of Income
Years ended December 31, 1993, 1992 and 1991
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Interest revenue:
Loans $ 20,401,249 23,919,650 30,399,223
Securities:
Taxable 4,845,241 6,193,365 6,521,694
Tax-exempt 1,816,230 1,130,478 1,209,223
Federal funds sold and other short-term
investments 211,121 250,158 269,130
Total interest revenue 27,273,841 31,493,651 38,399,270
Interest expense:
Deposits (note 6) 11,387,557 15,336,769 22,041,803
Securities sold under repurchase agreements 13,821 35,940 396,982
Long-term debt 367,290 759,872 1,334,139
Total interest expense 11,768,668 16,132,581 23,772,924
Net interest revenue 15,505,173 15,361,070 14,626,346
Provision for loan losses (note 4) 4,800,051 600,000 600,000
Net interest revenue after provision for loan
losses 10,705,122 14,761,070 14,026,346
Other operating revenue:
Service charges on deposit accounts 1,949,507 1,919,771 1,894,502
Securities gains (losses) 49,335 2,150,779 (2,930,256)
Trust and investment management fees 249,000 178,000 163,000
Mortgage banking revenue 166,365 100,684 51,812
Other 429,870 424,554 349,253
Total other operating revenue 2,844,077 4,773,788 (471,689)
Other operating expenses:
Salaries 5,840,042 5,671,046 5,380,721
Foreclosed properties, net 1,589,787 705,085 387,535
Net occupancy expense 1,452,843 1,422,425 1,584,870
Employee benefits 1,112,509 1,254,128 1,229,291
Legal and professional fees 1,070,602 1,042,589 1,028,712
FDIC insurance expense 895,071 865,950 830,915
Equipment expense 503,423 512,092 499,280
Other 2,854,459 3,142,243 2,780,887
Total other operating expense 15,318,736 14,615,558 13,722,211
Income (loss) before income taxes and cumulative
effect of change in accounting principle(1,769,537) 4,919,300 (167,554)
Income tax expense (benefit) (note 8) (1,061,000) 982,000 (224,000)
Income (loss) before cumulative effect of
change in accounting principle (708,537) 3,937,300 56,446
Cumulative effect on prior years of adoption
of Statement of Financial Accounting Standard
No. 109 325,000 - -
Net income (loss) $ (383,537) 3,937,300 56,446
Income (loss) per common share:
Income (loss) before cumulative effect
of change in accounting principle (6.65) 36.97 .53
Cumulative effect on prior years of adoption
of Statement of Financial Accounting
Standard No. 109 3.05 - -
Net income (loss) $ (3.60) 36.97 .53
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
FIRST SOUTHEAST BANKING CORP.
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
Year ended December 31, 1993, 1992 and 1991
<CAPTION>
Allowance for
Additional net unrealized
Common paid-in Retained Treasury loss on marketable
stock capital earnings stock equity securities Total
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1990 $ 119,633 12,613,397 17,901,955 (2,180,981) (1,384,025) 27,069,979
Net income - - 56,446 - - 56,446
Dividends declared - - (588,868) - - (588,868)
Purchase of treasury stock - - - (229,295) - (229,295)
Change in net unrealized loss on
marketable equity securities - - - - 1,384,025 1,384,025
Balance at December 31, 1991 119,633 12,613,397 17,369,533 (2,410,276) - 27,692,287
Net income - - 3,937,300 - - 3,937,300
Dividends declared - - (995,644) - - (995,644)
Balance at December 31, 1992 119,633 12,613,397 20,311,189 (2,410,276) - 30,633,943
Net loss - - (383,537) - - (383,537)
Balance at December 31, 1993 $ 119,633 12,613,397 19,927,652 (2,410,276) - 30,250,406
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
FIRST SOUTHEAST BANKING CORP.AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year ended December 31, 1993, 1992 and 1991
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (383,537) 3,937,300 56,446
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 4,800,051 600,000 600,000
Depreciation, amortization, and
accretion, net 1,444,306 686,021 680,000
Amortization of premiums on
investment securities, net 370,977 255,560 (32,850)
Securities (gains) losses (49,335) (2,150,779) 2,930,256
Deferred income taxes (1,353,000) (106,000) 16,000
Cumulative effect of change in
accounting principle (325,000) - -
Loss on bank premises and
foreclosed properties 1,061,852 220,216 83,207
Net increase in loans held for sale (277,200) (156,600) -
Decrease in minority interest 86,294 132,163 6,997
Decrease (increase) in accrued interest
receivable and other assets 2,779,109 (3,532,090) (1,236,003)
Increase (decrease) in other liabilities (80,934) 638,742 (5,529,031)
Net cash provided by (used in) operating
activities 8,073,583 524,533 (2,424,978)
Cash flows from investing activities:
Proceeds from sale of investments 2,713,661 64,215,582 21,479,339
Proceeds from maturity of investments 31,494,396 25,185,294 28,708,484
Purchase of investment securities (45,174,692) (100,227,707) (52,744,249)
Decrease in loans 1,702,653 38,386,786 25,943,404
Proceeds from sales of premises and equipment 30,466 367,620 11,266
Purchases of premises and equipment (2,370,352) (1,120,049) (351,726)
Proceeds from disposition of foreclosed
properties 1,645,756 803,574 3,966,230
Net cash provided by (used in) investing
activities (9,958,112) 27,611,100 27,012,748
</TABLE>
<TABLE>
FIRST SOUTHEAST BANKING CORP.AND SUBSIDIARIES
Consolidated Statement of Cash Flows, Continued
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in deposits $ 162,874 (9,937,766) (11,384,882)
Net increase (decrease) in securities sold
under repurchase agreements and
federal funds purchased 655,000 (766,000) (8,782,000)
Increase (decrease) of borrowings (3,100,000) (1,900,000) 2,000,000
Cash dividends paid - (995,644) (588,868)
Purchase of treasury stock - - (229,295)
Net cash used in financing activities (2,282,126) (13,599,410) (18,985,045)
Net increase (decrease) in cash and cash
equivalents (4,166,655) 14,536,223 5,602,725
Cash and cash equivalents:
Beginning of year 46,745,483 32,209,260 26,606,535
End of year $ 42,578,828 46,745,483 32,209,260
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 11,932,563 16,132,581 23,772,924
Income taxes 584,256 151,493 488,730
Supplemental schedule of noncash investing and
financing activities not described in the notes
to the consolidated financial statements:
Loans receivable satisfied through
foreclosure or acquisition of deeds
in lieu of foreclosure $ 2,428,000 1,023,000 6,314,000
Financing of sales of certain foreclosed
properties 1,015,000 427,000 2,639,000
See accompanying notes to consolidated financial statements.
</TABLE>
FIRST SOUTHEAST BANKING CORP.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1993 and 1992
(1) Summary of Significant Accounting Policies
First Southeast Banking Corp. (Corporation) provides banking services to
individual and corporate customers through its wholly-owned subsidiary,
First Bank Southeast, National Association, and its 97% owned subsidiary,
First Bank Southeast of Lake Geneva, National Association (collectively
"Banks"). Minority interest in income (loss) of subsidiaries is included
other operating expense and was not material to any year presented.
The Corporation and the Banks are subject to the regulations of certain
federal and state agencies and undergoes periodic examinations by those
regulatory authorities. The accounting policies and principles followed
by the Corporation and the Banks which materially affect the determination
of financial position, results of operations and cash flows are summarized
below:
(a) Principles of Consolidation and Presentation
The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles, and general practice within the
banking industry. All significant intercompany balances and transactions have
been eliminated in consolidation.
(b) Investment Securities
Securities include those held-for-sale and those held for investment.
Those classified as securities held-for-sale are carried at the lower of
amortized cost or market, determined on an aggregate basis. Investment
securities are those which management has the ability and intent to hold
to maturity, and are carried at amortized cost. Cost has been adjusted
for amortization of premiums and accretion of discounts using the
straight-line method. Investment securities would be written-down to market
value in the event that an impairment of value that is other than temporary
should become evident. Gains and losses on sales of securities are computed
on the basis of specific identification of securities sold.
(c) Loans
Loans are carried at the principal amounts outstanding. Unearned interest on
discounted loans is recognized as income using the sum-of-the-months' digits
method. Interest income is accrued on all non-discounted loans by applying the
contractual interest rate on to the amount outstanding, except where serious
doubt exists as to the collectibility of the loan, in which case the accrual
of interest ceases. Loans origination and commitment fees and certain direct
loan origination costs are deferred and the net amount amortized over the
contractual life of the loan as an adjustment of the related loans' yields.
Mortgage loans held for sale are valued at the lower of aggregate cost or
market. The market value of loans held for sale is determined by the price of
actual commitments to sell in the secondary market.
(d) Allowance for Loan Losses
A material estimate that is particularly susceptible to significant change in
the near term relates to the determination of the allowance for loan losses.
In connection with the determination of the allowance for loan losses,
management obtains independent appraisals for significant properties held as
collateral for loans.The allowance of loan losses is established by charges to
the provision for loan losses. Loan losses are recognized through charges to
the allowance. Subsequent recoveries are added to the reserve. The allowance
for loan losses is maintained at a level adequate to provide for potential
loan losses through charges to operating expense. The allowance is based
upon past loan loss experience and other factors which, in management's
judgment, deserve current recognition in estimating loan losses. Such other
factors considered by management include growth and composition of the loan
portfolio, the relationship of the allowance for loan losses to outstanding
loans and economic conditions. Management believes that the allowance for
loan losses is adequate. While management uses available information to
recognize losses on loans, future additions to the allowance may be necessary
based on changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process, periodically review
the allowance for losses on loans. Such agencies may require the recognition
of additions to the allowance based on their judgments about information
available to them at the time of their examination.
(e) Premises and Equipment
Premises and equipment are carried at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the related assets.
(f) Foreclosed Properties
Foreclosed properties represent property acquired through foreclosure or
acquisition of deed in lieu of foreclosure on loans for which the borrowers
have defaulted as to the payment of principal and interest. Foreclosed
properties are carried at the lower of the carrying value of the related loan
or fair value less the estimated costs to sell the property. Initial valuation
adjustments, if any, are charged to the allowance for loan losses. Subsequent
revaluations of properties which indicate reduced value are charged to expense.
Revenues and expenditures related to holding and operating foreclosed properties
are included in other operating expenses.
(g) Goodwill
Goodwill is amortized over fifteen years using the straight-line method.
(h) Income Taxes
Effective January 1, 1993, the Corporation adopted Statement of Financial
Accounting Standards No. 109 (Statement 109), Accounting for Income Taxes.
Statement 109 requires a change from the deferred method of accounting for
income taxes to the asset and liability method. Under the asset and liability
method, deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates in effect for the year in which those temporary differences
are expected to be recovered or settled. Under Statement 109, the effect on
deferred tax assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. The Corporation has
reported the cumulative effect of the change in the method of accounting for
income taxes in the 1993 consolidated statement of operations.
(i) Earnings Per Share
Income (loss) per common share is based on the weighted average number of shares
outstanding during each year.
(j) Cash and Cash Equivalents
For purposes of the consolidated statements of cash flows, cash and cash
equivalents include cash, amounts due from banks, federal funds sold and all
other highly liquid debt instruments with a maturity at date of acquisition of
three months or less. The Corporation's bank subsidiaries are required to
maintain noninterest-bearing deposits on hand or with the Federal Reserve Bank.
At December 31, 1993 and 1992, those required reserves were satisfied by
currency and coin holdings.
(k) Other Proposed Accounting Changes
In May 1993, the FASB issued Statement 114, Accounting by Creditors for
Impairment of a Loan. Statement 114 standardizes how creditors should
recognize losses on impaired loans. Statement 114 specifically excludes
residential mortgage loans, consumer installment loans, loans measured at fair
value or at the lower of cost or fair value and leases from the scope of the
statement. Loans covered within the scope of Statement 114 are considered
impaired when, based upon current information and events, it is probable that
a creditor will be unable to collect all amounts due according to the
contractual terms of the loan agreement. The extent to which a loan is
impaired will be determined based on the present value of expected future cash
flows discounted at the loan's effective rate, except that a creditor may
measure impairment based on a loan's observable market price, or the fair
value of the collateral if the loan is collateral dependent. Statement 114 is
effective for financial statements for fiscal years beginning after December 15,
1994. Statement 114 is expected to be adopted in the first fiscal quarter in
the year ending December 31, 1995. The Corporation does not anticipate that
adoption will result in any material effect on operating results or financial
position. In May 1993, the FASB issued Statement 115, Accounting for Certain
Investments in Debt and Equity Securities. Statement 115 requires the
classification of debt and equity securities into one of three categories.
These categories include securities held-to-maturity and securities
available-for-sale. Securities classified as held-to-maturity are measured at
amortized cost. Securities classified as available-for-sale are carried at
fair value and unrealized holding gains and losses are excluded from earnings
and reported as a separate component of equity. Adoption of Statement 115
effective January 1, 1994 resulted in an increase of stockholders' equity of
approximately $1,173,000 after consideration of tax effects.
(l) Reclassifications
Certain amounts for prior years have been reclassified to conform to the 1993
presentation.
(2) Securities
<TABLE>
(a) Securities Held for Sale
The amortized cost and estimated market values of securities held for sale at
December 31, 1993 are as follows:
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
<S> <C> <C> <C> <C>
U.S. Treasury securities and obli-
gations of U.S. Government
agencies and corporations $ 15,519,887 183,929 (19,816) 15,684,000
Mortgage-backed securities 32,011,518 366,711 (31,229) 32,347,000
Corporate securities 21,087,653 1,621,040 (20,693) 22,688,000
Totals $ 68,619,058 2,171,680 (71,738) 70,719,000
</TABLE>
The amortized cost and estimated market value of securities held for sale at
December 31, 1993 by contractual maturity is shown below. Expected maturities
may differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
Estimated
Amortized market
cost value
Due in one year or less $ 6,721,161 6,787,000
Due after one year through five years 23,129,333 23,412,000
Due after five years through ten years 5,848,596 6,001,000
35,699,090 36,200,000
Equity securities 908,450 2,172,000
Mortgage-backed securities 32,011,518 32,347,000
$ 68,619,058 70,719,000
<TABLE>
(b) Investment Securities
The amortized cost and estimated market values of investment securities at
December 31, 1993 and 1992 are as follows:
<CAPTION>
1993
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
<S> <C> <C> <C> <C>
Obligations of states and
political subdivisions $ 39,429,846 843,663 (2,509) 40,271,000
Collateralized mortgage
obligations 9,242,207 - (54,207) 9,188,000
Other securities 610,850 - - 610,850
Totals $ 49,282,903 843,663 (56,716) 50,069,850
</TABLE>
<TABLE>
1992
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government corpora-
tions and agencies $ 3,922,049 951 - 3,923,000
Obligations of states
and political subdivisions 38,154,275 570,627 (309,902) 38,415,000
Collateralized mortgage obligations 869,934 - (1,934) 868,000
Mortgage-backed securities 39,506,513 625,973 (187,486) 39,945,000
Corporate securities 24,394,016 1,764,588 (78,604) 26,080,000
Other securities 610,850 - - 610,850
Totals $107,457,637 2,962,139 (577,926) 109,841,850
</TABLE>
The amortized cost and estimated market value of investment securities at
December 31, 1993, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities because borrowers may
have the right to call or prepay obligations with or without call or
prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Amortized market
cost value
<S> <C> <C>
Due in one year or less $ 7,528,351 7,562,000
Due after one year through five years 22,329,035 22,803,000
Due after five years through ten years 9,572,460 9,906,000
Due after ten years 9,242,207 9,188,000
Equity securities 610,850 610,850
$ 49,282,903 50,069,850
</TABLE>
Gross gains realized on sales of investment securities totaled $202,335,
$2,199,790 and $609,335 during 1993, 1992 and 1991, respectively. Gross
losses realized on sales of investment securities totaled $685,732 and
$3,702,766 during 1992 and 1991, respectively. Securities with carrying
values aggregating approximately $8,580,000 and $9,612,000 at December 31, 1993
and 1992, respectively, are pledged to secure public or trust deposits,
securities sold under repurchase agreements and for other purposes as
required by law.
(3) Loans
Loans classified by type at December 31, 1993 and 1992 are as follows:
1993 1992
Commercial and municipal $ 117,879,194 124,925,672
Real estate mortgage 115,336,562 115,252,750
Installment and other 13,359,752 12,671,786
$ 246,575,508 252,850,208
Mortgage loans serviced for other investors approximate $33,280,000,
$19,478,000 and $9,800,000, as of December 31, 1993, 1992 and 1991,
respectively. Included in loans are mortgage loans held for sale of
approximately $433,800, and $156,600, as of December 31, 1993 and 1992,
respectively.
Nonaccrual and past due loans at December 1993 and 1992 are as follows:
1993 1992
Nonaccrual $ 4,298,000 7,682,000
Past due 90 days or more, still accruing 85,000 250,000
The effect of nonperforming loans on interest revenue
is as follows:
1993
Interest at original contract rate $ 540,000
Interest collected 87,000
Net reduction of interest revenue $ 453,000
In the ordinary course of business, the Banks originate loans to related
parties, which include directors, executive officers, and associates of
such persons. Loans to these individuals are made on substantially
the same terms as comparable transactions with other persons and do not
involve more than the normal risk of collectibility. Loan activity of
related parties for 1993 is summarized as follows:
Balance, December 31, 1992 $ 1,566,000
Originations and renewals 729,000
Repayments (767,000)
Balance, December 31, 1993 $ 1,528,000
(4) Allowance for Loan Losses
An analysis of the allowance for loan losses is as follows:
1993 1992 1991
Balance, beginning of year $ 3,173,125 3,246,468 3,093,005
Provision charged to expense 4,800,051 600,000 600,000
Recoveries of loans previously charged-off 60,321 182,064 47,456
Loans charged-off (2,658,919) (855,407) (493,993)
Balance, end of year $ 5,374,578 3,173,125 3,246,468
(5) Premises and Equipment
Premises and equipment at December 31, 1993 and 1992 are summarized as follows:
1993 1992
Land and improvements $ 1,983,337 1,983,337
Buildings 10,129,565 9,922,452
Furniture, fixtures and leasehold improvements 6,967,319 5,491,590
19,080,221 17,397,379
Less accumulated depreciation and amortization 6,931,517 6,369,675
$ 12,148,704 11,027,704
The Corporation has agreements for rental of certain premises and equipment.
Under the terms of these agreements the Corporation has future non-cancelable
minimum lease payments as follows:
Year ending
December 31, Amount
1994 $ 196,000
1995 196,000
1996 169,000
1997 138,000
1998 and after 670,000
$ 1,369,000
Rent expense under these leases was approximately $207,000, $276,000 and
$220,000 in 1993, 1992 and 1991, respectively.
(6) Deposits
Time deposits include approximately $19,127,000 and $19,756,000 of
certificates of deposit of $100,000 or more at December 31, 1993 and 1992.
Interest expense on certificates of deposit of $100,000 or more
approximated $704,000, $1,386,000 and $1,246,000 in 1993, 1992
and 1991, respectively.
(7) Long-term Debt
Long-term debt consists of a term note whose outstanding balance is
due July 1, 1997, payable to LaSalle National Bank, N.A. (LaSalle),
Chicago, Illinois bearing interest at LaSalle's prime rate or London
inter bank offered rate (LIBOR) plus 1.2%. The note is collateralized
by the stock of First Bank Southeast of Lake Geneva, N.A. and the
personal guarantee of a stockholder of the Corporation. The Corporation
is restricted from incurring additional indebtedness without the prior
approval of the Federal Reserve Board.
1993 1992
Maximum month-end balance $ 9,100,000 10,000,000
Average balance 7,296,000 10,045,000
December 31 balance 6,000,000 9,100,000
Interest rate at December 31 4.45% 5.17%
(8) Income Taxes
Income tax expense (benefit) in the consolidated statements of
operations consists of the following:
Federal State Total
Year ended December 31, 1993
Current $ 292,000 - 292,000
Deferred (1,353,000) - (1,353,000)
(1,061,000) - (1,061,000)
Year ended December 31, 1992
Current $ 1,088,000 - 1,088,000
Deferred (106,000) - (106,000)
$ 982,000 - 982,000
Year ended December 31, 1991
Current $ (289,000) 49,000 (240,000)
Deferred 16,000 - 16,000
$ (273,000) 49,000 (224,000)
Income tax expense (benefit) differs from the amounts computed by applying
the U.S. federal income tax rate (34%) to income (loss) before income
taxes and the cumulative effect of change in accounting principle.
A reconciliation to actual tax expense follows:
1993 1992 1991
Tax expense (benefit) at statutory rate $ (602,000) 1,673,000 (57,000)
Tax-exempt income, net of disallowance (548,000) (367,000) (471,000)
Goodwill amortization 120,000 105,000 105,000
State income taxes - - 32,000
Capital loss carry over - (195,000) 195,000
Other, net (31,000) (234,000) (28,000)
Income tax expense (benefit) $(1,061,000) 982,000 (224,000)
As discussed in Note 1(h) the Corporation adopted Statement 109 in 1993
without restating prior years' financial statements. The adoption of
Statement 109 resulted in the recognition of an increase in 1993 net
income of $325,000, as the cumulative effect of the change in accounting.
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at
December 31, 1993 are presented below:
1993
Deferred tax assets:
Loans, principally due to allowance for losses $ 2,285,000
Foreclosed properties 315,000
State net operating loss carryforwards 1,471,000
Other 571,000
Deferred tax assets 4,642,000
Valuation allowance (1,967,600)
2,674,400
Deferred tax liabilities:
Premises and equipment, principally
due to differences in depreciation (485,000)
Net deferred tax asset $ 2,189,400
At January 1, 1993, the balance of the valuation allowance approximated
$1,265,000. Such reserve increased in 1993 primarily due to increases in
state net operating loss carry forwards, and the state tax effect of
temporary differences.Included in other assets are deferred income tax
assets of $2,189,400 at December 31, 1993 and $511,400 at December 31,
1992. At December 31, 1993, the Corporation and its subsidiaries have
available alternative minimum tax carryforwards of $255,000 which are
carried forward indefinitely and state tax net operating loss carryforwards
of approximately $18,615,000, which begin to expire 1996 through 2008.
(9) Payment of Dividends
The Corporation relies partially on cash dividends received from the
subsidiary banks to fund its operating and dividend requirements. The
declaration and payment of cash dividends by the subsidiary banks to the
Corporation is restricted by certain statutory and regulatory limitations.
These restrictions limit cash dividends to current year net profits,
as defined, plus retained net profits from the past two years. At December 31,
1993, each of the subsidiary banks is precluded from paying a dividend to the
Corporation without prior approval from the office of the Comptroller of the
Currency.
(10) Employee Benefit Plans
The Corporation has a defined contribution plan which covers substantially
all employees. Contributions are made to the plan on behalf of each
participant in the amount of 5.25% of each participant's compensation plus
4.3% of each participant's excess compensation, as defined for such plan years.
Plan expense was approximately $360,000, $346,000 and $330,000 in 1993, 1992
and 1991, respectively.
(11) Capital
The Corporation and the Banks are subject to regulatory capital guidelines.
These guidelines require minimum Tier I capital of 3% of total assets and
4% of risk weighted assets, and total capital equal to 8% of risk-weighted
assets. The Corporation and the Banks are in compliance with all minimum
capital guidelines.
(12) Leases
The Corporation leases space in one of its buildings to tenants.
Noncancelable operating leases for such office space expire at various
dates over the next five years. Future minimum payments receivable
under noncancelable operating leases as of December 31, 1993 are:
Year
1994 $ 141,000
1995 77,000
1996 42,000
1997 15,000
1998 15,000
$ 290,000
Gross rental income in 1993, 1992 and 1991 was approximately $183,000,
$139,000 and 167,000, respectively.
(13) Financial Instruments With Off-Balance Sheet Risk
The subsidiary banks are party to financial instruments with off-balance
sheet risk in the normal course of business to meet the financing needs of
customers. These financial instruments include commitments to extend credit
and standby letters of credit and involve, to varying degrees, elements of
credit and interest rate risk in excess of the amounts recognized in the
consolidated financial statements. The contract amounts of those instruments
reflect the extent of involvement the banks have in particular classes of
financial instruments. The banks' exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for commitments
to extend credit and standby letters of credit is represented by the
contractual notional amount of those instruments. The banks use the same
credit policies in making commitments and conditional obligations as they do
for instruments reflected in the consolidated financial statements.
A summary of significant off-balance sheet financial commitments at
December 31, 1993 and 1992 is as follows:
Financial instruments whose contract
amounts represent credit risk 1993 1992
Commitments to extend credit $ 24,964,000 21,168,000
Credit card lines 4,079,000 4,172,000
Standby letters of credit 1,476,000 1,291,000
Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments are
expected to expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements. Each customer's credit
worthiness is evaluated on a case-by-case basis. The amount of collateral
obtained if deemed necessary is based on management's credit evaluation of
the counterparty. Collateral held varies but may include accounts receivable,
inventory, property, plant and equipment, income-producing commercial
properties and negotiable securities. Credit card lines are unsecured
agreements to extend credit. Such commitments are reviewed periodically,
at which time the commitments may be maintained, increased, decreased or
canceled, depending upon an evaluation of the customer's creditworthiness
and other considerations. Standby letters of credit are conditional
commitments issued by the subsidiary banks to guarantee the performance
of a customer to a third party. The credit risk involved in issuing
letters of credit is essentially the same as that involved in extending
loan facilities to customers. In some cases marketable securities are
pledged as collateral supporting those commitments.
(14) Regulatory and Other Commitments
The Corporation operates under a Memorandum of Understanding (MOU) with
the Federal Reserve Bank of Chicago. Specifically the Corporation and
its board of directors agreed to a number of requirements. Under the MOU,
the Corporation shall not declare or pay any dividends subsequent to 1992
nor increase its borrowings or incur any debt without the prior written
approval of the Federal Reserve Bank. The Corporation is subject to
various legal actions and proceedings in the normal course of business,
some of which involve substantial claims for compensatory or punitive damages.
Although litigation is subject to many uncertainties and the ultimate
exposure with respect to these matters cannot be ascertained, management
does not believe that the final outcome will have a material adverse effect
on the financial condition of the Corporation.
(15) Fair Value of Financial Instruments
Statement of Financial Accounting Standards 107, Disclosures about Fair Value
of Financial Instruments (Statements 107), requires disclosure of fair value
information about financial instruments for which it is practicable to
estimate that value, whether or not recognized in the consolidated balance
sheets. In cases where quoted market prices are not available,
fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the
assumptions used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot be
substantiated by comparison to independent markets and, in many cases,
could not be realized in immediate settlement of the instrument.
Statement 107 excludes certain financial instruments and all non-financial
instruments from its disclosure requirements. Accordingly, the aggregate
fair value amounts presented do not represent the underlying value of the
Corporation. The Corporation does not routinely measure the market value
of certain of its financial instruments because such measurements represent
point-in-time estimates of value. It is not the intent of the Corporation
to liquidate and therefore realize the difference between market value and
carrying value, and even if it were, there is no assurance that the estimated
market values could be realized. Thus the information presented may not
be relevant to predicting the Corporation's future earnings or cash flows.
The following methods and assumptions were used by the Corporation
in estimating its fair value disclosures for financial instruments:
Cash and cash equivalents - The carrying amounts of these assets are
reported in the consolidated balance sheets at approximately their
fair values.
Securities available for sale and investment securities - Fair values
for these assets are based on quoted market prices, where available.
If quoted market prices are not available, fair values are based on
quoted market prices of comparable instruments.
Loans - For variable-rate mortgage loans that reprice regularly and have
not experienced a significant change in credit risk, fair values are based
on carrying values. The fair value of fixed-rate residential mortgage loans
held for investment, commercial real estate loans, multi-family residential
property mortgage loans, consumer loans and commercial loans are estimated
using discounted cash flow analyses. The rates utilized for discounting
are the interest rates currently being offered for loans with similar
terms to borrowers of similar credit quality. For residential
construction loans, fair values are based on carrying values due to
the short-term nature of the loans.
The fair value of mortgage loan servicing rights for loans originated by
the banks has not been determined and is not presented below. These
rights, which consist of the banks' contractual right to service loans
for others, represent a future income producing intangible asset that
could be realized immediately be selling the rights to another institution.
The value of those rights, except to the extent that purchased mortgage
servicing rights exist, is not reflected in the Corporation's consolidated
balance sheets.
Deposits - The fair values disclosed for demand accounts are, by definition,
equal to the amount payable on demand at the reporting date (i.e., their
carrying value amounts). The fair values of fixed-rate certificates of
deposit are estimated using a discounted cash flow calculation that applies
current incremental interest rates being offered on certificates of
deposit to a schedule of aggregated expected monthly maturities of the
outstanding certificates of deposit.
Borrowings - The fair value of the Corporation's long-term borrowings
approximate the carrying value due to the interest rates floating at
market interest rates.
Off-Balance Sheet Items - The fair value of unused and open ended consumer
lines of credit was estimated using fees currently being charged and does
not include the value that relates to estimated cash flows from new loans
generated from existing lines of credit. The fair value of commitments to
extend credit was estimated using fees currently charged to enter into
such agreements. The fair value of commitments to sell loans is based on
the current market rates for such loans. The estimated fair values of the
Corporation's off-balance sheet items (note 13), are not material and
therefore are not included in the following schedule.
The carrying amounts and fair values of the Corporation's financial
instruments consist of the following at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Financial assets:
Cash and cash equivalents $ 42,578,828 42,578,828 49,745,483 49,745,483
Securities available for sale 68,619,058 70,719,000 - -
Investment securities 49,282,903 50,069,850 107,457,637 109,841,513
Loans, net 241,200,930 244,618,959 249,677,083 250,266,663
Financial liabilities:
Deposits:
Demand accounts 114,986,821 114,986,821 107,161,282 107,161,282
Time accounts 266,872,021 265,431,996 274,534,688 276,446,612
Securities sold under
repurchase agreements 985,000 985,000 330,000 330,000
Borrowings 6,000,000 6,000,000 9,100,000 9,100,000
</TABLE>
(16) Proposed Acquisition by Firstar Corporation
On February 10, 1994, the Corporation entered into a definitive agreement
with Firstar Corporation (Firstar) to exchange all outstanding shares of
common stock of the Corporation for common stock of Firstar.
The definitive agreement is subject to stockholder and regulatory approval.
(17) First Southeast Banking Corp. (Parent Company Only) Financial Information
Condensed Balance Sheet
December 31,
1993 1992
Cash $ 1,803,985 63,463
Due from subsidiaries 326,478 184,725
Investment in subsidiaries 31,596,377 34,099,927
Investment securities (market value of $1,264,000
and $1,548,000) 908,450 1,293,213
Goodwill, net of amortization 1,290,961 1,478,229
Other 1,155,347 2,822,466
$ 37,081,598 39,942,023
Liabilities and Stockholders' Equity
Note payable $ 6,000,000 9,100,000
Other 831,192 208,080
Stockholders' equity 30,250,406 30,633,943
$ 37,081,598 39,942,023
Condensed Statements of Operations
1993 1992 1991
Revenue:
Dividends received from Banks $ 2,651,870 2,402,436 2,628,220
Other dividend and interest income 82,403 141,291 105,565
Securities gain (losses) 40,391 1,439,728 (3,268,763)
Other 65,941 69,335 42,284
Total revenue 2,840,605 4,052,790 (492,694)
Expenses:
Interest 367,290 759,872 1,334,139
Goodwill amortization 187,267 187,267 187,267
Other 288,189 182,790 215,825
Total expenses 842,746 1,129,929 1,737,231
Income (loss) before income taxes and
equity in undistributed net income
(loss) of Banks 1,997,859 2,922,861 (2,229,925)
Income tax benefit 190,672 3,550 1,326,513
Income (loss) before
equity in undistributed
net income (loss) of Banks 2,188,531 2,926,411 (903,412)
Equity in undistributed net income
(loss) of Banks (2,572,068) 1,010,889 959,858
Net income (loss) $ (383,537) 3,937,300 56,446
<TABLE>
<CAPTION>
Condensed Statements of Cash Flows
1993 1992 1991
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (383,537) 3,937,300 56,446
Adjustments to reconcile net income to net
cash provided by operating activities:
Securities (gains) losses (40,391) (1,439,728) 1,384,025
Amortization 187,267 187,267 187,267
Decrease (increase) in other assets 1,540,798 (1,565,731) 615,412
Increase (decrease) in other liabilities 623,112 208,080 (4,414,522)
Equity in undistributed (net income)
loss of Banks 2,572,068 (1,010,889) (959,858)
Net cash provided by (used in) operating activities4,499,317 316,299 (3,131,230)
Cash flows from investing activities:
Proceeds from sales of investments 425,154 2,352,664 2,308,719
Purchase of common stock in Banks (83,949) (150,280) (15,566)
Net cash used in investing activities 341,205 2,202,384 2,293,153
Cash flows from financing activities:
Net increase (decrease) in borrowed funds (3,100,000) (1,900,000) 2,000,000
Dividends paid - (995,644) (588,868)
Purchase of treasury stock - - (229,295)
Net cash provided by (used in)financing activities(3,100,000) (2,895,644) 1,181,837
Net increase (decrease)in cashand cash equivalents 1,740,522 (376,961) 343,760
Cash and cash equivalents at beginning of year 63,463 440,424 96,664
Cash and cash equivalents at end of year $ 1,803,985 63,463 440,424
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $ 367,290 759,872 1,334,139
</TABLE>
The Corporation and the Banks utilize the services of an aviation service
of which the owner is a stockholder and director of the Corporation.
Fees paid to the aviation service during 1993, 1992 and 1991 totaled
approximately $33,000, $46,000 and $142,000, respectively.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES
Condensed Consolidated Balance Sheet
March 31, 1994
(Unaudited)
Assets
Cash and due from banks $ 29,312,227
Federal funds sold 9,000,000
Securities available-for-sale 76,177,111
Securities held-to-maturity
(market value of $47,059,000) 47,015,768
Loans 242,442,370
Allowance for loan losses (5,426,043)
Loans, net 237,016,327
Premises and equipment, net 13,072,070
Foreclosed properties 1,077,976
Goodwill, net of amortization of $2,358,716 2,013,822
Accrued interest receivable and other assets 7,620,591
Total assets $ 422,305,892
Liabilities and Stockholders' Equity
Deposits:
Demand $ 106,568,807
Time 267,716,051
Total deposits 374,284,858
Securities sold under
repurchase agreements (note 3) 6,188,000
Long-term debt 6,000,000
Other liabilities 4,701,434
Total liabilities 391,174,292
Minority interest 322,667
Stockholders' equity:
Common stock, $1 par value;
200,000 shares authorized;
119,633 shares iss 119,633
Additional paid-in capital 12,613,397
Retained earnings 19,563,967
Appreciation on securities available-for-sale,
net of deferred taxes 922,212
Treasury stock, 13,147 shares at cost (2,410,276)
Total stockholders' equity 30,808,933
Total liabilities and stockholders' equity $ 422,305,892
See accompanying notes to unaudited condensed consolidated financial statements.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three Months ended March 31, 1994 and 1993
(Unaudited)
1994 1993
Interest revenue:
Loans $ 4,942,059 4,900,771
Investment securities:
Taxable 1,130,291 1,280,906
Tax-exempt 407,947 424,428
Other 74,032 69,400
Total interest revenue 6,554,329 6,675,505
Interest expense:
Deposits 2,573,512 3,050,919
Securities sold under repurchase agreements 36,569 12,259
Long-term debt 68,278 94,156
Total interest expense 2,678,359 3,157,334
Net interest revenue 3,875,970 3,518,171
Provision for loan losses - 1,137,512
Net interest revenue
after provision for loan losses 3,875,970 2,380,659
Other revenue:
Service charges 470,676 453,234
Trust and investment management fees 62,000 44,000
Mortgage banking revenue 31,725 25,169
Other 69,532 220,775
Total other revenue 633,933 743,178
Other expenses:
Salaries and employee benefits 1,788,321 1,741,253
Other 1,875,622 1,574,644
Total other expenses 3,663,943 3,315,897
Income (loss) before income tax expense and
cumulative effect of change in accounting
principle 845,960 (192,060)
Income tax expense (benefit) 214,000 (114,000)
Income (loss) before cumulative effect of change
in accounting principle 631,960 (78,060)
Cumulative effect on prior years of adoption of
Statement of Financial Accounting Standards
No. 109 - 325,000
Net income $ 631,960 246,940
Income (loss) per common share:
Income (loss) before cumulative effect
of change in accounting principle $ 5.93 (0.74)
Cumulative effect on prior years of adoption
of Statement of Financial Accounting
Standards No. 109 - 3.05
Net income $ 5.93 2.31
See accompanying notes to unaudited condensed consolidated financial statements.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Three Months ended March 31, 1994 and 1993
(Unaudited)
1994 1993
Cash flows from operating activities:
Net income $ 631,960 246,940
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation, amortization, and accretion, net 229,136 204,074
Provision for loan losses - 1,137,512
Cumulative effect of change in accounting principle - (325,000)
Minority interest 9,835 56,332
Decrease (increase) in accrued interest receivable (795,755) 2,510,145
and other assets
Decrease in accrued expenses and other liabilities (248,246) (519,088)
Net cash provided by operating activities (173,070) 3,310,915
Cash flows from investing activities:
Net decrease in loans 4,184,603 6,063,845
Purchases of premises and equipment, net (1,081,983) (1,834,391)
Purchase of investment securities, net of maturities (3,893,628) (8,707,743)
Net change in foreclosed properties 64,451 (1,150,198)
Net cash used in investing activities (726,557 (5,628,487)
Cash flows from financing activities:
Net decrease in deposits (7,573,984) (13,008,670)
Net increase in securities
sold under repurchase agreements 5,203,000 1,840,000
Repayment of long-term debt - (1,600,000)
Cash dividends paid (995,645) -
Net cash provided by (used in) financing activities (3,366,629) (12,768,670)
Net decrease in cash and cash equivalents (4,266,256) (15,086,242)
Cash and cash equivalents:
Beginning of year 42,745,483 46,745,483
End of year $ 38,312,227 31,659,241
See accompanying notes to unaudited condensed consolidated financial statements.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 1994 and 1993
(Unaudited)
(1) General
The accounting and reporting policies of First Southeast Banking Corp. and
subsidiaries (First Southeast) conform to generally accepted accounting
principles and to general practices within the banking industry.
Significant accounting principles used by First Southeast are summarized
in Note 1 to the 1993 consolidated financial statements.
The condensed consolidated financial statements reflect adjustments, all
of which are of a normal recurring nature, and, in the opinion of management,
necessary for a fair statement of results for the interim periods.
The operating results for the three months ended March 31, 1994 are not
necessarily indicative of the results which may be expected for the entire
year. The accompanying condensed consolidated financial statements should
be read in conjunction with First Southeast's 1993 consolidated financial
statements and related notes.
(2) Allowance for Loan Losses
An analysis of the allowance for loan losses for the three months ended
March 31, 1994 and 1993 is as follows:
1994 1993
Balance, beginning of period $ 5,374,578 3,173,125
Provision charged to expense - 1,137,512
Recoveries of loans previously charged-off 73,465 15,080
Loans charged-off (22,000) (558,537)
Balance, end of period $ 5,426,043 3,767,180
(3) Nonperforming Loans
Nonperforming loans as of March 31, 1994 and 1993 are summarized as follows:
1994 1993
Nonperforming loans $ 5,308,000 9,385,000
(4) Long-term Debt
Long-term debt consists of a term note payable to LaSalle National Bank, N.A.
(LaSalle), Chicago, Illinois. Such note, with interest payable at LaSalle's
prime rate or the LIBOR plus 1.2%, is collateralized by the stock of First
Bank Southeast of Lake Geneva, N.A. and the personal guarantee of a
stockholder of First Southeast and is due July 1, 1997. First Southeast
is restricted from incurring additional indebtedness without prior
approval of the Federal Reserve Board.
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).
Item 21. Exhibits.
(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 February 10, 1994, among
Firstar Corporation, Firstar
Corporation of Wisconsin and First
Southeast Banking Corp.
2(b) Plan of Merger dated as of
February 10, 1994, between First
Southeast Banking Corp. and Firstar
Corporation of Wisconsin and joined in
by Firstar Corporation for certain
limited purposes
2(c) Voting and Stock Purchase Agreement
dated as of February 10, 1994, between
Firstar Corporation and David A. Straz
and joined in by First Southeast
Banking Corp. for certain limited
purposes
2(d) Voting and Stock Purchase Agreement
dated as of February 10, 1994, between
Firstar Corporation and David A.
Straz, Jr. and joined in by First
Southeast Banking Corp. for certain
limited purposes
2(e) Voting and Stock Purchase Agreement
dated as of February 10, 1994, between
Firstar Corporation and Lila G. Straz
and joined in by First Southeast
Banking Corp. for certain limited
purposes
2(f) Indemnity Agreement dated as of
February 10, 1994, among First
Southeast Banking Corp., David A.
Straz, Jr., Firstar Corporation,
Firstar Corporation of Wisconsin,
First Southeast Bank, N.A. and First
Southeast Bank of Lake Geneva, N.A.
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)
5 Opinion of Howard H. Hopwood III, Esq.
8 Tax Opinion of Foley & Lardner (to be
filed by Amendment)
13(a) Firstar Corporation's Annual Report on
Form 10-K for the year ended
December 31, 1993 (incorporated herein
by reference)
13(b) Firstar Corporation's Quarterly Report
on Form 10-Q for the quarter ended
March 31, 1994 (incorporated herein by
reference)
15 Letter from KPMG Peat Marwick
regarding unaudited interim financial
information (included in consent)
21 List of subsidiaries of Firstar
Corporation
23(a) Consent of KPMG Peat Marwick addressed
to Board of Directors of First
Southeast Banking Corp.
23(b) Consent of KPMG Peat Marwick addressed
to Board of Directors of Firstar
Corporation
23(c) Consent of James M. Harmon & Co., Ltd.
23(d) Consent of Howard H. Hopwood III, Esq.
(included in opinion)
23(e) Consent of Foley & Lardner (to be
filed by Amendment)
24(a) Powers of Attorney
24(b) Certified resolutions of Firstar
Corporation's Board of Directors
99 Form of Proxy
(b) No financial statement schedules are required to
be filed with regard to Firstar or First Southeast.
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 Form S-4,
within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration
Statement through the date of responding to the request.
(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.
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 May 20, 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.
Signature Title Date
/s/ Roger L. Fitzsimonds Chairman of the May 20, 1994
Roger L. Fitzsimonds Board, Chief
Executive Officer
and Director
/s/ John A. Becker President, Chief May 20, 1994
John A. Becker Operating Officer
and Director
/s/ William H. Risch Senior Vice May 20, 1994
William H. Risch President-Finance
and Treasurer
Michael E. Batten * Director May 20, 1994
Michael E. Batten
George M. Chester, Jr. * Director May 20, 1994
George M. Chester, Jr.
Roger H. Derusha * Director May 20, 1994
Roger H. Derusha
Director May , 1994
James L. Forbes
Holmes Foster * Director May 20, 1994
Holmes Foster
Joseph F. Heil, Jr. * Director May 20, 1994
Joseph F. Heil, Jr.
John H. Hendee, Jr. * Director May 20, 1994
John H. Hendee, Jr.
Jerry M. Hiegel * Director May 20, 1994
Jerry M. Hiegel
Joseph F. Hladky, III * Director May 20, 1994
Joseph F. Hladky, III
Director May , 1994
James H. Keyes
Sheldon B. Lubar * Director May 20, 1994
Sheldon B. Lubar
Daniel F. McKeithan, Jr.* Director May 20, 1994
Daniel F. McKeithan, Jr.
George W. Mead, II * Director May 20, 1994
George W. Mead, II
Guy A. Osborn * Director May 20, 1994
Guy A. Osborn
Director May , 1994
Judith D. Pyle
Clifford V. Smith, Jr. * Director May 20, 1994
Clifford V. Smith, Jr.
Director May , 1994
William W. Wirtz
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.
EXHIBIT 2(a)
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
FIRSTAR CORPORATION,
FIRSTAR CORPORATION OF WISCONSIN
AND
FIRST SOUTHEAST BANKING CORP.
<PAGE>
TABLE OF CONTENTS
Page No.
ARTICLE I
Undertakings of the Parties
1.1 The Merger......................................... 2
1.2 Approval of the Agreements......................... 2
1.3 Preparation of Registration Statement.............. 2
1.4 Preparation of Bank Regulatory Applications........ 3
1.5 Closing............................................ 3
1.6 Confidential Information........................... 3
1.7 No Covenant as to Tax Consequences................. 4
1.8 Release of Information............................. 4
ARTICLE II
Representations and Warranties of Firstar
2.1 Corporate Organization............................. 4
2.2 Capitalization..................................... 4
2.3 Authorization...................................... 5
2.4 No Violation....................................... 5
2.5 Financial Statements............................... 5
2.6 Registration Statement............................. 6
2.7 Shares to be Issued................................ 6
2.8 Accuracy of Information............................ 7
2.9 No Material Adverse Change......................... 7
ARTICLE III
Representations and Warranties of FCW
3.1 Corporate Organization............................. 7
3.2 Capitalization..................................... 7
3.3 Authorization...................................... 7
3.4 No Violation....................................... 8
3.5 Accuracy of Information............................ 8
ARTICLE IV
Representations and Warranties of First Southeast
4.1 Corporate Organization............................. 8
4.2 Capitalization..................................... 9
4.3 Organization of the Subsidiaries................... 9
4.4 Capitalization of the Subsidiaries................. 10
4.5 Authorization...................................... 11
4.6 No Violation....................................... 12
4.7 Financial Statements............................... 12
4.8 Absence of Certain Changes......................... 13
4.9 Employee and Employee Benefit Matters.............. 14
4.10 Litigation......................................... 16
4.11 Tax Matters........................................ 16
4.12 Registration Statement............................. 17
4.13 Title and Condition................................ 18
4.14 Insurance.......................................... 19
4.15 Compliance with Laws and Orders.................... 19
4.16 Governmental Regulation............................ 20
4.17 Contracts and Commitments.......................... 20
4.18 Shareholders and Undertakings from Affiliates...... 21
4.19 Agreements with Directors, Officers & Shareholders. 21
4.20 Absence of Adverse Agreements...................... 21
4.21 Accuracy of Information............................ 22
4.22 Transactions in Capital Stock of
First Southeast and the Banks...................... 22
4.23 Allowance for Loan Losses.......................... 22
4.24 No Undisclosed Liabilities......................... 22
4.25 Continuity of Interest............................. 23
4.26 Pooling and Tax-Free Status Matters................ 23
4.27 No Material Adverse Change......................... 23
ARTICLE V
Conduct of Business by Firstar
5.1 Approval by Firstar................................ 24
5.2 Subsequent SEC Filings............................. 24
5.3 Conduct of Business; Certain Covenants............. 24
5.4 Plant Closing Laws................................. 24
5.5 Bank Minority Shares............................... 24
ARTICLE VI
Conduct of Business by First Southeast Until Merger
6.1 Dividends.......................................... 25
6.2 Capitalization..................................... 25
6.3 Regular Course of Business......................... 25
6.4 Contact with Third Parties; No Board Recommendation 26
6.5 Corporate Structure................................ 27
6.6 Accounting and Tax Reporting....................... 27
6.7 Full Disclosure.................................... 27
6.8 Reports to Firstar................................. 27
6.9 Solicitation of First Southeast Shareholders....... 27
6.10 Supplement to First Southeast Letter............... 28
6.11 Dissent Process.................................... 28
6.12 Employee Benefit Plans............................. 28
6.13 Bank-Level Transactions............................ 28
6.14 Parent Company Debt................................ 29
6.15 Disposition of Assets.............................. 29
6.16 Out-of-State Participations........................ 29
ARTICLE VII
Conditions to Obligations of Firstar and FCW
7.1 No Material Adverse Change......................... 29
7.2 Representations and Warranties..................... 30
7.3 Performance and Compliance......................... 30
7.4 No Proceeding or Litigation........................ 30
7.5 Review or Audit by Firstar and Accountants......... 30
7.6 Audit of Plans..................................... 30
7.7 Pooling Letter..................................... 30
7.8 Approval of Shareholders........................... 31
7.9 Opinion of Counsel for First Southeast............. 31
7.10 Allowance for Loan Losses.......................... 31
7.11 Certificate of Chief Executive Officer............. 31
7.12 Good Standing Certificates......................... 31
7.13 Bills for Certain Fees of First Southeast or the
Bank............................................... 31
7.14 Tax Opinion........................................ 32
7.15 Regulatory Agreements.............................. 32
7.16 Environmental Audits............................... 32
ARTICLE VIII
Conditions to the Obligations of First Southeast
8.1 No Material Adverse Change......................... 32
8.2 Representations and Warranties..................... 32
8.3 Performance and Compliance......................... 33
8.4 No Proceeding or Litigation........................ 33
8.5 Opinion of Counsel for Firstar and FCW ............ 33
8.6 Certificate of Executive Officer................... 33
8.7 Tax Opinion........................................ 33
ARTICLE IX
Conditions to the Obligations of all Parties
9.1 Governmental Approvals............................. 33
9.2 Securities Law Compliance.......................... 34
9.3 Shareholder Approval............................... 34
ARTICLE X
Termination
10.1 Reasons for Termination............................ 34
10.2 Liability.......................................... 35
ARTICLE XI
Miscellaneous
11.1 Brokers........................................... 36
11.2 Expenses.......................................... 36
11.3 Waivers; Amendments............................... 36
11.4 Assignment........................................ 37
11.5 Entire Agreement.................................. 37
11.6 Captions and Counterparts......................... 37
11.7 Governing Law..................................... 37
11.8 Nonsurvival....................................... 37
11.9 Knowledge of the Parties.......................... 37
11.10 Notices........................................... 38
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization dated as of February 10,
1994 (the "Reorganization Agreement"), is entered into by and among Firstar
Corporation, a Wisconsin corporation ("Firstar"), First Southeast Banking
Corp., a Wisconsin corporation ("First Southeast"), and Firstar Corporation
of Wisconsin, a Wisconsin corporation and a wholly-owned subsidiary of
Firstar ("FCW").
WHEREAS, this Reorganization Agreement provides for the merger of
First Southeast with and into FCW (the "Merger") and for the conversion at
the Closing Date, as such term is defined herein, of all the outstanding
shares of common stock of First Southeast, $1.00 par value ("First Southeast
Common Stock"), into the right to receive shares of common stock of Firstar,
$1.25 par value ("Firstar Common Stock"), in accordance with the terms and
conditions hereof and of the Plan of Merger executed concurrently herewith
between FCW and First Southeast, and joined in by Firstar for certain
limited purposes (the "Plan of Merger" and together with this Reorganization
Agreement, the "Agreements");
WHEREAS, the respective Boards of Directors of First Southeast,
Firstar and FCW deem the Merger desirable and in the best interests of their
respective shareholders;
WHEREAS, the parties hereto desire and intend that the Merger
qualify as a tax-free reorganization under the Internal Revenue Code of
1986, as amended (the "Code"); and
WHEREAS, the parties hereto desire and intend that the Merger be
accounted for as a "pooling of interests" in accordance with generally
accepted accounting principles;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties, and agreements herein contained, and
in order to set forth the conditions upon which the foregoing reorganization
will be carried out, the parties agree as follows:
ARTICLE I
UNDERTAKINGS OF THE PARTIES
1.1 The Merger. Subject to the terms and conditions of this
Reorganization Agreement, on the Closing Date, First Southeast will merge
with and into FCW, which will be the surviving corporation.
1.2 Approval of the Agreements. The Agreements will be submitted
as soon as reasonably practicable to the shareholders of First Southeast for
ratification, confirmation and adoption by consent or at a meeting to be
duly called and held in accordance with law and the Articles of
Incorporation and Bylaws of First Southeast.
1.3 Preparation of Registration Statement. Firstar will use its
reasonable best efforts to file and prosecute the filing of a registration
statement (hereinafter the registration statement and amendments thereto are
referred to as the "Registration Statement") with the Securities and
Exchange Commission (the "SEC") covering the Firstar Common Stock to be
issued in the Merger with a view toward permitting the Registration
Statement to become effective as soon as reasonably practicable. First
Southeast will furnish to Firstar all information concerning First Southeast
required to be set forth in the Registration Statement and Firstar will
provide First Southeast and its counsel the opportunity to review and
approve the Proxy Statement portions of the Registration Statement. Firstar
shall promptly advise First Southeast and its counsel, and provide them with
copies, of any material communication received by Firstar or its counsel
from the SEC with respect to the Registration Statement. Firstar will bear
the cost of preparation, filing and duplication of the Registration
Statement, including the information or proxy statement and the prospectus
included therein (the "Proxy Statement-Prospectus"). The date on which the
Registration Statement becomes effective is referred to herein as the
"Registration Effective Date". Firstar and First Southeast will each render
to the other its full cooperation in preparing, filing, prosecuting the
filing of, and amending the Registration Statement such that it comports at
all times with the requirements of the Securities Act of 1933, as amended
(the "Securities Act"). Specifically, but without limitation, each will
promptly advise the other if at any time before the Closing Date any
information provided by it for inclusion in the Registration Statement
appears to have been, or shall have become, incorrect or incomplete and will
furnish the information necessary to correct such misstatements or
omissions. As promptly as practicable after the Registration Effective
Date, First Southeast will mail or deliver to its shareholders (i) the Proxy
Statement-Prospectus and (ii) as promptly as practicable after approval
thereof by Firstar, such other supplementary proxy materials as may be
necessary to make the Proxy Statement-Prospectus comply with the
requirements of the Securities Act. Except as provided above and except
with the prior written consent of Firstar, First Southeast will not mail or
otherwise furnish or publish to its shareholders any proxy solicitation
material or other material relating to the Merger that might constitute a
"prospectus" within the meaning of the Securities Act. Firstar shall, as
soon as practicable, make all filings required to obtain any Blue Sky
permits, authorizations, consents or approvals required for the issuance of
the Firstar Common Stock to be issued in the Merger.
1.4 Preparation of Bank Regulatory Applications. Firstar, FCW
and First Southeast will cooperate in the preparation by Firstar and FCW of
applications to (i) the Board of Governors of the Federal Reserve System
(the "Federal Reserve Board") pursuant to the Bank Holding Company Act of
1956, as amended, for approval of Firstar's and FCW's acquisition of control
of First Southeast and its subsidiaries, First Bank Southeast, N.A., ("First
Bank Southeast") and First Bank Southeast of Lake Geneva, N.A. ("First Bank
Lake Geneva" and, together with First Bank Southeast, N.A., the "Banks"),
(ii) any other federal or state bank regulatory agency the approval of which
may be necessary or appropriate. Firstar will use its best efforts to
obtain such regulatory approvals. The obligation to use such best efforts
shall not be construed as including an obligation to continue pursuing any
approval after it has become apparent that the approval is likely to contain
terms or conditions that are not reasonably acceptable to Firstar. First
Southeast will furnish such information, appropriate representations and
documents as may be necessary in connection therewith and as the parties may
mutually agree.
1.5 Closing. Subject to the terms and conditions herein set
forth, the closing of the transactions contemplated by this Reorganization
Agreement ("Closing") will be effected within five business days of the
satisfaction or waiver of the last of the conditions set forth in Articles
VII, VIII and IX hereof and the expiration of any waiting periods in
connection with necessary regulatory approvals, or on such other date as may
be mutually agreed upon by the parties ("Closing Date"). Each of the
parties hereto agrees to pursue with reasonable diligence the satisfaction
of such conditions. It is anticipated that the Closing will take place on
the Closing Date at the offices of Firstar, or at such other place as shall
be mutually agreeable to Firstar and First Southeast.
1.6 Confidential Information. All information that has been or
will be furnished by any party to another party in connection with the
Agreements will be kept confidential by such other party and will be used
only in connection with the Agreements and the transactions contemplated
thereby, except to the extent that such information is or thereafter becomes
lawfully obtainable from other public sources. In the event the Agreements
are terminated as provided in Article X hereof, all documents or materials
provided by either party shall be returned promptly to the supplying party,
the receiving party shall not retain any copies thereof and shall destroy
any notes which have been prepared from such documents or materials.
1.7 No Covenant as to Tax Consequences. It is understood and
agreed that neither Firstar nor FCW nor any of their respective officers or
agents have made any warranty or agreement, expressed or implied, as to the
tax consequences of the transactions contemplated by the Agreements or the
tax consequences of any action pursuant to or growing out of the Agreements.
1.8 Release of Information. First Southeast and Firstar will
each use their best efforts to cooperate in coordinating the public release
of information concerning the transactions contemplated by the Agreements.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF FIRSTAR
Firstar represents and warrants to First Southeast as follows:
2.1 Corporate Organization. Firstar is a corporation duly
organized, validly existing and in active status under the laws of the state
of Wisconsin and each jurisdiction in which the nature of business conducted
or assets owned or leased makes such qualification necessary and where
failure to do so would have a material adverse effect on Firstar and its
subsidiaries taken as a whole, with full power and authority to own, operate
and lease its properties as presently owned, operated and leased and to
engage in the activities and business now conducted by it. Firstar is
registered with the Federal Reserve Board as a bank holding company under
the Bank Holding Company Act of 1956, as amended. Firstar has delivered to
First Southeast true, accurate and complete copies of the currently
effective Articles of Incorporation and Bylaws of Firstar, including all
amendments thereto.
2.2 Capitalization. As of December 31, 1993, the authorized
capital stock of Firstar consisted of (i) 120,000,000 shares of Common
Stock, $1.25 par value, 64,360,819 shares of which were validly issued and
outstanding, and (ii) 2,500,000 shares of Preferred Stock, $1.00 par value,
of which 600,000 shares of Series C are reserved for issuance in connection
with Firstar's Shareholder Rights Plan approved January 19, 1989 (as used
herein, the term "Firstar Common Stock" includes one half of a Preferred
Stock Purchase Right issued pursuant to the Rights Agreement dated as of
January 29, 1989, between Firstar and Firstar Trust Company, as Rights
Agent). All of such issued and outstanding shares of capital stock are
fully paid and nonassessable, except as provided in Section 180.0622(2)(b)
of the Wisconsin Statutes and judicial interpretations thereof.
2.3 Authorization. The Interstate Banking and Acquisitions
Committee of the Board of Directors of Firstar has approved the transactions
contemplated by the Agreements and has authorized the execution, delivery
and performance by Firstar of the Agreements. Firstar has full corporate
power and authority to enter into the Agreements and to consummate the
transactions contemplated thereby. The Agreements are valid and binding
obligations of Firstar, enforceable in accordance with their terms, subject
to (i) all applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally, and (ii) the
application of equitable principles if equitable remedies are sought.
Firstar has, as sole shareholder of FCW, approved the Agreements in
accordance with law and the Articles of Incorporation and Bylaws of Firstar
and FCW, respectively.
2.4 No Violation. Provided that the requisite approvals from the
Federal Reserve Board and any other regulatory agencies are obtained and the
offering of Firstar Common Stock to be issued hereunder is duly registered
pursuant to the Securities Act, and, to the extent applicable, under state
securities or blue sky laws, neither the execution and delivery of the
Agreements nor the consummation of the transactions contemplated therein
will conflict with, result in the breach of, constitute a default under or
accelerate the performance provided by the terms of any law, or any rule or
regulation of any governmental agency or authority, or any judgment, order
or decree of any court or other governmental agency to which Firstar may be
subject, or any contract, agreement or instrument to which Firstar is a
party or by which Firstar is bound or committed, or the Articles of
Incorporation or Bylaws of Firstar, or constitute an event that with the
lapse of time or action by a third party, could, to the best of Firstar's
knowledge, result in a default under any of the foregoing or result in the
creation of any lien, charge or encumbrance upon any of the assets or
properties of Firstar or its subsidiaries or the capital stock of Firstar.
2.5 Financial Statements. Firstar has heretofore delivered to
First Southeast copies of the following financial statements relating to
Firstar and its consolidated subsidiaries: (i) the Consolidated Statements
of Condition of Firstar as of December 31, 1991 and 1992, and the
Consolidated Statements of Income, Shareholders' Equity and Changes in
Financial Position for each of the years in the three-year period ended
December 31, 1992, together with the notes thereto, as certified by KPMG
Peat Marwick, Firstar's independent auditors, (ii) Firstar's 1992 and 1993
Proxy Statements in connection with its annual shareholders meetings, (iii)
Firstar's 1991 and 1992 Form 10-Ks filed with the SEC, and (iv) Firstar's
Form 10-Qs for the first three quarters of 1992 and 1993. Each of the
aforementioned financial statements has, where necessary, been filed in a
timely manner with the SEC and all other federal or state regulatory
agencies as necessary, is true and correct in all material respects and
together they fairly present, in accordance with applicable laws and
regulations, and generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes thereto and except
that the unaudited statements for 1993 are subject to adjustments which
might be required as a result of audit of the independent auditors of
Firstar for its fiscal year ending December 31, 1993), the financial
position and results of operations of Firstar as of the dates and for the
periods therein set forth. Such financial statements do not, as of the date
thereof, include any material assets or omit to state any material
liability, absolute or contingent, or other facts, the inclusion or omission
of which renders such financial statements, in light of the circumstances
under which they were made, misleading in any material respect.
2.6 Registration Statement. The Registration Statement and the
Proxy Statement-Prospectus included therein (i) will comply in all material
respects with the requirements of the Securities Act, and (ii) will not, at
the date the Proxy Statement-Prospectus is first mailed or delivered to
First Southeast shareholders, or at the date or dates of the meeting or
consents of First Southeast's shareholders referred to in Section 6.9
hereof, as then amended or supplemented, contain any statement that is, at
the time at which, and in the light of the circumstances under which, it is
made, false or misleading with respect to any material facts or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein not false or misleading. Notwithstanding the
foregoing, Firstar and FCW make no representation or warranty and shall have
no responsibility for the truth or accuracy of any information with respect
to First Southeast or its affiliates or associates contained in the
Registration Statement or the Proxy Statement-Prospectus and which was
provided by First Southeast, its affiliates or associates.
2.7 Shares to be Issued. The shares of Firstar Common Stock to
be issued pursuant to the Agreements will, upon issuance, be validly issued,
fully paid and nonassessable, except insofar as statutory liability may be
imposed under Section 180.0622(2)(b) of the Wisconsin Statutes and judicial
interpretations thereof, and will have been registered under the Securities
Act and listed for trading on the New York Stock Exchange.
2.8 Accuracy of Information. The statements contained in the
Agreements and in any other written documents executed and/or delivered by
or on behalf of Firstar pursuant to the terms of the Agreements are true and
correct in all material respects and do not omit any material fact necessary
to make the statements contained herein or therein not materially misleading.
2.9 No Material Adverse Change. Since September 30, 1993 there
has been no material adverse change in the financial condition, assets,
liabilities, results of operation or business of Firstar.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF FCW
Firstar and FCW hereby jointly and severally represent and warrant
to First Southeast as follows:
3.1 Corporate Organization. FCW is a corporation duly organized,
validly existing and in active status under the laws of Wisconsin with full
power and authority to engage in the activities and business now conducted
by it. FCW is registered with the Federal Reserve Board as a bank holding
company under the Bank Holding Company Act of 1956, as amended. FCW has
delivered to First Southeast true, accurate and complete copies of the
currently effective Articles of Incorporation and Bylaws of FCW, including
all amendments thereto.
3.2 Capitalization. The authorized capital stock of FCW consists
of 56,000 shares of common stock, $1.00 par value, ten of which are validly
issued and outstanding, fully paid and nonassessable, except as provided in
Section 180.0622(2)(b) of the Wisconsin Statutes and judicial
interpretations thereof. All of such issued shares are owned by Firstar.
3.3 Authorization. The Board of Directors of FCW has approved
the transactions contemplated by the Agreements and has authorized the
execution, delivery and performance by FCW of the Agreements. FCW has full
corporate power and authority to enter into the Agreements, and to
consummate the transactions contemplated thereby. The Agreements are valid
and binding obligations of FCW, enforceable in accordance with their terms,
subject to (i) all applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally, and
(ii) the application of equitable principles if equitable remedies are
sought.
3.4 No Violation. Provided that the requisite approvals from the
Federal Reserve Board and any other regulatory agencies are obtained and the
offering of Firstar Common Stock to be issued hereunder is duly registered
pursuant to the Securities Act, and, to the extent applicable, under state
securities or blue sky laws, neither the execution and delivery of the
Agreements nor the consummation of the transactions contemplated in the
Agreements will conflict with, result in the breach of, constitute a default
under or accelerate the performance provided by the terms of any law, or any
rule or regulation of any governmental agency or authority, or any judgment,
order or decree of any court or other governmental agency to which FCW may
be subject, or any contract, agreement or instrument to which FCW is a party
or by which FCW is bound or committed, or the Articles of Incorporation or
Bylaws of FCW, or constitute an event that with the lapse of time or action
by a third party, could, to the knowledge of FCW, result in a default under
any of the foregoing or result in the creation of any lien, charge or
encumbrance upon any of the assets, properties, or capital stock of FCW.
3.5 Accuracy of Information. The statements contained in the
Agreements and in any other written documents executed and/or delivered by
or on behalf of FCW pursuant to the terms of the Agreements are true and
correct in all material respects, and do not omit any material fact
necessary to make the statements contained herein or therein not materially
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF FIRST SOUTHEAST
Except as disclosed in the First Southeast Letter (as defined
below), including its exhibits, First Southeast represents and warrants to
Firstar and FCW as follows:
4.1 Corporate Organization. First Southeast is a corporation
duly organized, validly existing and in active status under the laws of
Wisconsin with full power and authority to engage in the activities and
business now conducted by it. First Southeast possesses and is in full
compliance with all licenses, franchises, permits and other governmental
authorizations that are legally required where the failure to be in full
compliance would reasonably be expected to have a material adverse effect on
the financial condition, assets or business operations of First Southeast or
either Bank. First Southeast is registered with the Federal Reserve Board
as a bank holding company under the Bank Holding Company Act of 1956, as
amended. First Southeast has delivered to Firstar, as an exhibit to the
written statement signed by the Chief Executive Officer of First Southeast
and delivered by First Southeast to Firstar at least five days prior to the
date hereof (the "First Southeast Letter") true, accurate and complete
copies of the currently effective Articles of Incorporation and Bylaws of
First Southeast, including all amendments thereto. The minute books of
First Southeast and the Banks contain complete and accurate records of all
meetings and other corporate actions of their respective shareholders and
Boards of Directors (including committees of such Boards of Directors).
First Southeast has no subsidiaries, direct or indirect, except the Banks
and First Southeast Securities Corp., a Nevada corporation ("FSSC"), and
First Southeast Investment Corp., a Nevada corporation ("FSIC" and, together
with FSSC, the "Nevada Subsidiaries").
4.2 Capitalization. The authorized capital stock of First
Southeast consists of 200,000 shares of $1.00 par value common stock. There
are 106,486 shares of First Southeast Common Stock validly issued and
outstanding. All of such issued and outstanding shares of First Southeast
capital stock are fully paid and non-assessable, except as provided in
Section 180.0622(2)(b) of the Wisconsin Statutes and judicial
interpretations thereof and not issued in violation of any preemptive rights
of any shareholder. First Southeast does not have any arrangements or
commitments obligating First Southeast to issue or sell or otherwise dispose
of, or to purchase or redeem shares of its capital stock or any securities
convertible into or having the right to purchase shares of its capital stock.
4.3 Organization of the Subsidiaries. (a) First Bank Southeast
is a national banking association duly organized, validly existing and in
good standing under the laws of the United States. First Southeast has
delivered to Firstar, as an exhibit to the First Southeast Letter, true,
accurate and complete copies of the currently effective Articles of
Association and Bylaws of First Bank Southeast, including all amendments
thereto. First Bank Southeast is (i) duly authorized to conduct a general
banking business, subject to the supervision of the OCC, at its offices
identified in Section 4.3(a) of the First Southeast Letter, (ii) is an
insured bank as defined in the Federal Deposit Insurance Act, (iii) has full
power and authority to engage in the business and activities now conducted
by it, and (iv) possesses and is in full compliance with all licenses,
franchises, permits and other governmental authorizations that are legally
required. First Bank Southeast has no interest in any subsidiaries, direct
or indirect, except FSSC.
(b) First Bank Lake Geneva is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States. First Southeast has delivered to Firstar, as an exhibit to
the First Southeast Letter, true, accurate and complete copies of the
currently effective Articles of Association and Bylaws of First Bank Lake
Geneva, including all amendments thereto. First Bank Lake Geneva is (i)
duly authorized to conduct a general banking business, subject to the
supervision of the OCC, at its offices identified in Section 4.3(b) of the
First Southeast Letter, (ii) is an insured bank as defined in the Federal
Deposit Insurance Act, (iii) has full power and authority to engage in the
business and activities now conducted by it, and (iv) possesses and is in
full compliance with all licenses, franchises, permits and other
governmental authorizations that are legally required. First Bank Lake
Geneva has no interest in any subsidiaries, direct or indirect, except FSIC.
(c) Each of the Nevada Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of Nevada
with full power and authority to engage in the activities and business now
conducted by it. First Southeast has delivered to Firstar true, accurate
and complete copies of the currently effective Articles of Incorporation and
Bylaws of each of the Nevada subsidiaries. Each such corporation possesses
and is in full compliance with all licenses, franchises, permits and other
governmental authorizations that are legally required, where the failure to
be in full compliance would be reasonably expected to have a material
adverse effect on its financial condition, assets or business operations.
4.4 Capitalization of the Subsidiaries. (a) The authorized
capital stock of First Bank Southeast consists of 240,000 shares of Common
Stock, $20.00 par value ("First Bank Southeast Stock"), of which 240,000 are
validly issued and outstanding. First Southeast owns 239,700 of such
outstanding shares of First Bank Southeast Stock, free and clear of all
liens, pledges, assignments and security interests. The remaining 300 of
such outstanding shares are owned by directors of First Bank Southeast as
directors' qualifying shares subject to Stock Purchase Agreements, true and
complete copies of which have been provided to Firstar. All of the shares
of the capital stock of First Bank Southeast are fully paid and
nonassessable and not issued in violation of the preemptive rights of any
shareholder. Except for the Stock Purchase Agreements, neither First
Southeast nor First Bank Southeast is a party to or bound by any commitment
or obligation to issue or sell or otherwise dispose of, or to purchase or
redeem, any capital stock or any other security convertible into or having
the right to purchase such shares of the capital stock of the Bank.
(b) The authorized capital stock of First Bank Lake Geneva
consists of 500,000 shares of Common Stock, $10.00 par value ("First Bank
Lake Geneva Stock"), of which 83,000 are validly issued and outstanding.
First Southeast owns 80,878 of such outstanding shares of First Bank Lake
Geneva Stock, free and clear of all liens, pledges, assignments and security
interests except pursuant to the Term Loan Agreement dated June 1, 1992
between First Southeast and LaSalle National Bank, a true and complete copy
of which has been provided to Firstar. Of the remaining 2,122 of such
outstanding shares, 600 are owned by directors of First Bank Lake Geneva as
directors' qualifying shares subject to Stock Purchase Agreements, true and
complete copies of which have been provided to Firstar. All of the shares
of the capital stock of First Bank Lake Geneva are fully paid and
nonassessable and not issued in violation of the preemptive rights of any
shareholder. Except for the Stock Purchase Agreements, neither First
Southeast nor First Bank Lake Geneva is a party to or bound by any
commitment or obligation to issue or sell or otherwise dispose of, or to
purchase or redeem, any capital stock or any other security convertible into
or having the right to purchase such shares of the capital stock of the Bank.
(c) The authorized capital stock of FSSC consists of 2500 shares
of Common Stock, no par value, of which 100 are validly issued and
outstanding and owned by First Bank Southeast free and clear of all liens,
pledges, assignments and security interests. All of such shares of capital
stock are fully paid and nonassessable and not issued in violation of the
preemptive rights of any shareholder. Neither First Bank Southeast nor FSSC
is a party to or bound by any commitment or obligation to issue or sell or
otherwise dispose of, or to purchase or redeem, any capital stock or any
other security convertible into or having the right to purchase capital
stock of the corporation.
(d) The authorized capital stock of FSIC consists of 2500 shares
of Common Stock, no par value, of which 100 are validly issued and
outstanding and owned by First Bank Lake Geneva free and clear of all liens,
pledges, assignments and security interests. All of such shares of capital
stock are fully paid and nonassessable and not issued in violation of the
preemptive rights of any shareholder. Neither First Bank Lake Geneva nor
FSIC is a party to or bound by any commitment or obligation to issue or sell
or otherwise dispose of, or to purchase or redeem, any capital stock or any
other security convertible into or having the right to purchase capital
stock of the corporation.
4.5 Authorization. The Board of Directors of First Southeast has
approved the Agreements and the transactions contemplated thereby and has
authorized the execution, delivery and performance by First Southeast of the
Agreements. First Southeast has full corporate power and authority to enter
into the Agreements and, upon approval of its shareholders in accordance
with law, to consummate the transactions contemplated thereby. The
Agreements are valid and binding obligations of First Southeast, enforceable
in accordance with their terms, subject to (i) all applicable bankruptcy,
insolvency, moratorium, or other similar laws affecting the enforcement of
creditors' rights generally, and (ii) the application of equitable
principles if equitable remedies are sought.
4.6 No Violation. Provided that the requisite approvals from the
Federal Reserve Board and any other regulatory agencies are obtained and the
offering of the Firstar Common Stock to be issued hereunder is duly
registered under the Securities Act, and, to the extent applicable, under
state securities or blue sky laws, neither the execution and delivery of the
Agreements nor the consummation of the transactions contemplated therein
will conflict with, result in the breach of, constitute a default under or
accelerate the performance provided by the terms of any law, or any rule or
regulation of any governmental agency or authority, or any judgment, order
or decree of any court or other governmental agency to which First Southeast
or the Banks may be subject, or any contract, agreement or instrument to
which First Southeast or either Bank is a party or by which First Southeast
or either Bank is bound or committed, or the Articles of Incorporation or
Bylaws of First Southeast, or the Articles of Association of either Bank, or
constitute an event that with the lapse of time or action by a third party
or both, could, to the best of First Southeast's knowledge, result in a
material default under any of the foregoing or result in the creation of any
lien, charge or encumbrance upon any of the assets, properties or stock of
First Southeast or either Bank.
4.7 Financial Statements. First Southeast has furnished to
Firstar copies of the following financial statements:
(i) Audited consolidated balance sheets of First Southeast as of
December 31, 1992 and 1991, and the related audited statements of income and
stockholders' equity for each of the years then ended, accompanied by the
audit report thereon of James M. Harmon and Co. Ltd.;
(ii) Reports of Condition of each Bank as of September 30, 1993,
together with the related Reports of Income for the periods then ended, as
included in the call reports of the Bank as of said dates as filed with the
OCC.
Each of the financial statements referred to in this Section 4.7
hereof is true and correct in all material respects and together they fairly
present, the financial position and results of operation of First Southeast
and the Banks as of the dates and for the periods therein set forth. Each
of the financial statements referred to in clause (i) of this Section 4.7
has been prepared in accordance with generally accepted accounting
principles applied on a consistent basis. Each of the financial statements
referred to in clause (ii) of this Section 4.7 has been prepared in
accordance with the applicable regulations and standards of the OCC. Each
of the financial statements referred to in this Section 4.7 do not, as of
the date thereof, include any material assets or omit to state any material
liability, absolute or contingent, or other facts, the inclusion or omission
of which renders such financial statements, in light of the circumstances
under which they were made, misleading in any material respect. Since
December 31, 1992, there has been no material adverse change in the
financial condition, results of operation, business or prospects of First
Southeast or the Banks (other than changes in the ordinary course of
business, none of which, individually or in the aggregate, has been
materially adverse or changes specifically contemplated by this Agreement)
nor has there been any other event or condition of any character that has
materially and adversely affected the financial condition, results of
operations or business of First Southeast or either Bank taken and no fact
or condition exists that First Southeast or either Bank believes will cause
such a material change in the future.
4.8 Absence of Certain Changes. Since December 31, 1992, neither
First Southeast nor either Bank has (i) issued or sold any corporate debt
securities (except in the ordinary course of business); (ii) granted any
option for the purchase of its capital stock; (iii) declared or set aside or
paid any dividend or other distribution in respect of its capital stock,
(iv) incurred any material obligation or liability (absolute or contingent)
except obligations or liabilities incurred in the ordinary course of
business, or mortgaged, pledged or subjected to lien or encumbrance (other
than statutory liens for taxes not yet delinquent) any of its assets or
properties except pledges to secure government deposits and in connection
with repurchase or reverse repurchase agreements; (v) discharged or
satisfied any lien or encumbrance or paid any obligation or liability
(absolute or contingent), other than current liabilities included in the
respective Banks' balance sheets as of September 30, 1993, and current
liabilities incurred since the date thereof in the ordinary course of
business; (vi) sold, exchanged or otherwise disposed of any of its capital
assets other than in the ordinary course of business; (vii) made or modified
any general wage or salary increase exceeding five percent annually in the
aggregate; (viii) suffered any damage, destruction or loss, whether or not
covered by insurance, materially and adversely affecting its business,
property or assets or waived any rights of value that are material in the
aggregate; (ix) except in the ordinary course of business, entered, or
agreed to enter, into any agreement or arrangement granting any preferential
right to purchase any of its assets, properties or rights or requiring the
consent of any party to the transfer and assignment of any such assets,
properties or rights; (x) entered into any transaction outside the ordinary
course of its business, except in each case as expressly contemplated by
this Reorganization Agreement; or (xi) except in the ordinary course of
business or as reflected in the financial statements of First Southeast or
the respective Banks, sold or otherwise disposed of any of its investment
securities.
4.9 Employee and Employee Benefit Matters. (a) Neither First
Southeast nor either Bank is a party to or is bound by any written or oral
(i) employment or consulting contract that is not terminable without penalty
by First Southeast or the Bank, as the case may be, on notice of 60 days or
less, except an employment agreement dated September 7, 1993, between First
Bank Lake Geneva and Robert P. Fahey, a true and complete copy of which has
been provided by First Southeast to Firstar, or (ii) any collective
bargaining agreement covering employees.
(b) The First Southeast Letter lists (i) each pension, profit
sharing, stock bonus, thrift, savings, employee stock ownership or other
plan, program or arrangement, that constitutes an "employee pension benefit
plan" within the meaning of Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), that is maintained by First
Southeast or either Bank or to which First Southeast or either Bank
contributes for the benefit of any current or former employee, (ii) each
plan, program or arrangement for the provision of medical, surgical, or
hospital care or benefits, benefits in the event of sickness, accident,
disability, death, unemployment, severance, vacation, apprenticeship, day
care, scholarship, prepaid legal services or other benefits which constitute
an "employee welfare benefit plan" within the meaning of ERISA, that is
maintained by First Southeast or either Bank or to which First Southeast or
either Bank contributes for the benefit of any current or former employee,
and (iii) every other retirement or deferred compensation plan, bonus or
incentive compensation plan or arrangement, stock option plan, stock
purchase plan, severance or vacation pay arrangement, or other fringe
benefit plan, program or arrangement through which First Southeast or either
Bank provides benefits for or on behalf of any current or former employee,
officer, director, consultant or agent.
(c) All of the plans, programs and arrangements described in this
section and listed in the First Southeast Letter (hereinafter referred to as
the "Plans") are in compliance with all applicable requirements of ERISA and
all other applicable federal and state laws, including the reporting and
disclosure requirements of Part 1 of Title I of ERISA, except for instances
where non-compliance would not result in material liability to First
Southeast, either Bank or the Plans. Each of the 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 Internal Revenue Service to qualify under Section 401(a)
of the Code, and there exist no circumstances that would adversely affect
the qualified status of any such Plan under that section for which the
remedial amendment period has expired. Each 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. There is no pending or, to First Southeast's
knowledge, threatened litigation, governmental proceeding or investigation
against or relating to any Plan and there is no reasonable basis for any
material proceedings, claims, actions or proceedings against any Plan. No
"reportable event" (as defined in Section 4043(b) of ERISA) has occurred
with respect to any Plan and no 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.
Neither First Southeast nor either Bank has incurred any "accumulated
funding deficiency" (within the meaning of Section 412 of the Code), whether
or not waived, with respect to any Plan. There have been no acts or
omissions by First Southeast or either Bank which have given rise to or may
give rise to any material fines, penalties, taxes or related charges under
Section 502(c), 502(i) or 4071 of ERISA or Chapter 43 of the Code, for which
First Southeast or either Bank may be liable. None of the payments
contemplated by the Plans would, in the aggregate, constitute excess
parachute payments as defined in Section 280G of the Code. All group health
plans of First Southeast and either Bank, including any plans of current and
former affiliates of First Southeast or either Bank which must be taken into
account under 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.
(d) First Southeast has delivered to Firstar as attachments to
the First Southeast Letter (i) a true and complete copy of each Plan (or, in
the case of any Plan that is not in written form, a complete and accurate
description of the material provisions of the Plan), (ii) complete and
current copies of summary plan descriptions of each Plan that is subject to
ERISA, (iii) each trust agreement, insurance policy or other instrument
relating to the funding of any Plan, (iv) the two most recent Annual Reports
(Form 5500 series) and accompanying schedules filed with the Internal
Revenue Service or United States Department of Labor with respect to each
Plan that is subject to ERISA, (v) the most recent determination letter
issued by the Internal Revenue Service with respect to each Plan that is
intended to qualify under Section 401 of the Code, (vi) the most recent
available financial statements for each Plan that has assets, (vii) the most
recent audited financial statements for each Plan for which audited
financial statements are required by ERISA, and (viii) the most recent
actuarial report for each Plan that is a defined benefit pension plan.
(e) With respect to any 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), First Southeast has delivered to Firstar as
attachments to the First Southeast Letter (i) a description of all
transactions involving the purchase or sale by the Plan of employer
securities from or to a "disqualified person" (within the meaning of Section
4975 of the Code); (ii) copies of all independent appraisals that have been
used to establish the value of employer securities under such Plan from time
to time, and, if such appraisals have not been performed on at least an
annual basis, a description of the method used to determine the value of
such securities in the absence of a current appraisal; and (iii) copies of
any notes, loan documents, guarantees, or pledge agreements or other similar
documents, governing any loan by any party to such Plan, whether or not any
portion of such loan remains unpaid.
4.10 Litigation. No claims have been asserted and no relief has
been sought against First Southeast or either Bank in any pending litigation
or governmental proceedings or otherwise. There are no circumstances,
conditions, events or arrangements, contractual or otherwise, which may
hereafter give rise to any proceedings, claims, actions or government
investigations involving First Southeast or either Bank, nor are any such
proceedings, claims, actions or government investigations, to First
Southeast's knowledge, threatened involving First Southeast or either Bank.
Neither First Southeast nor either Bank is a party to any order, judgment or
decree which would reasonably be expected to have a material adverse effect
on the financial condition, assets or business of First Southeast or either
Bank, and neither First Southeast nor either Bank (i) is the subject of any
cease and desist order, or other formal or informal enforcement action by
any regulatory authority or (ii) has made any commitment to or entered into
any agreement with any regulatory authority that currently restricts or
adversely affects its operations or financial condition. First Southeast
has delivered to Firstar copies of all correspondence with or memoranda of
other communications with any regulatory authority since January 1, 1991,
relating to the operation or condition, financial or otherwise, of First
Southeast or the Banks.
4.11 Tax Matters. First Southeast and each Bank have filed with
the appropriate governmental agencies all federal, state and local income,
franchise, excise, real and personal property and other tax returns and
reports that are required to be filed, and neither First Southeast nor
either Bank is delinquent in the payment of any taxes shown on such returns
or reports or on any assessments for any such taxes received by First
Southeast or either Bank. To First Southeast's knowledge, there is no
pending Internal Revenue Service or Wisconsin Department of Revenue
examination with respect to First Southeast or either Bank. There are
included in each Bank's balance sheet as of September 30, 1993 and the First
Southeast consolidated balance sheet as of December 31, 1992, adequate
reserves for the payment of all accrued but unpaid federal, state and local
taxes of First Southeast and the Bank, including interest and penalties,
whether or not disputed for such fiscal years and all fiscal years prior
thereto. Neither First Southeast nor either Bank has executed or filed with
the Internal Revenue Service or the Wisconsin Department of Revenue any
agreement extending the period for assessment and collection of any federal
or state tax, nor is First Southeast or either Bank a party to any action or
proceeding by any governmental authority for assessment or collection of
taxes, except tax liens or levies against customers of the Bank. No claim
for assessment or collection of taxes has been asserted against First
Southeast or either Bank.
Neither First Southeast nor either Bank has, during the past ten
years, received any notice of deficiency, proposed deficiency or assessment
from the Internal Revenue Service or any other governmental agency, with
respect to any Federal, state, county or local taxes. To First Southeast's
knowledge, no Federal or state income tax return of First Southeast or
either Bank is currently the subject of any audit by the Internal Revenue
Service or any other governmental agency. No material deficiencies have
been asserted in connection with the federal and state income tax returns of
each of First Southeast and the Banks for all periods through and including
December 31, 1988, and to First Southeast's knowledge, no circumstances
exist which reasonably could be expected to result in assessments for
subsequent periods. Neither First Southeast nor either Bank is a party to
any agreement providing for allocation or sharing of taxes.
4.12 Registration Statement. The parts of the Registration
Statement and the Proxy Statement-Prospectus that relate to First Southeast
or the Banks and any of their affiliates or associates which were provided
by First Southeast will not, at the date the Proxy Statement-Prospectus is
first mailed or delivered to shareholders of First Southeast, and will not,
at the date or dates of the meeting or consents of First Southeast's
shareholders referred to in Section 6.9 hereof, as then amended or
supplemented, contain any statement that is, at the time at which, and in
light of the circumstances under which, it is made, false or misleading with
respect to any material facts or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
false or misleading. Notwithstanding the foregoing, First Southeast makes
no representation or warranty regarding and shall have no responsibility for
the truth or accuracy of any information with respect to Firstar or FCW or
any of their affiliates or associates contained in the Registration
Statement or the Proxy Statement-Prospectus.
4.13 Title and Condition. (a) First Southeast or a Bank has good
and marketable title to all assets and properties, whether real or personal,
tangible or intangible, that it purports to own, including without
limitation all assets and properties reflected in the unaudited balance
sheet of the Banks as of September 30, 1993 and the audited consolidated
balance sheets of First Southeast as of December 31, 1992, or acquired
subsequent thereto (except to the extent that such assets and properties
have been disposed of for fair value in the ordinary course of business
since the dates of such balance sheets) subject to no liens, mortgages,
security interests, encumbrances or charges of any kind, except (i) as noted
in said balance sheets or the notes thereto; (ii) statutory liens for taxes
not yet delinquent; (iii) security interests granted to secure deposits of
funds by federal, state or other governmental agencies; and (iv) minor
defects and irregularities in title and encumbrances that do not materially
impair the use thereof for the purposes for which they are held, and such
liens, mortgages, security interests, encumbrances and charges as are not in
the aggregate material to the assets and properties of First Southeast or
the Bank. First Southeast or a Bank, as lessee, has the right under valid
and subsisting leases to occupy, use, possess and control all property
leased by First Southeast or the Bank, qualified only by the written terms
of such leases, true and complete copies of which have been provided to
Firstar as an attachment to the First Southeast Letter. Within ten days of
the date of this Reorganization Agreement, a legal description of all real
property owned by First Southeast or the Banks, including properties held by
the Banks as a result of foreclosure or repossession or carried on the
Banks' books as "other real estate owned," or with respect to which, for
purposes of any Environmental Law, as hereinafter defined, First Southeast
has received notice that such property is deemed to be under the control of
First Southeast or a Bank (the "Real Properties"), will be provided to
Firstar by First Southeast. With respect to the Real Properties owned by
First Southeast or a Bank, First Southeast is not in violation of the
Americans with Disabilities Act of 1990 ("ADA") and the regulations
promulgated thereunder to the extent such ADA and regulations require
compliance for public accommodations by readily achievable barrier removal,
or compliance following alterations to existing facilities to the maximum
extent feasible, all as such Real Properties exist at closing. Terms used
in the preceding sentence are as defined under the ADA and regulations
thereunder in effect at closing.
(b) The Real Properties are in generally good condition,
reasonable wear and tear excepted, and have been well maintained in
accordance with reasonable and prudent business practices applicable to like
facilities. The Real Properties are in compliance with all Environmental
Laws and there are no conditions in connection with the Real Properties,
including the presence of lead or asbestos, which would be likely to subject
First Southeast or either Bank to damages, penalties, injunctive relief or
cleanup costs under any Environmental Laws, or which would, if known, be
likely to materially reduce the value of any Real Property or which would
require or be likely to require cleanup, removal, remedial action or other
response pursuant to Environmental Laws by First Southeast or either Bank.
Neither First Southeast nor either Bank is a party to any litigation or
administrative proceeding alleging First Southeast's or a Bank's violation
of Environmental Laws, nor has First Southeast or the Bank violated
Environmental Laws nor is First Southeast or either Bank required by any
governmental agency to clean up, remove or take remedial or other responsive
action due to the disposal, depositing, discharge, leaking or other release
of any hazardous substances or hazardous materials. Neither the Real
Properties nor First Southeast nor either Bank are subject to any judgment,
decree, order or citation related to or arising out of, or listed as a
potentially responsible party by any governmental body or agency in a matter
arising under, any Environmental Laws. The term "Environmental Laws" shall
mean all federal, state and local laws, including statutes, regulations,
ordinances, codes and rules relating to the discharge of air pollutants,
water pollutants or process waste water or substances, in effect now or as
of the Closing Date, including, but not limited to, the Federal Solid Waste
Disposal Act, the Federal Hazardous Materials Transportation Act, the
Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource
Conservation and Recovery Act of 1976, the Federal Comprehensive
Environmental Responsibility Cleanup and Liability Act of 1980, as amended
prior to the Closing Date, regulations of the Environmental Protection
Agency, regulations of the Nuclear Regulatory Agency, regulations of the
Occupational Safety and Health Administration, and any so-called "Superfund"
or "Superlien" Laws.
4.14 Insurance. First Southeast has delivered to Firstar as
exhibits to the First Southeast Letter, true, accurate and complete copies
of all insurance policies of First Southeast and the Banks. Each such
policy is in full force and effect, with all premiums due thereon on or
prior to the Closing Date having been paid as and when due. First Southeast
will use its best efforts to maintain the coverage provided in each of such
policies through the Closing Date.
4.15 Compliance with Laws and Orders. First Southeast and each
Bank have complied in all material respects with all laws, regulations and
orders (including zoning ordinances) applicable to them and to the conduct
of their businesses, including without limitation, all statutes, rules and
regulations pertaining to the conduct of each Bank's banking activities.
Neither First Southeast nor either Bank is in default under, and no event
has occurred that, with the lapse of time or action by a third party or
both, could result in the default under the terms of any judgment, decree,
order, writ, rule or regulation of any governmental authority or court,
whether federal, state or local and whether at law or in equity.
4.16 Governmental Regulation. First Southeast and each Bank hold
all licenses, certificates, permits, franchises and rights from all
appropriate Federal, state and other public authorities necessary for the
conduct of their businesses, and, between the date hereof and the Closing
Date, First Southeast will, and will cause each Bank to use its best efforts
to, maintain all such licenses, certificates, permits, franchises and rights
in effect. Each Bank is a member of the Bank Insurance Fund administered by
the FDIC; neither Bank has ever been a party to a "conversion transaction"
within the meaning of 12 U.S.C. Section 1815(d)(2)(B). Neither First
Southeast nor either Bank is a party or subject to any agreement with, or
directive or order issued by, the Federal Reserve Board, the OCC or any
other bank regulatory authority, which imposes any restrictions or
requirements not applicable generally to bank holding companies (in the case
of First Southeast), or national banking association (in the case of the
Banks), with respect to the conduct of its business.
4.17 Contracts and Commitments. Neither First Southeast nor
either Bank is a party to or bound by any written or oral (i) lease or
license with respect to any property, real or personal, with a value in
excess of $25,000, whether as lessor, lessee, licensor or licensee; (ii)
contract or commitment for capital expenditures in excess of $25,000 for any
one project or $100,000 in the aggregate; (iii) contract or commitment for
total expenses in excess of $25,000 made in the ordinary course of business
for the purchase of materials, supplies or for the performance of services
for a period of more than 60 days from the date of this Reorganization
Agreement; (iv) contract or option for the purchase or sale of any real or
personal property other than in the ordinary course of business; (v)
contract, commitment or agreement made outside the ordinary course of
business; or (vi) union contract or collective bargaining agreement. First
Southeast and each Bank have performed in all material respects all
obligations required to be performed by them to date, and are not in default
under, and no event has occurred which, with the lapse of time or action by
a third party or both, could result in a default under any outstanding
mortgage, lease, contract, commitment or agreement to which First Southeast
or either Bank is a party or by which First Southeast or either Bank is
bound or under any provision of their respective charter documents or
Bylaws, and each such outstanding mortgage, lease, contract, commitment or
agreement is a valid and legally binding obligation of First Southeast or
the relevant Bank and, to the knowledge of First Southeast, constitutes a
valid and legally binding obligation of the other party or parties thereto,
subject to (i) all applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally, and
(ii) the application of equitable principles if equitable remedies are
sought.
4.18 Shareholders and Undertakings from Affiliates. First
Southeast has furnished to Firstar (i) current shareholder lists of First
Southeast and each Bank that set forth the record name and the address and
number of shares held by each holder of stock thereof and identify each
shareholder who is an officer or director of First Southeast or either Bank
or holder of ten percent (10%) or more of the outstanding First Southeast
Common Stock, as Exhibit 4.18(i) to the First Southeast Letter; and (ii)
written undertakings, in the form attached hereto as Exhibit 4.18(ii)
("Affiliates' Undertakings"), of all of the affiliates of First Southeast,
defined as set forth in Exhibit 4.18(ii).
4.19 Agreements with Directors, Officers and Shareholders. No
executive officer, or holder of ten percent (10%) or more of the outstanding
capital stock of First Southeast nor any executive officer of either Bank
nor any "associate" of any such person (as such term is defined in the
general rules and regulations under the Securities Act) (a "Company or Bank
Principal") (i) is a party (other than as a depositor) to any transaction
with First Southeast or the Bank, whether as a borrower or otherwise, which
(a) was made other than in the ordinary course of business, (b) was made on
other than substantially the same terms, including interest rate and
collateral, as those prevailing at the time for comparable transactions for
other persons, or (c) involves more than the normal risk of collectibility
or presents other unfavorable features, or (ii) is a party to any loan or
loan commitment, whether written or oral, from First Southeast or either
Bank involving an amount in excess of $10,000. No Company or Bank Principal
is an executive officer or director, or, in violation of the Depository
Institution Management Interlocks Act, owns any shares of any depository
organization other than a Bank. For the purposes of this Section 4.19, the
term "depository organization" means a commercial bank (including a private
bank), a savings bank, a trust company, a savings and loan association, a
homestead association, a cooperative bank, an industrial bank, a credit
union, or a depository holding company.
4.20 Absence of Adverse Agreements. Neither First Southeast nor
either Bank nor, to the knowledge of First Southeast, any shareholder of
First Southeast, is a party to any agreement, option or contract (other than
the Agreements, the Indemnity Agreement dated the date hereof among Firstar,
FCW, First Southeast, the Banks and the majority shareholder of First
Southeast, the Voting and Stock Purchase Agreements dated of the date hereof
between Firstar and the shareholders of First Southeast and the Stock
Purchase Agreements) the subject of which involves or relates to the merger,
consolidation, or sale of assets or stock of First Southeast or either
Bank.
4.21 Accuracy of Information. No representation or warranty
contained in the Agreements contains any untrue statement of a material fact
or omits a material fact necessary to make the statements in the Agreements
not misleading. The statements contained in the First Southeast Letter and
in any other written documents executed and/or delivered by or on behalf of
First Southeast pursuant to the terms of the Agreements are true and correct
in all material respects and the First Southeast Letter and such other
documents do not omit any material fact necessary to make the statements
contained therein not materially misleading. The statements contained in
the First Southeast Letter and such other documents will be deemed to
constitute representations and warranties of First Southeast under this
Reorganization Agreement to the same extent as if set forth herein in full.
4.22 Transactions in Capital Stock of First Southeast and the
Banks. Neither First Southeast nor David A. Straz, Jr. has engaged in any
transactions involving First Southeast Common Stock in violation of federal
or state securities laws.
4.23 Allowance for Loan Losses. (a) The allowance for loan
losses of First Bank Southeast after all anticipated loan losses have been
charged off, in an amount not less than 2.0% of the Bank's gross loans
outstanding, is adequate. Since September 30, 1993 the Bank has taken
chargeoffs of $1,456,470 and written down its "other real estate owned" by
$267,604.
(b) The allowance for loan losses of First Bank Lake Geneva after
all anticipated loan losses have been charged off, in an amount not less
than 2.0% of the Bank's gross loans outstanding, is adequate. Since
September 30, 1993 the Bank has taken chargeoffs of $333,497 and written
down its "other real estate owned" by $344,348.
4.24 No Undisclosed Liabilities. Neither First Southeast nor
either Bank nor any of their respective properties is subject to any
liability or obligation (absolute, accrued, contingent or otherwise) known
to First Southeast, including without limitation, any lease, contract,
commitment or purchase or sale agreement, except:
(a) as specifically disclosed in this Agreement or the financial
statements of First Southeast delivered pursuant to Section 4.7 hereof;
(b) as disclosed in the First Southeast Letter; or
(c) liabilities or obligations arising or incurred in the
ordinary course of business of First Southeast or either Bank since
September 30, 1993 and consistent with past practices.
4.25 Continuity of Interest. There is no plan or intention by
the shareholders of First Southeast who own one percent (1%) or more of the
First Southeast Common Stock, and to the best of the knowledge of the
management of First Southeast, there is no plan or intention on the part of
the remaining shareholders of First Southeast to sell, exchange or otherwise
dispose of a number of shares of Firstar Common Stock received in the Merger
that would reduce the First Southeast shareholders' ownership of Firstar
Common Stock to a number of shares having a value, as of the Closing Date,
of less than fifty percent (50%) of the value of all of the formerly
outstanding First Southeast Common Stock as of the same date. For purposes
of this representation, shares of First Southeast Common Stock exchanged for
cash or shares of Firstar Common Stock, by dissenting shareholders or
exchanged for cash in lieu of fractional shares of Firstar Common Stock will
be treated as outstanding Firstar Common Stock on the Closing Date. In
addition, shares of First Southeast Common Stock and shares of Firstar
Common Stock held by First Southeast shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the Merger shall be
considered in making the foregoing representation.
4.26 Pooling and Tax-Free Status Matters. To the knowledge of
First Southeast, neither First Southeast 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 tax-free reorganization under Section 368 of the Code.
4.27 No Material Adverse Change. Since December 31, 1992, there
has been no material adverse change in the financial condition, assets,
liabilities, results of operation or business of First Southeast or either
Bank.
ARTICLE V
CONDUCT OF BUSINESS BY FIRSTAR
Firstar agrees that:
5.1 Approval by Firstar. Firstar will give its consent or
approval on such matters as may be appropriate or required in connection
with the transactions contemplated by the Agreements, subject, however, to
Sections 1.4 and 9.1 of this Reorganization Agreement.
5.2 Subsequent SEC Filings. As soon as reasonably practicable,
Firstar will furnish First Southeast copies of all Firstar's periodic
reports on Forms 10-K, 10-Q and 8-K filed with the SEC subsequent to the
date hereof. Such reports shall be prepared in compliance with laws
applicable to Firstar.
5.3 Conduct of Business; Certain Covenants. From and after the
execution and delivery of this Agreement and until the Closing Date, Firstar
will, except insofar as deviations from the following covenants would not
reasonably be expected to have a material adverse impact on Firstar and its
subsidiaries, taken as a whole:
(a) conduct its business and operate only in accordance with
sound banking and business practices; and
(b) maintain its corporate existence in good standing and file
all material required reports with all applicable regulatory authorities.
5.4 Plant Closing Laws. Firstar shall indemnify the shareholders
of First Southeast from any damages they may incur if Firstar takes any
action that subjects the shareholders to damages under the federal Worker
Adjustment and Retraining Notification Act or Section 109.07 of the
Wisconsin Statutes.
5.5 Bank Minority Shares. As soon as reasonably practicable
after the Closing Date, Firstar or FCW will offer to purchase directly or
pursuant to a Plan of Merger, all of the outstanding shares of First Bank
Lake Geneva other than shares owned by First Bank Southeast or directors'
qualifying shares, at a price per share of $287.27.
ARTICLE VI
CONDUCT OF BUSINESS BY FIRST SOUTHEAST UNTIL MERGER
First Southeast agrees that from the date of this Reorganization
Agreement until the Closing Date:
6.1 Dividends. First Southeast will not declare or pay any
dividends or make any distributions on First Southeast Common Stock other
than cash dividends in an amount or amounts not to exceed in the aggregate
the cash dividends that the shareholders of First Southeast would have
received from Firstar had they owned, after February 15, 1994, 1,801,577
shares of Firstar Common Stock on the record dates in such quarters for the
determination of Firstar shareholders entitled to receive dividends. First
Southeast will not permit either Bank to declare or pay any dividends or
make any distributions on its common stock other than cash dividends
necessary to fund such dividends of First Southeast, pay expenses expressly
contemplated by this Reorganization Agreement, service First Southeast's
debt and pay ordinary and necessary operating expenses of First Southeast on
a basis consistent with prior years.
6.2 Capitalization. First Southeast will not, nor will it permit
either Bank to, issue, sell or otherwise dispose of, grant an option for, or
acquire for value any shares of capital stock of First Southeast or the
Banks or otherwise effect any change in connection with its capitalization
or that of the Banks, except in connection with the bank-level mergers with
Firstar affiliates referred to in Section 6.13 hereof.
6.3 Regular Course of Business. First Southeast will, and will
cause each Bank to, carry on its business in substantially the same manner
as heretofore and use its best efforts to maintain and preserve its business
organization intact, retain its present employees and maintain its
relationships with customers. Except with the prior written consent of
Firstar, First Southeast will not, and will not permit either Bank to (i)
enter into any transaction other than in the ordinary course of business or
incur or agree to incur any obligation or liability, except (a) liabilities
incurred and obligations entered into in the ordinary course of business,
(b) with respect to an agreement with Quarles & Brady for fair and
reasonable legal services in connection with the Agreements and the
transactions contemplated thereby, providing for payment on an hourly basis
only, at a rate per hour not to exceed the amount disclosed in Section 6.3
of the First Southeast Letter, and for an aggregate amount estimated not to
exceed $100,000; (c) with respect to any agreements for fees with KPMG Peat
Marwick and James M. Harmon & Co., Ltd. for fair and reasonable services in
connection with preparation of the Registration Statement and proxy
solicitation materials and other activities contemplated by the Agreements
and for an aggregate amount estimated not to exceed the amount disclosed in
Section 6.3 of the First Southeast Letter; and (d) consulting fees to
David A. Straz, Jr. for consulting services to First Southeast in the
ordinary course of its business and exclusive of matters concerning the sale
of First Southeast in amounts not to exceed $195 per hour; (ii) change its
lending, investment, liability management and other material policies
concerning its or either Bank's banking business, unless required by
statute, regulation or order; (iii) grant any bonus or increase in the rates
of pay of employees or directors except normal salary and bonus increases to
employees, based on past practice, not to exceed five percent (5%) in the
aggregate; (iv) except pursuant to the contracts or commitments disclosed in
the First Southeast Letter or in the ordinary course of business, incur or
commit to any capital expenditure which exceeds $25,000; (v) except in the
ordinary course of business or as expressly contemplated by this
Reorganization Agreement, and, in the case of sales for more than $50,000,
after prior notice to Firstar, sell any loans made prior to the date hereof,
or sell any investment securities from their respective investment
portfolios, or sell or otherwise dispose of any assets; or (vi) agree to any
of the foregoing actions.
6.4 Contact with Third Parties; No Board Recommendation. First
Southeast will not initiate, solicit or encourage and will not permit either
Bank to 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 financial advisor, attorney, accountant or other
representative retained by First Southeast or either Bank to take any such
action. For purposes of this Agreement, "Competing Transaction" shall mean
any of the following: (i) the merger or consolidation of First Southeast or
either Bank with any person or entity other than Firstar or its
subsidiaries, (ii) the acquisition of more than three percent (3%) of the
consolidated gross assets of First Southeast by any person or entity other
than Firstar or its subsidiaries, (iii) the acquisition of any of the
capital stock of First Southeast or either Bank by any person or entity
other than Firstar or its subsidiaries, or (iv) the acquisition by First
Southeast or either Bank of the stock or, except in the ordinary course of
business, the assets of any other person or entity. Promptly upon receiving
any oral or written offer relating to any such event or proposed event,
First Southeast shall notify Jon H. Stowe, Executive Vice President of
Firstar, or, in his absence, any other member of Firstar's Acquisition Team,
by telephone, confirmed by letter, giving all relevant details of such oral
or written offer. The Board of Directors of First Southeast will not
recommend that it or its shareholders vote in favor of any Competing
Transaction.
6.5 Corporate Structure. First Southeast will not, nor will it
permit either Bank to, without the prior written consent of Firstar, create
or acquire any subsidiary. There will be no change in the Articles of
Incorporation or Bylaws of First Southeast or the Articles of Association or
Bylaws of either Bank, without the prior written consent of Firstar.
6.6 Accounting and Tax Reporting. First Southeast will not, nor
will it permit either Bank to, change any of its methods of accounting in
effect at the end of its last fiscal year, 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 of First
Southeast or the Bank for its last taxable year, except as may be required
by law or generally accepted accounting principles.
6.7 Full Disclosure. First Southeast will afford Firstar, its
officers, accountants, counsel and other authorized representatives, such
access to all books, records, tax returns, leases, contracts and documents
of First Southeast and the Banks and to the buildings, structures, fixtures
and appurtenances of First Southeast and the Banks for purposes of
inspecting their condition, and will furnish to Firstar such information
with respect to the assets and business of First Southeast and the Banks as
Firstar may from time to time reasonably request in connection with the
Agreements and the transactions contemplated hereby and as permitted by law,
provided that such access or investigation shall not interfere unnecessarily
with the normal operations of First Southeast and the Banks.
6.8 Reports to Firstar. First Southeast will promptly advise
Firstar in writing of all actions taken by the directors and shareholders of
First Southeast at meetings or in connection with written consents filed
with First Southeast and furnish Firstar with copies of all monthly and
other interim financial statements of First Southeast and the Bank as they
become available. First Southeast will use its best efforts to keep Firstar
fully informed concerning all trends and developments of which it becomes
aware that may have a material effect upon the business, properties or
condition (either financial or otherwise) of First Southeast and the Banks.
6.9 Solicitation of First Southeast Shareholders. First
Southeast will take such action as may be necessary in accordance with
applicable law, including soliciting consents or causing a special meeting
of its shareholders to be held as soon as practicable after the effective
date of the Registration Statement, to solicit, and will use its best
efforts to obtain, the requisite ratification, confirmation and adoption of
the Agreements and approval of the Merger by its shareholders and the
consent or approval of its shareholders on such other matters as may be
appropriate or required in connection with the transactions contemplated by
the Agreements. The Board of Directors of First Southeast shall (i)
recommend to its shareholders approval of the Merger; (ii) not withdraw,
modify or amend such recommendation; and (iii) use its best efforts to
obtain such shareholder approval. First Southeast and Firstar shall
coordinate and cooperate with respect to the timing of such meeting and
shall use their best efforts to hold such meeting as soon as practicable
after the date hereof.
6.10 Supplement to First Southeast Letter. First Southeast will
promptly supplement or amend the First Southeast Letter with respect to any
matter hereafter arising that, if existing or occurring at the date of this
Reorganization Agreement, would have been required to be set forth or
described in the First Southeast Letter. No supplement or amendment to the
First Southeast Letter will have any effect for the purpose of determining
satisfaction of the condition set forth in Section 7.2 hereof.
6.11 Dissent Process. First Southeast will give to Firstar
prompt notice of any written notice relating to the exercise of dissenters'
rights granted under the Wisconsin Statutes, including the name of the
dissenting shareholder and the number of shares of First Southeast Common
Stock to which the dissent relates. Firstar will have the right to
participate in all negotiations and proceedings relating thereto, and,
exceptions required by law. First Southeast will not make any payment with
respect to, or settle or offer to settle, any appraisal demands without
Firstar's prior written consent.
6.12 Employee Benefit Plans. Except as required by law or
provided by this Agreement, First Southeast will not make any material
change in any Plan. First Southeast will cooperate fully with Firstar and
FCW and will take all steps necessary in the judgment of Firstar and its
counsel to cause the termination of any Plan or the merger thereof,
effective on or after closing into one or more employee benefit plans
maintained by Firstar or FCW. Without limitation of the foregoing, if
requested by Firstar or FCW, First Southeast will cause the trustee of any
Plan to value the assets of such Plan and, effective on or after closing,
transfer all Plan assets and liabilities to a successor trustee designated
by Firstar or FCW, all in the manner specified by Firstar or FCW.
6.13 Bank-Level Transactions. (a) First Southeast and the Banks
will cooperate with Firstar and FCW in the preparation by Firstar or FCW of
applications to the OCC and any other appropriate regulatory authority to
effect, contingent on consummation of the Merger, the transfer of certain
Bank assets and liabilities to and/or a merger of the Banks with one or more
bank subsidiaries of Firstar.
(b) As soon as reasonably practicable, First Southeast and the
Banks will withdraw their pending applications to the Wisconsin Commissioner
of Banking for approval of the Banks' previously-proposed charter
conversions and merger with each other.
(c) First Southeast and the Banks will cooperate with Firstar and
FCW in effecting, including through publication of branch closing notices,
the closing, on or as soon as practicable after the Closing Date, of First
Bank Southeast's Milwaukee and North Cape offices, First Bank Lake Geneva's
New Muenster office, and such other offices as the parties may mutually
agree.
6.14 Parent Company Debt. At closing, debt at the parent company
level will not exceed $2.7 million.
6.15 Disposition of Assets. All the life insurance policies
carried on David A. Straz, Jr. by First Southeast or either Bank will be
sold by such entity to Mr. Straz prior to the Closing Date for their
respective cash surrender values. All the shares First Southeast owns of
Southern Exchange Bank will be sold by First Southeast to Mr. Straz at least
five trading days prior to the Closing Date at their fair market value. The
shares First Southeast owns of Wisconsin Energy Corp. will be sold prior to
the Closing Date at their fair market value.
6.16 Out-of-State Participations. Prior to the Closing Date, all
out-of-state participations at either Bank shall be sold for their book
value as of December 31, 1993, reduced by normal loan principal payments to
the date of sale.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF FIRSTAR AND FCW
The obligations of Firstar and FCW under the Agreements to cause
the transactions contemplated therein to be consummated shall be subject to
the satisfaction of the following conditions:
7.1 No Material Adverse Change. There shall not have been any
material adverse change, or discovery of a condition or the occurrence of
any event that has or is likely to result in such a change, in the financial
condition, assets, liabilities, results of operation or business of First
Southeast or either Bank from the date hereof to the Closing Date.
7.2 Representations and Warranties. All representations and
warranties by First Southeast contained in this Reorganization Agreement
shall be true and correct in all material respects at, or as of, the Closing
Date as though such representations and warranties were made on and as of
said date, except with respect to (y) changes expressly contemplated in this
Reorganization Agreement, or (z) breaches that are not reasonably likely to
have a material adverse impact on First Southeast or either Bank or on the
benefits to have been received by Firstar or FCW from consummation of the
transactions contemplated by the Agreements.
7.3 Performance and Compliance. First Southeast shall have
performed or complied with all covenants, agreements and conditions required
by the Agreements to be performed and satisfied by it on or prior to the
Closing Date.
7.4 No Proceeding or Litigation. At the Closing Date, no suit,
action or proceeding shall be pending or overtly threatened and no liability
or claim shall have been asserted against First Southeast or either Bank
which has not been disclosed in the First Southeast Letter (i) involving any
of the assets, properties, business or operations of First Southeast or
either Bank that might result in any material adverse change in the
financial condition or results of operations of First Southeast or the Bank,
or (ii) before any court or other governmental agency by the federal or any
state government in which it is or will be sought to restrain or prohibit
the consummation of the Merger.
7.5 Review or Audit by Firstar and Accountants. Prior to the
Closing Date, Firstar and KPMG Peat Marwick shall have had an adequate
opportunity to conduct such a complete review, in accordance with standards
established by the American Institute of Certified Public Accountants, or
audit, in accordance with generally accepted auditing standards, of the
financial condition, assets, liabilities, results of operation, and business
of First Southeast and the Banks as Firstar shall deem prudent and such
review or audit shall not have disclosed matters that are inconsistent in
any material respect with any of the representations and warranties of First
Southeast contained in this Reorganization Agreement.
7.6 Audit of Plans. Firstar shall have had the opportunity to
conduct, or to have conducted by an entity of its choosing, at its expense,
an audit of any Plans.
7.7 Pooling Letter. Firstar shall have received confirmation
from KPMG Peat Marwick that the Merger will be accounted for as a "pooling
of interests" in accordance with generally accepted accounting principles,
as of a date no more than five business days prior to the Closing Date.
Failure to obtain the confirmation contemplated in this Section 7.7 due to
an affirmative act of Firstar alone shall constitute a waiver of this
condition.
7.8 Approval of Shareholders. This Reorganization Agreement and
all actions contemplated thereby and hereby, including the Merger, that
require the approval of First Southeast's shareholders shall have received
the required shareholder approval by consent or at a meeting duly called and
held for such purpose, and holders of not more than five percent (5%) of the
First Southeast Common Stock outstanding as of the date of such consent
action or record date for such meeting shall have undertaken steps to
perfect their right to dissent in accordance with the Wisconsin Statutes and
not lost or abandoned such right.
7.9 Opinion of Counsel for First Southeast. Firstar and FCW
shall have received an opinion from Quarles & Brady, counsel for First
Southeast, dated the Closing Date, substantially to the effect set forth in
Exhibit 7.9 hereto.
7.10 Allowance for Loan Losses. (a) As of the Closing Date, the
allowance for loan losses of First Bank Southeast after all anticipated loan
losses shall have been charged off shall not be less than an amount equal to
2.0% of its gross loans outstanding.
(b) As of the Closing Date, the allowance for loan losses of
First Bank Lake Geneva after all anticipated loan losses shall have been
charged off shall not be less than an amount equal to 2.0% of its gross
loans outstanding.
7.11 Certificate of Chief Executive Officer. First Southeast
shall have furnished Firstar a certificate, signed by its Chief Executive
Officer, dated the Closing Date, to the effect that the conditions described
in Sections 7.1, 7.2, 7.3, 7.4, 7.8, and 7.10 of this Reorganization
Agreement have been fully satisfied, to the best of the knowledge of such
Chief Executive Officer.
7.12 Active Status Certificates. Firstar and FCW shall have
received (i) a statement of the State of Wisconsin, certifying that First
Southeast is a corporation in active status in Wisconsin, and (ii)
statements from the OCC stating that the Banks are in good standing as
national banking associations, each dated within five business days prior to
the Closing Date.
7.13 Bills for Certain Fees of First Southeast or the Bank.
Firstar shall have received a copy of an itemized bill from Quarles & Brady
to First Southeast for services performed in connection with the
transactions contemplated in the Agreements, through two business days prior
to the Closing Date, which details the fees charged to that date and
estimated to be charged through the Closing Date for such services.
7.14 Tax Opinion. Firstar and FCW shall have received an opinion
from Foley & Lardner, dated the Closing Date, opining that the Merger will
be treated as a tax-free reorganization under the Code. Firstar and FCW
have requested such an opinion. The failure to obtain such opinion due to
an act or omission of Firstar or FCW shall constitute a waiver of such
condition.
7.15 Regulatory Agreements. The Federal Reserve Bank of Chicago
(the "Reserve Bank") shall have agreed that (a) the agreement by and between
First Southeast and David A. Straz, Jr. and the Reserve Bank dated August
14, 1984, and (b) the Memorandum of Understanding executed between First
Southeast and the Reserve Bank dated November 6, 1991, from and after the
Closing will not apply to Firstar or FCW.
7.16 Environmental Audits. Firstar shall have had an opportunity
to have conducted by an entity of its choosing, environmental site
assessments of the Real Properties carried on the Banks' books as "other
real estate owned" to determine if such properties have indications of or
give evidence that any violations of Environmental Laws have occurred on any
such properties. If the Agreements are terminated and the Merger abandoned
for any reason, First Southeast will reimburse Firstar for the cost of such
environmental site assessments.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF FIRST SOUTHEAST
The obligations of First Southeast under the Agreements to cause
the transactions contemplated herein to be consummated shall be subject to
the satisfaction of the following conditions:
8.1 No Material Adverse Change. There shall not have been any
material adverse change, or discovery of a condition or the occurrence of
any event that has or is likely to result in such a change, in the
consolidated financial condition, assets, liabilities, results of operation
or business of Firstar from the date hereof to the Closing Date.
8.2 Representations and Warranties. All representations and
warranties of Firstar and FCW contained in this Reorganization Agreement
shall be true and correct in all material respects at, or as of, the Closing
Date as though such representations were made at and as of said date, except
with respect to (y) changes expressly contemplated in this Reorganization
Agreement, or (z) breaches that are not reasonably likely to have a material
adverse impact on Firstar or FCW or on the benefits to have been received by
First Southeast or its shareholders from consummation of the transactions
contemplated by the Agreements.
8.3 Performance and Compliance. Firstar shall have performed or
complied with all covenants, agreements and conditions required by the
Agreements to be performed and satisfied by it at or prior to the Closing
Date.
8.4 No Proceeding or Litigation. At the Closing Date, no suit,
action or proceeding shall be pending or overtly threatened before any court
or other governmental agency by the federal or any state government in which
it is sought to restrain or prohibit the consummation of the Merger.
8.5 Opinion of Counsel for Firstar and FCW. Firstar and FCW
shall have delivered to First Southeast an opinion of Firstar's General
Counsel, dated the Closing Date, substantially to the effect set forth in
Exhibit 8.5 hereto.
8.6 Certificate of Executive Officer. Firstar shall have
furnished to First Southeast a certificate, signed by any one of its
executive officers and dated the Closing Date, to the effect that the
conditions described in Sections 8.1, 8.2 and 8.3 of this Reorganization
Agreement have been fully satisfied.
8.7 Tax Opinion. First Southeast shall have received an opinion
from Foley & Lardner dated the Closing Date, opining that the Merger will be
treated as a tax-free reorganization under the Code. First Southeast has
requested such an opinion. The failure to obtain such opinion due to an act
or omission of First Southeast shall constitute a waiver of such condition.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
In addition to the provisions of Articles VII and VIII hereof, the
obligations of First Southeast, Firstar and FCW to cause the transactions
contemplated herein to be consummated, shall be subject to the satisfaction
of the following conditions.
9.1 Governmental Approvals. The parties hereto shall have
received all necessary approvals of governmental agencies and authorities,
on conditions satisfactory to Firstar, of the transactions contemplated by
the Agreements and each of such approvals shall remain in full force and
effect at the Closing Date and such approvals and the transactions
contemplated thereby shall not have been contested by any federal or state
governmental authority nor by any other third party by formal proceeding.
If any contest as aforesaid is brought by formal proceedings, any party may,
but shall not be obligated to, answer and defend such contest.
9.2 Securities Law Compliance. The Registration Statement shall
have become effective by an order of the SEC, the Firstar Common Stock to be
issued in the Merger shall have been qualified or exempted under all
applicable state securities or blue sky laws, and there shall have been no
stop order issued or threatened by the SEC that suspends the effectiveness
of the Registration Statement, and no proceeding shall have been commenced,
pending or overtly threatened for such purpose.
9.3 Shareholder Approval. The Agreements and the Merger shall
have been duly approved by the requisite affirmative votes of the
shareholders of First Southeast.
ARTICLE X
TERMINATION
10.1 Reasons for Termination. The Agreements may be terminated
and the Merger abandoned at any time before the Closing Date,
notwithstanding the approval or adoption of the Agreements by the
shareholders of First Southeast and/or FCW:
(a) By mutual written consent of the Board of Directors of First
Southeast and the Board of Directors or the Interstate Banking and
Acquisitions Committee of Firstar;
(b) By written notice from Firstar to First Southeast if:
(i) any condition set forth in Articles VII or IX of this
Reorganization Agreement has not been substantially satisfied or
waived in writing by October 31, 1994, unless the failure to
satisfy such condition is due to a breach of the Agreements by
Firstar;
(ii) any warranty or representation made by First Southeast
shall be discovered to be or to have become untrue, incomplete or
misleading where any such breach, individually or in the
aggregate, (y) is reasonably likely to have a material adverse
impact on First Southeast or either Bank or on the benefits to
have been received by Firstar or FCW from consummation of the
transactions contemplated by the Agreements, and (z) has not been
cured within ten business days following receipt by First
Southeast of notice of such discovery; or
(iii) First Southeast shall have breached one or more
covenants of this Reorganization Agreement in any material respect
considering all such breaches in the aggregate, where such breach
has not been cured within ten business days following receipt by
First Southeast of notice of such breach; or
(c) By written notice from First Southeast to Firstar, authorized
by the Board of Directors of First Southeast, if:
(i) any condition set forth in Articles VIII or IX of this
Reorganization Agreement has not been substantially satisfied or
waived in writing by October 31, 1994, unless the failure to
satisfy such condition is due to a breach of the Agreements by
First Southeast;
(ii) any warranty or representation made by Firstar shall be
discovered to be or to have become untrue, incomplete or
misleading where any such breach, individually or in the
aggregate, (y) is reasonably likely to have a material adverse
impact on Firstar or on the benefits to have been received by
First Southeast or its shareholders from consummation of the
transactions contemplated by the Agreements, and (z) has not been
cured within ten business days following receipt by Firstar of
notice of such discovery;
(iii) Firstar shall have breached one or more covenants of
this Reorganization Agreement in any material respect considering
all such breaches in the aggregate, where such breach has not been
cured within ten business days following receipt by Firstar of
notice of such breach; or
(iv) the average composite closing price of Firstar Common
Stock on the New York Stock Exchange and the Midwest Stock
Exchange, on the ten consecutive trading days immediately
preceding the date on which the parties could otherwise have
closed the transactions contemplated by the Agreements, is less
than $27.00.
10.2 Liability. In the event of termination of this
Reorganization Agreement caused (a) otherwise than by breach of a party
hereto or (b) by any breach or misrepresentation by a party hereto not
covered by the next sentence, there shall be no liability on the part of
First Southeast, Firstar or FCW of any nature whatsoever, except that the
parties shall pay fees and expenses pursuant to Section 11.2 of this
Reorganization Agreement and continue to comply with the obligations set
forth in Section 1.6 of this Reorganization Agreement. In the event of
termination of this Reorganization Agreement caused by (i) willful breach by
a party of any agreement, covenant, or undertaking of such party contained
herein or in any exhibit hereto; (ii) any material misrepresentations or
breach of warranty in any material respect by a party herein, which at the
date hereof was known to be a misrepresentation or breach of warranty by
such party; or (iii) the failure of any condition set forth in Articles VII,
VIII or IX hereof which has failed because a party did not exercise good
faith and best efforts towards the fulfillment of such condition; then the
other party shall be entitled to all its legal and equitable remedies.
ARTICLE XI
MISCELLANEOUS
11.1 Brokers. Firstar and First Southeast agree that no third
person or entity has in any way brought the parties together or been
instrumental in the making of the Agreements. Each such party agrees to
indemnify the other against any claim by any third person or entity for any
commission, brokerage or finder's fee, or other payment with respect to the
Agreements or the transactions contemplated thereby based on any alleged
agreement or misunderstanding between such party and such third person or
entity, whether express or implied from the actions of such party.
11.2 Expenses. Each party to the Agreements will pay its
respective fees and expenses incurred in connection with the preparation and
performance of the Agreements, including fees and expenses of its counsel,
accountants, and other experts and advisors, except that (a) Firstar agrees
to reimburse First Southeast and the Banks for any out-of-pocket fees and
expenses they incur at the request and direction of Firstar (to include fees
paid or payable by First Southeast to KPMG Peat Marwick pursuant to
Firstar's letter dated January 13, 1994 (the "Peat Marwick Letter") but not
to include fees paid or payable to James M. Harmon & Co., Ltd. or fees paid
or payable for the environmental audits referred to in Section 6.16 hereof),
and (b) First Southeast agrees to reimburse Firstar for the costs of the
environmental site assessments referred to in Section 7.16 hereof.
11.3 Waivers; Amendments. At any time prior to the Closing Date,
either Firstar, by action taken by its Board of Directors or Interstate
Banking and Acquisitions Committee or officers thereunto authorized, or
First Southeast, by action taken by its Board of Directors or officers
thereunto authorized, may waive the performance of any of the obligations of
the other or waive compliance by the other with any of the covenants or
conditions contained in the Agreements or agree to the amendment or
modification of the Agreements by an agreement in writing executed in the
same manner as the Agreements; provided, however, that after consent of or a
favorable vote by the shareholders of First Southeast pursuant to Section
6.9 of this Reorganization Agreement any such action shall be taken by First
Southeast only if, in the opinion of its Board of Directors, such waiver,
amendment or modification will not have any material adverse effect on the
benefits intended under the Agreements for the shareholders of First
Southeast and will not require resolicitation of any proxies from such
shareholders.
11.4 Assignment. This Reorganization Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, but shall not be assigned by the parties hereto
without the prior written consent of the other parties.
11.5 Entire Agreement. This Reorganization Agreement, the Plan
of Merger, the Indemnity Agreement, the Voting and Stock Purchase
Agreements, the Affiliates' Undertakings and the Peat Marwick Letter
supersede any other agreement, whether written or oral, that may have been
made or entered into by First Southeast or Firstar or FCW or by any officer
or officers of such parties relating to the acquisition of the business or
the capital stock of First Southeast by Firstar or FCW. The aforementioned
agreements constitute the entire agreement by the respective parties, and
there are no agreements or commitments except as set forth herein and
therein.
11.6 Captions and Counterparts. The captions in this
Reorganization Agreement are for convenience only and shall not be
considered a part of or affect the construction or interpretation of any
provision of this Reorganization Agreement. This Reorganization Agreement
may be executed in several counterparts, each of which shall constitute one
and the same instrument.
11.7 Governing Law. The Reorganization Agreement shall be
construed and interpreted in accordance with the laws of the State of
Wisconsin.
11.8 Nonsurvival. No representations, warranties or covenants in
this Reorganization Agreement shall survive the Merger or termination under
Article X hereof, other than the obligations set forth in Sections 1.6, 1.8,
5.5, 7.16 and 11.2, and the representations set forth in Section 4.25, of
this Reorganization Agreement.
11.9 Knowledge of the Parties. Wherever in this Agreement any
representation or warranty is made upon the knowledge of a party hereto,
such knowledge shall include the actual knowledge of any executive officer
of such party or any facts that upon due inquiry, would have been known to
such person.
11.10 Notices. All notices given hereunder shall be in writing
(including a telecopy) and shall be mailed by first class mail, postage
prepaid, or sent by facsimile transmission or by nationally recognized
overnight delivery service, addressed as follows:
(a) If to Firstar or FCW, to:
Firstar Corporation
[or Firstar Corporation of Wisconsin]
Attn: Jon H. Stowe
Executive Vice President
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-4349
with a copy to:
Firstar Corporation
Law Department
Attn: Howard H. Hopwood, III
Senior Vice President and
General Counsel
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-6111
(b) If to First Southeast, to:
First Southeast Banking Corp.
Attn: David A. Straz, Jr.,
President
P.O. Box 490
Lake Geneva, WI 53147
Telecopy No. (414) 248-7024
with a copy to:
Quarles & Brady
Attn: Robert J. Kalupa, Esq.
411 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 271-3552
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
and Plan of Reorganization to be duly executed as of the date first above
written.
FIRSTAR CORPORATION
[SEAL] By: Jon H. Stowe
Its:Executive Vice President
Attest: John A. Kielich
Its:First Vice President
[SEAL] FIRST SOUTHEAST BANKING CORP.
By: David A. Straz, Jr.
Its:President
Attest: _______________________
Its:___________________
[NO SEAL] FIRSTAR CORPORATION OF WISCONSIN
By: John A. Kielich
Its:Vice President
Attest: Joan M. Fagan
Its:Assistant Secretary
<PAGE>
EXHIBIT 4.18(ii)
[Form of First Southeast Affiliate's Undertaking]
February 10, 1994
Firstar Corporation
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Gentlemen:
I have been advised that as of the date hereof I may be deemed an
"affiliate" of First Southeast Banking Corp., a Wisconsin corporation
("First Southeast"), as that term is defined for purposes of paragraphs (c)
and (d) of Rule 145 of the rules and regulations (the "Rules and
Regulations") under the Securities Act of 1933, as amended (the "Act")
("Affiliate"). Pursuant to the terms of the Agreement and Plan of
Reorganization among Firstar Corporation, a Wisconsin corporation
("Firstar"), Firstar Corporation of Wisconsin, a Wisconsin corporation
("FCW"), and First Southeast (the "Reorganization Agreement"), and the
related Plan of Merger by and between First Southeast and FCW joined in by
Firstar for certain limited purposes, both dated as of February 9, 1994
(together with the Reorganization Agreement, the "Agreements"), First
Southeast will be merged with and into FCW (the "Merger"), and as a result
of the Merger, I may receive shares of common stock of Firstar, $1.25 par
value ("Firstar Common Stock").
In connection with the above transactions, I represent and warrant to
Firstar and agree that:
A. I will not make any sale, transfer or other disposition of the
shares of Firstar Common Stock in violation of the Act or the Rules and
Regulations.
B. I have no present plan or intent to dispose of the Firstar Common
Stock acquired by me pursuant to the Merger.
C. I have been advised that the offering, sale and delivery of the
shares of Firstar Common Stock to me pursuant to the Merger will be
registered under the Act on a Registration Statement on Form S-4. I have
also been advised, however, that, since I may be deemed to be an Affiliate
of First Southeast at the time the Agreements are submitted for a vote of
the shareholders of First Southeast, the shares of Firstar Common Stock must
be held by me indefinitely unless (i) such shares of Firstar Common Stock
have been registered for distribution under the Act, (ii) a sale of the
shares of Firstar Common Stock is made in conformity with the volume and
other limitations of Rule 145, or (iii) in the opinion of counsel acceptable
to Firstar, some other exemption from registration under the Act is
available with respect to any such proposed sale, transfer or other
disposition of the shares of Firstar Common Stock.
D. I have carefully read this Agreement and the Agreements and have
discussed their requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of the shares of Firstar
Common Stock, to the extent I felt necessary, with my counsel or counsel for
First Southeast.
E. I understand that Firstar is under no obligation to register the
sale, transfer or other disposition of the shares of Firstar Common Stock
for sale, transfer or other disposition by me to make compliance with an
exemption from registration available.
F. I understand that stop transfer instructions will be given to the
registrar of the certificates for the shares of Firstar Common Stock and
that there will be placed on the certificates for the shares of Firstar
Common Stock, or any substitutions therefore, a legend stating in substance:
"The shares represented by this certificate were issued in a
transaction (the acquisition of First Southeast Banking Corp.) to
which Rule 145 promulgated under the Securities Act of 1933, as
amended (the "Act"), applies and may be sold or otherwise
transferred only in compliance with the limitations of such Rule
145, or upon receipt by Firstar Corporation of an opinion of
counsel acceptable to it that some other exemption from
registration under the Act is available, or pursuant to a
registration statement under the Act. The shares represented by
this certificate may not be sold or otherwise transferred prior to
the publication by Firstar Corporation of an earnings statement
covering at least 30 days of operations subsequent to [the
effective date of the Merger]."
G. I hereby agree that, for a period of two (2) years following the
effective date of the Merger, I will obtain an agreement similar to this
agreement from each transferee of the shares of Firstar Common Stock sold or
otherwise transferred by me, but only if such transfer is effected other
than in a transaction involving a registered public offering or as a sale
pursuant to Rule 145.
H. Notwithstanding the other provisions hereof, I agree not to sell,
pledge, transfer, or otherwise dispose of the shares of Firstar Common
Stock, or reduce my risk relative to the Firstar Common Stock in any other
way, from the date hereof until such time as financial results covering at
least 30 days of combined operations of the parties to the Merger have been
published within the meaning of Section 201.01 of the Securities and
Exchange Commission's Codification of Financial Reporting Policies. It is
understood and agreed that any transfer of my shares of First Southeast to a
Nevada partnership pursuant to documents substantially to the effect of the
partnership agreement reviewed by KPMG Peat Marwick prior to the date hereof
will not be a breach of this Agreement. I have not reduced my risk relative
to the Firstar Common Stock to date.
It is understood and agreed that this Agreement will terminate and be
of no further force and effect and the legend set forth in Paragraph F above
will be removed by delivery of substitute certificates without such legend,
and the related transfer restrictions shall be lifted forthwith, if the
period of time specified in Paragraph H of this Agreement has passed and (i)
my shares of Firstar Common Stock shall have been registered under the Act
for sale, transfer or other disposition by me or on my behalf, (ii) I am not
at the time an Affiliate of Firstar and have held the shares of Firstar
Common Stock for at least two (2) years (or such other period as may be
prescribed by the Act and the Rules and Regulations) and Firstar has filed
with the Securities and Exchange Commission ("SEC") all of the reports it is
required to file under the Securities Exchange Act of 1934, as amended,
during the preceding twelve (12) months, (iii) I am not and have not been
for at least three (3) months an Affiliate of Firstar and I have held the
shares of Firstar Common Stock for at least three (3) years, or (iv) Firstar
shall have received a letter from the staff of the SEC, or an opinion of
Firstar's General Counsel or other counsel acceptable to Firstar, to the
effect that the stock transfer restrictions and the legend are not required.
This Agreement shall be binding on my heirs, legal representatives and
successors.
Very truly yours,
_______________________________
Accepted as of the 10th day of February, 1994.
FIRSTAR CORPORATION
By: _____________________
<PAGE>
EXHIBIT 7.9
[Closing Date]
Firstar Corporation
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Gentlemen:
We have acted as special counsel to First Southeast Banking Corp.
("First Southeast"), a Wisconsin corporation and a bank holding company
registered under the Bank Holding Company Act of 1956, as amended, in
connection with the merger of First Southeast with and into Firstar
Corporation of Wisconsin, a Wisconsin corporation ("FCW"), pursuant to an
Agreement and Plan of Reorganization dated as of February ____, 1994 (the
"Reorganization Agreement"), by and among First Southeast, FCW, and Firstar
Corporation, a Wisconsin corporation ("Firstar") the parent of FCW. This
letter is furnished to you pursuant to Section 7.9 of the Reorganization
Agreement. We have represented David A. Straz, Jr., to the extent of his
being party to the Indemnity Agreement. Unless the context clearly requires
otherwise, capitalized terms used herein shall have the meanings ascribed
thereto in the Reorganization Agreement.
As special counsel for First Southeast, we have examined and relied
upon corporate records of First Southeast and the Banks and such other
documents, and certificates provided by their officers, including
certificates supplied to Firstar in connection with this transaction, and
certificates of public officials.
Furthermore, in regard to the matters stated in numbered paragraphs 6,
7 and 8, we wish to advise you that we have not been engaged to give
substantive attention to any legal or governmental proceedings, orders or
third party agreements (other than the Agreements) to which First Southeast
or either Bank may be a party. We have not searched the dockets of any
court or any governmental agency to determine if any such proceedings are
pending or orders entered involving First Southeast or either Bank or the
Merger.
Based upon and subject to the foregoing and the qualifications set
forth in subsequent portions of this letter, it is our opinion that:
1. First Southeast is a corporation validly existing and in
active status under the laws of the State of Wisconsin, with full power and
authority, corporate or otherwise, except as may be limited by the terms of
formal agreements between First Southeast and the Federal Reserve Bank
("FRB") dated August 14, 1984, and November 6, 1991, copies of which have
been previously delivered to you, to own the stock of the Banks that it
currently holds and to engage in the activities of a bank holding company.
First Southeast is registered with the FRB as a bank holding company under
the Bank Holding Company Act of 1956, as amended. First Southeast has no
direct or indirect subsidiaries except the Banks, and First Southeast
Securities Corp. (FSC) ("FSC") and First Southeast Investment Corp. (FIC)
("FIC"), both Nevada corporations.
2. First Bank Southeast, N.A. and First Bank Southeast of Lake
Geneva, N.A. are each a national banking association validly existing under
the laws of the United States. Each Bank (i) is duly authorized to conduct
a commercial banking business in its offices subject to the supervision of
the United States Comptroller of the Currency; (ii) is an "insured
depository institution" as defined in Section 3(c)(2) of the Federal Deposit
Insurance Act, 12 U.S.C. Section 1813(c)(2); and (iii) to our knowledge has
full power and authority, corporate or otherwise (including all necessary
licenses, franchises, permits and other governmental authorizations) to
engage in the banking business.
3. The authorized capital stock of First Southeast consists of
200,000 shares of common stock, $1.00 par value, of which 106,486 shares of
First Southeast Common Stock are validly issued and outstanding. All of
such shares are fully paid and nonassessable, except as provided at Sec.
180.0622(2)(b) of the Wisconsin Statutes as interpreted by Wisconsin
Courts. To our knowledge, First Southeast does not have any arrangements or
commitments obligating it to issue or sell or otherwise dispose of, or to
purchase or redeem shares of its capital stock or any securities convertible
into or having the right to purchase shares of its capital stock. 102,807
of such shares are pledged to Bank One Wisconsin securing debt of David A.
Straz, Jr.
4. (a) The authorized capital stock of First Bank Southeast, N.A.
consists of 240,000 shares of common stock, $20.00 par value, all of which
are validly issued and outstanding, fully paid and nonassessable. First
Southeast is the registered holder of 239,700 of such shares of the
outstanding capital stock of such Bank. To our knowledge, neither First
Southeast nor the Bank has any arrangements or commitments other than the
Stock Purchase Agreements relating to directors' qualifying shares
obligating it to issue or sell or otherwise dispose of, or to purchase or
redeem shares of the Bank's capital stock or any securities convertible into
or having the right to purchase shares of the Bank's capital stock. First
Bank Southeast, N.A. has no subsidiaries, except FSC.
(b) The authorized capital stock of First Bank Southeast of
Lake Geneva, N.A. consists of 500,000 shares of common stock, $10.00 par
value, of which 83,000 are validly issued and outstanding, fully paid and
nonassessable. First Southeast is the registered holder of 80,878 shares of
the outstanding capital stock of such Bank. To our knowledge, neither First
Southeast nor the Bank has any arrangements or commitments other than the
(i) Stock Purchase Agreements relating to directors' qualifying shares and
(ii) the pledge pursuant to the Term Loan Agreement dated June 1, 1992,
between First Southeast and LaSalle National Bank obligating it to issue or
sell or otherwise dispose of, or to purchase or redeem shares of the Bank's
capital stock or any securities convertible into or having the right to
purchase shares of the Bank's capital stock. First Bank Southeast of Lake
Geneva, N.A. has no subsidiaries, except FIC.
5. The execution, delivery and performance of the Reorganization
Agreement, the Plan of Merger by First Southeast have been duly authorized
and approved by all requisite action of the Board of Directors and
shareholders of First Southeast and each has been duly executed and
delivered by First Southeast and in the case of the Indemnity Agreement, by
David A. Straz, Jr., and constitutes a valid and binding obligation of First
Southeast and in the case of the Indemnity Agreement, by David A. Straz,
Jr., enforceable in accordance with their terms.
6. Except as disclosed in the First Southeast Letter, as updated
through the date hereof, neither the execution and delivery of the
Reorganization Agreement, the Plan of Merger, and the Indemnity Agreement,
nor the consummation of the Merger, to our knowledge, will conflict with,
result in the breach of, constitute a default under, or accelerate the
performance provided by the terms of any mortgage, lease, contract,
commitment or agreement to which First Southeast or either Bank is a party
and of which we are aware, or any law, rule or regulation of any
governmental agency or authority or the Articles of Incorporation or
Association or Bylaws of First Southeast or either Bank, or, to our
knowledge, any judgment, order or decree of any court or other governmental
agency to which First Southeast or either Bank may be subject and of which
we are aware, or constitute an event that, with the lapse of time or action
by a third party, could result in a default under any of the foregoing or
result in the creation of any lien, charge or encumbrance upon any of the
assets, properties or stock of First Southeast or either Bank.
7. Except as set forth in the First Southeast Letter, as updated
through the date hereof, we have not been made aware of (i) any claims
having been asserted or relief having been sought against or affecting First
Southeast or either Bank in any pending litigation or governmental
proceedings; (ii) there being any proceedings, claims, actions or
governmental investigations threatened against First Southeast or either
Bank; (iii) First Southeast or either Bank being a party to any order,
judgment or decree, other than any order, judgment or decree to which either
Bank may be subject or a party in the ordinary course of its business; (iv)
First Southeast or either Bank being the subject of any cease and desist
order, or other formal enforcement action, or any memorandum of
understanding with any bank regulatory authority; and (v) First Southeast or
either Bank making any commitment to or entering into any agreement with any
bank regulatory authority that restricts or adversely affects its or their
operations or financial condition.
8. Without having conducted any investigation, we have not been
made aware that (i) First Southeast or either Bank is not in compliance in
all material respects with all laws, regulations and orders (including
zoning ordinances) applicable to it and to the conduct of its banking
activities; and (ii) First Southeast or either Bank is in default under, or
an event has occurred that with the lapse of time or action by a third party
could result in the default under the terms of any judgment, decree, order,
writ or rule or regulation of any governmental authority or court, whether
federal, state or local and whether at law or in equity.
9. To our knowledge and except as disclosed in the First
Southeast Letter, there is no suit, action or proceeding pending or overtly
threatened before any court or other governmental agency by the federal or
state government in which it is or will be sought to restrain or prohibit
the consummation of the Merger.
On the basis of information developed and made available to us by First
Southeast in the course of the preparation of the portions of the Proxy
Statement-Prospectus and the Registration Statement that relate to First
Southeast or the Banks and without having conducted any investigation,
nothing has come to our attention to lead us to believe that (i) the
portions of the Proxy Statement-Prospectus and Registration Statement
relating to First Southeast or the Banks (other than financial statements
and other financial data included therein, which we did not participate in
the preparation of and therefore express no view concerning) contained, on
the effective date of the Registration Statement (the "Registration
Effective Date") and at this date, any untrue statement of a material fact
or omitted any material fact required to be stated therein or necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading, and (ii) any event has occurred as a
result of which the Proxy Statement-Prospectus and Registration Statement
should be supplemented or amended at any time subsequent to the Registration
Effective Date in order to correct any statement regarding First Southeast
or the Banks made therein or to make any additional statements regarding
First Southeast or the Banks. We express no view concerning the manner in
which such information given to you and your counsel by First Southeast, the
Banks, and us was presented or described in the Proxy Statement-Prospectus
and Registration Statement. Moreover, the limitations inherent in the
process of independently verifying factual matters are such that we assume
no responsibility for the accuracy, completeness or fairness of the factual
statements contained in the Registration Statement or the Proxy
Statement-Prospectus.
The opinions expressed in this letter are also subject to the following
additional qualifications:
(a) We have assumed without independent investigation (i) the
authenticity of all documents submitted to us as originals, (ii) the
genuineness of all signatures and proper delivery of all documents, and
(iii) the conformity to the originals of all documents submitted to us
as copies.
(b) Our opinions expressed herein that the Reorganization
Agreement, the Plan of Merger and the Indemnity Agreement constitute
the valid and binding obligations of First Southeast and, in the case
of the Indemnity Agreement, David A. Straz, Jr., are legally
enforceable against them in accordance with their terms, are expressly
subject to:
i) limitations on the availability of specific enforcement
and other equitable remedies based upon the application of
equitable principles; and
ii) bankruptcy, involvency, reorganization, arrangement,
moratorium, fraudulent conveyance and other similar state and
federal laws affecting the enforcement of creditors' rights
generally.
(c) We have assumed that you have obtained any and all required
federal and state banking approvals for the transactions described
herein and that any necessary waiting periods have elapsed.
(d) Our review of the corporate records of First Southeast and the
Banks has been limited to the Articles of Incorporation in the case of
First Southeast, the Articles of Association, in the case of the Banks,
the Bylaws, stock register books, and minutes of the Boards of
Directors and shareholders of such organizations for the last ten years.
(e) We have assumed that you have performed (and will perform) all
of your obligations under, and are in full compliance with, the
Reorganization Agreement, the Plan of Merger, and the Indemnity
Agreement.
The opinions contained in this letter are limited to the laws of the
United States and of the State of Wisconsin. We express no opinion as to
the applicability or effect of the laws of any other state or country.
This letter is being delivered to you solely for your benefit pursuant
to Section 7.9 of the Reorganization Agreement and may not be relied upon by
any other person or for any other purpose. This letter is not to be used,
circulated, quoted or otherwise referred to any any other person or for any
other purpose without our prior express written permission.
Very truly yours,
QUARLES & BRADY
<PAGE>
[HHH Letterhead] EXHIBIT 8.5
[Closing Date]
First Southeast Banking Corp.
Attn: David A. Straz, Jr., President
P.O. Box 490
Lake Geneva, WI 53147
Gentlemen:
As Senior Vice President and General Counsel of Firstar Corporation
("Firstar"), I am familiar with the Agreement and Plan of Reorganization
(the "Reorganization Agreement") dated as of February 10, 1994, by and among
Firstar, First Southeast Banking Corp., a Wisconsin corporation ("First
Southeast"), and Firstar Corporation of Wisconsin, a Wisconsin corporation
("FCW"), and the Plan of Merger dated of even date therewith by and between
First Southeast and FCW and joined in by Firstar for certain limited
purposes (the "Plan of Merger"). Section 8.5 of the Reorganization
Agreement requires as a condition to your obligation to consummate the
transactions contemplated by the Reorganization Agreement and the Plan of
Merger that you receive an opinion as of this date as to certain matters.
Any capitalized term used, but not defined herein, shall have the meaning
ascribed to it in the Reorganization Agreement or the Plan of Merger.
As counsel for Firstar, I have examined or caused to be examined such
corporate records, certificates and other documents and have examined such
matters of law as I considered necessary or appropriate for purposes of this
opinion.
Based upon the foregoing, it is my opinion that:
1. Firstar and FCW are corporations duly organized, validly existing
and in active status under the laws of Wisconsin with full power and
authority to engage in the activities and business now conducted by them.
Firstar and FCW are registered with the Federal Reserve Board as bank
holding companies under the Bank Holding Company Act of 1956, as amended.
2. The authorized capital stock of Firstar consists of (i)
120,000,000 shares of Common Stock, $1.25 par value, _______ shares of which
were validly issued and outstanding as of _______________, 1994, and (ii)
2,500,000 shares of Preferred Stock, $1.00 par value, of which 600,000
shares of Series C were reserved for issuance in connection with Firstar's
Shareholder Rights Plan approved January 19, 1989, as of __________, 1994.
All of the issued and outstanding shares of capital stock of both Firstar
and FCW are fully paid and non-assessable, except as provided in
180.0622(2)(b) of the Wisconsin Business Corporation Law and judicial
interpretations thereof, and not issued in violation of the preemptive
rights of any shareholder.
3. The execution, delivery and performance of the Reorganization
Agreement, the Plan of Merger, and the Indemnity Agreement have been duly
authorized and approved by all requisite action of the boards of directors
and shareholders of Firstar and FCW, and the Reorganization Agreement, the
Plan of Merger, and the Indemnity Agreement have been duly executed and
delivered by Firstar and FCW and each constitutes a valid and binding
obligation of Firstar and FCW, enforceable in accordance with their terms,
subject to (a) all applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and
(b) the application of equitable principles if equitable remedies are sought.
4. The Registration Statement referred to in Section 1.3 of the
Reorganization Agreement is effective under the Securities Act of 1933, as
amended, and no stop order suspending the effectiveness of the Registration
Statement has been instituted.
5. The Proxy Statement/Prospectus referred to in Section 1.3 of the
Reorganization Agreement, as of the date it was disseminated to holders of
common stock of First Southeast, and the Registration Statement, as of the
date on which the Registration Statement became effective (the Registration
Effective Date"), and any amendment thereto that subsequently become
effective, complied in all material respects with the requirements of the
Securities Act of 1933, as amended; provided, however, that in this
connection (a) I have relied upon First Southeast and the Bank and their
counsel as to the accuracy of the descriptions included in the Proxy
Statement/Prospectus and the Registration Statement relating to First
Southeast and the Bank and their business operations; and (b) I did not
participate in the preparation of financial statements and financial data
for First Southeast and the Bank included in the Proxy Statement/Prospectus
and the Registration Statement, and I therefore express no opinion as to
such matters.
6. On the basis of information developed and made available to me in
the course of the preparation of the Proxy Statement/Prospectus and the
Registration Statement, but without independently verifying the accuracy,
completeness or fairness of the statements contained therein, nothing has
come to my attention that leads me to believe that (a) the portions of the
Proxy Statement/Prospectus and Registration Statement relating to Firstar
and FCW and their affiliates (other than financial statements and other
financial data included therein
as to which I express no opinion) contained, on the Registration Effective
Date and at this date, any untrue statement of a material fact or omitted
any material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading, and (b) any event has occurred as a result of
which the Proxy Statement/Prospectus and Registration Statement should be
supplemented or amended to correct any statement regarding Firstar and FCW
or their affiliates made therein or to supplement or amend the statements to
include additional statements.
7. Neither the execution and delivery of the Reorganization Agreement
and the Plan of Merger nor the consummation of the Merger will conflict
with, result in the breach of, constitute a default under or accelerate the
performance provided by the terms of any law, or any rule or regulation of
any governmental agency or authority, or any judgment, order or decree of
any court or other governmental agency to which Firstar may be subject, or
any contract, agreement or instrument to which Firstar is a party or by
which Firstar is bound or committed, or the Articles of Incorporation or
Bylaws of Firstar, or constitute an event that, with the lapse of time or
action by a third party, could result in a default under any of the
foregoing or result in the creation of any lien, charge or encumbrance upon
any of the assets, properties or stock of Firstar.
8. The shares of common stock of Firstar to be issued pursuant to the
Reorganization Agreement and the Plan of Merger will be validly issued,
fully paid and non-assessable, except insofar as liability may be imposed
under 180.0622(2)(b) of the Wisconsin Business Corporation Law and
judicial interpretations thereof, and listed on the New York Stock Exchange.
9. The Merger, when consummated in accordance with the Reorganization
Agreement and the Plan of Merger, will be valid and effective in accordance
with law.
10. To my knowledge after due investigation, there is no suit, action
or proceeding pending or overtly threatened before any court or other
governmental agency by the federal or state government in which it is or
will be sought to restrain or prohibit the consummation of the Merger.
Very truly yours,
Howard H. Hopwood III
Senior Vice President
and General Counsel
EXHIBIT 2(b)
PLAN OF MERGER
This Plan of Merger dated as of February 10, 1994, is entered into
by and between Firstar Corporation of Wisconsin, a Wisconsin corporation
("FCW"), and First Southeast Banking Corp., a Wisconsin corporation ("First
Southeast"), and joined in by Firstar Corporation, a Wisconsin corporation
("Firstar"), for certain limited purposes.
First Southeast is a corporation duly organized and existing under
the laws of Wisconsin with authorized common stock of 200,000 shares, $1.00
par value, of which 106,486 shares are validly issued and outstanding.
FCW is a corporation duly organized and existing under the laws of
Wisconsin with authorized capital stock of 56,000 shares of Common Stock,
$1.00 par value ("FCW Common Stock"), of which 10 shares are validly issued
and outstanding, and are owned by Firstar.
Firstar is a corporation duly organized and existing under the
laws of Wisconsin with 120,000,000 shares of authorized Common Stock, $1.25
par value ("Firstar Common Stock"), of which 64,381,919 shares were validly
issued and outstanding as of January 31, 1994.
Contemporaneous with the execution and delivery of this Plan of
Merger, Firstar, FCW and First Southeast, have entered into an Agreement and
Plan of Reorganization (the "Reorganization Agreement" and, together with
this Plan of Merger, the "Agreements") that contemplates the merger of First
Southeast with and into FCW (the "Merger"), on the "Closing Date", as
hereinafter defined, upon the terms and conditions provided in this Plan of
Merger.
The Boards of Directors of First Southeast and FCW deem it fair
and equitable to, and in the best interests of, their respective
shareholders, that First Southeast be merged with and into FCW with FCW
being the Surviving Corporation (as hereinafter defined), on the terms and
conditions herein set forth and pursuant to the Wisconsin Business
Corporation Law. 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 shareholders
for approval.
The Board of Directors of Firstar has authorized the execution and
delivery of this Plan of Merger and the issuance of the Firstar Common Stock
and payment of the cash provided herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, provisions and covenants 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.
1. Merger. First Southeast will be merged with and into FCW,
which will be the surviving corporation (hereinafter called the "Surviving
Corporation" whenever reference is made to it as of the Closing Date or
thereafter). Such Merger will be pursuant to the provisions of and with the
effect provided in the Wisconsin Business Corporation Law. The date when
the Merger will be consummated is hereinafter referred to as the "Closing
Date" as defined in Section 15 below.
2. Name. The name of the Surviving Corporation will be the name
of FCW in effect at the Closing Date.
3. Board of Directors; Officers. The Board of Directors of the
Surviving Corporation at the Closing Date will consist of all the persons
who are directors of FCW immediately prior to the Closing Date. Such
directors will serve as directors of the Surviving Corporation until the
next annual meeting of the Surviving Corporation or until such time as their
successors have been elected and have qualified. The officers of FCW
immediately prior to the Closing Date will be the officers of the Surviving
Corporation until their successors are elected or appointed in accordance
with the Bylaws of the Surviving Corporation.
4. Articles of Incorporation. The Articles of Incorporation of
FCW as in effect immediately prior to the Closing Date will, from and after
the Closing Date, be and continue to be the Articles of Incorporation of the
Surviving Corporation until further amended as provided by law.
5. Bylaws. The Bylaws of FCW as in effect immediately prior to
the Closing Date will, from and after the Closing Date, be and continue to
be the Bylaws of the Surviving Corporation until the same are altered,
amended or rescinded as therein provided or as provided in the Articles of
Incorporation of the Surviving Corporation.
6. Effect of the Merger. At the Closing Date, First Southeast
will merge into FCW which will be the Surviving Corporation, and the
separate existence of First Southeast shall cease as provided in 180.1106
of the Wisconsin Business Corporation Law. The title to all property owned
by each corporation shall be vested in the Surviving Corporation without
reversion or impairment and all liabilities of each corporation shall become
those of the Surviving Corporation. Any civil, criminal, administrative or
investigatory proceeding pending against either corporation may be continued
as if the merger did not occur or the Surviving Corporation may be
substituted in the proceeding.
7. Conversion of Common Stock of FCW. At the Closing Date, the
shares of FCW Common Stock validly issued and outstanding immediately prior
to the Closing Date will, by virtue of the Merger and without any action by
the holder thereof, be converted into 10 shares of Common Stock, $1.00 par
value, of the Surviving Corporation so that all shares of Common Stock of
the Surviving Corporation will be owned by Firstar. The outstanding
certificates representing shares of Common Stock of FCW will, after the
Closing Date, be deemed to represent the number of shares of the Surviving
Corporation into which they have been converted and may be exchanged for new
certificates of the Surviving Corporation upon the request of the holder
thereof.
8. Conversion of Common Stock of First Southeast. On the
Closing Date, each share of First Southeast Common Stock validly issued and
outstanding immediately prior to the Closing Date (and not held by a
shareholder who objected under 180.1301 et seq. of the Wisconsin Business
Corporation Law with respect to such share) will, by virtue of the Merger
and without any action by the holder thereof, be converted into the right to
receive at the times described below, the number of shares of Firstar Common
Stock that is equal to the quotient produced by dividing the Dollar Purchase
Price Per Share (as hereinafter defined) by $33.00. For the purposes of
this Section 8, the "Dollar Purchase Price Per Share" means (a) $59,452,055,
divided by (b) 106,486.
On and after the Closing Date, the holder of each such share of
First Southeast Common Stock will be treated as the record holder of such
number of shares of Firstar Common Stock, subject, however, to the
provisions of this Section 8 as to fractional interests in one share of
Firstar Common Stock and to the provisions of Section 9 as to delivery of
certificates for, and dividends payable upon, such shares of Firstar Common
Stock. Notwithstanding the foregoing, no stockholder of First Southeast
will become the holder of any fractional share of Firstar Common Stock, and
neither certificates nor scrip for fractional shares of Firstar Common Stock
will be issued for any fractional interests otherwise payable upon the
Merger. In lieu thereof, each holder of shares of First Southeast Common
Stock who otherwise would have been entitled to a fractional share of
Firstar Common Stock will be paid the value of such fraction in cash. In
the case of any holder of First Southeast Common Stock who did not vote for
the Merger and who gives notice of objection with respect to any or all of
his shares of First Southeast Common Stock as provided in 180.1301 et seq.
of the Wisconsin Business Corporation Law, each such share of First
Southeast Common Stock will be converted into the right to receive the fair
value of the share as provided in such statute. At the Closing Date, the
holders of First Southeast Common Stock will cease to have any rights with
respect to such stock other than the rights to receive Firstar Common Stock
as provided herein, cash in lieu of fractional shares or the fair value of
the stock as provided herein or as provided by law.
9. Surrender of First Southeast Common Stock Certificates Upon
Merger. As soon as reasonably practicable after satisfaction of the
conditions in Article IX of the Reorganization Agreement, Firstar or its
exchange agent will mail or deliver to each First Southeast shareholder a
letter of transmittal with instructions for effecting the surrender of his
or her shares of First Southeast Common Stock in exchange for shares of
Firstar Common Stock. Upon receipt of letters of transmittal from Firstar
or its exchange agent, each holder of a certificate or certificates that
represents shares of First Southeast Common Stock (other than holders
exercising their rights to dissent in accordance with 180.1301 et seq. of
the Wisconsin Business Corporation Law) will surrender the same to Firstar
conditional upon the Closing together with instructions for the issuance of
shares of Firstar Common Stock and any payment by Firstar, in lieu of a
fractional interest, to which the holder will be entitled at Closing
pursuant to this Plan of Merger. At the Closing, provided that Firstar has
previously received such certificates and such instructions in form
satisfactory to Firstar, Firstar will deliver, in accordance with such
instructions and this Plan of Merger, a check for any cash payment in lieu
of fractional shares to which the holder is entitled and a certificate or
certificates for any shares of Firstar Common Stock to which the holder is
entitled. Until receipt of such certificates and instructions from a holder
of First Southeast Common Stock, Firstar will withhold (i) delivery of any
such cash payment and (ii) delivery of any cash dividends distributed upon
shares of Firstar Common Stock into which such holder's shares were
converted. No interest will be paid or accrued on any cash payable upon the
surrender of such certificates and Firstar will assume no responsibility for
any delay not within Firstar's control in connection with the payment of any
part of such funds. After the Closing Date and until surrendered for
exchange, each outstanding certificate which, prior to the Closing Date
represented shares of First Southeast Common Stock, shall be deemed for all
purposes to evidence ownership of and to represent the number of whole
shares of Firstar Common Stock into which such shares of First Southeast
Common Stock shall have been converted, and the record holder of such shares
shall, after the Closing Date, be entitled to vote the shares of Firstar
Common Stock in to which such shares of First Southeast Common Stock shall
have been converted on any matters in which the holders of record of Firstar
Common Stock, as of any date subsequent to the Closing Date, shall be
entitled to vote.
10. Shareholder Approval. This Plan of Merger will be submitted
to the respective shareholders of First Southeast and FCW for ratification
and confirmation by consent or at meetings to be called and held in
accordance with the applicable provisions of law and the respective Articles
of Incorporation and Bylaws of First Southeast and FCW. First Southeast and
FCW will proceed expeditiously and cooperate fully in the procurement of any
other consents and approvals and in the taking of any other action, and the
satisfaction of all other requirements prescribed by law or otherwise,
necessary for consummation of the Merger, and the other transactions
contemplated hereby and by the Reorganization Agreement on the terms herein
and therein provided.
11. Consummation of the Merger. Consummation of the Merger is
conditional upon the fulfillment or waiver of the conditions precedent set
forth in Articles VI, VII and VIII of the Reorganization Agreement.
12. Termination. This Plan of Merger may be terminated and the
Merger abandoned by mutual consent of the respective Boards of Directors of
First Southeast and FCW at any time prior to the Closing Date. If the
Reorganization Agreement is terminated in accordance with Article IX
thereof, then this Plan of Merger will terminate simultaneously and the
Merger will be abandoned without further action by First Southeast or FCW.
13. Waivers; Amendments. Either First Southeast or FCW may, at
any time prior to the Closing Date, by action taken by its Board of
Directors or officers thereunto authorized, waive the performance of any of
the obligations of the other or waive compliance by the other with any of
the covenants or conditions contained in this Plan of Merger or agree to the
amendment or modification of this Plan of Merger by an agreement in writing
executed in the same manner as this Plan of Merger; provided, however, that
after a favorable vote by or consent of the shareholders of First Southeast
any such action will be taken by First Southeast only if, in the opinion of
its Board of Directors, such waiver, amendment or modification will not have
any material adverse effect on the benefits intended under this Plan of
Merger for the shareholders of First Southeast.
14. Closing Date. The Merger will become effective on the day
(the "Closing Date") on which and at the time at which the Articles of
Merger are filed by First Southeast and FCW with the Wisconsin Secretary of
State, as provided in 180.1105 of the Wisconsin Business Corporation Law.
15. Captions; Counterparts. The captions in this Plan of Merger
are for convenience only and will not be considered a part of or affect the
construction or interpretation of any provision of this Plan of Merger.
This Plan of Merger may be executed in several counterparts, each of which
will constitute one and the same instrument.
16. Governing Law. This Plan of Merger is to be construed and
interpreted in accordance with the laws of the State of Wisconsin.
17. Notices. All notices given hereunder shall be in writing
(including a telecopy) and shall be mailed by first-class mail, postage
prepaid, or sent by facsimile transmission or by nationally recognized
overnight delivery service, addressed as follows:
(a) If to Firstar or FCW, to:
Firstar Corporation
Attention: Jon H. Stowe,
Executive Vice President
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telecopy No. (414) 765-4349
with a copy to:
Firstar Corporation
Law Department
Attn: Howard H. Hopwood, III
Senior Vice President and
General Counsel
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telecopy No. (414) 765-6111
(b) If to First Southeast, to:
First Southeast Banking Corp.
Attn: David A. Straz, Jr.,
President
P.O. Box 490
Lake Geneva, WI 53147
Telecopy No. (414) 248-7024
with a copy to:
Quarles & Brady
Attn: Robert J. Kalupa, Esq.
411 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 271-3552
IN WITNESS WHEREOF, the parties hereto have caused this Plan of
Merger to be duly executed as of the date first above written.
FIRSTAR CORPORATION
[SEAL] By: Jon H. Stowe
Title:Executive Vice President
Attest: John A. Kielich
Title: First Vice President
FIRSTAR CORPORATION OF WISCONSIN
[NO SEAL] By: John A. Kielich
Title: Vice President
Attest: Joan M. Fagan
Title: Assistant Secretary
FIRST SOUTHEAST BANKING CORP.
[SEAL] By: David A. Straz, Jr.
Title: President
Attest: David A. Straz
Title: Secretary
EXHIBIT 2(c)
VOTING AND STOCK PURCHASE AGREEMENT
THIS VOTING AND STOCK PURCHASE AGREEMENT dated as of February 10,
1994 (this "Agreement"), is entered into by and between Firstar Corporation
("Firstar"), a Wisconsin corporation, and David A. Straz, Jr.
("Shareholder"), and joined in by First Southeast Banking Corp. ("First
Southeast"), a Wisconsin corporation, for certain limited purposes.
W I T N E S S E T H :
WHEREAS, as of the date hereof, Shareholder is the owner of
102,807 shares of the common stock of First Southeast, $1.00 par value
("First Southeast Common Stock"), which represents approximately 96.55% of
the issued and outstanding shares of the capital stock of First Southeast;
WHEREAS, Firstar is contemplating the acquisition of First
Southeast by means of a merger (the "Merger") of First Southeast with and
into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a
wholly-owned subsidiary of Firstar, pursuant to an Agreement and Plan of
Reorganization and Plan of Merger, each dated of even date herewith (the
"Merger Agreements");
WHEREAS, Firstar is unwilling to expend the substantial time,
effort and expense necessary to implement the proposed acquisition of First
Southeast, including applying for and obtaining necessary approvals of
federal banking authorities, unless Shareholder enters into this Agreement
with Firstar; and
WHEREAS, Shareholder believes it is in his best interest as well
as the best interest of First Southeast for Firstar to consummate the Merger;
NOW, THEREFORE, in consideration of the covenants and agreements
of the parties herein contained and as an inducement to Firstar to incur the
expenses associated with the Merger, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Representations and Warranties. Shareholder represents and
warrants that as of the date hereof Shareholder owns beneficially and of
record 102,807 shares of First Southeast Common Stock (the "Subject
Shares"), all of which shares are free and clear of all liens, pledges,
security interests, claims, encumbrances, options and agreements to sell,
except as disclosed in the First Southeast Letter, as defined in the Merger
Agreements. Shareholder represents and warrants that Shareholder has the
sole voting power with respect to the Subject Shares.
2. Voting Agreement. Shareholder shall vote all the Subject
Shares in favor of the Merger at any meeting of shareholders of First
Southeast called for the purpose of approving the Merger and shall, if his
consent is solicited by First Southeast, consent to the Merger. Shareholder
shall not vote in favor of or consent to any acquisition of stock or all or
substantially all of the assets of First Southeast by any party other than
Firstar or its affiliates prior to the termination of this Agreement. None
of the Subject Shares shall be transferred while this Agreement is in
effect, except to a Nevada partnership organized pursuant to documents
substantially to the effect of the partnership agreement previously reviewed
by KPMG Peat Marwick (the "Nevada Partnership") and provided that the Nevada
Partnership has, prior to such transfer, executed a Voting and Stock
Purchase Agreement satisfactory in form and content to Firstar. At
Firstar's request and provided that Firstar is then in compliance with the
Merger Agreements, Shareholder shall use his best efforts to cause any
necessary meeting of shareholders of First Southeast to be duly called and
held or any necessary consents of shareholders to be obtained for the
purpose of approving the Merger.
3. Purchase Right. Shareholder hereby grants to Firstar the
exclusive right (the "Purchase Right") to purchase any or all of the Subject
Shares for a price of $558.31 per share, payable in cash. The exercise of
the Purchase Right by Firstar with respect to any amount of shares that
exceeds five percent (5%) of the outstanding voting stock of First Southeast
is subject to the approval of the Board of Governors of the Federal Reserve
System and any other necessary regulatory approvals. The Purchase Right is
exercisable at any time prior to the earlier of the Closing, as defined in
the Merger Agreements, or the termination of the Merger Agreements, and
after (a) a material breach by First Southeast of the Merger Agreements,
(b) a breach by the Shareholder of this Agreement; (c) the acquisition or
overtly threatened acquisition by any person not related to the current
shareholders of First Southeast of more than five percent (5%) of the stock
of First Southeast or its subsidiaries, First Bank Southeast, N.A. and First
Bank Southeast of Lake Geneva, N.A. (the "Banks"), or of a material portion
of the assets of First Southeast or the Banks; or (d) any similar events or
circumstances that lead Firstar reasonably to believe that First Southeast
is likely to materially breach the Merger Agreements.
4. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Firstar any direct or indirect ownership or
incidence of ownership of or with respect to any shares of First Southeast
Common Stock. All rights, ownership and economic benefits of and relating
to the shares of First Southeast Common Stock shall remain and belong to
Shareholder and Firstar shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of First Southeast or exercise any power or authority to direct
Shareholder in the voting of any of the shares of First Southeast Common
Stock, or the performance of his duties or responsibilities as a shareholder
of First Southeast, except as otherwise expressly provided herein.
5. Evaluation of Investment. Shareholder, by reason of his
knowledge and experience in financial and business matters [and through
serving as an officer of a financial institution], believes himself capable
of evaluating the merits and risks of the investment in common stock of
Firstar, $1.25 par value ("Firstar Common Stock"), contemplated by the
Merger Agreements.
6. Documents Delivered. Shareholder acknowledges receipt of
copies of the following documents:
a. Merger Agreements and all exhibits thereto;
b. Firstar's 1992 Annual Report (including Annual Report on Form
10-K for the year ended December 31, 1992);
c. Notice of 1993 Annual Meeting of Shareholders and Proxy
Statement dated April 22, 1993 of Firstar;
d. Firstar's Reports on Form 10-Q for the periods ended
March 31, June 30, and September 30, 1993.
7. Investment Purpose. Shareholder hereby represents, warrants
and agrees that he is acquiring the shares of Firstar Common Stock pursuant
to the Reorganization Agreement solely for his own account, for investment,
and not with a view to the distribution or resale thereof.
8. Amendment and Modification. This Agreement may be amended,
modified or supplemented at any time by the written approval of such
amendment, modification or supplement by First Southeast, Shareholder and
Firstar.
9. Entire Agreement. This Agreement evidences the entire
agreement among the parties hereto with respect to the matters provided for
herein and there are no agreements, representations or warranties with
respect to the matters provided for herein other than those set forth herein
and in the Merger Agreements and their related written agreements. This
Agreement supersedes any agreements among First Southeast and its
shareholders, concerning the acquisition, disposition or control of the
stock of First Southeast.
10. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or
inoperative, this Agreement shall be construed with the invalid or
inoperative provisions deleted and the rights and obligations of the parties
shall be construed and enforced accordingly.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
12. Governing Law. The validity, construction, enforcement and
effect of this Agreement shall be governed by the internal laws of the State
of Wisconsin.
13. Headings. The headings for the paragraphs of this Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect the meaning or interpretation of this Agreement.
14. Successors. This Agreement shall be binding upon and inure
to the benefit of First Southeast and Firstar, and their successors, and
Shareholder and Shareholder's spouse and their respective executors,
personal representatives, administrators, heirs, legatees, guardians and
other legal representatives. This Agreement shall survive the death or
incapacity of Shareholder. This Agreement may be assigned by Firstar only
to an affiliate of Firstar.
15. Termination. This Agreement shall terminate at the earlier
of: (i) October 31, 1994; (ii) the termination of the Merger Agreements; or
(iii) consummation of the transactions contemplated by the Merger Agreements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
FIRST SOUTHEAST BANKING CORP.
[SEAL] By: David A. Straz, Jr.
Title: President
FIRSTAR CORPORATION
[SEAL] By: Jon H. Stowe
Title: Executive Vice President
SHAREHOLDER
David A. Straz, Jr.
[Name]
<PAGE>
EXHIBIT 2(d)
VOTING AND STOCK PURCHASE AGREEMENT
THIS VOTING AND STOCK PURCHASE AGREEMENT dated as of February 10,
1994 (this "Agreement"), is entered into by and between Firstar Corporation
("Firstar"), a Wisconsin corporation, and David A. Straz ("Shareholder"),
and joined in by First Southeast Banking Corp. ("First Southeast"), a
Wisconsin corporation, for certain limited purposes.
W I T N E S S E T H :
WHEREAS, as of the date hereof, Shareholder is the owner of 3079
shares of the common stock of First Southeast, $1.00 par value ("First
Southeast Common Stock"), which represents approximately 2.89% of the issued
and outstanding shares of the capital stock of First Southeast;
WHEREAS, Firstar is contemplating the acquisition of First
Southeast by means of a merger (the "Merger") of First Southeast with and
into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a
wholly-owned subsidiary of Firstar, pursuant to an Agreement and Plan of
Reorganization and Plan of Merger, each dated of even date herewith (the
"Merger Agreements");
WHEREAS, Firstar is unwilling to expend the substantial time,
effort and expense necessary to implement the proposed acquisition of First
Southeast, including applying for and obtaining necessary approvals of
federal banking authorities, unless Shareholder enters into this Agreement
with Firstar; and
WHEREAS, Shareholder believes it is in his best interest as well
as the best interest of First Southeast for Firstar to consummate the Merger;
NOW, THEREFORE, in consideration of the covenants and agreements
of the parties herein contained and as an inducement to Firstar to incur the
expenses associated with the Merger, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Representations and Warranties. Shareholder represents and
warrants that as of the date hereof Shareholder owns beneficially and of
record 3079 shares of First Southeast Common Stock (the "Subject Shares"),
all of which shares are free and clear of all liens, pledges, security
interests, claims, encumbrances, options and agreements to sell, except as
disclosed in the First Southeast Letter, as defined in the Merger
Agreements. Shareholder represents and warrants that Shareholder has the
sole voting power with respect to the Subject Shares.
2. Voting Agreement. Shareholder shall vote all the Subject
Shares in favor of the Merger at any meeting of shareholders of First
Southeast called for the purpose of approving the Merger and shall, if his
consent is solicited by First Southeast, consent to the Merger. Shareholder
shall not vote in favor of or consent to any acquisition of stock or all or
substantially all of the assets of First Southeast by any party other than
Firstar or its affiliates prior to the termination of this Agreement. None
of the Subject Shares shall be transferred while this Agreement is in
effect, except to a Nevada partnership organized pursuant to documents
substantially to the effect of the partnership agreement previously reviewed
by KPMG Peat Marwick (the "Nevada Partnership") and provided that the Nevada
Partnership has, prior to such transfer, executed a Voting and Stock
Purchase Agreement satisfactory in form and content to Firstar. At
Firstar's request and provided that Firstar is then in compliance with the
Merger Agreements, Shareholder shall use his best efforts to cause any
necessary meeting of shareholders of First Southeast to be duly called and
held or any necessary consents of shareholders to be obtained for the
purpose of approving the Merger.
3. Purchase Right. Shareholder hereby grants to Firstar the
exclusive right (the "Purchase Right") to purchase any or all of the Subject
Shares for a price of $558.31 per share, payable in cash. The exercise of
the Purchase Right by Firstar with respect to any amount of shares that
exceeds five percent (5%) of the outstanding voting stock of First Southeast
is subject to the approval of the Board of Governors of the Federal Reserve
System and any other necessary regulatory approvals. The Purchase Right is
exercisable at any time prior to the earlier of the Closing, as defined in
the Merger Agreements, or the termination of the Merger Agreements, and
after (a) a material breach by First Southeast of the Merger Agreements,
(b) a breach by the Shareholder of this Agreement; (c) the acquisition or
overtly threatened acquisition by any person not related to the current
shareholders of First Southeast of more than five percent (5%) of the stock
of First Southeast or its subsidiaries, First Bank Southeast, N.A. and First
Bank Southeast of Lake Geneva, N.A. (the "Banks"), or of a material portion
of the assets of First Southeast or the Banks; or (d) any similar events or
circumstances that lead Firstar reasonably to believe that First Southeast
is likely to materially breach the Merger Agreements.
4. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Firstar any direct or indirect ownership or
incidence of ownership of or with respect to any shares of First Southeast
Common Stock. All rights, ownership and economic benefits of and relating
to the shares of First Southeast Common Stock shall remain and belong to
Shareholder and Firstar shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of First Southeast or exercise any power or authority to direct
Shareholder in the voting of any of the shares of First Southeast Common
Stock, or the performance of his duties or responsibilities as a shareholder
of First Southeast, except as otherwise expressly provided herein.
5. Evaluation of Investment. Shareholder, by reason of his
knowledge and experience in financial and business matters [and through
serving as an officer of a financial institution], believes himself capable
of evaluating the merits and risks of the investment in common stock of
Firstar, $1.25 par value ("Firstar Common Stock"), contemplated by the
Merger Agreements.
6. Documents Delivered. Shareholder acknowledges receipt of
copies of the following documents:
a. Merger Agreements and all exhibits thereto;
b. Firstar's 1992 Annual Report (including Annual Report on Form
10-K for the year ended December 31, 1992);
c. Notice of 1993 Annual Meeting of Shareholders and Proxy
Statement dated April 22, 1993 of Firstar;
d. Firstar's Reports on Form 10-Q for the periods ended
March 31, June 30, and September 30, 1993.
7. Investment Purpose. Shareholder hereby represents, warrants
and agrees that he is acquiring the shares of Firstar Common Stock pursuant
to the Reorganization Agreement solely for his own account, for investment,
and not with a view to the distribution or resale thereof.
8. Amendment and Modification. This Agreement may be amended,
modified or supplemented at any time by the written approval of such
amendment, modification or supplement by First Southeast, Shareholder and
Firstar.
9. Entire Agreement. This Agreement evidences the entire
agreement among the parties hereto with respect to the matters provided for
herein and there are no agreements, representations or warranties with
respect to the matters provided for herein other than those set forth herein
and in the Merger Agreements and their related written agreements. This
Agreement supersedes any agreements among First Southeast and its
shareholders, concerning the acquisition, disposition or control of the
stock of First Southeast.
10. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or
inoperative, this Agreement shall be construed with the invalid or
inoperative provisions deleted and the rights and obligations of the parties
shall be construed and enforced accordingly.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
12. Governing Law. The validity, construction, enforcement and
effect of this Agreement shall be governed by the internal laws of the State
of Wisconsin.
13. Headings. The headings for the paragraphs of this Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect the meaning or interpretation of this Agreement.
14. Successors. This Agreement shall be binding upon and inure
to the benefit of First Southeast and Firstar, and their successors, and
Shareholder and Shareholder's spouse and their respective executors,
personal representatives, administrators, heirs, legatees, guardians and
other legal representatives. This Agreement shall survive the death or
incapacity of Shareholder. This Agreement may be assigned by Firstar only
to an affiliate of Firstar.
15. Termination. This Agreement shall terminate at the earlier
of: (i) October 31, 1994; (ii) the termination of the Merger Agreements; or
(iii) consummation of the transactions contemplated by the Merger Agreements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
FIRST SOUTHEAST BANKING CORP.
[SEAL] By: David A. Straz, Jr.
Title: President
FIRSTAR CORPORATION
[SEAL] By: Jon H. Stowe
Title: Executive Vice President
SHAREHOLDER
David A. Straz
[Name] David A. Straz
EXHIBIT 2(e)
VOTING AND STOCK PURCHASE AGREEMENT
THIS VOTING AND STOCK PURCHASE AGREEMENT dated as of February 10,
1994 (this "Agreement"), is entered into by and between Firstar Corporation
("Firstar"), a Wisconsin corporation, and Lila G. Straz ("Shareholder"), and
joined in by First Southeast Banking Corp. ("First Southeast"), a Wisconsin
corporation, for certain limited purposes.
W I T N E S S E T H :
WHEREAS, as of the date hereof, Shareholder is the owner of 600
shares of the common stock of First Southeast, $1.00 par value ("First
Southeast Common Stock"), which represents approximately .56% of the issued
and outstanding shares of the capital stock of First Southeast;
WHEREAS, Firstar is contemplating the acquisition of First
Southeast by means of a merger (the "Merger") of First Southeast with and
into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a
wholly-owned subsidiary of Firstar, pursuant to an Agreement and Plan of
Reorganization and Plan of Merger, each dated of even date herewith (the
"Merger Agreements");
WHEREAS, Firstar is unwilling to expend the substantial time,
effort and expense necessary to implement the proposed acquisition of First
Southeast, including applying for and obtaining necessary approvals of
federal banking authorities, unless Shareholder enters into this Agreement
with Firstar; and
WHEREAS, Shareholder believes it is in his best interest as well
as the best interest of First Southeast for Firstar to consummate the Merger;
NOW, THEREFORE, in consideration of the covenants and agreements
of the parties herein contained and as an inducement to Firstar to incur the
expenses associated with the Merger, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Representations and Warranties. Shareholder represents and
warrants that as of the date hereof Shareholder owns beneficially and of
record 600 shares of First Southeast Common Stock (the "Subject Shares"),
all of which shares are free and clear of all liens, pledges, security
interests, claims, encumbrances, options and agreements to sell, except as
disclosed in the First Southeast Letter, as defined in the Merger
Agreements. Shareholder represents and warrants that Shareholder has the
sole voting power with respect to the Subject Shares.
2. Voting Agreement. Shareholder shall vote all the Subject
Shares in favor of the Merger at any meeting of shareholders of First
Southeast called for the purpose of approving the Merger and shall, if his
consent is solicited by First Southeast, consent to the Merger. Shareholder
shall not vote in favor of or consent to any acquisition of stock or all or
substantially all of the assets of First Southeast by any party other than
Firstar or its affiliates prior to the termination of this Agreement. None
of the Subject Shares shall be transferred while this Agreement is in
effect, except to a Nevada partnership organized pursuant to documents
substantially to the effect of the partnership agreement previously reviewed
by KPMG Peat Marwick (the "Nevada Partnership") and provided that the Nevada
Partnership has, prior to such transfer, executed a Voting and Stock
Purchase Agreement satisfactory in form and content to Firstar. At
Firstar's request and provided that Firstar is then in compliance with the
Merger Agreements, Shareholder shall use his best efforts to cause any
necessary meeting of shareholders of First Southeast to be duly called and
held or any necessary consents of shareholders to be obtained for the
purpose of approving the Merger.
3. Purchase Right. Shareholder hereby grants to Firstar the
exclusive right (the "Purchase Right") to purchase any or all of the Subject
Shares for a price of $558.31 per share, payable in cash. The exercise of
the Purchase Right by Firstar with respect to any amount of shares that
exceeds five percent (5%) of the outstanding voting stock of First Southeast
is subject to the approval of the Board of Governors of the Federal Reserve
System and any other necessary regulatory approvals. The Purchase Right is
exercisable at any time prior to the earlier of the Closing, as defined in
the Merger Agreements, or the termination of the Merger Agreements, and
after (a) a material breach by First Southeast of the Merger Agreements,
(b) a breach by the Shareholder of this Agreement; (c) the acquisition or
overtly threatened acquisition by any person not related to the current
shareholders of First Southeast of more than five percent (5%) of the stock
of First Southeast or its subsidiaries, First Bank Southeast, N.A. and First
Bank Southeast of Lake Geneva, N.A. (the "Banks"), or of a material portion
of the assets of First Southeast or the Banks; or (d) any similar events or
circumstances that lead Firstar reasonably to believe that First Southeast
is likely to materially breach the Merger Agreements.
4. No Ownership Interest. Nothing contained in this Agreement
shall be deemed to vest in Firstar any direct or indirect ownership or
incidence of ownership of or with respect to any shares of First Southeast
Common Stock. All rights, ownership and economic benefits of and relating
to the shares of First Southeast Common Stock shall remain and belong to
Shareholder and Firstar shall have no authority to manage, direct,
superintend, restrict, regulate, govern or administer any of the policies or
operations of First Southeast or exercise any power or authority to direct
Shareholder in the voting of any of the shares of First Southeast Common
Stock, or the performance of his duties or responsibilities as a shareholder
of First Southeast, except as otherwise expressly provided herein.
5. Evaluation of Investment. Shareholder, by reason of his
knowledge and experience in financial and business matters [and through
serving as an officer of a financial institution], believes himself capable
of evaluating the merits and risks of the investment in common stock of
Firstar, $1.25 par value ("Firstar Common Stock"), contemplated by the
Merger Agreements.
6. Documents Delivered. Shareholder acknowledges receipt of
copies of the following documents:
a. Merger Agreements and all exhibits thereto;
b. Firstar's 1992 Annual Report (including Annual Report on Form
10-K for the year ended December 31, 1992);
c. Notice of 1993 Annual Meeting of Shareholders and Proxy
Statement dated April 22, 1993 of Firstar;
d. Firstar's Reports on Form 10-Q for the periods ended
March 31, June 30, and September 30, 1993.
7. Investment Purpose. Shareholder hereby represents, warrants
and agrees that he is acquiring the shares of Firstar Common Stock pursuant
to the Reorganization Agreement solely for his own account, for investment,
and not with a view to the distribution or resale thereof.
8. Amendment and Modification. This Agreement may be amended,
modified or supplemented at any time by the written approval of such
amendment, modification or supplement by First Southeast, Shareholder and
Firstar.
9. Entire Agreement. This Agreement evidences the entire
agreement among the parties hereto with respect to the matters provided for
herein and there are no agreements, representations or warranties with
respect to the matters provided for herein other than those set forth herein
and in the Merger Agreements and their related written agreements. This
Agreement supersedes any agreements among First Southeast and its
shareholders, concerning the acquisition, disposition or control of the
stock of First Southeast.
10. Severability. The parties agree that if any provision of
this Agreement shall under any circumstances be deemed invalid or
inoperative, this Agreement shall be construed with the invalid or
inoperative provisions deleted and the rights and obligations of the parties
shall be construed and enforced accordingly.
11. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
12. Governing Law. The validity, construction, enforcement and
effect of this Agreement shall be governed by the internal laws of the State
of Wisconsin.
13. Headings. The headings for the paragraphs of this Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect the meaning or interpretation of this Agreement.
14. Successors. This Agreement shall be binding upon and inure
to the benefit of First Southeast and Firstar, and their successors, and
Shareholder and Shareholder's spouse and their respective executors,
personal representatives, administrators, heirs, legatees, guardians and
other legal representatives. This Agreement shall survive the death or
incapacity of Shareholder. This Agreement may be assigned by Firstar only
to an affiliate of Firstar.
15. Termination. This Agreement shall terminate at the earlier
of: (i) October 31, 1994; (ii) the termination of the Merger Agreements; or
(iii) consummation of the transactions contemplated by the Merger Agreements.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
FIRST SOUTHEAST BANKING CORP.
[SEAL] By: David A. Straz, Jr.
Title: President
FIRSTAR CORPORATION
[SEAL] By: Jon H. Stowe
Title: Executive Vice President
SHAREHOLDER
Lila G. Straz
[Name] Lila G. Straz
<PAGE>
EXHIBIT 2(f)
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT dated as of February 10, 1994 (the
"Agreement"), is entered into by and among First Southeast Banking Corp.
("First Southeast"), a Wisconsin corporation, the undersigned shareholder of
First Southeast, David A. Straz, Jr. (the "Shareholder"), Firstar
Corporation ("Firstar"), a Wisconsin corporation, Firstar Corporation of
Wisconsin ("FCW"), a Wisconsin corporation and a wholly-owned subsidiary of
Firstar, and First Southeast Bank, N.A. and First Southeast Bank of Lake
Geneva, N.A. (the "Banks").
W I T N E S S E T H:
WHEREAS, Firstar, FCW and First Southeast are parties to that certain
Agreement and Plan of Reorganization of even date herewith (the
"Reorganization Agreement") providing for the merger (the "Merger") of First
Southeast with and into FCW and the conversion of all of the outstanding
shares of common stock of First Southeast into the right to receive shares
of Firstar common stock $1.25 par value ("Firstar Common Stock") from
Firstar, (the "Merger"); and
WHEREAS, the obligation of Firstar and FCW under the Reorganization
Agreement to consummate the transactions contemplated therein are subject to
the receipt by Firstar of an indemnity from the Shareholder; and
WHEREAS, the Shareholder is executing this Agreement for the purpose of
inducing Firstar to consummate the transactions contemplated by the
Reorganization Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties hereby agree as
follows:
1. Grant of Indemnity. The Shareholder hereby indemnifies (subject
to the limitations set forth in Sections 4(A) and 4(C) of this Agreement)
and holds Firstar, FCW, First Southeast, and the Banks harmless from and
against any and all losses, costs, damages, expenses, liabilities, taxes,
interest, penalties, judgments, amounts paid in settlement, claims, demands,
deficiencies, causes of action, suits or other damage, including, without
limitation, reasonable attorneys' fees and expenses, but reduced by any
applicable insurance recovery or other offsetting asset (all the foregoing
items being hereinafter referred to as the "Claims"), resulting from,
arising out of or incurred with respect to (or alleged to result from, arise
out of or to have been incurred with respect to): (i) the falsity,
inaccuracy, or breach of any representation, warranty, covenant or agreement
made by First Southeast contained in the Reorganization Agreement, whether
intentional, negligent or innocent; (ii) the falsity, inaccuracy or breach
of any representation, warranty, covenant or agreement contained in the
First Southeast Letter, as such term is defined in the Reorganization
Agreement, or in any documents, certificates, schedules or exhibits
delivered to Firstar or FCW pursuant to the Reorganization Agreement or the
First Southeast Letter, whether intentional, negligent or innocent; (iii)
any of the matters referred to in the letter dated of even date herewith
from Firstar Corporation to the Shareholder (the "Side Letter Issues"); and
(iv) the expenses or costs incurred by Firstar, FCW, First Southeast, or the
Banks, including reasonable attorneys fees (including fees generated by
Firstar personnel at the hourly rate for internal services normally charged
by them for the purpose of intercompany cost allocation), in connection with
investigating, attempting to correct, defending against, or participating in
the defense against any of the Claims for which Firstar, FCW, First
Southeast or the Banks are entitled to indemnification pursuant to the
foregoing provisions.
2. Survival; Effect of Investigation, Representations and Warranties.
The indemnity granted herein shall survive any investigations by
an indemnified party prior to Closing, any investigations by an indemnified
party after Closing of any potential Claims, and the Closing of the
transactions contemplated by the Reorganization Agreement. Notwithstanding
any expiration of the representations, warranties, covenants and agreements
in the Reorganization Agreement, the foregoing indemnity shall nonetheless
survive any such expiration, as well as the execution of this Agreement, the
execution of the Reorganization Agreement and the Closing, with the same
effect as though such representations, warranties, covenants and agreements
remained in effect. Notwithstanding anything contained in this Agreement,
the Shareholder shall be released from the agreement of indemnification
contained in this Agreement in respect of any Claims for which Firstar has
not given written notice to the Shareholder by the earlier of (a) the
expiration of one (1) year of the Closing or (b) the date on which the first
audited results of the combined company is mailed to Firstar's shareholders;
provided, however, the foregoing limitation shall not apply to (i) any
liability for income, franchise, excise or real or personal property taxes
with the respect to periods prior to the Closing, not fully accrued for in
the consolidated financial statements of First Southeast ("Tax Claims");
(ii) Claims resulting from, arising out of or incurred with respect to (or
alleged to result from, arise out of or to have been incurred with respect
to) litigation pending at the Closing or overtly threatened against First
Southeast or the Banks at or prior to the Closing ("Litigation Claims");
(iii) Claims resulting from, arising out of or incurred with respect to (or
alleged to result from, arise out of or to have been incurred with respect
to) the Side Letter Issues (the "Side Letter Claims") and (iv) such other
contingencies pending against First Southeast or the Banks at the Closing,
the outcome of which cannot reasonably be determined by Firstar as of such
date, including breaches of Section 4.13(b) of the Reorganization Agreement
("Additional Claims" and, together with Tax Claims, Litigation Claims, and
Side Letter Claims, "Specific Claims"), of which (i), (ii) or (iv) shall be
identified through a recitation of the specific facts available prior to
Closing, by Firstar in writing to the Shareholder on or before the Closing.
Specific Claims may be asserted by the indemnified parties against the
Shareholder until barred by the applicable statute of limitations. The
agreement to indemnify shall remain effective in respect of all Claims made
by the indemnified parties in writing on or prior to such date until the
same are finally determined and satisfied in full.
3. Procedure for Indemnification.
(A) An indemnified party shall promptly give notice to the
Shareholder after obtaining knowledge of any Claim other than the Side
Letter Claims and, if such indemnity shall arise from the claim of a third
party, shall permit the Shareholder to assume the defense, at his sole
expense, of any such Claim or any litigation resulting from such Claim,
provided that the indemnified party shall not be required to permit the
Shareholder to assume the defense of any third party claim which if not
first paid, discharged or otherwise complied with would result in an
interruption or cessation of the conduct of the business of First Southeast
or the Banks or any material part thereof or, in the reasonable sole opinion
of Firstar, might materially adversely affect First Southeast or the Banks.
Except as set forth in Section 2 of this Agreement, notwithstanding the
foregoing notice requirement, the right to indemnification hereunder shall
not be affected by any failure of the indemnified party to give such notice
or any delay by the indemnified party in giving such notice unless, and then
only to the extent that, the rights and remedies of the Shareholder shall
have been prejudiced as a result of the failure to give, or delay in giving,
such notice. Failure by the Shareholder to notify the indemnified party of
his election to defend any such claim or action by a third party within
fourteen (14) days after notice thereof shall have been given to the
Shareholder shall be deemed a waiver by him of his right to defend such
claim or action.
(B) If the Shareholder assumes the defense of such claim by a
third party or litigation resulting therefrom, as set forth above, his
obligation hereunder as to such claim shall include taking all steps
necessary in the defense or settlement of such claim or litigation resulting
therefrom, including the retention of counsel satisfactory to the
indemnified party, and holding the indemnified party harmless from and
against any and all Claims caused by or arising out of any settlement
approved by the Shareholder, or any judgment in connection with such claim
or litigation resulting therefrom. Without the prior written consent of the
indemnified party, the Shareholder shall not, in the defense of such claim
or any litigation, consent to the entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional
term thereof the giving by the claimant or the plaintiff to the indemnified
party of a release, in form satisfactory to the indemnified party, from all
liability in respect of such claim or litigation. Notwithstanding the
foregoing, the indemnified party will be entitled (i) to participate in the
defense of such claim or litigation and, (ii) subject to the limitations of
any contract of insurance, upon fourteen (14) days prior written notice to
the Shareholder, to control and manage any defense. If the defendants in
any such action include both an indemnified party and the Shareholder and
the indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties.
(C) If the Shareholder does not elect to assume the defense of any
such claim by a third party or litigation resulting therefrom or if the
indemnified party does not allow the Shareholder to assume the defense of
any such claim by a third party or litigation resulting therefrom, as set
forth in Section 3(A) of this Agreement, the indemnified party may defend
against such claim or litigation in such manner as it deems appropriate,
and, unless the Shareholder shall deposit with the indemnified party a sum
equivalent to the total amount demanded in such claim or litigation plus the
indemnified party's estimate of the cost of defending the same, the
indemnified party may settle such claim or litigation on such terms as it
deems appropriate and the Shareholder shall, in accordance with the
provisions hereof, promptly reimburse the indemnified party for the amount
of such settlement and for all losses and expenses incurred by the
indemnified party in connection with the defense against or settlement of
such claim or litigation. The Shareholder agrees to cooperate fully with
the indemnified party in the conduct of any defense against any claim.
4. Limitations on Indemnification.
(A) Notwithstanding the foregoing, the aggregate liability of the
Shareholder under this Agreement in respect of any Claim or combination of
Claims other than Specific Claims shall be $1 million. The liability of the
Shareholder in respect of the aggregate of all Specific Claims shall be
limited to $5 million; provided, however, that prior to Closing, Firstar
shall specifically allocate a portion of such $5 million limitation to each
individual Specific Claim.
The liability of the Shareholder under this Agreement must be paid in
shares of Firstar Common Stock, with the value of each such share of stock
deemed for this purpose to equal the Market Value of Firstar Common Stock on
the Closing Date. For purposes of this Indemnity Agreement, the "Market
Value of Firstar Common Stock on the Closing Date" means the average
composite closing prices of Firstar Common Stock on the New York Stock
Exchange and the Midwest Stock Exchange on the ten consecutive trading days
immediately preceding the Closing under the Reorganization Agreement.
Except as otherwise provided herein, the amount of indemnity due an
indemnified party hereunder shall be satisfied by delivery of Firstar Common
Stock equal in value (as determined in accordance with this Agreement) to
the amount of the indemnity to be so satisfied and the indemnity shall be
deemed paid and satisfied upon receipt by the indemnified party of
certificate(s) representing Firstar Common Stock appropriately endorsed to
the indemnified party.
(B) In the event the number of shares of outstanding Firstar
Common Stock is changed, between the Closing Date and the date of payment by
the Shareholder under this Agreement, by means of a stock split or stock
dividend, then the Market Value of Firstar Common Stock on the Closing Date
shall be deemed modified accordingly. In the event, between the Closing
Date and the date of payment by the Shareholder under this Agreement,
Firstar Common Stock is converted into or exchanged for another class,
series or type of stock in a recapitalization, merger, consolidation,
combination or any similar corporate change, then payment hereunder shall be
made in the number of shares of such new class, series or type of stock into
or for which each share of Firstar Common Stock has been converted or
exchanged, multiplied by the number of shares of Firstar Common Stock
otherwise payable hereunder. In the event the Shareholder shall have sold
all or part of his shares of Firstar Common Stock issued in connection with
the Reorganization Agreement prior to the date of payment under this
Agreement, then he shall repurchase shares of Firstar Common Stock in an
amount sufficient to pay the indemnified parties under this Agreement.
(C) Notwithstanding anything to the contrary in other sections of
this Agreement, the Shareholder shall not be liable for the first $250,000
of the aggregate amount of all Claims hereunder provided, however, that if
the aggregate amount of all Claims hereunder exceeds $250,000, the
Shareholder shall be liable for the amount of all Claims hereunder in excess
of $100,000.
5. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, superseding
all prior oral or written agreements or understandings. There have been and
are no promises, restrictions, agreements or understandings between the
parties with respect to the subject matter hereof except as set forth herein.
6. Headings; Counterparts. The headings in this Agreement are for
convenience only and shall not be considered a part of or affect the
meaning, construction or interpretation of any provision of this Agreement.
This Agreement may be executed in several counterparts each of which shall
be deemed an original and shall bind the signatory, but all of which
together shall constitute but one and the same instrument.
7. Governing Law; Consent to Jurisdiction. This Agreement shall be
governed, construed and interpreted exclusively in accordance with the laws
of the State of Wisconsin.
8. Notices. All notices given hereunder shall be in writing
(including a telecopy and shall be mailed by first class mail, postage
prepaid, or sent by facsimile transmission or by nationally recognized
overnight delivery service, addressed as follows:
(a) If to Firstar, to:
Firstar Corporation
Attn: Jon H. Stowe
Executive Vice President
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-4349
with a copy to:
Firstar Corporation
Law Department
Attn: Howard H. Hopwood, III
Senior Vice President and
General Counsel
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-6111
(b) If to First Southeast, FCW or
the Banks, after the Closing,
to such entities:
c/o Firstar Corporation
Attn: Jon H. Stowe
Executive Vice President
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-4349
With a copy to:
Firstar Corporation
Law Department
Attn: Howard H. Hopwood
Senior Vice President and
General Counsel
777 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 765-6111
(c) If to the Shareholder, to:
David A. Straz, Jr.
540 Gulf Boulevard
Belleair Shore, FL 34635
Telecopy No. (813) 595-7644
with a copy to:
Quarles & Brady
Attn: Robert J. Kalupa, Esq.
411 East Wisconsin Avenue
Milwaukee, WI 53202
Telecopy No. (414) 271-3552
or to such other address as a party may have furnished to the others in
writing in accordance herewith except that notices of a change of address
shall be effective only upon receipt.
9. Severability. If any provision of this Agreement shall be deemed
invalid or inoperative, or in the event a court of competent jurisdiction
determines that any of the provisions of this Agreement contravene public
policy in any way, this Agreement shall be construed so that the remaining
provisions shall not be affected, but shall remain in full force and effect,
and any such provisions which are invalid or inoperative or which contravene
public policy shall be deemed, without further action or deed on the part of
any person, to be modified, amended and/or limited, but only to the limited
extent necessary to render the same valid and enforceable.
10. Amendment and Modification. This Agreement may only be amended,
modified or supplemented by a written agreement executed by each of the
parties hereto.
11. Assignment. Except for assignments by Firstar, First Southeast,
FCW, or the Banks to an entity controlled by, controlling or under common
control with Firstar, this Agreement shall not be assigned by any party
without the prior written consent of the other parties hereto. Subject to
the foregoing, this Agreement and all of the provisions hereof shall inure
to the benefit of Firstar, FCW, and the Banks and their respective
successors and assigns, and shall be binding upon the shareholders and their
heirs, personal representatives, successors and assigns. This Agreement
shall not be revoked by death or incapacity.
12. Waiver of Defenses and Notice.
(A) The Shareholder's liability for performance of this Agreement
shall be absolute and unconditional, except for conditions expressly set
forth in this Agreement; and the Shareholder unconditionally and irrevocably
waives each and every defense which would otherwise operate to impair or
diminish such liability.
(B) The Shareholder hereby unconditionally waives (a) all notices
of any kind whatsoever except as otherwise provided in this Agreement; and
(b) any subrogation to the rights of an indemnified party against a third
party until the indemnified party has been paid in full and such payments
are not subject to any right of recovery.
13. Waiver of Compliance; Consents. Any failure of an indemnified
party, on the one hand, or the Shareholder, on the other hand, to comply
with any obligation, covenant, agreement or condition herein may be waived
in writing by the party entitled to the performance of such obligation;
however, such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure. Whenever
this Agreement requires or permits consent by or on behalf of any party
hereto, such consent shall be given in writing in a manner consistent with
the requirements for a waiver of compliance as set forth above.
14. Affiliated Parties. Any notice to or by any indemnified party
which is an affiliate of one or more other indemnified parties, or any
action by any such indemnified party, shall be deemed given to or received
or taken by all affiliated indemnified parties.
15. Transactions in First Southeast Common Stock. The Shareholder
shall not, prior to the Closing, sell, transfer or otherwise dispose of any
shares of common stock of First Southeast that he owns on the date of this
Agreement except to a Nevada partnership of which the Shareholder is the
general partner.
16. Effective Date. This Agreement shall be effective upon the
Closing of the Reorganization Agreement and shall be void if the
Reorganization Agreement is terminated.
17. Costs and Expenses. In the event of any dispute hereunder between
the Shareholder and an indemnified party, the prevailing party in such
dispute shall be entitled to recover from the other party its reasonable
costs and expenses incurred in connection with such dispute, including,
without limitation, reasonable attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
FIRSTAR CORPORATION
[SEAL]
By: Jon H. Stowe
Attest: John A. Kielich
FIRSTAR CORPORATION OF WISCONSIN
[NO SEAL]
By: John A. Kielich
Attest: Joan M. Fagan
FIRST SOUTHEAST BANKING CORP.
[SEAL]
By: David A. Straz, Jr., Pres.
Attest:
FIRST SOUTHEAST BANK, N.A.
[SEAL]
By: David A. Straz, Jr., Chmn.
Attest: ______________________
FIRST SOUTHEAST BANK OF
[SEAL] LAKE GENEVA, N.A.
By: David A. Straz, Jr., Chmn.
Attest: ______________________
SHAREHOLDER
David A. Straz, Jr.
David A. Straz, Jr.
EXHIBIT 5
May 20, 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, and the rights to purchase Series C Preferred
Stock associated with each share of Common Stock (the "Preferred Stock
Purchase Rights"), issuable in connection with the merger (the "Merger") of
Firstar Corporation of Wisconsin ("FCW"), and First Southeast Banking Corp.
("FSBC"), 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 shareholders of
FSBC 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.
(3) The issuance of the Preferred Stock 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
Subsidiaries of the Registrant Exhibit 21
Firstar Corporation has no parents. The following list shows the name
of each subsidiary of Firstar and the state or juristiction of the
incorporation.
State or
Other Jurisdiction
in which Incorporated
Name of Subsidiary or Organized
1 Firstar Bank Milwaukee, N.A. United States
1 Firstar Bank Appleton Wisconsin
1 Firstar Bank Eau Claire, N.A. United States
1 Firstar Bank Fond du Lac, N.A. United States
1 Firstar Bank Grantsburg, N.A. United States
1 Firstar Bank Green Bay Wisconsin
1 Firstar Bank Lake Geneva, N.A. United States
1 Firstar Bank Madison, N.A. United States
1 Firstar Bank Manitowoc Wisconsin
1 Firstar Bank Minocqua Wisconsin
1 Firstar Bank Oshkosh, N.A. United States
1 Firstar Bank Portage Wisconsin
1 Firstar Bank Racine Wisconsin
1 Firstar Bank Rice Lake, N.A. United States
1 Firstar Bank Sheboygan, N.A. United States
1 Firstar Bank Wausau, N.A. United States
1 Firstar Bank Wisconsin Rapids, N.A. United States
5 Firstar Bank Ames Iowa
5 Firstar Bank Burlington, N.A. United States
5 Firstar Bank Cedar Falls Iowa
5 Firstar Bank Cedar Rapids, N.A. United States
5 Firstar Bank Council Bluffs Iowa
5 Firstar Bank Davenport, N.A. United States
5 Firstar Bank Des Moines, N.A. United States
5 Firstar Bank Mount Pleasant Iowa
5 Firstar Bank Ottumwa Iowa
5 Firstar Bank Red Oak, N.A. United States
5 Firstar Bank Sioux City, N.A. United States
3 Firstar Bank of Minnesota, N.A. United States
2 Firstar Bank DuPage Illinois
2 Firstar Bank West, N.A. United States
2 Firstar Bank North Shore Illinois
2 Firstar Bank Park Forest Illinois
4 Firstar Metropolitan Bank & Trust Arizona
State or
Other Jurisdiction
in which Incorporated
Name of Subsidiary or Organized
Firstar Corporation of Wisconsin Wisconsin
Firstar Corporation of Illinois Illinois
Firstar Corporation of Minnesota Minnesota
Firstar Corporation of Arizona Arizona
Firstar Corporation of Iowa Iowa
1 Firstar Trust Company Wisconsin
1 Firstar Trust Company of Florida, N.A. United States
2 Firstar Trust Company of Illinois Illinois
3 Firstar Trust Company of Minnesota Minnesota
Firstar Investment Research &
Management Company Wisconsin
Firstar Insurance Services, Inc. Wisconsin
6 Elan Investment Services, Inc. Wisconsin
Elan Life Insurance Company, Inc. Arizona
Elan Title Services, Inc. Wisconsin
6 Firstar Community Investment Corporation Wisconsin
Firstar Development Corporation Delaware
6 Firstar Leasing Services Corporation Wisconsin
6 Firstar Mortgage Corporation Wisconsin
6 FM Properties of Wisconsin, Inc. Wisconsin
6 CSFM Corporation Wisconsin
Firstar Home Mortgage Corporation Wisconsin
6 Firstar Information Services Corporation Wisconsin
5 Banks of Iowa Capital Corporation Iowa
5 Banks of Iowa Credit Corporation Iowa
7 CRC Corporation Wisconsin
5 Firstar CSC Corporation Iowa
6 DPC of Milwaukee, Inc. Wisconsin
State or
Other Jurisdiction
in which Incorporated
Name of Subsidiary or Organized
Appleton Capital Corporation Nevada
Eau Claire Capital Corporation Nevada
Fond du Lac Capital Corporation Nevada
Grantsburg Capital Corporation Nevada
Green Bay Capital Corporation Nevada
Lake Geneva Capital Corporation Nevada
Madison Capital Corporation Nevada
Manitowoc Capital Corporation Nevada
Milwaukee Capital Corporation Nevada
Minocqua Capital Corporation Nevada
Oshkosh Capital Corporation Nevada
Portage Capital Corporation Nevada
Racine Capital Corporation Nevada
Rice Lake Capital Corporation Nevada
Sheboygan Capital Corporation Nevada
Wausau Capital Corporation Nevada
Wisconsin Rapids Capital Corporation Nevada
Burlington Capital Corporation Nevada
Cedar Rapids Capital Corporation Nevada
Davenport Capital Corporation Nevada
Des Moines Capital Corporation Nevada
Red Oak Capital Corporation Nevada
Sioux City Capital Corporation Nevada
Notes
1 Subsidiary of Firstar Corporation of Wisconsin
2 Subsidiary of Firstar Corporation of Illinois
3 Subsidiary of Firstar Corporation of Minnesota
4 Subsidiary of Firstar Corporation of Arizona
5 Subsidiary of Firstar Corporation of Iowa
6 Subsidiary of Firstar Bank Milwaukee, N.A.
7 Subsidiary of Firstar Bank Madison, N.A.
All Capital Corporations are subsidiaries of their respective banks
EXHIBIT 23(c)
CONSENT OF JAMES M. HARMON & CO., LTD.
The Board of Directors
First Southeast Banking Corp.:
We consent to use of our report included herein and to the reference to our
firm under the heading "Experts" in the Proxy Statement-Prospectus.
/s/ James M. Harmon
James M. Harmon & Co., Ltd.
Kenosha, Wisconsin
May 18, 1994
<PAGE>
EXHIBIT 24(a)
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
12 day of May, 1994.
Michael E. Batten
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
11 day of May, 1994.
George M. Chester, Jr.
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
6 day of May, 1994.
Roger H. Derusha
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
5 day of May, 1994.
James L. Forbes
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
6 day of May, 1994.
Holmes Foster
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
8 day of May, 1994.
Joseph F. Heil, Jr.
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
16 day of May, 1994.
John H. Hendee, Jr.
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
9 day of May, 1994.
Jerry M. Hiegel
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
6 day of May, 1994.
Joseph F. Hladky, III
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
8 day of May, 1994.
Sheldon B. Lubar
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
5 day of May, 1994.
Daniel F. McKeithan, Jr.
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
6 day of May, 1994.
George W. Mead, II
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
6 day of May, 1994.
Guy A. Osborn
<PAGE>
FIRST SOUTHEAST BANKING CORP.
POWER OF ATTORNEY WITH RESPECT TO
REGISTRATION STATEMENT
COVERING COMMON STOCK OF
FIRSTAR 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 a
Registration Statement and any and all amendments (including post-effective
amendments) to the Registration Statement relating to the issuance of Common
Stock, $1.25 par value, of Firstar Corporation and associated preferred
stock purchase rights in connection with the acquisition by Firstar
Corporation (or a subsidiary thereof) of First Southeast Banking Corp.
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 such Registration Statement and to such
amendments (including post-effective amendments) to the 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
11 day of May, 1994.
Clifford V. Smith, Jr.
<PAGE>
EXHIBIT 24(b)
FIRSTAR CORPORATION
CERTIFICATE
I, William J. Schulz, First Vice President and Secretary of Firstar
Corporation, a Wisconsin corporation (the "Corporation"), DO HEREBY CERTIFY
that the resolutions attached hereto as Exhibit A are a true and correct
copy of the resolutions adopted by the Interstate Banking and Acquisitions
Committee of the Board of Directors of the Corporation on November 3, 1993,
at a meeting duly called and held at which a quorum was present and acted
throughout; that such actions of the Committee were ratified and approved by
the Board of Directors of the Corporation on January 20, 1994, at a meeting
duly called and held at which a quorum was present and acted throughout; and
such resolutions have not been amended or modified, rescinded or revoked and
are in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal of the Corporation this 18 day of May, 1994.
/s/ William J. Schulz
[SEAL] William J. Schulz
First Vice President and
Secretary
<PAGE>
Exhibit A
First Southeast Banking Corp.
FIRSTAR CORPORATION
RESOLUTIONS
OF THE
INTERSTATE BANKING AND ACQUISITIONS COMMITTEE
Acquisition
RESOLVED, that the Chairman of the Board, President, Senior Executive Vice
President, Executive Vice President, any Senior Vice President, and any
First Vice President of the Corporation, and each of them, be and they
hereby are authorized and empowered for and in the name and on behalf of the
Corporation to execute and deliver acquisition, purchase, reorganization,
merger, consolidation, voting, indemnity and related agreements (the "Merger
Agreements") with respect to the acquisition by the Corporation of First
Southeast Banking Corp., Lake Geneva, Wisconsin ("First Southeast"), a bank
holding company, and its subsidiary banks, First Bank Southeast, N.A.,
headquartered in Milwaukee, Wisconsin, and First Bank Southeast of Lake
Geneva, N.A., headquartered in Lake Geneva, Wisconsin (together, the
"Banks"), upon the terms and conditions presented at this meeting, including
the assumption of such liabilities as First Southeast may have, or upon such
other, additional or modified terms and conditions, including an increase in
the price or the number of shares of common stock of the Corporation, $1.25
par value, with associated Preferred Stock Purchase Rights (together, the
"Common Stock"), of up to ten percent (10%), that in the judgment of such
officers do not substantially depart from the terms and conditions hereby
specifically approved, consideration to be payable in Common Stock, whereby
First Southeast will be merged with or into a corporate subsidiary of the
Corporation ("Acquisition Corporation") and the Corporation will become or
remain the owner of 100% of the stock of the surviving entity, and
Acquisition Corporation will acquire the outstanding minority shares of
First Bank Southeast of Lake Geneva, N.A. for $700,000 in cash.
Banking Application
RESOLVED, that the Chairman of the Board, President, Senior Executive Vice
President, Executive Vice President, any Senior Vice President, and any
First Vice President of the Corporation, and each of them, be and they
hereby are authorized and empowered for and in the name and on behalf of the
Corporation to execute and deliver to the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), pursuant to the Bank Holding
Company Act of 1956, as amended, an application for prior approval by the
Federal Reserve Board of the acquisition by the Corporation of direct or
indirect ownership, control or power to vote, of 100% of the voting shares
of First Southeast and of the Banks.
RESOLVED, that any and all resolutions which may be required by any federal
or state banking laws in connection with or relating to the application
referred to in the immediately preceding resolution be and they hereby are
approved and adopted; that the appropriate officers of the Corporation, and
each of them, be and they hereby are authorized to certify that such
resolutions were duly adopted at this meeting; and that the First Vice
President and Secretary shall cause a copy of each resolution so certified
to be attached to the minutes of this meeting.
Issuance of Common Stock
RESOLVED, that the appropriate officers of the Corporation be and they
hereby are authorized, in connection with the acquisition of First Southeast
and the Banks to issue no more than 1,818,182 shares of Common Stock,
subject to the increases contemplated in the foregoing resolutions.
Exchange Agent
RESOLVED, that the appropriate officers of the Corporation, and each of
them, be and they hereby are authorized to appoint Firstar Trust Company, or
such other company or person as any such officer deems appropriate, to act
as Exchange Agent pursuant to and in accordance with the Merger Agreements.
Further, Firstar Trust Company, the Transfer Agent and Registrar for the
Corporation's Common Stock, is hereby authorized to record and countersign
new certificates evidencing such number of shares of Common Stock as are
issued by the Corporation under and pursuant to the Merger Agreements and to
deliver such new certificates after they have been countersigned, all in
accordance with instructions from officers of the Corporation and in
compliance with the requirements and regulations of the New York Stock
Exchange or other applicable stock exchange as they may now or hereafter
exist. Further, any resolutions as may be required by the Exchange Agent
and Transfer Agent and Registrar to effectuate this resolution are adopted
hereby and shall be attached to the minutes of this meeting and the First
Vice President and Secretary may so certify.
Authorization of Registration Statement and Amendments
RESOLVED, that preparation of the Registration Statement on Form S-4 or such
other form as may be appropriate covering the Common Stock of the
Corporation, including prospectuses, exhibits and other documents to be
filed with the Securities and Exchange Commission (the "Commission") for the
purpose of registering the offer and sale of the Common Stock, under the
Securities Act of 1933, as amended, be and it hereby is in all respects
approved; that the directors and appropriate officers of the Corporation,
and each of them, be and they hereby are authorized to execute (whether for
and on behalf of the Corporation, or as an officer or director of the
Corporation, or otherwise), such Registration Statement (including
amendments to the prospectus and the addition or amendment of exhibits and
other documents relating thereto or required by law or regulation in
connection therewith), any and all amendments (including post-effective
amendments) to the Registration Statement or a new Registration Statement in
such form as such directors and officers may deem necessary, appropriate or
desirable, as conclusively evidenced by their execution thereof; that the
appropriate officers of the Corporation, and each of them, be and they
hereby are authorized to cause such Registration Statement, amendments to
the Registration Statement or new Registration Statement, so executed, to be
filed with the Commission; and that the appropriate officers of the
Corporation, and each of them, be and they hereby are authorized to make
such payments, and do such other acts or things as in their opinion, may be
necessary or desirable in order to effect any such filing, to cause the
Registration Statement to become effective, and to maintain the Registration
Statement in effect so long as they deem it to be in the best interest of
the Corporation.
RESOLVED, that Howard H. Hopwood, III, Senior Vice President and General
Counsel of the Corporation, is hereby designated as the person duly
authorized to receive communications and notices from the Commission with
respect to the Registration Statement and with the powers conferred upon him
as such person by the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder.
Authorization of Power of Attorney
RESOLVED, that each officer and director who may be required to sign and
execute any such Registration Statement or any amendment thereto or document
in connection therewith (whether for and on behalf of the Corporation, or as
an officer or director of the Corporation, or otherwise), be and hereby is
authorized to execute a power of attorney appointing 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 or
attorneys to sign in his or her name, place and stead in any such capacity
any such Registration Statement and any and all amendments (including
post-effective amendments) thereto and documents in connection therewith,
and to file the same with the Commission, each of said attorneys to have
power to act with or without the other, and to have full power and authority
to do and perform, in the name and on behalf of each of said officers and
directors who shall have executed such power of attorney, every act
whatsoever which such attorneys, or any of them, may deem necessary,
appropriate or desirable to be done in connection therewith as fully and to
all intents and purposes as such officers or directors might or could do in
person.
Authorization of Blue Sky Applications
RESOLVED, that it is desirable and in the best interest of the Corporation
that its securities be qualified or registered for sale in various states;
that the Chairman of the Board, President, Senior Vice President-Finance and
Treasurer, Senior Vice President and General Counsel, and First Vice
President and Secretary, and each of them, be and they hereby are authorized
to determine the states in which appropriate action shall be taken to
qualify or register for sale all or such part of the securities of the
Corporation as said officers may deem advisable; that said officers are
hereby authorized to perform on behalf of the Corporation any such acts as
they may deem necessary or advisable in order to comply with the applicable
laws of any such states, and in connection therewith to execute and file all
requisite papers and documents, including but not limited to, applications,
reports, surety bonds, irrevocable consents and appointments of attorneys
for service of process; and the execution by such officers of any such paper
or document or the doing by them of any act in connection with the foregoing
matters shall conclusively establish their authority therefor from the
Corporation and the approval and ratification by the Corporation of the
papers and documents so executed and the action so taken.
Listing Applications
RESOLVED, that the Chairman of the Board, President, Senior Vice
President-Finance and Treasurer, Senior Vice President and General Counsel,
and First Vice President and Secretary, and each of them, be and they hereby
are authorized for and on behalf of the Corporation to take such action as
such officers, or any of them, may deem necessary, appropriate or desirable
to make application for the listing on the New York Stock Exchange, Midwest
Stock Exchange or other exchange of the Common Stock to be issued in
connection with the acquisition pursuant to and in accordance with the
Merger Agreements, and such officers, and each of them, be and they hereby
are designated as representatives of the Corporation to appear before the
appropriate department of any such exchange and to take all such other steps
as such officers, or any of them, may deem necessary, appropriate or
desirable to effect such listing.
Other Action
RESOLVED, that the appropriate officers of the Corporation, and each of
them, be and they hereby are authorized and empowered, in the name and for
and on behalf of the Corporation, to take any action, including paying
expenses, and to execute and deliver any and all letters, documents,
amendments, certificates, agreements or other writings, that such officer or
officers may deem necessary, appropriate or desirable in order to enable the
Corporation fully to exercise its rights and to perform its obligations or
otherwise to carry out the purposes and intents of the Merger Agreements,
and each and all of the foregoing resolutions.
<PAGE>
EXHIBIT 99
PROXY FOR SPECIAL MEETING OF THE SHAREHOLDERS
TO BE HELD JULY ___, 1994
FIRST SOUTHEAST BANKING CORP.
303 Center Street
Lake Geneva, WI 53147
The undersigned hereby appoints David A. Straz, Jr. and David A. Straz,
or either of them, proxies with power of substitution to vote all the shares
of Common Stock that the undersigned would be entitled to vote if then
personally present at the Special Meeting of Shareholders of First Southeast
Banking Corp. to be held July ___, 1994, at 9:00 a.m., local time, and at
any adjournments thereof, upon the matters as set forth in the Proxy
Statement-Prospectus dated June ___, 1994, receipt of which is hereby
acknowledged, as follows:
The Board of Directors recommends a vote "FOR"
the following:
1. to consider and vote upon the approval and adoption of an
Agreement and Plan of Reorganization dated as of February 10, 1994
by and among First Southeast Banking Corp., Firstar Corporation
and Firstar Corporation of Wisconsin (a subsidiary of Firstar
Corporation), and a Plan of Merger dated as of February 10, 1994
by and between First Southeast Banking Corp. and Firstar
Corporation of Wisconsin, joined in by Firstar Corporation for
certain limited purposes, providing for the merger of First
Southeast Banking Corp. with and into Firstar Corporation of
Wisconsin, in which the outstanding shares of First Southeast
Banking Corp. Common Stock will be converted into the right to
receive shares of Firstar Corporation Common Stock and associated
Preferred Stock Purchase Rights, all as more fully described in
the Proxy Statement-Prospectus.
_______ _______ _______
_______ _______ _______
FOR AGAINST ABSTAIN
2. in their discretion, on such other business as may properly be
brought before the Special Meeting or any adjournment or
adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE PROPOSAL.
Please
Sign Here ________________________________
Dated: _____________________________, 1994
Note: Please date proxy and sign it exactly as name or names appear
above. All joint owners of shares should sign. State full title when
signing as executor, administrator, trustee, guardian, etc.
