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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1 TO FORM 10-K
(MARK ONE)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
/X/ SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to
COMMISSION FILE NO. 000-19368
COMMUNITY FIRST BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 46-0391436
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
520 MAIN AVENUE
FARGO, NORTH DAKOTA 58124-0001
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(Address of principal executive offices and zip code)
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (701) 298-5600
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK, $.01 PAR VALUE
PREFERRED STOCK PURCHASE RIGHTS
8-7/8% CUMULATIVE CAPITAL SECURITIES,
$25 LIQUIDATION AMOUNT(1)
8.20% CUMULATIVE CAPITAL SECURITIES,
$25 LIQUIDATION AMOUNT(2)
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES /X/ NO / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
As of March 19, 1999, assuming as market value the price of $19.2815 per share,
the average between the high and low sale prices on the Nasdaq National Market,
the aggregate market value of shares held by nonaffiliates was approximately
$828 million.
As of March 19, 1999, the Company had outstanding 47,177,803 shares of
Common Stock, $.01 par value, net of treasury shares.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1998 Annual Report to Shareholders and the 1999 Proxy Statement
for the Company's Annual Meeting of Shareholders held on April 27, 1999, are
incorporated by reference into Parts II and III, respectively, of Form 10-K, as
amended by this Form 10-K/A, to the extent described in such Parts.
(1) The 8-7/8% Cumulative Capital Securities (the "CFB I Capital Securities")
were issued by CFB Capital I ("CFB Capital I"), a wholly owned Delaware business
trust subsidiary of the Company. The Company has also fully and unconditionally
guaranteed all of CFB Capital I's obligations under the CFB I Capital
Securities.
(2) The 8.20% Cumulative Capital Securities (the "CFB II Capital Securities")
were issued by CFB Capital II ("CFB Capital II"), a wholly owned Delaware
business trust subsidiary of the Company. The Company has also fully and
unconditionally guaranteed all of CFB Capital II's obligations under the CFB II
Capital Securities.
2
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PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Statements of Financial Condition of the Company as of
December 31, 1998 and 1997, and the related Consolidated Statements of Income,
Comprehensive Income, Shareholders' Equity and Cash Flows for each of the three
years ended December 31, 1998, the Notes to the Consolidated Financial
Statements, contained in the Company's 1998 Annual Report to Shareholders on
pages 23 through 39 and reconciliation of amounts previously reported in Form
10-Q to restated financial data as currently included in Exhibit 99.4 to Form
10-K as previously filed, are incorporated herein by reference. The report of
Ernst & Young LLP, independent auditors, is included in this Form 10-K/A
following the signature page.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(c) EXHIBITS.
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Exhibit
Number Description
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2.1 Agreement and Plan of Reorganization dated as of June 25, 1996
between the Registrant and Mountain Parks Financial Corp.
(incorporated by reference to the Appendix to the Registrant's Joint
Proxy Statement with Mountain Parks Financial Corp. included in the
Registration Statement on Form S-4 [File No. 333-14439], as declared
effective by the Commission on November 7, 1996).
2.2 Stock Purchase Agreement dated as of February 18, 1997 by and among
the Registrant, KeyCorp and Key Bank of the Rocky Mountains, Inc.
(incorporated by reference to Exhibit 2.8 to the Registrant's
Amendment No. 1 to its Annual Report on Form 10-K for the fiscal year
ended December 31, 1996, filed with the Commission as of May 8, 1997
[the "1996 Form 10-K"]).
2.3 Restated Agreement and Plan of Merger dated as of August 22, 1997,
including Agreement and First Amendment to Agreement dated as of the
same date, between the Registrant and First National Summit
Bankshares, Inc. (incorporated by reference to Appendices A and B to
the Proxy Statement-Prospectus contained in the Registrant's
Registration Statement on Form S-4 [File No. 333-38997] filed with
the Commission on October 29, 1997).
2.4 Restated Agreement and Plan of Merger dated as of August 28, 1997
between the Registrant and Republic National Bancorp, Inc.
(incorporated by reference to Appendix A to the Proxy
Statement-Prospectus contained in the Registrant's Registration
Statement on Form S-4 [File No. 333-38225] filed with the Commission
on October 20, 1997).
3
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Exhibit
Number Description
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2.5 Office Purchase and Assumption Agreement dated as of the
10th day of September, 1997 by and between Bank One,
Arizona, National Association, Bank One, Colorado, National
Association, Bank One, Utah, National Association and the
Registrant, (incorporated by reference to Exhibit 2.6 to the
Registrant's Registration Statement on Form S-4 [File No.
333-36091], filed with the Commission on September 22,
1997).
2.6 Agreement and Plan of Merger dated as of November 6, 1997,
among the Registrant, Community First National Bank and
Pioneer Bank of Longmont (the "Parties")(incorporated by
reference to Exhibit 2.7 to the Registrant's Registration
Statement on Form S-4 [File No. 333-37527], filed with the
Commission on November 21, 1997), and as amended by First
Amendment to Agreement and Plan of Merger dated as of the
19th day of December, 1997, by and among the Parties
(incorporated by reference to Appendix B to the Proxy
Statement-Prospectus contained in the Registrant's
Registration Statement on Form S-4 [File No. 333-48825]
filed with the Commission on March 31, 1998).
2.7 Agreement and Plan of Merger dated as of January 8, 1998 by
and between the Registrant and Community Bancorp, Inc.
(incorporated by reference to Exhibit 2.14 to the
Registrant's Registration Statement on Form S-4 [File No.
333-49367] filed with the Commission on June 9, 1998 (the
"June 1998 Form S-4")), and as amended by First Amendment to
Agreement and Plan of Merger, dated as of the 9th day of
March, 1998, between the Registrant and Community Bancorp,
Inc. (incorporated by reference to Exhibit 2.15 to the June
1998 Form S-4).
2.8 Agreement and Plan of Merger dated as of April 2, 1998
between the Registrant and Western Bancshares of Las Cruces,
Inc. (incorporated by reference to Exhibit 2.16 to the June
1998 Form S-4).
2.9 Agreement and Plan of Merger dated as of May 18, 1998
between the Registrant and Guardian Bancorp. (incorporated
by reference to Exhibit 2.17 to the June 1998 Form S-4).
2.10 Agreement and Plan of Merger dated as of January 12, 1998
between the Registrant and FNB, Inc. (incorporated by
reference to Exhibit 2.16 to the June 1998 Form S-4).
3.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to Exhibit 3.1 to the 1996 Form
10-K), as amended by a Certificate of Amendment to the
Registrant's Certificate of Incorporation as filed with the
Delaware Secretary of State on May 7, 1998 and attached
hereto.
3.2 Bylaws of the Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-1 [File No. 33-41246], as declared effective by the
Commission on August 13, 1991 [the "1991 S-1"]).
4.1 Certificate of Designations, Preferences and Rights of
Series A Junior Participating Preferred Stock of the
Registrant (incorporated by reference to Exhibit A to
Exhibit 1 to the Registrant's Registration Statement on Form
8-A, filed with the Commission on January 9, 1995 [the "Form
8-A"]).
4
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Exhibit
Number Description
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4.2 Form of Rights Agreement dated as of January 5, 1995, between the
Registrant, and Norwest Bank Minnesota, National Association
("Norwest Bank"), which includes as Exhibit B thereto the form of
Rights Certificate (incorporated by reference to Exhibit 1 to the
Form 8-A.)
4.3 Subordinated Indenture dated February 5, 1997, between the Registrant
and Wilmington Trust Company, as Indenture Trustee, including form of
Junior Subordinated Indenture (incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form S-3 [File No.
333-19921] filed with the Commission as of January 30, 1997 [the
A1997 CFB Capital I Form S-3"]).
4.4 Amended and Restated Trust Agreement of CFB Capital I dated
February 5, 1997, including Form of Capital Security Certificate of
CFB Capital I (incorporated by reference to Exhibit 4.5 to the 1997
CFB Capital I Form S-3).
4.5 Capital Securities Guarantee Agreement dated as of February 5, 1997,
between the Registrant and Wilmington Trust Company as Trustee
(incorporated by reference to Exhibit 4.7 to the 1997 CFB Capital I
Form S-3).
4.6 Indenture dated June 24, 1997 relating to the Registrant's 7.30%
Subordinated Notes Due 2004 (the "New Notes") between the Registrant
and Norwest Bank, as trustee (incorporated by reference to Exhibit
4.1 to the Registrant's Registration Statement on Form S-4 [File No.
333-36091] as declared effective by the Commission on November 10,
1997 [the "1997 Subordinated Note Form S-4"]).
4.7 Subordinated Indenture dated December 10, 1997, between the
Registrant and Wilmington Trust Company, as Indenture Trustee,
including form of Junior Subordinated Indenture (incorporated by
reference to Exhibit 4.1 to the Registrant's Registration Statement
on Form S-3 [File No. 333-37521] as declared effective by the
Commission on December 4, 1997 [the "1997 CFB Capital II Form S-3"]).
4.8 Amended and Restated Trust Agreement of CFB Capital II dated December
10, 1997, including Form of Capital Security Certificate of CFB
Capital II (incorporated by reference to Exhibit 4.5 to the 1997 CFB
Capital II Form S-3).
4.9 Capital Securities Guarantee Agreement dated as of December 10, 1997,
between the Registrant and Wilmington Trust Company as Trustee
(incorporated by reference to Exhibit 4.7 to the 1997 CFB Capital II
Form S-3).
10.1 1998 Annual Incentive Plan for Holding Company Management.*,**
10.2 Restated 1987 Stock Option Plan (incorporated by reference to Exhibit
10.7 to the Registrant's Registration Statement on Form S-8 [File No.
33-46744], as declared effective by the Commission on May 6,
1992).*,**
10.3 Form of Tax Sharing Agreement between the Registrant and each of its
subsidiary Banks
5
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Exhibit
Number Description
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(incorporated by reference to Exhibit 10.3 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1995 [the "1995
Form 10-K"]).
10.4 Form of Service Agreement for Data Processing between Community First
Service Corporation and each of the subsidiary Banks of the
Registrant (incorporated by reference to Exhibit 10.4 to the 1995
Form 10-K).
10.5 Form of Bank Services Agreement between the Registrant and each of
its subsidiary Banks (incorporated by reference to Exhibit 10.5 to
the 1995 Form 10-K).
10.6 Form of Agency Agreement between the Registrant and each of its
subsidiary Banks, and Assignment of Agency Agreement and Second
Assignment of Agency Agreement, which assign the Registrant's
interest in the Agency Agreement to Community First Financial, Inc.
(relating to the Registrant's subsidiary Banks) (incorporated by
reference to Exhibit 10.6 to the 1995 Form 10-K).
10.7 Lease dated April 27, 1993, between Community First Properties, Inc.
(formerly Fargo Tower Partners) and the Registrant (incorporated by
reference to Exhibit 10.11 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1994).
10.8 Promissory Note dated July 14, 1997 (Term Note) in the principal
amount of $30,000,000, issued to Norwest Bank, as Agent, on behalf of
Harris Trust and Savings Bank ("Harris Bank"), Bank of America
National Trust and Savings Association ("Bank of America") and
Norwest (incorporated by reference to Exhibit 10.8 to Registrant's
Amendment No. 1 to its Annual Report on Form 10-K for the year ended
December 21, 1997 [the "1997 Form 10-K"]).
10.9 Promissory Notes dated July 14, 1997 (Current Notes), each in the
principal amount of $8,333,333.33, issued to each of Harris, Bank of
America and Norwest (incorporated by reference to Exhibit 10.9 to the
1997 Form 10-K).
10.10 Credit Agreement dated July 14, 1997 among the Company, Harris Bank,
Bank of America, Norwest as a lender, and Norwest as Agent
(incorporated by reference to Exhibit 10.10 to the 1997 Form 10-K).
10.11 Form of Indemnification Agreement entered into by and between the
Registrant and the Registrant's officers and directors (incorporated
by reference to Exhibit 10.33 to Registrant's Annual Report on Form
10-K for the year ended December 31, 1992 [the "1992 Form 10-K"]).
10.12 1996 Stock Option Plan, as approved by the Board of Directors on
February 6, 1996 (incorporated by reference to Exhibit 10.15 to the
1995 Form 10-K), and as amended by resolution of the Board of
Directors on February 1, 1999 in the form attached.*
10.13 Supplemental Executive Retirement Plan, effective as of August 1,
1995 (incorporated by reference to Exhibit 10.13 to the 1997
Form 10-K).**
6
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Exhibit
Number Description
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10.14 Registrant's Deferred Compensation Plan for Members of the Board of
Directors, effective August 1, 1993, including First Amendment to the
Registrant's Deferred Compensation Plan for Members of the Board of
Directors, effective as of February 1, 1999.*,**
10.15.1 Change in Control Severance Agreement dated December 1, 1998 between
the Registrant and Donald R. Mengedoth.*,**
10.15.2 Change in Control Severance Agreement dated December 1, 1998 between
the Registrant and Mark A. Anderson.*,**
10.15.3 Form of Change in Control Severance Agreement dated December 1, 1998
between the Registrant and Messrs. David A. Lee, Ronald K. Strand and
Bruce A. Heysse.*,**
10.15.4 Form of Change in Control Severance Agreement dated December 1, 1998
between the Registrant and Registrant's executive officers.*,**
13.1 Annual Report to Shareholders.*
21.1 Subsidiaries of the Registrant.*
23.1 Consent of Ernst & Young LLP.
27.1 Financial Data Schedule relating to Financial Statements at
December 31, 1998.*
27.2 Restated Financial Data Schedules relating to Restated Financial
Statements at December 31, 1997 and December 31, 1996.*
27.3 Restated Financial Data Schedules relating to Restated Financial
Statements at March 31, 1998, June 30, 1998 and September 30, 1998.*
27.4 Restated Financial Data Schedules relating to Restated Financial
Statements at March 31, 1997, June 30, 1997 and September 30, 1997.*
99.4 Reconciliation of Amounts Previously Reported.*
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* Previously filed.
** Executive compensation plans and arrangements.
7
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SIGNATURE
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
COMMUNITY FIRST BANKSHARES, INC.
("Registrant")
Dated: July 7, 1999 By /s/ Mark A. Anderson
-----------------------------------------
Mark A. Anderson
Vice Chairman - Corporate Services, Chief
Financial Officer, Chief Information
Officer, Secretary and Treasurer
(Principal Financial and Accounting Officer)
8
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REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Community First Bankshares, Inc.
We have audited the accompanying consolidated statements of financial
condition of Community First Bankshares, Inc. and subsidiaries as of December
31, 1998 and 1997, and the related consolidated statements of income,
comprehensive income, shareholders' equity and cash flows for each of the
three years in the period ended December 31, 1998. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these 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, based on our audits, the financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Community First Bankshares, Inc. and subsidiaries at December 31,
1998 and 1997, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended December 31, 1998,
in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Minneapolis, Minnesota
July 1, 1999
F-1
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EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated July 1, 1999, included in this Form
10-K/A with respect to the consolidated financial statements of Community
First Bankshares, Inc. for the year ended December 31, 1998, incorporated by
reference in this Form 10-K/A.
We also consent to the incorporation by reference in the following
Registration Statements and related Prospectuses of Community First
Bankshares, Inc. of our report dated July 1, 1999, with respect to the
consolidated financial statements of Community First Bankshares, Inc.
incorporated by reference in this Annual Report (Form 10-K/A) for the year
ended December 31, 1998.
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Registration
Form Statement No. Purpose
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S-8 33-44921 1987 Stock Option Plan
S-8 33-48160 401(k) Retirement Plan
S-8 333-52071 1996 Stock Option Plan and 401(k) Plan
S-3 333-37527 Registration of $150,000,000 of Common Stock,
Preferred Stock and Debt Securities
S-4 333-40071 Shelf registration of 4,438,207 shares of Common Stock
S-4 333-49367 Shelf registration of 7,000,000 shares of Common Stock
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/s/ ERNST & YOUNG LLP
Minneapolis, Minnesota
July 7, 1999
