SIMMONS FIRST NATIONAL CORPORATION
----------------------------------
Financial Statements
--------------------
(Form 10-Q)
-------------
June 30, 1994
-------------
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1994 Commission File Number 06253
-------------- ------
SIMMONS FIRST NATIONAL CORPORATION
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Arkansas 71-0407808
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 Main Street Pine Bluff, Arkansas 71601
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 501-541-1350
------------------------
Not Applicable
- ------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report
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) and (2) has
been subject to such filing requirements for the past 90 days.
YES X NO
---- ----
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Indicate the number of shares outstanding of each of issuer's classes of
securities.
Class A, Common 3,677,378
Class B, Common None
<PAGE>
SIMMONS FIRST NATIONAL CORPORATION
INDEX
Page No.
Part I: Summarized Financial Information
Consolidated Balance Sheets --
June 30, 1994 and December 31, 1993 3-4
Consolidated Statements of Income --
Three Months ended June 30, 1994 and 1993 5
Consolidated Statements of Cash Flows --
Three Months ended June 30, 1994 and 1993 6-7
Consolidated Statement of Changes in Stockholders'
Equity -- Three Months ended June 30, 1994 and 1993 8
Notes to Consolidated Financial Statements 9-16
Management's Discussion and Analysis of Financial
Condition and Results of Operations 17-18
Review by Independent Certified Public Accountants 19
Part II: Other Information 20
<PAGE>
Part I
------
A. Summarized Financial Information
<TABLE>
SIMMONS FIRST NATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1994 AND DECEMBER 31, 1993
ASSETS
------
<CAPTION>
June 30, December 31,
(Dollars in Thousands) 1994 1993
- ------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Cash and due from banks $ 27,718 $ 35,020
Federal funds sold and securities purchased
under agreements to resell 11,995 14,070
--------- ---------
Cash and cash equivalents 39,713 49,090
Investment securities (Note 6)
Securities held to maturity 143,684 198,626
Securities available for sale 56,931
Mortgage loans held for delivery
against commitments 28,196 47,775
Assets held in trading accounts 724 3,759
Loans 387,915 394,426
Allowance for loan losses (Note 5) (7,514) (7,430)
--------- ---------
Net loans (Note 5) 380,401 386,996
Premises and equipment 10,974 10,220
Foreclosed assets held for sale, net 2,079 2,877
Interest receivable 6,420 5,829
Other assets 31,494 33,588
--------- ---------
Total Assets $ 700,616 $ 738,760
========= =========
</TABLE>
The December 31, 1993 Consolidated Balance Sheet is as reported in the
Company's 1993 Annual Report.
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<CAPTION>
June 30, December 31,
(Dollars in Thousands) 1994 1993
- -------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Non-interest bearing transaction accounts $ 102,454 $ 135,468
Interest bearing transaction and
savings deposits 238,043 224,730
Time deposits (Note 9) 236,928 250,157
--------- ---------
Total Deposits 577,425 610,355
Federal funds purchased and securities
sold under agreements to repurchase 16,373 26,347
Borrowed funds 17,482 17,191
Other liabilities 9,055 9,532
--------- ---------
Total Liabilities 620,335 663,425
--------- ---------
STOCKHOLDERS' EQUITY
Capital stock
Class A, common, par value $5 a share,
authorized 10,000,000 shares;
issued and outstanding 3,677,378
at 1993 and 1994 18,387 18,387
Surplus 19,827 19,827
Net unrealized gain (loss) on securities
available for sale 777
Undivided profits (Note 10) 41,290 37,121
--------- ---------
Total Stockholders' Equity $ 80,281 $ 75,335
--------- ---------
Total Liabilities and
Stockholders' Equity $ 700,616 $ 738,760
========= =========
</TABLE>
The December 31, 1993 Consolidated Balance Sheet is as reported in the
Company's 1993 Annual Report.
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
SIMMONS FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1994 AND 1993
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands, except per share figures 1994 1993 1994 1993
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 7,353 $ 6,842 $ 14,503 $ 13,853
Federal funds sold and securities
purchased under agreements to resell 174 163 405 442
Investment securities - taxable
Held to maturity 1,472 2,714 2,924 5,445
Available for sale 830 1,583
Investment securities - non-taxable
Held to maturity 698 656 1,393 1,269
Mortgage loans held for delivery
against commitments 636 604 1,246 961
Trading account 24 32 56 122
Other interest 9 15 20 35
------- ------- ------- -------
TOTAL INTEREST INCOME 11,196 11,026 22,130 22,127
------- ------- ------- -------
INTEREST EXPENSE
Deposits 3,446 3,572 6,830 7,244
Borrowed funds 414 433 832 924
------- ------- ------- -------
TOTAL INTEREST EXPENSE 3,860 4,005 7,662 8,168
------- ------- ------- -------
NET INTEREST INCOME 7,336 7,021 14,468 13,959
Provision for loan losses 525 714 1,050 1,578
NET INTEREST INCOME AFTER PROVISION ------- ------- ------- -------
FOR LOAN LOSSES 6,811 6,307 13,418 12,381
NON-INTEREST INCOME ------- ------- ------- -------
Trust income 396 459 850 868
Service charges on deposit accounts 559 573 1,107 1,140
Other service charges and fees 208 199 445 453
Income on sale of mortgage loans and trading
account income, net of commissions 319 464 1,094 1,140
Securities gains (losses) 27 0 56 21
Other operating income 4,561 4,584 9,483 9,003
------- ------- ------- -------
TOTAL NON-INTEREST INCOME 6,070 6,279 13,035 12,625
NON-INTEREST EXPENSE ------- ------- ------- -------
Salaries and employee benefits 5,070 4,780 10,369 9,854
Net occupancy expense 538 479 1,019 944
Equipment expense 473 488 984 1,004
Other operating expense 3,537 3,681 7,184 7,091
------- ------- ------- -------
TOTAL NON-INTEREST EXPENSE 9,618 9,428 19,556 18,893
------- ------- ------- -------
NET INCOME BEFORE INCOME TAXES 3,263 3,158 6,897 6,113
Provision for income taxes (Note 8) 911 839 1,919 1,656
------- ------- ------- -------
NET INCOME $ 2,352 $ 2,319 $ 4,978 $ 4,457
======= ======= ======= =======
<PAGE>
EARNINGS PER COMMON SHARE AVG $ 0.64 $ 0.71 $ 1.35 $ 1.45
======= ======= ======= =======
DIVIDENDS PER COMMON SHARE $ 0.12 $ 0.10 $ 0.22 $ 0.20
======= ======= ======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
SIMMONS FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1994 AND 1993
<CAPTION>
Six Months Ended
June 30, June 30,
(Dollars in Thousands) 1994 1993
- -------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES (Note 3)
Net Income $ 4,978 $ 4,457
Items not requiring (providing) cash
Depreciation and amortization 846 910
Provision for loan losses 1,050 1,578
Amortization of premiums and accretion of
discounts on investment securities and mortgage-
backed certificates (152) 488
Provision for real estate owned losses 81 66
(Gain)/loss on sale of investments (56) (21)
(Gain) on sale of premises and equipment (4) (11)
Deferred income taxes (173) (352)
Changes in:
Accrued interest receivable (591) (329)
Mortgage loans held for delivery
against commitments (6,734) (12,274)
Prepaid expenses 2,037 692
Accounts payable and accrued expenses (1,792) 5
Income taxes payable 1315 (455)
Trading accounts 1,050 259
--------- ---------
Net cash provided by operating activities 1,855 (4,987)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Net collection of loans 31,767 9,135
Purchase of premises and equipment (1,782) (1,566)
Proceeds from sale of fixed assets 416 209
Proceeds from the sale of real estate owned 808 376
Proceeds from maturing investment securities 15,235 46,106
Purchase of investment securities (14,254) (65,727)
--------- ---------
Net cash provided by investing securities 32,190 (11,467)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in demand deposits, money market,
all-in-one and savings accounts (19,701) 2,004
Net repayment of certificates of deposit (13,229) (13,135)
Repayments of other borrowings (55,420) (55,453)
Proceeds from other borrowings 55,711 57,740
Dividends paid (809) (655)
Net (increase) federal funds purchased and
securities sold under agreements to repurchase (9,974) (15,947)
Sale of common stock 16,110
Net cash used in financing activities $ (43,422) $ (9,336)
--------- ---------
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
<TABLE>
SIMMONS FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1994 AND 1993
(Continued)
<CAPTION>
Six Months Ended
June 30, June 30,
(Dollars in Thousands) 1994 1993
- ---------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
DECREASE IN CASH AND CASH
EQUIVALENTS $ (9,377) $ (25,790)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 49,090 64,059
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 39,713 $ 38,269
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
<TABLE>
SIMMONS FIRST NATIONAL CORPORATION
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1994 AND 1993
<CAPTION>
NET UNREALIZED
GAIN (LOSS)
COMMON SECURITIES UNDIVIDED
(Dollars in Thousands) STOCK SURPLUS AFS PROFITS TOTAL
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1992 $ 14,362 $ 7,742 $ $ 29,115 $ 51,219
Sale of additional stock
June 10, 1993 (805,000 shares
at $22 per share) 4,025 12,085 16,110
Net income 4,457 4,457
Cash dividend declared (655) (655)
--------- --------- --------- --------- --------
Balance, June 30, 1993 18,387 19,827 32,917 71,131
Net income 4,939 4,939
Cash dividends declared (735) (735)
--------- --------- --------- --------- --------
Balance, December 31, 1993 18,387 19,827 37,121 75,335
Net unrealized gain (loss)
on securities available for sale
(SFAS 115 "Accounting for Certain
Investments in Debt and Equity
Securities", adopted
January 1, 1994.) 777 777
Net income 4,978 4,978
Cash dividends declared (809) (809)
--------- --------- --------- --------- --------
Balance, June 30, 1994 $ 18,387 $ 19,827 $ 777 $ 41,290 $ 80,281
========= ========= ========= ========= ========
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
SIMMONS FIRST NATIONAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1: ACCOUNTING POLICIES
The consolidated financial statements include the accounts of
Simmons First National Corporation and its subsidiaries. Significant
intercompany accounts and transactions have been eliminated in consolidation.
All adjustments made to the unaudited financial statements were of
a normal recurring nature. In the opinion of management, all adjustments
necessary for a fair presentation of the results of interim periods have been
made. Certain prior year amounts are reclassified to conform to current year
classification.
The accounting policies followed in the presentation of interim
financial results are presented on pages 30-32 of the 1993 Annual Report to
shareholders.
NOTE 2: CONTINGENT LIABILITIES
On July 6, 1992, Mortgage Investment Corporation ("MIC"), formerly
InterAmericas Mortgage Corporation, filed suit alleging that Simmons First
National Bank ("Bank") made purported misrepresentations about the amount of
loan level detail of the loans in the Settlement Agreement of a prior suit
which the Bank had filed and won against InterAmericas Mortgage Corporation.
MIC also asserted that the Bank had failed to disclose an alleged dispute
between the Bank and Federal National Mortgage Association ("FNMA"), and MIC
further alleged that it would not have entered into the Settlement Agreement
had it known of the purported facts. The MIC complaint also alleged that the
Bank breached the Settlement Agreement by not acting reasonably to provide
loan level detail to a private mortgage insurance company and by changing an
indemnity provision. The complaint sought compensatory damages of $1,000,000,
punitive damages of $500,000, plus attorneys' fees. The suit was settled in
June of 1994, with no material effect on earnings. A number of other legal
proceedings exist in which the Company and/or its subsidiaries are either
plaintiffs or defendants or both. Most of the lawsuits involve loan
foreclosure activities. The various unrelated legal proceedings pending
against the subsidiary banks in the aggregate are not expected to have a
material adverse effect on the financial position of the Company and its
subsidiaries.
NOTE 3: ADDITIONAL CASH FLOW INFORMATION FOR SIX MONTHS ENDED
JUNE 30, 1994 AND 1993
<TABLE>
<CAPTION>
Six Months Ended
June 30,
(Dollars in Thousands) 1994 1993
- --------------------------------------------------------------------
<S> <C> <C>
Interest paid $ 7,643 $ 8,202
Income taxes
paid $ 2,121 $ 1,831
</TABLE>
<PAGE>
NOTE 4: CERTAIN TRANSACTIONS
From time to time the Company and its subsidiaries have made loans
and other extensions of credit to directors, officers, their associates and
members of their immediate families, and from time to time directors, officers
and their associates and members of their immediate families have placed
deposits with Simmons First National Bank, Simmons First Bank of Lake Village,
and Simmons First Bank of Jonesboro. Such loans, other extensions of credit
and deposits were made in the ordinary course of business, on substantially
the same terms (including interest rates and collateral) as those prevailing
at the time for comparable transactions with other persons and did not involve
more than normal risk of collectibility or present other unfavorable features.
NOTE 5: LOANS AND ALLOWANCE FOR LOAN LOSSES
The various categories are summarized as follows:
<TABLE>
<CAPTION>
June 30, December 31,
(Dollars in Thousands) 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Loans:
Consumer:
Credit card $ 156,546 $ 168,673
Student loan 58,519 65,379
Other consumer 38,834 36,763
Real estate:
Construction 5,476 6,281
Single family residential 35,576 36,651
Other commercial 41,011 37,853
Commercial:
Commercial 26,266 20,007
Agricultural 20,290 16,088
Financial institutions 3,007 3,087
Other 2,708 3,998
Total loans before unearned discount and -------- --------
allowances for loan losses 388,233 394,780
Unearned discount (318) (354)
Allowance for loan losses (7,514) (7,430)
-------- --------
$ 380,401 $ 386,996
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
----------- -------------
(Dollars in Thousands)
<S> <C> <C>
Allowance for Loan Losses:
Balance, beginning of year $ 7,430 $ 5,748
Additions
Provision charged to expense 1,050 1,578
-------- --------
8,480 7,326
Deductions
Losses charged to allowance, net of
recoveries of $173,000 and $242,000 for
the first six months of 1994 and 1993,
respectively 966 753
-------- --------
Balance, June 30 $ 7,514 $ 6,573
========
Additions
Provision charged to expense 1,428
--------
8,001
Deductions
Losses charged to allowance,
net of recoveries of $485,000
for the last six months of
1993 571
--------
Balance, end of year $ 7,430
========
</TABLE>
During the first quarter of 1994, foreclosed assets held for sale
decreased to $2,079,000 and are carried at the lower of cost or fair market
value. Nonaccrual loans and other non-performing assets for the Company at
June 30, 1994, were $3,950,000 and $865,000, respectively, bringing the total
of non-performing assets to $6,894,000.
<PAGE>
NOTE 6: INVESTMENT SECURITIES
The amortized cost and fair value of investments in debt securities that are
Held to Maturity and Available For Sale are as follows:
<TABLE>
<CAPTION>
June 30, 1994 December 31, 1993
-------------------------------------------------------------------------------------------------------
Gross Gross Gross Gross
(Dollars in Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Thousands) Cost Gains (Losses) Value Cost Gains (Losses) Value
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Held to Maturity
U.S. Treasury $ 76,922 $ 1,694 $ (870) $ 77,746 $ 132,778 $ 5,599 $ (33) $ 138,344
U.S. Government
agencies 12,396 158 (144) 12,410 13,215 546 (28) 13,733
Mortgage-backed
securities 3,807 12 (193) 3,626 1,008 24 (10) 1,022
State and political
subdivisions 50,559 1,161 (630) 51,090 49,438 2,680 (52) 52,066
Other securities 2,187 365 (1) 2,551
--------- --------- -------- -------- -------- --------- --------- ---------
$ 143,684 $ 3,025 $ (1,837) $ 144,872 $ 198,626 $ 9,214 $ (124) $ 207,716
========= ========= ======== ======== ======== ========= ========= =========
Available For Sale
U.S. Treasury $ 51,743 $ 663 $ (39) $ 52,367
U.S. Government
agencies 1,503 37 1,540
Mortgage-backed
securities
State and political
subdivisions
Other securities 2,508 517 (1) 3,024
--------- --------- -------- --------
$ 55,754 $ 1,217 $ (40) $ 56,931
========= ========= ======== ========
</TABLE>
Maturities of investment securities at June 30, 1994
<TABLE>
<CAPTION>
Held to Maturity Available for Sale
Amortized Fair Amortized Fair
(Dollars in Thousands) Cost Value Cost Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
One year of less $ 16,666 $ 16,915 $ 33,998 $ 34,160
After one through five years 73,717 74,239 19,248 19,747
After five through ten years 43,712 43,792
After ten years 5,782 6,300
Mortgage-backed securities not due
on a single maturity date 3,807 3,626
Other securities 2,508 3,024
-------- -------- -------- --------
$ 143,684 $ 144,872 $ 55,754 $ 56,931
======== ======== ======== ========
</TABLE>
<PAGE>
The book value of securities pledged as collateral, to secure
public deposits and for other purposes, amounted to $74,937,000 at June 30,
1994, and $74,492,000 at December 31, 1993. The approximate fair value of
pledged securities amounted to $76,164,000 at June 30, 1994 and $79,588,000
at December 31, 1993.
The book value of securities sold under agreements to repurchase
amounted to $193,000 and $152,000 for June 30, 1994 and December 31, 1993,
respectively.
As of January 1, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115. "Accounting for Certain Investments in
Debt and Equity Securities." SFAS No. 115 requires the classification of
securities into one of three categories: Trading, Available for Sale, or Held
to Maturity.
Management will determine the appropriate classification of debt
securities at the time of purchase and re-evaluate the classifications
periodically. Trading account securities are used to provide inventory for
resale. Debt securities are classified as held to maturity when the Company
has the positive intent and ability to hold the securities to maturity.
Securities not classified as held to maturity or trading are classified as
available for sale.
The following table shows the net change in the Net Unrealized Gain
and Loss on Securities Available for Sale shown in the equity section of the
Corporation's balance sheet:
<TABLE>
<CAPTION>
<S> <C>
Balance, January 1, 1994 $ 946
Net change for period (169)
--------
Balance, June 30, 1994 $ 777
========
</TABLE>
The table below shows the mark-to-market adjustment made for the
first six months to the securities held in trading accounts:
<TABLE>
<CAPTION>
<S> <C>
Balance, December 31, 1993 $ 3,759
Net Securities traded (3,031)
Mark-to-market adjustment (4)
-------
Balance, June 30, 1994 $ 724
=======
</TABLE>
<PAGE>
During 1994 and 1993, there were no securities sold. The gross
realized gains and losses shown in the table below were the result of called
bonds.
<TABLE>
<CAPTION>
June 30, December 31,
(Dollars in Thousands) 1994 1993
- ----------------------------------------------------------------------
<S> <C> <C>
Proceeds from sales $ -- $ --
--------- ---------
Gross gains 60 21
Gross losses 4 --
--------- ---------
Securities gains (losses) $ 56 $ 21
========= =========
</TABLE>
Approximately 14 percent of the state and political subdivisions
are rated A or above. Of the remaining securities, most are nonrated bonds
and represent small, Arkansas issues, which are evaluated on an ongoing basis.
NOTE 7: STOCK OPTIONS
As of June 30, 1994, 63,000 shares of common stock of the Company
had been granted through an employee stock option incentive plan. There were
38,400 exercisable shares at the end of the first quarter, none of which had
been issued.
NOTE 8: INCOME TAXES
The provision for income taxes is comprised of the following
components:
<TABLE>
<CAPTION>
June 30, June 30,
(Dollars in Thousands) 1994 1993
- ----------------------------------------------------------------------------
<S> <C> <C>
Income taxes currently payable $ 2,092 $ 2,008
Increase in future income tax benefits (173) (352)
------- -------
Provision for income taxes $ 1,919 $ 1,656
======= =======
</TABLE>
<PAGE>
The tax effects of temporary differences related to deferred taxes
shown on the balance sheet are:
<TABLE>
<CAPTION>
June 30, December 31,
(Dollars in Thousands) 1994 1993
- -----------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses $ 2,878 $ 2,929
Valuation adjustment of foreclosed assets
held for sale 337 470
Deferred compensation payable 368 342
Deferred loan fee income 838 980
Other 816 706
------- -------
Total deferred tax assets 5,237 5,427
------- -------
Deferred tax liabilities:
Accumulated depreciation (388) (389)
Other (5)
------- -------
Total deferred tax liabilities (393) (389)
----------------- -----------------
Net Deferred tax assets before
valuation allowance $ 4,844 $ 5,038
------- -------
Valuation allowance:
Beginning balance (560) (466)
Change during period 17 (98)
------- -------
Ending balance (543) (564)
------- -------
Net deferred tax asset $ 4,301 $ 4,474
======= =======
</TABLE>
A reconciliation of income tax expense at the statutory rate to the
Company's actual income tax expense is shown below:
<TABLE>
<CAPTION>
June 30, June 30,
(Dollars in Thousands) 1994 1993
- --------------------------------------------------------------------------
<S> <C> <C>
Computed at the statutory rate (34%) $ 2,345 $ 2,078
Increase (decrease) resulting from:
Tax exempt income (502) (381)
Other difference, net 76 (41)
------- -------
Actual tax provision $ 1,919 $ 1,656
======= =======
</TABLE>
NOTE 9: TIME DEPOSITS
Time deposits include approximately $51,590,000 and $61,353,000
of certificates of deposit of $100,000 or more at June 30, 1994, and
December 31, 1993, respectively.
<PAGE>
NOTE 10: UNDIVIDED PROFITS
The subsidiary banks are subject to a legal limitation on dividends
that can be paid to the parent company without prior approval of the
applicable regulatory agencies. The approval of the Comptroller of the
Currency is required, if the total of all dividends declared by a national
bank in any calendar year exceeds the total of its net profits, as defined,
for that year combined with its retained net profits of the preceding two
years. Arkansas bank regulators have specified that the maximum dividend
limit state banks may pay to the parent company without prior approval is 50%
of current year earnings. At June 30, 1994, the bank subsidiaries had
approximately $12.3 million available for payment of dividends to the
Corporation without prior approval of the regulatory agencies.
The Federal Reserve Board's risk-based capital guidelines require a
minimum risk-adjusted ratio for total capital of 8% by the end of 1992. The
Federal Reserve Board has further refined its guidelines to include the
definitions for (1) a well-capitalized institution, (2) an adequately-
capitalized institution, and (3) an undercapitalized institution. The criteria
for a well-capitalized institution is a 5% "Tier l leverage capital" ratio, a
6% "Tier 1 risk-based capital" ratio, and a 10% "total risk-based capital"
ratio. As of June 30, 1994, each of the three subsidiary banks met the
capital standards for a well-capitalized institution. The Company's total
capital to total risk-weighted assets ratio was 21.6% at June 30, 1994, well
above the minimum required.
NOTE 11: COMMITMENTS AND CREDIT RISK
The three affiliate banks of the Corporation grant agribusiness,
commercial, consumer, and residential loans to their customers. Included in
the Corporation's diversified loan portfolio is unsecured debt in the form of
credit card receivables that comprised approximately 40.4% and 42.8% of the
portfolio, as of June 30, 1994 and December 31, 1993, respectively.
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 a portion of the commitments may
expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. Each customer's
creditworthiness 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 counter party. Collateral held varies, but may include
accounts receivable, inventory, property, plant and equipment, commercial
real estate, and residential real estate.
At June 30, 1994 and December 31, 1993, the Corporation had
outstanding commitments to originate loans aggregating approximately
$54,224,000 and $48,238,000, respectively. The commitments extended over
varying periods of time, with the majority being disbursed within a one year
period. Loan commitments at fixed rates of interest amounted to $18,722,000
and $12,025,000 at June 30, 1994 and December 31, 1993, respectively, with the
remainder at floating market rates.
Letters of credit are conditional commitments issued by the bank
subsidiaries of the Corporation, to guarantee the performance of a customer to
a third party. Those guarantees are primarily issued to support public and
private borrowing arrangements, including commercial paper, bond financing,
and similar transactions. The credit risk involved in issuing letters of
<PAGE>
credit is essentially the same as that involved in extending loans to
customers. The Corporation had total outstanding letters of credit amounting
to $932,000 and $820,000 at June 30, 1994 and December 31, 1993, respectively,
with terms ranging from 90 days to one year.
Lines of credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Lines of
credit generally have fixed expiration dates. Since a portion of the line
may expire without being drawn upon, the total unused lines do not necessarily
represent future cash requirements. Each customer's creditworthiness is
evaluated on a case-by-case basis. The amount of collateral obtained, if
deemed necessary, upon extension of credit, is based on management's credit
evaluation of the counter party. Collateral held varies, but may include
accounts receivable, inventory, property, plant and equipment, commercial real
estate, and residential real estate. Management uses the same credit policies
in granting lines of credit as it does for on balance sheet instruments.
At June 30, 1994, the Corporation had granted unused lines of credit
to borrowers aggregating approximately $11,878,000 and $155,822,000 for
commercial lines and open-end consumer lines, respectively. At December 31,
1993, unused lines of credit to borrowers aggregated approximately $3,615,000
for commercial lines and $132,140,000 for open-end consumer lines,
respectively.
Mortgage loans serviced for others totaled $1,334,415,000 and
$1,395,424,000 at June 30, 1994 and December 31, 1993, respectively, of which
mortgage-backed securities serviced totaled $1,106,123,000 and $1,123,747,000
at June 30, 1994 and December 31, 1993, respectively. Simmons First National
Bank serviced VA loans subject to certain recourse provisions totaling
approximately $164,139,000 and $187,338,000, at June 30, 1994 and
December 31, 1993, respectively. A reserve was established for potential loss
obligations, based on management's evaluation of historical losses, as well as
prevailing and anticipated economic conditions, giving consideration for
specific reserves. As of June 30, 1994 and December 31, 1993, this reserve
balance was $210,000, and is included in other liabilities.
NOTE 12: EMPLOYEE BENEFIT PLANS
Financial Accounting Standards No 106, "Employer's Accounting for
Postretirement Benefits Other than Pensions" (FAS 106), has been adopted by
management with an effective date of January 1, 1993. The adoption of FAS 106
did not result in any material adjustments to earnings or material changes in
accounting treatment.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
Net income for the quarter ended June 30, 1994, was $2,352,000, an
increase of $33,000, or 1.4%, over the same period of 1993. Earnings per
share for the three month periods ended June 30, 1994 and June 30, 1993, were
$.64 and $.71, respectively. Year-to-date earnings for 1994 were $4,978,000,
an increase of $521,000 or 11.7%, over earnings of the first six months of
1993. Per share earnings for the six month periods ended June 30, 1994 and
1993, were $1.35 and $1.45, respectively.
The Company's annualized return on average assets (ROA) for the
three-month periods ended June 30, 1994 and 1993, were 1.34% and 1.33%,
respectively. For the six month periods ended June 30, 1994 and 1993,
annualized ROA were 1.40% and 1.29%, respectively. Annualized return on
equity (ROE) for the same periods were 12.83% and 15.59%, respectively.
Net interest income, the difference between interest income and
interest expense, for the three month period ended June 30, 1994, increased
$315,000, or 4.5%, when compared to the same period in 1993. During the
second quarter, interest income increased $170,000, or 1.6%, and interest
expense decreased $145,000, or 3.6%, when compared to the same period in
1993. Total interest income figures for the six months ended June 30, 1994
and 1993, were $22,130,000 and $22,127,000, respectively. Total interest
expense for this same period in 1994 decreased $506,000 to $7,662,000,
resulting in a net interest income of $14,468,000, a 3.6% increase during
the six-month period in 1994, when compared to the same period figures of
1993.
Continued improvement in asset quality resulted in a reduction in
the provision for loan losses for the second quarter of 1994, to $525,000,
compared to $714,000 for the same period of 1993. The year-to-date provision
for loan losses decreased $528,000, to $1,050,000 from $1,578,000 at June 30,
1993, a 33.5% reduction.
During the second quarter of 1994, non-interest income decreased
$209,000, or 3.3%, when compared to the second quarter of 1993. Non-interest
income for the six-month period increased $411,000, to $13,035,000. The
primary factor in this improvement was the resolution of two problem assets,
resulting in a non-recurring addition to non-interest income of $388,000
during the first quarter of 1994.
During the three months ended June 30, 1994, non-interest expense
increased $190,000, or 2.0%, over the same period in 1993, For the first six
months of 1994 and 1993, non-interest expense was $19,556,000 and $18,893,000,
respectively. This $663,000, or 3.5% increase primarily reflects the normal
increase in the costs of doing business.
<PAGE>
FINANCIAL CONDITION
- -------------------
Generally speaking, the Company's banking subsidiaries rely upon net
inflows of cash from financing activities, supplemented by net inflows of cash
from operating activities, to provide cash used in their investing activities.
As is typical of most banking companies, significant financing activities
include: deposit gathering; use of short-term borrowing facilities, such as
federal funds purchased and repurchase agreements; and the issuance of
long-term debt. The banks' primary investing activities include loan
originations and purchases of investment securities, offset by loan payoffs
and investment maturities.
Liquidity represents an institution's ability to provide funds to
satisfy demands from depositors and borrowers, by either converting assets
into cash or accessing new or existing sources of incremental funds. It is a
major responsibility of management to maximize net interest income within
prudent liquidity constraints. Internal corporate guidelines have been
established to constantly measure liquid assets as well as relevant ratios
concerning earning asset levels and purchased funds. Each bank subsidiary is
also required to monitor these same indicators and report regularly to its own
senior management and board of directors. At June 30, 1994, each bank was
within established guidelines and total corporate liquidity was strong. At
June 30, 1994, cash and due from banks, securities available for sale, and
federal funds sold and securities purchased under agreements for resale were
13.8% of total assets.
<PAGE>
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
BAIRD, KURTZ & DOBSON
Certified Public Accountants
200 East Eleventh
Pine Bluff, Arkansas
Board of Directors
Simmons First National Bank
Pine Bluff, Arkansas
We have made a review of the accompanying consolidated condensed
financial statements, appearing on pages 3 to 8 of the accompanying Form 10-Q,
of SIMMONS FIRST NATIONAL CORPORATION and consolidated subsidiaries as of
June 30, 1994 and for the three month and six month periods ended June 30,
1994 and 1993, in accordance with standards established by the American
Institute of Certified Public Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of interim
financial information, applying analytical review procedures to financial
data, and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an examination in accordance
with generally accepted auditing standards, the objective which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the condensed financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31, 1993,
and the related consolidated statements of income, cash flows and changes in
stockholders' equity for the year then ended (not presented herein) and in
our report dated January 28, 1994, we expressed an unqualified opinion on
those consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated balance sheet as of
December 31, 1993, is fairly stated in all material respects in relation to
the consolidated balance sheet from which it has been derived.
BAIRD, KURTZ & DOBSON
Pine Bluff, Arkansas
July 22, 1994
<PAGE>
Part II
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The annual shareholders meeting of the Company was held on
May 10, 1994. The matters submitted to the security holders for approval
included setting the number of directors at nine (9), the election of
directors and two amendments to the Articles of Incorporation of the Company.
(b) At the annual meeting, all nine (9) incumbent directors were
re-elected by proxies solicited pursuant to Section 14 of the Security
Exchange Act of 1934, without any solicitation in opposition thereto.
(c) The First Amendment to the Articles of Incorporation of the
Company submitted to the security holders was an election by the Company to
be governed by the Arkansas Business Corporation Act of 1987. The First
Amendment was adopted and the results of the vote are shown below in the
table.
The Second Amendment to the Articles of Incorporation of the
Company submitted to the security holders was an Article to limit the
liability of the directors of the Company as permitted by the Arkansas
Business Corporation Act of 1987. The Second Proposal was adopted and the
results of the vote are shown below in the table.
The following table shows the required analysis of the voting by
security holders at the annual meeting:
<TABLE>
<CAPTION>
VOTING OF SHARES
Broker
Action For Against Abstain Non-Votes
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Set Number of
Directors at Nine (9) 3,205,404 6,606 8,456 0
Director Election:
Ayres 3,017,731 5,850 0 0
Floriani 3,016,420 5,850 0 0
Greenwood 3,017,776 5,850 0 0
Henson 3,016,621 5,850 0 0
May 3,017,731 5,850 0 0
Perdue 3,018,902 5,850 0 0
Robinson 3,019,681 5,850 0 0
Ryburn 3,018,192 5,850 0 0
Stone 3,018,192 5,850 0 0
First Proposal 2,594,651 83,835 19,718 528,213
Second Proposal 2,978,714 39,067 18,871 188,211
</TABLE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Attached as Exhibits are the Articles of Restatement of the Articles
of Incorporation and the restated Bylaws. The Articles of Restatement of the
Articles of Incorporation restate the Articles of Incorporation to fully
integrate the all previously adopted and filed amendments to the Articles of
Incorporation. The Bylaws have been restated by the Board of Directors to
reflect certain amendments necessary to be consistent with the Articles of
Incorporation and certain other amendments adopted by the Board of Directors.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Item
3(i) Articles of Restatement of the Articles of Incorporation
3(ii) Bylaws (Restated)
<PAGE>
ARTICLES OF RESTATEMENT OF THE
ARTICLES OF INCORPORATION OF
SIMMONS FIRST NATIONAL CORPORATION
Pursuant to the Arkansas Business Corporation Act, Simmons First
National Corporation does hereby adopt the following Articles of Restatement
of its Articles of Incorporation:
FIRST: The name of this Corporation is
----- SIMMONS FIRST NATIONAL CORPORATION.
SECOND: The duration of this Corporation and the period of its
------ existence shall be perpetual.
THIRD: The nature of the business of this Corporation and the
----- objects and purposes purposed to be transacted, promoted
or carried on by it are as follows, to-wit:
(a) To act as a holding company and to acquire and own stock or
other interest in other businesses of any lawful character, including
specifically banks, mortgage loan and servicing businesses, factoring
businesses, and other financially oriented businesses; and as shareholder or
as owner of other interest in such businesses, to exercise all rights
incident thereto;
(b) To do all things herein set forth, and in addition, all such
other acts and things necessary or convenient or intended for the attainment
of any of the purposes of this Corporation and to participate in, engage in,
carry on and conduct any business that a natural person lawfully might or
could do insofar as such acts and business undertakings are permitted to be
done by a corporation organized under the general corporation laws of the
State of Arkansas, with all powers conferred upon corporations, specifically
or by inference, under the laws of the State of Arkansas.
FOURTH: The authorized capital stock of this Corporation shall
------ consist of 10,000,000 shares of Class A common stock
having a par value of $5.00 per share; 300 shares of Class B common stock
having a par value of $1.00 per share; 50,000 shares of Class A preferred
stock having a par value of $100.00 per share; 50,000 shares of Class B
preferred stock having a par value of $100.00 per share; all with the powers,
privileges, incidents, preferences and limitations hereinafter set forth:
(a) The entire voting power of this Corporation shall be vested in
the Class A common and Class B common stockholders, and the holders of each
share of the Class A common and Class B common stock shall be entitled to one
vote, in person or by proxy, for each share of such stock standing in his name
on the books of the Corporation. Except as may otherwise be provided or
required by law, the holders of Class A preferred stock and Class B preferred
stock shall have no power to vote and shall not be entitled to notice of any
meeting of the stockholders of the Corporation.
(b) Class A preferred stock, which may be issued at the discretion
of the Board of Directors of the Corporation for any price not less than the
par value stated per share, shall provide for cumulative dividends at a rate
to be fixed by the Board of Directors of the Corporation prior to the issuance
thereof; shall have such options for conversion into the common stock of the
<PAGE>
Corporation as shall be designated by the Board of Directors; and when issued
and outstanding may be redeemed by the Corporation in the manner provided by
its Bylaws and upon authorization of the Board of Directors in whole or in
part thereof at a redemption price of Two Hundred Dollars per share together
with the amount of any accrued dividends which may have been unpaid at the
time of redemption. Class A preferred stock shall, in addition, have the
following incidents, powers, privileges, preferences and restrictions, to-wit:
(i) In the event of dissolution, voluntary or
involuntary, liquidation or winding up of the affairs of the Corporation, or
any distribution of all of its assets to its stockholders, the holders of
record of Class A preferred stock shall be entitled to receive One Hundred
Dollars per share out of the assets available for distribution on a par with
the holders of record of Class B preferred stock and before any other payments
to stockholders are made whatsoever. After the payment of the preferences
here provided on Class A preferred stock and elsewhere provided on Class B
preferred stock, any remaining assets available for distribution shall be
prorated to the holders of common stock. A consolidation, merger, or
amalgamation of this Corporation shall not be deemed a distribution of assets
of the Corporation within the meaning of any of the provisions of these
Articles of Incorporation.
(ii) The dividends, at the rate established by the
Board of Directors upon the issuance of Class A preferred stock, shall be
cumulative so that if the Corporation fails in any fiscal year to pay such
dividends on all of the issued and outstanding Class A preferred stock, such
deficiency in the dividends shall be fully paid, but without interest, before
any dividends shall be paid on or set apart for any other class of stock
outstanding from the Corporation. Subject to this provision and other
provisions for preferences upon dissolution or liquidation, Class A preferred
stock shall not be entitled to participate in any other or additional surplus
or net profits of the Corporation.
(iii) In the exercise of its right of redemption of
Class A preferred stock, the Board of Directors of the Corporation shall have
full power and discretion to select from the outstanding Class A preferred
stock of the Corporation particular shares for redemption, and its proceedings
in this connection shall not be subject to attack except for actual and
intentional fraud. In all instances, the Board shall have complete authority
to determine upon and take all the necessary proceedings fully to effect the
redemption, calling in and retirement of the shares selected for redemption,
and the cancellation of the certificates representing such shares. Upon
completion of such proceedings, the rights of the holders of the shares of
such preferred stock which have been redeemed and called in shall in all
respects cease, except that holders shall be entitled to receive the
redemption price for their respective shares.
(iv) Whenever any shares of Class A preferred stock of
the Corporation are purchased or redeemed as herein authorized, the Corporation
may, by resolution of its Board of Directors, retire such shares, and
thereupon this Corporation shall, in connection with the retirement of such
shares, cause to be filed a certificate of reduction of capital.
(v) The Board of Directors may elect to issue the Class
A preferred stock authorized for this Corporation in series each having such
dividend rates and conversion options into the common stock of this
Corporation as they may elect at the time of the issue of any series and
these rights and incidents may differ between such series, provided that the
required filing of a certificate stating the respective rights and incidents
<PAGE>
of each series are filed as required by law.
(c) Class B preferred stock, which may be issued at the discretion
of the Board of Directors of the Corporation for any price not less than the
par values stated per share, shall provide for preferential (after payment of
dividends on any outstanding Class A preferred stock) non-cumulative dividends
at a rate to be fixed by the Board of Directors of the Corporation prior to
the issuance thereof; shall have such conversion options as shall be
designated by the Board of Directors into the common stock of the Corporation
and the time and method within which the same may be exercised; and when
issued and outstanding may be redeemed by the Corporation in the manner
provided by its Bylaws and upon authorization of the Board of Directors in
whole or in any part thereof at a redemption price of Two Hundred Dollars per
share together with the amount of any accrued dividends which may have been
declared but remain unpaid at the time of redemption. Class B preferred stock
shall, in addition, have the following incidents, powers, privileges,
preferences and restrictions, to-wit:
(i) In the event of any dissolution, voluntary or
involuntary, liquidation or winding up of the affairs of the Corporation, or
any distribution of all of its assets to its stockholders, the holders of
record of Class B preferred stock shall be entitled to receive One Dollar per
share out of the assets available for distribution on a par with the holders
of Class A preferred stock. After the payment of the preferences here
provided for, Class B preferred stock and as elsewhere herein provided for
Class A preferred stock, any remaining assets available for distribution will
be prorated to the holders of the common stock. A consolidation, merger or
amalgamation of the Corporation shall not be deemed a distribution of assets
of the Corporation within the meaning of any of the provisions of these
Articles of Incorporation.
(ii) The dividends, at the rate established by the Board
of Directors upon the issuance of Class B preferred stock, shall be non-
cumulative, but such dividends shall be paid before any dividends are declared
or paid on any other class of stock outstanding from the Corporation, except
the dividend established by the Board of Directors on Class A preferred stock
then outstanding. Subject to this provision and other provisions for
preferences upon dissolution or liquidation, holders of Class B preferred
stock shall not be entitled to participate in any other or additional surplus
or net profits of the Corporation.
(iii) In the exercise of its right of redemption of
Class B preferred stock, the Board of Directors of the Corporation shall have
full power and discretion to select from the outstanding Class B preferred
stock of the Corporation particular shares for redemption, and its proceedings
in this connection shall not be subject to attack except for actual and
intentional fraud. In all instances, the Board shall have complete authority
to determine upon and take the necessary proceedings fully to effect the
redemption, calling in and retirement of the shares selected for redemption,
and the cancellation of the certificates representing such shares. Upon
completion of such proceedings, the rights of holders of the shares of such
preferred stock which have been redeemed and called in shall in all respects
cease, except that such holders shall be entitled to receive the redemption
price for their respective shares.
(iv) Whenever any shares of Class B preferred stock of
the Corporation are purchased or redeemed as herein authorized, the
Corporation may, by resolution of its Board of Directors, retire such shares,
and thereupon this Corporation shall, in connection with the retirement of
<PAGE>
such shares, cause to be filed a certificate of reduction of capital.
(v) The Board of Directors may elect to issue the Class
B preferred stock authorized for this Corporation in series, each having such
dividend rates and conversion options into the common stock of this
Corporation as they may elect at the time of the issue of any series, and
these rights and incidents may be differ between each series, provided that
the required filing of a certificate stating the respective rights and
incidents of each series are filed as required by law.
(d) Certificates evidencing the allotment of shares to subscribers
vest in the subscriber or his assignee, to the extent of actual ownership as
provided by law, the right to participate in dividends and vote shares or
fractional shares of stock.
(e) In the event that two successive annual dividends payable on
the Class A preferred stock are in default, then immediately upon the
happening of such event and until such defaults and all defaults subsequent
thereto are made good, the holders of Class A preferred stock shall be
entitled to one vote for each share of such stock at any meeting of the
Corporation in the same manner and to the same extent as if such share of
Class A preferred stock were a share of Class A common stock or Class B
common stock of the Corporation. Upon payment in full of the defaulted
dividends, the voting power shall again be vested exclusively in the common
stockholders.
(f) No stockholder of the Corporation, whether of common or
preferred stock, shall because of his ownership of stock have a pre-emptive
or other right to purchase, subscribe for, or take any part of the stock or
any part of the notes, debentures, bonds or other securities convertible into
or carrying options or warrants to purchase stock of the Corporation issued,
optioned, or sold by it. Any part of the capital stock and any part of the
notes, debentures, bonds or other securities convertible into or carrying
options or warrants to purchase stock of the Corporation authorized by the
Articles of Incorporation or any amendment thereto duly filed, may at any
time be issued, optioned for sale, and sold or disposed of by the Corporation
pursuant to resolution of its Board of Directors to such persons and upon such
terms as to such Board may seem proper without first offering such stock or
securities or any part thereof to existing stockholders of any class.
(g) The Board of Directors of the Corporation shall have the power,
at their discretion, to prepare and cause to be issued convertible bonds or
debentures of the Corporation, whether or not secured by a sinking fund,
pledge or other commitment, having such rights, conversion options into the
common or preferred stock of the Corporation, bearing such interest, having
such maturity dates, with such restrictions, incidents, privileges, and
characteristics, and in such amounts, total and individually, as may be
determined by the Board of Directors to be appropriate for the corporate
purposes.
FIFTH: The Corporation shall not commence business until it
----- has received consideration of the value of at least
Three Hundred Dollars for the issuance of its shares of stock.
SIXTH: The initial office of the Corporation shall be at Fifth
----- and Main Streets in the City of Pine Bluff, Arkansas, and
the name of the resident agent of the Corporation is J. Thomas May, whose
address is 2111 Country Club Lane, Pine Bluff, Arkansas.
<PAGE>
SEVENTH: The name and post office address of the incorporator is
------- Wayne A. Stone, 10 Westridge Drive, Pine Bluff, Arkansas.
EIGHTH: The Board of Directors of this Corporation shall consist
------ of not less than five (5) nor more than twenty-five (25)
persons, the exact number of directors within such minimum and maximum limits
to be fixed and determined, from time to time, by resolution of majority of
the full Board of Directors or by resolution of the shareholders at any
annual or special meeting thereof. Any vacancy in the Board of Directors for
any reason, including an increase in the number thereof, may be filled by
action of the Board of Directors.
NINTH: The affairs and business of this Corporation shall be
----- controlled and conducted by the Board of Directors. The
Board of Directors may make By-Laws for the management of the affairs and
business of this Corporation, from time to time, and may amend or repeal such
By-Laws. In addition, the Corporation and Board of Directors shall have all
the powers provided for boards of directors and corporations under the laws of
the State of Arkansas, including, but not limited to, the power to create
an Executive Committee from among their number, to provide for the day-to-day
management and operations of the Corporation's affairs.
TENTH: The private property of the stockholders shall not be
----- subject to the payment of the corporate debts to any
extent whatsoever.
ELEVENTH: (a)(1) Except as otherwise expressly provided in this
-------- Article, in the event that any person becomes an
Interested Stockholder (as hereinafter defined), then any acquisition of
additional Voting Shares (as hereinafter defined), other than through a
Business Combination (as hereinafter defined), by such Interested Stockholder
shall only be pursuant to a Tender Offer ( as hereinafter defined) to acquire,
for cash, any and all outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors ("Voting Shares") not
owned by such Interested Stockholder at the Fair Price (as hereinafter
defined).
(2) The provisions of this section (a) shall not apply
to any person exempted from the requirements of this section by the Board of
Directors in a resolution passed before the person becomes an Interested
Stockholder.
(3) A Tender Offer shall be made on the terms and
subject to the conditions as set forth below:
(i) All expenses associated with the making
and conduct of the Tender Offer shall be the sole responsibility of the
Interested Stockholder; and
(ii) The Tender Offer shall be an offer to
purchase any and all outstanding Voting Shares not owned by the Interested
Stockholder at a price per share not less than the Fair Price, net to the
seller in cash. Shares tendered pursuant to valid guarantees of delivery
before the initial expiration date of the Tender Offer, specifically
identifying certificates therefor, shall be deemed to be validly tendered for
purposes of the Tender Offer. The initial expiration of the Tender Offer
shall not be less than twenty (20) business days after the commencement of
the Tender Offer.
<PAGE>
(b) In addition to any affirmative vote required by law, and
except as otherwise expressly provided in this Article:
(1) any merger or consolidation of the Corporation with
or into any other Corporation, or
(2) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the property and assets of the
Corporation, or
(3) the adoption of any plan or proposal of liquidation
or dissolution of the Corporation; or
(4) any reclassification of the Corporation's securities
(including any stock split); shall require the affirmative vote of the holders
of at least 80% of the outstanding Voting Shares, unless such Business
Combination is approved by 80% of the Continuing Directors (as hereinafter
defined) of the Corporation. Such affirmative vote of the shareholders or
directors shall be required, notwithstanding the fact that no vote may be
required, or that some lesser percentage may be specified, by law or in any
agreement or otherwise.
(c) The provisions of sections (a) and (b) of this Article shall
not be applicable to any Business Combination or stock acquisition, and such
Business Combination or stock acquisition shall require only such affirmative
vote as is required by law and any other provisions of these Articles of
Incorporation, if any, if such transaction has been approved by 80% of the
Continuing Directors of the Corporation.
(d) For purposes of this Article:
(1) "Business Combination" means any transaction which
is referred to in any one or more paragraphs (1) through (4) of section (b) of
this Article.
(2) "Person" includes a natural person, corporation,
partnership, association, joint stock company, trust, unincorporated
association or other entity. When two or more Persons act as a partnership,
limited partnership, syndicate or other group for the purpose of acquiring,
holding or disposing of common stock, such syndicate or group shall be deemed
a Person for purposes of this Article.
(3) "Interested Stockholder" means any Person (other
than the Corporation), any Subsidiary (as hereinafter defined) or any Employee
Stock Ownership Trust or other compensation plan of the Corporation, who or
which as of any date immediately prior to the consummation of any transaction
described in this Article:
(i) is the beneficial owner, directly or
indirectly, of more than 10% of the Voting Shares; or
(ii) is an Affiliate of the Corporation and at
any time within two years prior thereto was the beneficial owner, directly or
indirectly, of not less than 6% of the then outstanding Voting Shares.
(4) "Tender Offer" means a tender offer for cash made
in accordance with the then applicable rules and regulations of the Securities
and Exchange Commission issued pursuant to Section 14(d) of the Securities
<PAGE>
Exchange Act of 1934, as amended.
(5) "Fair Price" means the amount payable by the
Interested Stockholder in respect of each Voting Share, which shall be the
greater amount determined on either of the following bases:
(i) The highest price per share of Voting
Shares including commissions paid to brokers or dealers for solicitation or
other services, at which Voting Shares held by the Interested Stockholder were
acquired pursuant to any market purchase or otherwise within the preceding
twenty-four (24) full calendar months prior to the commencement of the Tender
Offer. For purposes of this subsection (i), if the consideration paid in any
such acquisition of Voting Shares consisted, in whole or part, of
consideration other than cash, then such other consideration shall be valued
at the market value thereof at the time of the payment.
(ii) The highest sale price per share of the
Voting Shares for any trading day during the preceding twenty-four (24) full
calendar months prior to the commencement of the Tender Offer. For purposes
of this subsection (ii), the sale price for any trading day shall be the last
sale price per share of Voting Shares as reported in the National Association
of Securities Dealers Automated Quotation System.
(6) "Beneficial Ownership" means any right or power
through any contract, arrangement, understanding, relationship or otherwise
to exercise, directly or indirectly, (1) voting power, which includes the
power to vote, or to direct the voting of, the Voting Shares, or (2)
investment power, which includes the power to dispose of, or to direct the
disposition of, the Voting Shares.
Notwithstanding the foregoing, Beneficial Ownership shall not
include (1) ownership by a registered broker holding shares of Voting Shares
in its street name for customers, or (2) ownership by an employee plan
maintained for the Company's employees, provided that each employee is
entitled to vote the shares in the trust which are allocable to him.
(7) A person shall be a "beneficial owner" of any Voting
Shares:
(i) which such Person or any of its Affiliates
or Associates (as hereinafter defined) beneficially owns, directly or
indirectly; or
(ii) which such Person or any of its
Affiliates or Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (b) the right
to vote pursuant to any agreement, arrangement or understanding, or
(iii) which are beneficially owned, directly
or indirectly, by any other Person with which such first mentioned Person or
any of its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
any Voting Shares.
(8) An "Affiliate" of, or a Person "affiliated" with, a
specified Person, is a Person that directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common control with
<PAGE>
the Person specified.
(9) The term "Associate" used to indicate a relationship
with any Person means (1) any corporation or organization (other than the
Corporation or a majority-owned subsidiary of the Corporation) of which such
Person is an officer or partner or is, directly or indirectly, the beneficial
owner of 10% or more of any class of equity securities, (2) any trust or
other estate in which such Person has a substantial beneficial interest or as
to which such Person serves as trustee or in a similar fiduciary capacity, or
(3) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person.
(10) The outstanding Voting Shares shall include shares
deemed owned through application of paragraph (7) of section (d) above, but
shall not include any other Voting Shares which may be issuable pursuant to
any agreement or upon exercise of conversion rights, warrants, or options, or
otherwise.
(11) "Proponent" means any Person (or its Affiliates or
Associates) which makes any Tender Offer for the Voting Shares or proposes
any Business Combination directly affecting the Corporation or its
subsidiaries.
(12) "Continuing Directors" means the incumbent
directors of the Corporation on the date immediately preceding the date the
Proponent (or its Affiliates or Associates) became an Interested Stockholder.
In the event the Proponent (or its Affiliates or Associates) is not an
Interested Stockholder, then all directors of the Corporation shall be
Continuing Directors.
(13) "Subsidiary" shall mean a corporation of which a
majority of each class of equity is owned, directly or indirectly, by the
Corporation.
(e) A majority of the Continuing Directors shall have the power and
duty to determine for the purposes of this Article on the basis of information
known to them, (1) if a Business Combination is proposed by or on behalf of
an Interested Stockholder or Affiliate of an Interested Stockholder, (2) the
number of Voting Shares beneficially owned by any Person, (3) whether a
person is an Affiliate or Associate of another, or (4) whether a person has
an agreement, arrangement or understanding with another as to the matters
referred to in paragraph (7) of section (d) above.
(f) Nothing contained in this Article shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by
law. The Board of Directors is specifically authorized to seek equitable
relief, including an injunction, to enforce the provisions of the Article.
TWELFTH: (a) Every person who was or is a party of, is
------- threatened to be made party to, or is involved in, any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or officer
of the Corporation (or is or was serving at the request of the Corporation as
a director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise) shall be indemnified
and held harmless to the fullest extent legally permissible under and pursuant
to any procedure specified in the Arkansas Business Corporation Act of 1965,
as amended and as the same may be amended hereafter, against all expenses,
liabilities and losses (including attorney's fees, judgments, fines and
<PAGE>
amounts paid or to be paid in settlement) reasonably incurred or suffered by
him in connection therewith. Such right of indemnification shall be a
contract right that may enforced in any lawful manner by such person, and the
Corporation may in the discretion of the Board of Directors enter into
indemnification agreements with its directors and officers. Such right of
indemnification shall not be exclusive of any other right which such director
or officer may have or hereafter acquire and, without limiting the generality
of such statement, he shall be entitled to his rights of indemnification under
any agreement, vote of stockholders, provision of law or otherwise, as well as
his rights under this section.
(b) The Board of Directors may cause the Corporation to purchase
and maintain insurance on behalf of any person who is, or was, a director of
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation or as its
representative in a partnership, joint venture, trust or other enterprise,
against any liability asserted against such person and incurred in any such
capacity or arising out of such status, whether or not the Corporation would
have the power to indemnify such person.
(c) Expenses incurred by a director or officer of the Corporation
in defending a civil or criminal action, suit or proceeding by reason of the
fact that he is, or was, a director or officer of the Corporation (or is or
was serving at the Corporation's request as a director or officer of another
corporation or as its representative in a partnership, joint venture, trust
or other enterprise) shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding (1) upon authorization (i) by
the Board of Directors by a majority vote of a quorum consisting of directors
who are not parties to the action, suit or proceeding, (ii) if such a quorum
is not obtainable or, even if obtainable, if a quorum of disinterested
directors so directs, then by independent legal counsel in a written opinion,
or (iii) by the shareholders; and (2) upon receipt of an undertaking by, or
on behalf of, such person to repay such amount, if it shall ultimately be
determined that he or she is not entitled to be indemnified by the
Corporation as authorized by relevant provisions of the Arkansas Business
Corporation Act of 1965 as the same now exists or as it may hereafter be
amended.
(d) If any provision of this Article or the application thereof to
any person or circumstance is adjudicated invalid, such invalidity shall not
affect other provisions or applications of this Article which lawfully can be
given without the invalid provision of this Article.
THIRTEENTH: In the event of any Tender Offer, merger offer or other
---------- acquisitive offer for the shares or assets of the
Corporation or any of its subsidiaries, then, in addition to any other action
required by law, the Board of Directors shall consider the following factors
in evaluating such offer, prior to making any recommendation with respect to
such offer:
(a) The likely impact of the proposed acquisitive transaction on
the Corporation, its subsidiaries, its shareholders, its employees and the
communities served by the Corporation and its subsidiaries;
(b) The timeliness of the offer and proposed transaction
considering the current business climate and the current business activities
and plans of the Corporation and its subsidiaries;
(c) The possibility of any legal defects, including but not limited
<PAGE>
to bank and bank holding company regulatory matters, in the offer of proposed
transaction;
(d) The risk of non-consummation of the offer due to inadequate
financing, failure to obtain regulatory approval or such other risks as the
Board may identify;
(e) The current market price of the stock and the assets of the
Corporation and its subsidiaries;
(f) The book value of the stock of the Corporation;
(g) The relationship of the proposed price in the offer to the
Board's opinion of the current value of the Corporation and its subsidiaries
in an independently negotiated transaction;
(h) The relationship of the proposed price in the offer to the
Board's opinion of the future value of the Corporation and its subsidiaries
as an independent entity; and
(i) Any other factors which the Board deems pertinent.
No director who is an Affiliate or Associate (as defined in Article
Eleventh above) of the offeror shall participate in any manner whatsoever in
the above evaluation of the offer.
FOURTEENTH: Any amendment, repeal or modification of any of the
---------- terms of the Articles of Incorporation of the
Corporation shall, in addition to all other requirements of law, require the
approval of 80% of the shares entitled to vote on such amendment, repeal or
modification, unless such amendment, repeal or modification shall have been
approved by an affirmative vote of 80% of the Continuing Directors of the
Corporation (as defined in Article Eleventh above).
FIFTEENTH: The Corporation elects to be governed by and subject to
--------- the Arkansas Business Corporation Act of 1987.
SIXTEENTH: To the fullest extent permitted by the Arkansas Business
--------- Corporation Act, as it now exists or may hereafter be
amended, a director of this Corporation shall not be liable to the Corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director.
IN WITNESS WHEREOF, the President and Chief Executive Officer of the
Corporation has set his hand this 28th day of July, 1994.
SIMMONS FIRST NATIONAL CORPORATION
By /s/ J. Thomas May
---------------------------------
J. Thomas May, President and
Chief Executive Officer
<PAGE>
CERTIFICATE
Pursuant to the Arkansas Business Corporation Act, Simmons First
National Corporation does hereby certify that the Articles of Incorporation,
as duly restated in the Articles of Restatement of Articles of Incorporation,
were duly adopted and restated by a resolution of the Board of Directors and
contain no amendments which require the approval of the shareholders.
IN WITNESS WHEREOF, the President and Chief Executive Officer of
Simmons First National Corporation has set his hand this 28th day of
July, 1994.
SIMMONS FIRST NATIONAL CORPORATION
By /s/ J. Thomas May
--------------------------------
J. Thomas May, President and
Chief Executive Officer
<PAGE>
BY-LAWS
OF
SIMMONS FIRST NATIONAL CORPORATION
ARTICLES I. OFFICES
--------------------
The principal office of the Corporation in the State of Arkansas
shall be located at 501 Main Street in the City of Pine Bluff, County of
Jefferson. The Corporation may have such other offices, either within or
without the State of Arkansas, as the Board may designate or as the business
of the Corporation may require from time to time.
The registered office of the Corporation required by The Arkansas
Business Corporation Act of 1987, as amended, to be maintained in the State of
Arkansas may be, but need not be, identical with the principal office in the
State of Arkansas, and the address of the registered office nay be changed
from time to time by the Board.
ARTICLE II. SHAREHOLDERS
------------------------
SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders,
--------- for the purpose of electing directors and such other
business as may properly come before the meeting, shall be held on such date
and at such place as the Board shall from time to time determine by resolution
adopted at a regular meeting. If the day fixed for the annual meeting shall
be a legal holiday in the State of Arkansas, such meeting shall be held on the
next succeeding business day. If the election of directors shall not be held
on the day designated for the annual meeting of the shareholders, or at any
adjournment thereof, the Board shall cause the election to be held at a
special meeting of the shareholders as soon thereafter as conveniently may be
held.
SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders,
--------- for any purpose or purposes, unless otherwise prescribed
by statute, may be called by the Chairman of the Board, President or by the
Board, and shall be called by the Chairman of the Board or the President at
the request of the holders of not less than one-tenth of all the outstanding
shares of the Corporation entitled to vote at a meeting.
SECTION 3. PLACE OF MEETING. The Board may designate any place,
--------- either within or without the State of Arkansas, as the
place of meeting for any annual meeting or for any special meeting called by
the Board. If no designation is made, the place of meeting shall be the
principal office of the Corporation in the State of Arkansas.
SECTION 4. NOTICE OF MEETING. Written or printed notice stating
--------- the place, day and hour of the meeting and, in case of
a special meeting, the purpose or purposes for which the meeting is called,
shall be delivered not less than ten (10) nor more than sixty (60) days
before the date of the meeting, unless one of the purposes of the meeting is
to increase the authorized capital stock or bond indebtedness of the
Corporation, in which case the notice shall be delivered not less than sixty
(60) nor more than seventy-five (75) days prior to the date of the meeting,
either personally or by mail, at the direction of the Chairman of the Board,
the President, or the Secretary, or the officer or persons calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
<PAGE>
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at the address as it appears
on the stock transfer books of the Corporation, with postage thereon prepaid.
SECTION 5. FIXING OF RECORD DATE. For the purpose of determining
--------- shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of the Corporation may
fix in advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than seventy (70) days
prior to the date of the meeting or action requiring a determination of
shareholders. If no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders,
or shareholders entitled to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the
Board declaring such dividend is adopted, as the case may be, shall be the
record date for such action. When a determination of shareholders entitled
to vote at any meeting of shareholders has been made as provided in this
section, such determination shall apply, in the absence of further Board
action, to any adjournment of such meeting to a date not more than one
hundred-twenty (120) days after the date of the original meeting. In the
event of any adjournment of a meeting, the Board may set a new record date
for such adjourned meeting and, in all events, shall establish a new record
date if the meeting is adjourned to a date more than one hundred-twenty (120)
days after the date of the original meeting.
SECTION 6. VOTING LISTS. The officer or agent having charge of
--------- stock transfer books for shares of the Corporation shall
make a list of the shareholders who are entitled to notice of the meeting, or
any adjournment thereof, arranged in alphabetical order, with the address of
and the number of shares held by each. This list, shall be kept on file at
the principal office of the Corporation, commencing not later than two (2)
business days after the mailing of the notice of the meeting, and shall be
subject to inspection and, subject to the provisions of A.C.A. 4-27-1602C,
copying by any shareholder, at the expense of the shareholder, at any time
during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any shareholder at any time during the meeting. The original stock transfer
book shall be prima facie evidence as to who are the shareholders entitled to
examine such lists or transfer books or to vote at any meeting of
shareholders.
SECTION 7. QUORUM. A majority of the votes entitled to be cast,
--------- represented in person or by proxy, shall constitute a
quorum at a meeting of the shareholders. If less than a majority of the votes
entitled to be cast are represented at a meeting, a majority of the votes so
represented may adjourn the meeting from time to time without further notice.
At such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the meeting
as originally notified. The shareholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough votes to leave less than a quorum.
SECTION 8. PROXIES. At all meetings of shareholders, a shareholder
--------- may vote by proxy executed in writing by the shareholder
or by a duly authorized attorney in fact. Such proxy shall be filed with the
Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
<PAGE>
otherwise provided in the proxy.
SECTION 9. VOTING OF SHARES. Each outstanding share of Class A
--------- common stock shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders.
SECTION 10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing
---------- in the name of another corporation may be voted by such
officer, agent or proxy as the by-laws of such corporation may prescribe, or,
in the absence of such provision, as the Board of such corporation may
determine.
Shares held by an administrator, executor, guardian or conservator
may be voted by the fiduciary either in person or by proxy, without a transfer
of such shares into such fiduciary's name. Shares standing in the name of a
trustee may be voted by the trustee, either in person or by proxy, but no
trustee shall be entitled to vote shares held as trustee without a transfer
of such shares into the trustee's name.
Shares standing in the name of a receiver (including a trustee in
bankruptcy) may be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer
thereof into the receiver's name, if authority to do so is contained in an
appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its stock held by its subsidiaries in a fiduciary
capacity may be voted only by a co-fiduciary or by a person or persons
designated in the instrument creating the fiduciary relationship. Shares
of its own stock belonging to the Corporation or held by it or its
subsidiaries in a fiduciary capacity shall not be voted, directly or
indirectly, at any meeting, other than as specified above, and, unless such
shares may be voted by a co-fiduciary or designate as specified above, shall
not be counted in determining the total number of outstanding shares at any
given time.
SECTION 11. VOTING FOR DIRECTORS. Directors shall be elected by a
---------- plurality of the votes cast by the shares entitled to
vote thereon. Shareholders shall not be allowed to vote cumulatively for the
election of Directors.
ARTICLE III. BOARD OF DIRECTORS
-------------------------------
SECTION 1. GENERAL POWERS. The business and affairs of the
--------- Corporation shall be managed by its Board of Directors
(herein "BOARD").
SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
--------- directors with which this Corporation shall commence
business shall be one, but the number of directors to be elected at the annual
shareholders' meeting shall be prescribed at said meeting, and shall be not
less than five (5) nor more than twenty-five (25), the exact number within
such minimum and maximum limits to be prescribed and determined from time to
time by resolution of the shareholders at any meeting thereof, or by
<PAGE>
resolution of a majority of the Board. However, between annual shareholders'
meetings a majority of the Board may increase the number of directors by two
(2) more than the number of directors last elected by shareholders, where such
number was fifteen (15) or less, and by four (4) more than the number of
directors last elected by the shareholders, where such number was sixteen (16)
or more, but in no event shall the number of directors exceed twenty-five
(25). Each director shall hold office until the next annual meeting of the
shareholders following the date of election and until a successor shall have
been elected and qualified. Directors need not be residents of the State of
Arkansas or shareholders of the Corporation.
SECTION 3. ADVISORY DIRECTORS. The Board of this Corporation may
--------- elect individuals to serve as Advisory Directors, and
they may attend meetings of the board and may receive compensation for
attendance. The Advisory Directors shall serve at the pleasure of the Board
of this Corporation for such terms as the Board by resolution may establish.
The function of such Advisory Directors shall be to advise and consult with
the regular Board with respect to the affairs of the Corporation. Advisory
Directors shall not be entitled to vote on matters which come before the
Board or any committee thereof.
SECTION 4. ADVISORY DIRECTOR EMERITUS. The Board may elect one
--------- individual as an Advisory Director Emeritus. The
Advisory Director Emeritus may attend meetings of the Board and may receive
compensation as designated by the Board. The Advisory Director Emeritus shall
serve at the pleasure of the Board of this Corporation for such terms as the
Board by resolution may establish. The Advisory Director Emeritus may be of
counsel to the Board and may be called upon for advice from time to time.
The Advisory Director Emeritus shall not vote on matters coming before the
Board or any committee thereof.
SECTION 5. REGULAR MEETINGS. The regular meeting of the Board shall
--------- be held, without notice, on the fourth Monday of each
month at the principal business office. When any regular meeting of the Board
falls upon a holiday, the meeting shall be held the next business day unless
the Board shall designate some other day.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board may be
--------- called by or at the request of the Chairman of the Board,
the President or any three (3) or more directors. The person or persons
authorized to call special meetings of the Board may fix any place, either
within or without the State of Arkansas, as the place for holding any special
meeting of the Board called by them.
SECTION 7. NOTICE. Notice of any special meeting shall be given,
--------- when practicable in light of the circumstances, at least
one day previously thereto by written notice delivered personally, deposited
into the U. S. mail, or sent by telefacsimile. If mailed, such notice shall
be deemed to be delivered when deposited in the United States mail, with
postage thereon prepaid. If notice be given by telefacsimile, such notice
shall be deemed to be delivered upon transmission. Any director may waive
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at nor the purpose of any regular meeting of the Board need be
specified in the notice or waiver of notice of such meeting.
SECTION 8. QUORUM AND VOTING. A majority of the number of
--------- directors prescribed pursuant to Section 3 of this
<PAGE>
Article III shall constitute a quorum for the transaction of business at
any meeting of the Board, but if less than such majority is present at a
meeting, a majority of the directors present may adjourn the meeting from
time to time without further notice. A vote of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board.
SECTION 9. MANNER OF MEETING. Any regular or special meeting may be
--------- conducted, in person or through the use of any means of
electronic communication by which all directors participating may
simultaneously hear each other during the meeting. If any meeting is held in
which some or all of the directors participate therein through the use of
electronic communication such director or directors shall be deemed to be
present in person at the meeting.
SECTION 10. VACANCIES. Any vacancy occurring in the Board may be
---------- filled by the affirmative vote of a majority of the
remaining directors though less than a quorum of the Board. A director
elected to fill a vacancy shall be elected for the unexpired term of the
predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors shall be filled by an election at an
annual meeting or at a special meeting of shareholders called for that
purpose, or by the directors at a meeting as authorized in Article III,
Section 2.
SECTION 11. COMPENSATION. By resolution of the Board, the directors
---------- may be paid their expenses, if any, of attendance at
each meeting of the Board or Board Committee, and may be paid a retainer plus
a fixed sum for attendance at each meeting of the Board or Board Committee or
a stated salary as director. No such payment shall preclude any director
from serving the Corporation in any other capacity and receiving compensation
therefor.
SECTION 12. PRESUMPTION OF ASSENT. A director of the Corporation
---------- who is present at a meeting of the Board at which action
on any corporate matter is taken shall be presumed to have assented to the
action taken, unless (1) the Director objects to holding the meeting or
transacting business at the meeting, or (2) a dissent or abstention shall be
entered in the minutes of the meeting, or (3) the director shall deliver a
written notice of dissent or abstention to such action to the presiding
officer of the meeting before adjournment or to the Corporation immediately
after adjournment. Such right to dissent shall not apply to a director who
voted in favor of such action.
SECTION 13. INFORMAL ACTION BY DIRECTORS. Any action required to be
---------- taken at a meeting of the directors, or any other action
which may be taken at a meeting of the directors, may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors entitled to vote with respect to the subject
matter thereof.
ARTICLE IV. COMMITTEES
----------------------
SECTION 1. EXECUTIVE COMMITTEE. There shall be an Executive
--------- Committee of the Board consisting of no less than five
or more than seven outside directors of the Corporation or its affiliates,
selected by the Board. The exact number within such minimum and maximum
limits shall be determined by resolution of the Board at the annual meeting
<PAGE>
where the members of the Executive Committee are selected as hereinafter set
forth. The Chairman of the Board and the President of the Corporation shall
be ex-Officio members of the Committee. The Executive Committee shall be
selected annually following the annual meeting of the shareholders of the
corporation at the same meeting where the other board committees are named.
The Executive Committee of the Board shall be chaired by a chairman,
who shall be selected by the Committee. A secretary, who shall be selected
by the Committee, shall record minutes of each meeting as a formal record of
the deliberations and recommendations of the Committee.
The Executive Committee shall meet monthly and upon call of the
chairman or upon written request of three (3) or more members of the
Committee.
The duties and responsibilities of the Executive Committee shall
include, but shall not be limited to, the following:
(1) Consult with executive management regarding matters
related to the policies and management decisions of the Corporation and its
subsidiaries.
(2) Consider and help develop management succession.
(3) Monitor and recommend the makeup of the Board, bearing
in mind the requirements for board members and ages of board members.
(4) Monitor and assist, where desirable, in acquisition and
merger matters.
(5) Review and assist in the formulation of policies.
(6) Submit possible nominees and suggest names for board
membership on subsidiary boards.
The Board may delegate to the Executive Committee any of the powers
and authority of the Board regarding management of the business and affairs of
the Corporation, except those powers not subject to delegation as set forth
in A.C.A. Section 4-27-825E. Any decision made or action taken, based under
such delegation, shall be reported to the Board at its next regular meeting.
SECTION 2. AUDIT COMMITTEE. There shall be an Audit Committee,
--------- consisting of not less than four (4) outside directors
of the Corporation or its affiliates, appointed by the Board annually or more
often, whose duty it shall be to cause examinations into the affairs of the
Corporation and its affiliates, and to report the result of such examinations
to the Board at its meetings thereafter.
SECTION 3. OTHER COMMITTEES. The Board may also appoint from among
--------- its own members and members of the board of directors of
its affiliates such other committees as the Board may determine, which shall
in each case consist of not less than two (2) directors, and which shall have
such powers and duties as shall from time to time be prescribed by the Board.
The Chairman of the Board and the President shall be ex-Officio members of
each committee appointed by the Board. The Secretary shall maintain a list
of the committees of the Corporation, as same exist from time to time, and
attach a copy hereto as an Appendix.
<PAGE>
SECTION 4. PROCEDURE. A majority of the members of any committee
--------- may fix its rules of procedure. Upon the request of the
Board, all actions by any committee shall be reported to the Board at a
meeting succeeding such action and shall be subject to revision, alteration
and approval by the Board; provided, that no rights or acts of third parties
shall be affected by any such revision or alteration.
ARTICLE V. OFFICERS
-------------------
SECTION 1. NUMBER. The officers of the Corporation shall be a
--------- Chairman of the Board, a President, one or more
Vice-Presidents (the number thereof to be determined by the Board), a
Secretary and a Chief Financial Officer, each of whom shall be elected by the
Board. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board. Any two or more offices may be held
by the same person. The Secretary, or such officer as the Board may
designate, shall maintain a list of the officers of the Corporation, as same
exist from time to time, and attach a copy hereto as an Appendix.
SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
---------- Corporation to be elected by the Board shall be elected
annually by the Board at the first meeting of the Board held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as is convenient.
Each officer shall hold office until a successor shall have been duly elected
and qualified or until such officer's death, resignation or removal in the
manner hereinafter provided.
SECTION 3. REMOVAL. Any officer or agent elected or appointed by
--------- the Board may be removed by the Board whenever, in its
judgment, the best interests of the Corporation would be served thereby, but
such removal shall be without prejudice as to any contract rights of the
person so removed.
SECTION 4. VACANCIES. A vacancy in any office because of death,
--------- resignation, removal, disqualification or otherwise,
may be filled by the Board for the unexpired portion of the term.
SECTION 5. CHAIRMAN OF THE BOARD. The Chairman of the Board shall
--------- be a senior executive officer of the Corporation and,
subject to the control of the Board, shall, in general, participate in the
management of the business and affairs of the Corporation. The Chairman of
the Board shall, when present, preside at all meetings of the shareholders
and of the Board. Further. The Chairman of the Board may sign, with the
Secretary or any other proper officer of the Corporation thereunto
authorized by the Board, certificates for shares of the Corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the Board has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board or by these By-Laws to some
other officer or agent of the Corporation, or shall be required by law to be
otherwise signed or executed; and, in general, shall perform all duties
incident to the office of Chairman of the Board and such other duties as may
be prescribed by the Board.
SECTION 6. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
--------- shall be the principal executive officer of the
Corporation and, subject to the control of the Board, shall, in general,
supervise and control all of the business and affairs of the Corporation. The
<PAGE>
Board shall designate the Chief Executive Officer from between the Chairman of
the Board and the President. The Chief Executive Officer may sign, with the
Secretary or any other proper officer of the Corporation thereunto authorized
by the Board, certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts, or other instruments which the Board has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board or by these By-Laws to some
other officer or agent of the Corporation, or shall be required by law to be
otherwise signed or executed; and, in general, shall perform all duties
incident to the office of Chief Executive Officer and such other duties as may
be prescribed by the Board.
SECTION 7. PRESIDENT. The President shall be a senior executive
--------- officer of the Corporation and, subject to the control
of the Board, shall, in general, participate in the management of the business
and affairs of the Corporation. In the event the Chairman of the Board is not
elected by the Board, or in the absence of the Chairman of the Board,
the President shall have the same duties and responsibilities of the Chairman
of the Board. In the event that the Chairman of the Board has been designated
the Chief Executive Officer, the President shall be the executive officer
second in line of authority and shall perform all duties as may be prescribed
by the Board from time to time.
SECTION 8. THE VICE-PRESIDENTS. In the event of the President's
--------- absence, death, inability or refusal to act, the Vice-
President (or in the event there is more than one Vice-President, the Vice-
Presidents in the order designated by the Board) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all restrictions upon the President. Any Vice-President may sign, with the
Secretary or Assistant Secretary, certificates for shares of the Corporation;
and shall perform such other duties as may be assigned or delegated by the
Chairman of the Board, President or Board.
SECTION 9. THE SECRETARY. The Secretary shall: (a) keep the minutes
--------- of the meetings of the shareholders and the Board in one
or more books provided for that purpose; (b) see that all notices are duly
given, in accordance with the provisions of these By-Laws or as required by
law; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which under seal is duly authorized; (d) keep a
register of the post office address of each shareholder; (e) sign with the
Chairman of the Board, President, or a Vice-President, certificates for
shares of the Corporation, the issuance of which shall have been authorized
by resolution of the Board; (f) have general charge of the stock transfer
books of the Corporation; and (g) in general, perform all duties incident to
the office of Secretary and such other duties as may be assigned or delegated
by the Chairman of the Board, President or the Board.
SECTION 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer
---------- shall: (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; receive and give
receipts for moneys due and payable to the Corporation from any source
whatsoever, and deposit all such moneys in the name of the Corporation in
such banks, trust companies or other depositaries as shall be selected in
accordance with the provisions of Article VI of these By-Laws; and (b) in
general, perform all of the duties incident to the office of Chief Financial
Officer and such other duties as may be assigned or delegated by the Chairman
of the Board, President or the Board. The offices of Chief Financial Officer
and Secretary may be held by the same person.
<PAGE>
SECTION 11. ASSISTANT SECRETARIES. The Assistant Secretaries, when
---------- authorized by the Board, may sign with the President or
a Vice-President certificates for shares of the Corporation, the issuance of
which shall have been authorized by a resolution of the Board. The Assistant
Secretaries, in general, shall perform such duties as shall be assigned to
them by the Secretary, the Chairman of the Board,President or the Board.
SECTION 12. SALARIES. The salaries of the officers (other than the
---------- Chairman of the Board and the President) shall be fixed
from time to time by the Chairman of the Board and the President, subject
to review and approval by the Board. The salaries of the Chairman of the Board
and the President shall be fixed from time to time by the Board. No officer
shall be prevented from receiving a salary due to service as a director of
the Corporation.
ARTICLE VI. CONTRACTS, LOANS, CHECKS AND DEPOSITS
-------------------------------------------------
SECTION 1. CONTRACTS. The Board may authorize any officer or
--------- officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances.
SECTION 2. LOANS. No loans shall be contracted on behalf of the
--------- Corporation and no evidences of indebtedness shall be
issued in its name, unless authorized by a resolution of the Board. Such
authority may be general or confined to specific instances.
SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other orders
--------- for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation, shall be signed by such
officer or officers, agent or agents of the Corporation and in such manner as
shall be determined by resolution of the Board.
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise
--------- employed shall be deposited to the credit of the
Corporation in such banks, trust companies or other depositories as the Board
may select.
ARTICLE VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
--------------------------------------------------------
SECTION 1. CERTIFICATES OF SHARES. Certificates representing shares
-------- of the Corporation shall be in such form as shall be
determined by the Board. Such certificates shall be signed by the Chairman
of the Board, President or a Vice-President and by the Secretary or an
Assistant Secretary. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the person to whom
the shares represented thereby are issued, with the number of shares and date
of issue, shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer shall be
canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that in case of a lost, destroyed or mutilated certificate, a new one may be
issued therefor upon such terms and indemnity to the Corporation as the Board
may prescribe.
<PAGE>
SECTION 2. TRANSFER OF SHARES. Transfer of shares of the
--------- Corporation shall be made only on the stock transfer
books of the Corporation by the holder of record thereof or by a legal
representative thereof, who shall furnish proper evidence of authority to
transfer, or by an attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, and on surrender
for cancellation of the certificate for such shares. The person in whose
name shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes. The Board shall have
power to appoint one or more transfer agents and registrars for the transfer
and registration of certificates of stock of any class or debentures and may
require that stock certificates or debentures shall be countersigned and
registered by one or more of such transfer agents and registrars.
ARTICLE VIII - MISCELLANEOUS PROVISIONS
----------------------------------------
SECTION 1. FISCAL YEAR. The fiscal year of the Corporation shall
--------- be the calendar year; provided, however, that the Board
shall have the power to fix and change the fiscal year of the Corporation.
SECTION 2. EXECUTION OF INSTRUMENTS. All agreements, indentures,
--------- mortgages, deeds, conveyances, transfers, certificates,
declaration, receipts, discharges, releases, satisfactions, settlements,
petitions, schedules, accounts, affidavits, bonds, undertaking, proxies and
other instruments or documents may be signed, executed, acknowledges,
verified, delivered or accepted in behalf of the Corporation by the Chairman
of the Board, or the President, or any Vice President, or the Secretary. Any
such instruments may also be executed, acknowledged, verified, delivered or
accepted in behalf of the Corporation in such other manner and by such other
officers as the Board may from time to time direct. The provisions of this
Section are supplementary to any other provisions of these By-Laws.
SECTION 3. RECORDS. The Articles of Incorporation, the By-Laws and
--------- proceedings of all meetings of the shareholders, the
Board, standing committees of the Board, shall be recorded in appropriate
minute books provided for that purpose. The minutes of each meeting shall
be signed by the Secretary or other officer appointed to act as secretary
of the meeting.
ARTICLE IX. INDEMNIFICATION OF DIRECTORS AND OFFICERS
------------------------------------------------------
SECTION 1. GENERAL. This Corporation shall have the power to
--------- indemnify its directors, officers, employees and agents,
and the directors, officers, employees and agents of the Corporation shall
have the right to indemnity, to the extent and in the manner provided in the
Arkansas Business Corporation Act of 1965, as amended.
SECTION 2. MANDATORY INDEMNIFICATION. Every person who was or is a
--------- party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is
or was a director or officer of the Corporation (or is or was serving at the
request of the Corporation as a director or officer of another corporation,
or as its representative in a partnership, joint venture, trust or other
enterprise) shall be indemnified and held harmless to the fullest extent
legally permissible under and pursuant to any procedure specified in the
Arkansas Business Corporation Act of 1965, as amended and as the same may be
<PAGE>
amended hereafter, against all expenses, liabilities and losses (including
attorney's fees, judgments, fines and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith. Such right of indemnification shall be a contract right that
may be enforced in any lawful manner by such person, and the Corporation may
in the discretion of the Board enter into indemnification agreements with its
directors and officers. Such right of indemnification shall not be
exclusive of any other right which such director or officer may have, or
hereafter acquire, and, without limiting the generality of such statement,
such director or officer shall be entitled to all rights of indemnification
under any agreement, vote of shareholders, provision of law, or otherwise, as
well as all rights under this section.
SECTION 3. INSURANCE. The Board may cause the Corporation to
--------- purchase and maintain insurance on behalf of any person
who is or was a director or officer of the Corporation (or is or was serving
at the request of the Corporation as a director or officer of another
corporation or as its representative in a partnership, joint venture, trust
or other enterprise) against any liability asserted against such person and
incurred in any such capacity or arising out of such status, whether or not
the Corporation would have power to indemnify such person.
SECTION 4. INDEMNIFICATION FOR EXPENSES. Expenses incurred by a
--------- director or officer of the Corporation in defending a
civil or criminal action, suit or proceeding by reason of the fact that such
person is, or was, a director or officer of the Corporation (or is or was
serving at the Corporation's request as a director or officer of another
corporation or as its representative in a partnership, joint venture, trust
or other enterprise) shall be paid by the Corporation in advance of the final
disposition such action, suit or proceeding (1) upon authorization (i) by the
Board by a majority vote of a quorum consisting of directors who are not
parties to the action, suit or proceeding, (ii) if such a quorum is not
obtainable, or even if obtainable if a quorum of disinterested directors so
directs, then by independent legal counsel in a written opinion, or (iii) by
the shareholders; and (2) upon receipt of an undertaking by, or on behalf of,
such person to repay such amount, if it shall ultimately be determined that
such officer or director is not entitled to be indemnified by the Corporation
as authorized by relevant provisions of the Arkansas Business Corporation Act
of 1965, as the same now exists or may hereafter be amended.
ARTICLE X. DIVIDENDS
----------------------
The Board may from time to time declare, and the Corporation may
pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Articles of Incorporation.
ARTICLE XI. SEAL
-----------------
The Board may provide a corporate seal which shall be circular in
form and shall have inscribed thereon the name of the Corporation and the
state of incorporation and the words "Corporate Seal."
ARTICLE XII. WAIVER OF NOTICE
--------------------------------
Whenever any notice is required to be given to any shareholder or
director of the Corporation under the provisions of the By-Laws, under the
<PAGE>
provisions of the Articles of Incorporation or under the provisions of the
Arkansas Business Corporation Act of 1965, as amended, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE XIII - BY-LAWS
----------------------
SECTION 1. INSPECTION. A copy of the By-Laws, with all amendments
--------- thereto, shall at all times be kept in a convenient place
at the principal business office of the Corporation, and shall be open for
inspection to all shareholders, during business hours.
SECTION 2. AMENDMENTS. The By-Laws may be amended, altered or
--------- repealed, at any meeting of the Board, by a majority
vote.
SIGNATURES
Pursuant to the requirements 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.
SIMMONS FIRST NATIONAL CORPORATION
----------------------------------
(Registrant)
Date: 8/10/94 /s/ J. Thomas May
------------------------- --------------------------------------
J. Thomas May, President
and Chief Executive Officer
Date: 8/10/94 /s/ Barry L. Crow
-------------------------- ---------------------------------------
Barry L. Crow, Executive Vice President
and Chief Financial Officer
<PAGE>
