As filed with the Securities and Exchange Commission on January 23, 1995
REGISTRATION NO. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
SIMMONS FIRST NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
ARKANSAS 6021 71-0407808
(State or other jurisdiction (Primary Standard Industrial (I.R.S. employer
of incorporation or Classification Code Number) identification
organization No.)
501 MAIN STREET
PINE BLUFF, ARKANSAS 71601
(501) 541-1000
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
-----------------------------------
J. THOMAS MAY, PRESIDENT
SIMMONS FIRST NATIONAL CORPORATION
501 MAIN STREET
PINE BLUFF, ARKANSAS 71601
(501) 541-1103
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
Copies to:
PATRICK A BURROW JEFFREY C. GERRISH
RAMSAY, BRIDGFORTH, HARRELSON & STARLING P. THOMAS PARRISH
501 MAIN STREET, 11 TH FLOOR GERRISH & MCCREARY, P.C.
PINE BLUFF, ARKANSAS 71601 700 COLONIAL ROAD, SUITE 200
(501) 535-9000 MEMPHIS, TENNESSEE 38117
(901) 767-0900
--------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE
PUBLIC: As promptly as practicable after the effective date of this
Registration Statement.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
Proposed
Title of Proposed Maximum
Each Class of Maximum Aggregate Amount of
Securities to Amount to be Offering Price Offering Registration
be Registered Registered(1) Per Share(2) Price Fee
- ------------------------------------------------------------------------------
Common Stock,
$5.00 par
value 137,255 shares $15.21 $2,087,940 $720.00
- ------------------------------------------------------------------------------
(1) The maximum possible number of shares which could be issued under the
variable exchange ratio.
(2) Based upon the book value of Dumas Bancshares, Inc. less estimated cash
to be paid, which amount is estimated solely for the purpose of calculating
the registration fee pursuant to Rule 457.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
SIMMONS FIRST NATIONAL CORPORATION
CROSS-REFERENCE SHEET
Pursuant to Item 501 (b) of Regulation S-K Showing Location in
the Prospectus of Information by Items 1 through 19,
Part I, of Form S-4 Registration Statement
------------------------------------------
ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
- ----------------------- ----------------------
1. Forepart of the Registration Registration Statement Cover;
Statement and Outside Front Front Cover Page of Prospectus
Cover Page of Prospectus.
2. Inside Front and Outside Inside Front and Back Cover Page
Back Cover Page of of Prospectus; Available
Prospectus. Information; Documents
Incorporated by Reference;
Table of Contents
3. Risk Factors, Ratio of Prospectus Summary; Simmons First
Earnings to Fixed Charges National Corporation
and Other Information
4. Terms of Transaction. The Merger
5. Pro Forma Financial Information Financial Information
6. Material Contacts with the The Merger
Company Being Acquired.
7. Additional Information *
Required for Reoffering by
Persons and Parties Deemed
to be Underwriters.
8. Interests of Named Experts Experts; Legal Matters
and Counsel.
9. Disclosure of Commission *
Position on Indemnification
for Securities Act
Liabilities.
10. Information with Respect to *
S-3 Registrants.
11. Incorporation of Certain *
Information by Reference.
12. Information with Respect to Outside Front Cover Page of
S-2 or S-3 Registrants. Prospectus; Summary; The Merger;
Financial Information; Simmons
First National Corporation;
Consolidated Financial Statements
13. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference.
14. Information with Respect to *
Registrants other than S-3 or
S-2 Registrants.
15. Information with Respect to *
S-3 Companies.
16. Information with Respect to *
S-2 or S-3 Companies.
17. Information with Respect to Summary; Dumas Bancshares, Inc.;
Companies Other than S-3 or Dumas Bancshares, Inc. Special
S-2 Companies. Meeting; Financial Information;
Election by Dumas Bancshares,
Inc. Stockholders under the 1987
Act; Dumas Bancshares, Inc.;
Dumas Bancshares, Inc. Financial
Statements
18. Information if Proxies, Dumas Bancshares, Inc. Special
Consents or Authorizations Meeting; Dumas Bancshares, Inc.
are to be Solicited
19. Information if Proxies Simmons First National
Consents or Authorizations Corporation
are not to be Solicited or
in an Exchange Offer.
DUMAS BANCSHARES, INC.
PROXY STATEMENT
SIMMONS FIRST NATIONAL CORPORATION
PROSPECTUS
137,255 SHARES OF COMMON STOCK
PAR VALUE $5.00
This Proxy Statement and Prospectus ("Proxy Statement") is being
furnished to the stockholders of Dumas Bancshares, Inc. ("DBI") in connection
with the solicitation of proxies by the Board of Directors of DBI for use at
the special meeting of stockholders of DBI to be held on March 16, 1995,
including any adjournments or postponements of the meeting. At the meeting or
any adjournments or postponements thereof, the stockholders of DBI will be
asked to consider and vote on a proposal to authorize and approve the
transactions contemplated by the Agreement and Plan of Merger between Simmons
First National Corporation ("Simmons" or "Company") and DBI, dated November
15, 1994 (the "Agreement"), and incidental thereto the stockholders of DBI
will be asked to consider and vote on a proposal to elect to have DBI governed
by the Arkansas Business Corporation Act of 1987. Pursuant to the Agreement,
Simmons would acquire all of the issued and outstanding stock of DBI through
a merger transaction (the "Merger") in which DBI would merge with and into
Simmons in exchange for the issuance to the stockholders of DBI of up to
137,255 shares of Simmons Class A common stock, par value $5.00 ("Simmons
Common Stock") and the payment in cash of up to $2,450,000.00.
Simmons has agreed to register under the Securities Act of 1933,
as amended (the "Securities Act") up to 137,255 shares of Simmons Common Stock
that may be issued to stockholders of DBI in partial exchange for their stock
in DBI. Consequently, this Proxy Statement serves as a Prospectus of Simmons
under the Securities Act for the issuance of shares of Simmons Common Stock
to stockholders of DBI.
This Proxy Statement and the accompanying forms of proxy are first
being mailed to stockholders of DBI on or about February ___, 1995. On
February 1, 1995, the closing price on the National Association of Securities
Dealers Automatic Quotation System closing per share price of Simmons First
National Corporation Class A Common Stock was $_____.
THE ABOVE MATTERS ARE DISCUSSED IN DETAIL IN THIS PROXY STATEMENT.
STOCKHOLDERS ARE STRONGLY URGED TO READ AND CONSIDER CAREFULLY THIS PROXY
STATEMENT IN ITS ENTIRETY.
THE SECURITIES TO BE ISSUED IN THE PROPOSED TRANSACTION HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy Statement is February ___, 1995.
NO PERSON IS AUTHORIZED BY SIMMONS OR DBI TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATION, OTHER THAN THOSE CONTAINED IN THIS PROXY
STATEMENT, IN CONNECTION WITH THE SOLICITATION AND THE OFFERING MADE BY THIS
PROXY STATEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROXY STATEMENT
DOES NOT CONSTITUTE THE SOLICITATION OF A PROXY OR AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO PURCHASE, ANY SECURITIES IN ANY JURISDICTION IN
WHICH SUCH SOLICITATION OR OFFERING MAY NOT LAWFULLY BE MADE.
NEITHER THE DELIVERY OF THIS PROXY STATEMENT NOR ANY DISTRIBUTION
OF SECURITIES MADE HEREUNDER SHALL IMPLY THAT THERE HAS BEEN NO CHANGE IN THE
INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS OF SIMMONS OR DBI SINCE THE
DATE HEREOF.
AVAILABLE INFORMATION
Simmons is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), and, in
accordance therewith, files proxy statements, reports and other information
with the Securities and Exchange Commission ("Commission"). This filed
material can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices in Chicago (500 West
Madison, Northwestern Atrium Center, 14th Floor, Chicago, Illinois 60661) and
in New York (75 Park Place, New York, New York 10007) and copies of such
material can be obtained by mail from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Simmons First National Corproation Class A Common Stock, symbol SFNCA,
is traded on the National Association of Securities Dealers Automated
Quotation National Market System and the Company's Exchange Act reports and
other information can be inspected and copied at the National Association of
Securities Dealers, 1735 "K" Street, N.W., Washington, D.C. 20006.
Simmons has filed with the Commission a Registration Statement on
Form S-4 (together with any amendments thereto, the "Registration Statement")
under the Securities Act with respect to a maximum of 137,255 shares of Simmons
Class A Common Stock to be issued upon consummation of the transactions
contemplated by the Agreement. This Proxy Statement does not contain all the
information set forth in the Registration Statement and the exhibits thereto,
certain portions of which have been omitted as permitted by rules and
regulations of the Commission. Copies of the Registration Statement are
available from the Commission, upon payment of prescribed rates. For further
information, reference is made to the Registration Statement and the exhibits
filed therewith. Statements contained in this Proxy Statement or any document
incorporated by reference in this Proxy Statement relating to the contents of
any contract or other document referred to herein or therein are not
necessarily complete, and in each instance reference is made to the copy of
such contract or other document filed as an exhibit to the Registration
Statement or such other document, each such statement being qualified in all
respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE
NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE
UPON REQUEST FROM MR. BARRY L. CROW, EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, SIMMONS FIRST NATIONAL CORPORATION, 501 MAIN STREET, PINE
BLUFF, ARKANSAS 71601, (501) 541-1350. IN ORDER TO ENSURE TIMELY DELIVERY OF
THE DOCUMENTS, ANY REQUEST, ALTHOUGH NOT REQUIRED, SHOULD BE MADE, BY
CERTIFIED MAIL, ON OR BEFORE MARCH 9, 1995.
The following documents have been filed with the Commission
under the Exchange Act, are incorporated by reference into this Proxy
Statement:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993, filed with the Commission on March 30, 1994.
2. The Company's most recent Quarterly Report on Form 10-Q for
the calendar quarter ended September 30, 1994, filed with the Commission on
November 14, 1994.
3. The Company's most recent Current Report on Form 8-K filed
with the Commission on November 18, 1994 and January 20, 1994.
Each document filed subsequent to the date of this Proxy Statement
pursuant to Section 13 (a), 13(c), 14 or 15 (d) of the Exchange Act prior to
the holding of the special meeting of the stockholders of DBI shall be deemed
to be incorporated by reference in this Proxy Statement and shall be part
hereof from the date of filing of such document. Any statement contained in
a document incorporated or deemed to be incorporated in this Proxy Statement
shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference modifies or supersedes such document.
All information contained in this Proxy Statement relating to
Simmons has been supplied by Simmons and all information relating to DBI has
been supplied by DBI.
TABLE OF CONTENTS
SUMMARY
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dumas Bancshares, Inc. . . . . . . . . . . . . . . . . . . . . . . . .
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Company . . . . . . . . . . . . . . . . . . . . . . . . .
Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . .
Election by Dumas Bancshares, Inc. Stockholders Under the 1987 Act . .
The Dumas Bancshares, Inc. Special Meeting . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences. . . . . . . . . . . . . . . .
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . .
Market Prices. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comparative Per Share Data . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . .
THE DUMAS BANCSHARES, INC. SPECIAL MEETING
Date, Time and Place . . . . . . . . . . . . . . . . . . . . . . . . .
Purpose of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . .
Shares Outstanding and Entitled to Vote; Record Date . . . . . . . . .
Vote Required. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Voting; Solicitation of Proxies. . . . . . . . . . . . . . . . . . . .
THE MERGER
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . .
Reason for the Merger. . . . . . . . . . . . . . . . . . . . . . .
Fairness of the Transaction. . . . . . . . . . . . . . . . . . . . . .
The Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Bank Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . .
Antitrust Matters. . . . . . . . . . . . . . . . . . . . . . . . . . .
Certain Federal Income Tax Consequences. . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . .
Right of Dissent Under the 1965 Act. . . . . . . . . . . . . . . . . .
Right of Dissent under the 1987 Act. . . . . . . . . . . . . . . . . .
Exchange Ratio for the Merger. . . . . . . . . . . . . . . . . . . . .
Expenses of the Merger . . . . . . . . . . . . . . . . . . . . . . . .
FINANCIAL INFORMATION
Pro Forma Consolidated Balance Sheets. . . . . . . . . . . . . . . . .
Pro Forma Consolidated Statements of Income. . . . . . . . . . . . . .
Notes to Pro Forma Consolidated Financial Statements . . . . . . . . .
ELECTION BY DUMAS BANCSHARES, INC. STOCKHOLDERS UNDER THE 1987
ACT
Election Incidental to the Merger. . . . . . . . . . . . . . . . . . .
Reason for the Election. . . . . . . . . . . . . . . . . . . . . . . .
Result of the Election . . . . . . . . . . . . . . . . . . . . . . . .
SIMMONS FIRST NATIONAL CORPORATION
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Simmons Common Stock. . . . . . . . . . . . . . . . . .
Resale of Simmons Common Stock . . . . . . . . . . . . . . . . . . . .
No Shareholder Approval Required . . . . . . . . . . . . . . . . . . .
DUMAS BANCSHARES, INC.
Description of Business. . . . . . . . . . . . . . . . . . . . . . . .
Management's Discussion and Analysis . . . . . . . . . . . . . . . . .
Directors and Executive Officers . . . . . . . . . . . . . . . . . . .
Transactions with Management . . . . . . . . . . . . . . . . . . . . .
Principal Stockholders of Dumas Bancshares, Inc. . . . . . . . . . . .
Competition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description of Dumas Bancshares, Inc. Stock. . . . . . . . . . . . . .
Comparison of Rights of Holders of Dumas Bancshares, Inc. Common Stock
and Simmons Common Stock. . . . . . . . . . . . . . . . . . . . . . . .
LEGAL MATTERS AND EXPERTS
Legal Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
INDEX TO DUMAS BANCSHARES, INC. FINANCIAL STATEMENTS. . . . . . . . . . . .
ANNEXES
I - Agreement and Plan of Reorganization . . . . . . . . . . . . .
II - Arkansas Business Corporation Act of 1965 Section 4-26-1007. .
III- Arkansas Business Corporation Act of 1987 Section 4-27-1301
et. seq.. . . . . . . . . . . . . . . . . . . . . . . . . . .
SUMMARY
The following is a summary of certain information contained
elsewhere in this Proxy Statement. Reference is made to, and this summary is
qualified in its entirety by, the more detailed information contained elsewhere
in this Proxy Statement, in the attached Annexes and in the documents
incorporated by reference. Stockholders are urged to read carefully this
Proxy Statement and the attached Annexes in their entirety.
THE COMPANY
The Simmons First National Corporation (the "Company") is a bank
holding company registered under the Bank Holding Company Act of 1956. At
September 30, 1994 and December 31, 1993, the Company had consolidated total
assets of $692.5 million and $738.8 million, respectively, and total equity
capital of $82.3 million and $75.3 million, respectively. The Company owns
three subsidiary banks in Arkansas. Its lead bank, Simmons First National Bank
(the "Bank"), is a national bank which has been in operation since 1903. In
the past two years the Bank has received substantial favorable national media
coverage for offering one of the lowest credit card interest rates in the
United States. The Bank's primary market area, with the exception of its
nationally-provided credit card and mortgage banking services, is the State of
Arkansas. The Company also owns two community banks, Simmons First Bank of
Jonesboro ("Simmons/Jonesboro"), and Simmons First Bank Lake Village
("Simmons/Lake Village"), both acquired in 1984. The Company's banking
subsidiaries conduct their operations through 23 branches located in 9
communities in Arkansas.
The Corporation's Common Stock is traded on the National
Association of Securities Dealers Automated Quotation National Market System
over-the-counter market (NASDAQ-NMS) under the symbol "SFNCA". The
Corporation's principal executive offices are located at 501 Main Street, Pine
Bluff, Arkansas, 71601, and its telephone number is (501) 541-1000.
DUMAS BANCSHARES, INC.
DBI is a bank holding company which owns all of the outstanding
stock of Dumas State Bank, Dumas Arkansas and First State Bank of Gould, Gould,
Arkansas. As of September 30, 1994 and December 31, 1993, DBI had consolidated
total assets of $43.0 million and $43.7 million, respectively, and consolidated
equity capital of $3.6 million and $3.4 million, respectively.
There is no public market for shares of DBI's outstanding capital
stock. DBI's principal executive offices are located at Hwy 54 & 65, Dumas,
Arkansas, 71639; its telephone number is (501) 382-4204.
THE MERGER
On November 15, 1994, the Company and DBI entered into a
definitive agreement pursuant to which the Company proposes to acquire all of
the issued and outstanding stock of DBI by merger of DBI with and into Simmons.
The acquisition of DBI will be consummated through the issuance to the
shareholders of DBI, based upon their respective elections, of up to 137,255
shares of Simmons Common Stock and the payment of up to $2,450,000.00 in cash.
The reasons for the Merger, are, among others, to provide liquidity to the
holders of DBI common stock, to expand the present banking services of DBI and
to expand the geographical presence of Simmons into the banking markets in
which DBI operates thereby increase the earning potential of the consolidated
enterprises. See "The Merger-The Agreement."
Upon consummation of the Merger, DBI will merge with and into
Simmons, and Simmons will be the surviving corporation in the Merger. As a
result of the Merger, each share of DBI common stock outstanding immediately
prior to the effective time (the "Effective Time") of the Merger (other than
shares as to which dissenter's rights have been perfected ("Dissenters'
Shares") under either the Arkansas Business Corporation Act of 1965 or the
Arkansas Business Corporation Act of 1987) will be converted into the right to
receive (i) a number of shares of Simmons Common Stock equal to $161.2903
divided by the average closing price per share of Simmons Common Stock during
the period of twenty (20) trading days on which one or more trades actually
takes place ending immediately prior to the fifth trading day preceding the
Effective Time (the "Exchange Ratio"), (ii) $161.2903 in cash, without
interest, or (iii) a combination of Simmons Common Stock and cash
(collectively, the "Merger Consideration"), provided that the total number of
shares of Simmons Common Stock to be issued as Merger Consideration shall not
be less than 51% nor more than 70% of the Merger Consideration and the total
cash to be paid as part of the Merger Consideration shall not be less than 30%
nor more than 49% of the Merger Consideration. The Merger is conditioned on
being a tax-free reorganization. Fractional shares of Simmons Common Stock
will not be issued in connection with the Merger. A holder of DBI common stock
otherwise entitled to a fractional share will be paid cash in lieu of such
fractional shares.
Subject to the allocation procedures set forth below, each record
holder of shares of DBI Common Stock will be entitled (i) to elect to receive
cash for all of such shares (a "Cash Election"), (ii) to elect to receive
Simmons Common Stock for all of such shares (a "Stock Election"), (iii) to
elect to receive Simmons Common Stock for a stated percentage of such shares
("Partial Stock Election ") and cash for the balance ("Partial Cash Election")
or (iv) to indicate that such holder has no preference as to the receipt of
cash or Simmons Common Stock for such shares (a "Non-Election"). All such
elections are to be made on a form of election (the "Form of Election").
Holders of record of shares of DBI common stock who hold such shares as
nominees, trustees or in other representative capacities (a "Representative")
may submit multiple Forms of Election, provided that such Representative
certifies that each such Form of Election covers all the shares of DBI common
stock held by such Representative for a particular beneficial owner. All
elections must be received on or before the close of business seven (7) days
next following the date of the DBI special shareholders meeting at which the
Merger is approved ("Election Deadline") and will be revocable until the close
of business on the Election Deadline.
DBI STOCKHOLDERS SHOULD CONSIDER THAT STOCKHOLDERS RECEIVING
SIMMONS COMMON STOCK IN THE MERGER WILL RECEIVE A NUMBER OF SHARES OF SIMMONS
COMMON STOCK DETERMINED PURSUANT TO THE EXCHANGE RATIO FOR EACH SHARE OF DBI
COMMON STOCK. BECAUSE THE EXCHANGE RATIO WILL BE FIXED BASED ON AN AVERAGE
MARKET PRICE PER SHARE OF SIMMONS COMMON STOCK PRIOR TO THE EFFECTIVE DATE AND
BECAUSE THE MARKET PRICE OF SIMMONS COMMON STOCK IS SUBJECT TO FLUCTUATION, THE
MARKET VALUE OF THE SIMMONS COMMON STOCK THAT HOLDERS OF SHARES OF DBI COMMON
STOCK MAY RECEIVE IN THE MERGER FOR EACH SHARE OF DBI COMMON STOCK MAY BE
LESS THAN, GREATER THAN OR EQUAL TO $161.2903. IN ADDITION, BECAUSE OF SUCH
FLUCTUATIONS IN THE VALUE OF SHARES OF SIMMONS COMMON STOCK, THE MARKET VALUE
OF THE SHARES OF SIMMONS COMMON STOCK THAT HOLDERS OF SHARES OF DBI COMMON
STOCK MAY RECEIVE IN THE MERGER MAY INCREASE OR DECREASE FOLLOWING THE MERGER.
On November 14, 1994, the date immediately prior to the
announcement of the definitive agreement, shares of Simmons Common Stock closed
on the NASDAQ-NMS at a price of $24.50. There is no established market value
for the stock of DBI.
THE BOARD OF DIRECTORS OF DBI UNANIMOUSLY RECOMMEND THAT THE DBI
STOCKHOLDERS VOTE IN FAVOR OF THE ADOPTION OF THE AGREEMENT.
CONSOLIDATED COMPANY
As a result of the Merger, the consolidated operations and its
constituent parts of Simmons and DBI as of September 30, 1994 will reflect
assets, shareholders' equity, net interest income and income from continuing
operations as follows (in thousands):
<TABLE>
<CAPTION>
% %
Pro Forma Pro Forma Pro Forma
SFNCA Consolidated DBI Consolidated Consolidated
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets $ 692,515 94.24 $ 43,026 5.86 $ 734,817
Shareholders' equity 82,270 95.92 3,624 4.22 85,770
Net interest income 21,890 94.95 1,249 5.42 23,054
Income from continuing
operations (NI) 7,631 97.36 312 3.98 7,838
Annualized
----------
Net interest income 29,267 94.95 1,670 5.41 30,823
Income from continuing
operations (NI) 10,203 97.37 417 3.97 10,479
</TABLE>
If the maximum of 137,255 shares of common stock of Simmons are
issued to DBI stockholders, Simmons will have a total of 3,814,583 shares of
common stock issued and outstanding. Present Simmons stockholders will control
96.40% of such shares and DBI stockholders will control 3.60% of such shares.
FAIRNESS OPINION
The Agreement provides that the Board of Directors of DBI is to
receive, as one of the conditions to the consummation of the Merger, a written
opinion from a financial advisor to the effect that the consideration to be
paid to the holders of the shares of DBI stock pursuant to the merger is fair.
With the consent of Simmons, DBI has retained the Memphis, Tennessee firm of
Southard Financial, a financial advisory firm, to issue this opinion. While
no opinion has been rendered to date, the opinion is expected to be issued
prior to the consummation of the Merger.
ELECTION BY DUMAS BANCSHARES, INC. STOCKHOLDERS UNDER THE 1987 ACT
The Election by the stockholders of DBI to be governed by the
Arkansas Business Corporation Act of 1987 codified at Ark. Code Ann. Section
4-27-101 et. seq. (the "1987 Act") is incidental to and a condition of the
Merger proposal and approval of such election will have no force or effect
unless the Merger is likewise approved.
DBI is an Arkansas corporation organized under the Arkansas
Business Corporation Act of 1965, codified at Ark. Code Ann. Section 4-26-101
et. seq. (the "1965 Act"). The 1987 Act is applicable to corporations that
were incorporated on or after January 1, 1988 or those "1965 Act" corporations
that elect to be governed by the 1987 Act by amending their Articles of
Incorporation to adopt the 1987 Act. The stockholders of Simmons elected to
be governed by the 1987 Act by amending its Articles of Incorporation during
1994.
The 1965 Act and 1987 Act have statutory merger procedures that
must be complied with in order to legally consummate a merger. Although both
Acts contain similar provisions, DBI must elect to be governed by the 1987 Act
in order to facilitate compliance with the applicable statutory procedures.
THE DUMAS BANCSHARES, INC. SPECIAL MEETING
Approval of the Merger by the stockholders of DBI will be
considered at a Special Meeting to be held at the offices of DBI, Highways 65
& 54, Dumas Arkansas on March 16, 1995, at 10:00 a.m. Central Standard Time.
The affirmative vote of the holders of a two-thirds of the
outstanding shares of DBI common stock is required for the approval of the
Merger and the election to be governed by the 1987 Act. Directors, executive
officers and their affiliates hold a total of 67.85% of the outstanding stock
of DBI. Management anticipates that the directors, executive officers, and
their affiliates will vote in favor of the Merger, and therefore, the approval
of the Merger is assured. Stockholders of DBI are entitled to dissenters'
rights. See "The Merger - Right of Dissent under the 1965 Act; Right of
Dissent under the 1987 Act."
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
It is intended that for federal income tax purposes the Merger
will be treated as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and, accordingly, for
federal income tax purposes, no gain or loss will be recognized by either
Simmons or DBI as a result of the Merger and DBI's stockholders will not
recognize gain or loss upon the receipt of solely Simmons Common Stock in
exchange for DBI common stock. DBI expects to receive an opinion of Company's
counsel, dated as of the effective date of the Merger, opining that
shareholders who exchange their DBI common stock solely for shares of Simmons
Common Stock will not recognize a gain or loss in the Merger, and holders of
shares of DBI common stock who exchange their shares for shares of Simmons
Common Stock and cash will recognize gain, if any is realized, in the Merger
but not in excess of the amount of cash received. The parties to this
transaction will not request a ruling from the Internal Revenue Service
concerning the taxability of this transaction. See "The Merger - Certain
Federal Income Tax Consequences."
DISSENTERS' RIGHTS
Holders of DBI common stock are entitled to dissenter's rights
with respect to the Merger. Holders of DBI Common Stock may exercise their
right of dissent under either the 1965 Act or the 1987 Act. See "The Merger -
Right of Dissent under the 1965 Act; Right of Dissent under the 1987 Act;
Annex II; Annex III."
REGULATORY APPROVALS
At this time, Simmons has applied for approval of the Board of
Governors of the Federal Reserve and the Arkansas Bank Commissioner to merge
DBI into Simmons. The consummation of the Merger is dependent upon the
receipt of approvals from the foregoing regulatory agencies.
See "The Merger - Regulatory Approvals."
ACCOUNTING TREATMENT
Simmons intends to treat the Merger as a purchase for accounting
purposes. See "The Merger - Accounting Treatment."
MARKET PRICES
Simmons Common Stock is traded over-the-counter in the NASDAQ
National Market System. Dumas Bancshares, Inc. common stock is not traded
publicly and there is no quoted market for the stock. The table below shows
the high and low closing sales prices for Simmons Common Stock.
<TABLE>
<CAPTION>
Simmons
Common Stock(1)
-----------------------
1 Share
-----------------------
High Low
--------- ---------
<S> <C> <C>
1991 $ 12.875 $ 10.750
1992 $ 24.000 $ 12.875
1993 $ 27.500 $ 21.000
01/01/94 - 09/30/94 $ 29.000 $ 22.500
- -------------
<FN>
(1) All share prices have been adjusted for a 100% stock dividend which was
declared April 13, 1992.
</TABLE>
On November 14, 1994, immediately prior to the public announcement
of the definitive agreement between Simmons and DBI as to the proposed merger
transaction, the closing sales price for Simmons Common Stock was $24.50. On
February 1, 1995, the closing sales price for Simmons Common Stock was
$_______.
COMPARATIVE PER SHARE DATA
The following table sets forth for the periods indicated selected
historical per share data of Simmons and DBI and the corresponding pro forma
and pro forma equivalent per share amounts giving effect to the proposed
Merger. The data presented are based upon the consolidated financial
statements and related notes of Simmons which are incorporated by reference in
this Proxy Statement, and the consolidated financial statements and related
notes of DBI and the pro forma combining balance sheet and income statements,
including the notes thereto, appearing elsewhere herein. This information
should be read in conjunction with such historical and pro forma financial
statements and related notes thereto. The assumptions used in the preparation
of this table appear elsewhere in this Proxy Statement. See "Financial
Information." These data are not necessarily indicative of the results of the
future operations of the consolidated organization or the actual results that
would have occurred if the Merger had been consummated prior to the periods
indicated.
<TABLE>
<CAPTION>
SFNCA DBI SFNCA/DBI
Historical Historical ProForma Consolidated(1)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Book value per common share:
September 30, 1994 $ 22.37 $ 116.90 $ 22.49
Cash dividends per common share:
Year ended December 31, 1991 0.37 1.50 .37
Year ended December 31, 1992 0.40 1.50 .40
Year ended December 31, 1993 0.40 1.50 .40
Nine months ended September 30, 1994 0.33 0.00 .33
Income per share from continuing
operations:
Year ended December 31, 1993 2.78 12.57 2.74
Nine months ended September 30, 1993 2.13 9.77 2.03
Nine months ended September 30, 1994 2.08 10.06 2.06
- -------------
<FN>
(1) ProForma consolidated based on the issuance of 137,255 shares of Simmons
Common Stock at a price of $25.50 per share. Shareholders of DBI may multiply
the Pro Forma consolidated results on a per share basis shown below by the
exchange ratio, which may range from 5.120 to 6.325, to provide a comparison
with DBI Historical results shown.
</TABLE>
SELECTED FINANCIAL DATA
The table on the following page presents selected historical
financial data of Simmons and DBI and selected unaudited pro forma financial
data after giving effect to the Merger as a purchase for accounting purposes.
The Simmons historical data for each of the years in the five-year period ended
December 31, 1993 are based on the historical financial statements of Simmons
as audited by Baird, Kurtz and Dobson, independent public accountants. The
Simmons and DBI historical data for the nine months ended September 30, 1994
and 1993 are based on unaudited historical records. The DBI historical data
for 1993 and the operating and per share data for 1992 are based on the
historical financial statements of DBI, as audited by Kemp and Company,
independent auditors. The DBI selected balance sheet items for 1992 and the
historical data for the year 1991 are based on unaudited historical company
records. The DBI historical data for 1990 and 1989 are based on the historical
financial statements, as audited by Baird, Kurtz and Dobson, independent public
accountants. The pro forma data is not necessarily indicative of the results
of operations or the financial condition that would have been reported had the
Merger been in effect during those periods, or as of those dates, or that may
be reported in the future. Pro forma consolidated per share data of Simmons
and DBI give effect to the exchange of each share of DBI common stock for
6.325 shares of Simmons Common Stock.
These data should be read in conjunction with the consolidated
financial statements of each of Simmons and DBI, and the related notes thereto,
incorporated by reference herein and in conjunction with the unaudited pro
forma financial information, including the notes thereto, appearing elsewhere
in this Proxy Statement. See "Incorporation of Certain Documents by Reference"
and "Financial Information."
<TABLE>
SELECTED FINANCIAL DATA
SIMMONS FIRST NATIONAL CORPORATION
<CAPTION>
Year Ended December 31,
($ in thousands, Sept. 30, Sept. 30, ----------------------------------------------------------
(except per share data) 1994 1993 1993 1992 1991 1990 1989
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SFNCA - HISTORICAL
Operating Data
Total interest income $ 33,707 $ 34,553 $ 44,394 $ 46,042 $ 49,674 $ 47,816 $ 45,917
Net interest income 21,890 22,490 28,450 26,525 22,536 21,278 18,944
Provision for possible loan losses 1,575 2,292 3,006 3,741 3,552 2,681 4,279
Income from continuing operations 7,631 6,963 9,396 7,477 5,300 4,363 3,089
Per Share Data
Income from continuing operations 2.08 2.13 2.78 2.61 1.99 1.63 1.16
Cash dividend paid 0.33 .30 0.40 0.40 0.37 0.34 .30
Selected Balance Sheet Items
Total assets 692,515 698,125 738,760 705,903 673,377 647,783 528,225
Total securities 169,487 197,410 198,626 202,994 168,580 145,167 93,839
Net loans 399,329 371,391 386,996 361,907 325,760 325,444 318,859
Total deposits 567,141 578,415 610,355 590,409 563,114 528,302 429,533
Long-term debt 12,154 12,186 12,178 12,208 12,236 12,261 12,284
Capital accounts 82,270 73,270 75,335 51,219 45,460 40,259 36,848
</TABLE>
<TABLE>
SELECTED FINANCIAL DATA
DUMAS BANCSHARES, INC.
<CAPTION>
Year Ended December 31,
($ in thousands, Sept. 30, Sept. 30, ----------------------------------------------------------------
(except per share data) 1994 1993 1993 1992 1991 1990 1989
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DBI - HISTORICAL
Operating Data
Total interest income $ 2,069 $ 1,983 $ 2,677 $ 3,078 $ 3,859 $ 3,892 $ 3,330
Net interest income 1,249 1,143 1,566 1,593 1,629 1,579 1,423
Provision for possible loan losses 4 5 6 36 156 56 69
Income from continuing operations 312 303 390 386 335 414 320
Per Share Data
Income from continuing operations 10.06 9.77 12.57 12.45 10.81 13.35 10.32
Cash dividend paid 0.00 0.00 1.50 1.50 1.50 1.50 1.50
Selected Balance Sheet Items
Total assets 43,026 42,481 43,747 43,635 43,679 42,035 37,758
Total securities 10,481 9,957 10,651 10,491 9,166 9,510 8,186
Net loans 26,811 23,189 23,172 20,301 21,820 24,326 20,648
Total deposits 37,381 38,090 39,160 39,447 39,725 38,271 34,463
Long-term debt 600 700 700 800 810 810 810
Capital accounts 3,624 3,395 3,425 3,077 2,757 2,507 2,082
</TABLE>
<TABLE>
SELECTED FINANCIAL DATA
PRO FORMA CONSOLIDATED
<CAPTION>
($ in thousands, September 30, December 31,
(except per share data) 1994 1993
---------------------------------------------------------------------------------------
<S> <C> <C>
PRO FORMA - Consolidated
Operating Data
Total interest income $ 35,653 $ 46,896
Net interest income 23,054 29,892
Provision for possible loan losses 1,579 3,012
Income from continuing operations 7,838 9,638
Per Share Data
Income from continuing operations 2.06 2.74
Cash dividend paid 0.33 0.40
</TABLE>
<TABLE>
<CAPTION>
September 30,
1994
-------------
<S> <C>
Selected Balance Sheet Items
Total assets $ 734,817
Total securities 180,049
Net loans 426,140
Total deposits 604,522
Long-term debt 12,154
Capital accounts 85,770
</TABLE>
THE DUMAS BANCSHARES, INC. SPECIAL MEETING
DATE, TIME AND PLACE
The DBI Special Shareholders Meeting will be held on March 16,
1995, commencing at 10:00 a.m. Central Standard Time, at the offices of DBI,
Highways 65 & 54, Dumas, Arkansas.
PURPOSE OF MEETING
The purpose of the DBI Special Shareholders Meeting is to consider
and vote upon the adoption of the Agreement between DBI and Simmons and to
consider and vote upon the election of DBI to be governed by the Arkansas
Business Corporation Act of 1987 (the "Election").
SHARES OUTSTANDING AND ENTITLED TO VOTE; RECORD DATE
The close of business on February 7, 1995 has been fixed by the
Board of Directors of DBI as the record date for the determination of holders
of DBI common stock entitled to notice of and to vote at the DBI Special
Shareholders Meeting. At the close of business on January 19, 1995, there
were 31,000 shares of DBI common stock issued and outstanding held by 75
shareholders of record. Holders of record of DBI common stock on the record
date are entitled to one vote per share and are entitled to dissenters' rights.
See "The Merger - Right of Dissent under the 1965 Act; Right of Dissent under
the 1987 Act."
VOTE REQUIRED
The affirmative vote of two-thirds of all the shares of DBI common
stock outstanding on the record date is required to adopt the Agreement and the
Election.
As of September 30, 1994, directors, executive officers and their
affiliates own 67.85% of the outstanding stock of DBI. Management anticipates
that the directors, executive officers, and their affiliates will vote in favor
of the Merger, and therefore, the approval of the Merger is assured.
VOTING; SOLICITATION OF PROXIES
Proxies for use at the DBI Special Meeting accompany copies of
this Proxy Statement delivered to record holders of DBI common stock and such
proxies are solicited on behalf of the Board of Directors of DBI. A holder of
DBI common stock may use his proxy if he is unable to attend the DBI Special
Meeting in person or wishes to have his shares voted by proxy even if he does
attend the meeting. The proxy may be revoked in writing by the person giving
it at any time before it is exercised, by notice of such revocation to the
secretary of DBI, or by submitting a proxy having a later date, or by such
person appearing at the DBI meeting and electing to vote in person. All
proxies validly submitted and not revoked will be voted in the manner specified
therein. If no specification is made, the proxies will be voted in favor of
the Merger and the Election.
DBI will bear the cost of solicitation of proxies from its
stockholders. In addition to using the mail, proxies may be solicited by
personal interview. Officers and other employees of DBI acting on DBI's
behalf, may solicit proxies personally.
THE MERGER
BACKGROUND OF THE MERGER
In May, 1994, the Chairman of the Board of Directors of DBI,
Merle F. Peterson, and the President and Chief Executive Officer of DBI, James
R. Hall, met with DBI's counsel to discuss strategic long-term planning issues
for DBI in light of three factors: (1) the desire on the part of Mr. Hall to
retire by the end of 1995, (2) the desire on the part of Mr. Peterson, who
with his wife were the holders of 35.07% of DBI's outstanding shares, to
liquidate his holdings in DBI on a tax-free basis, and (3) the large number of
bank merger and acquisition transactions that had been occurring over the past
12 to 18 months in the Mid-South area at attractive purchase price premiums.
Following that meeting, counsel met with DBI's Board of Directors
on June 9, 1994 to discuss planning issues in light of those three factors.
At that meeting, the Board of Directors determined that it would be in the best
interest of the stockholders of DBI for DBI to actively solicit offers for
acquisition by outside parties. The Board retained its counsel to assist it
with soliciting outside acquisition offers.
Over the next several weeks, informal discussions occurred with a
number of institutions that determined level of interest in possibly acquiring
DBI. At a meeting of the Board of Directors on September 8, 1994, DBI's
counsel presented to the Board of Directors a written offer from Simmons to
acquire DBI. After discussion, the Board of Directors authorized senior
management and counsel to pursue additional negotiations with Simmons. Those
negotiations ensued, and on September 23, 1994, a letter of intent was reached
between DBI and Simmons regarding an acquisition. At the time the letter of
intent was reached, DBI and Simmons exchanged certain information for review by
each party's respective management, counsel and advisors. Further
negotiations commenced regarding the negotiation of the Merger Agreement. On
November 10, 1994, DBI's Board of Directors met for purposes of considering and
acting upon the proposed Agreement between DBI and Simmons. Based upon the
terms of the Agreement, including the condition that DBI receive a written
opinion from a financial advisor as to the fairness of the transaction prior
to its consummation, the DBI Board of Directors unanimously approved the
Agreement.
At a meeting of the Board of Directors of SFNC held on November
14, 1994, the SFNC Board unanimously approved the Agreement. The agreement
was signed on November 15, 1994.
REASONS FOR THE MERGER
In reaching its determination that the Merger and the Agreement
are fair to, and in the best interest of, DBI and its shareholders, DBI's Board
of Directors consulted with its counsel, as well as with DBI's management, and
considered a number of factors, including, without limitation, the following:
a. The familiarity of the DBI Board of Directors with and review of
DBI's business, operations, earnings and financial condition;
b. The belief of the DBI Board of Directors that the terms of the
Agreement are attractive in that the Agreement allows DBI's shareholders at
their option to become shareholders in Simmons, a company whose stock is traded
over NASDAQ's National Market System, as well as the recent earnings
performance of Simmons;
c. The wide range of banking products and services of Simmons and its
dividend payment history;
d. The belief of the DBI Board of Directors, based upon analysis of
the anticipated financial effects of the Merger, that upon consummation of the
Merger, Simmons and its banking subsidiaries would be well-capitalized
institutions, the financial positions of which would be in excess of all
applicable regulatory capital requirements.
e. The current and prospective economic and regulatory environment
and competitive constraints facing the banking industry and financial
institutions in DBI's market area;
f. The recent business combinations involving financial institutions,
either announced or completed, during the past 12 months in the United States,
the State of Arkansas and contiguous states and the effect of such combinations
on competitive conditions in DBI's market area;
g. The belief of the DBI Board of Directors that, in light of the
reasons discussed above, Simmons was an attractive choice as a long-term
affiliation partner of DBI; and
h. The expectation that the Merger will generally be a tax-free
transaction to those DBI shareholders who elect to receive stock of Simmons by
virtue of the Merger (see "Certain Federal Income Tax Consequences").
DBI's Board did not assign any specific or relative weight to the foregoing
factors in their considerations.
FAIRNESS OF THE TRANSACTION
The Agreement provides that the Board of Directors of DBI is to
receive, as one of the conditions for DBI to consummate the Merger, a written
opinion from a financial advisor to the effect that the consideration to be
paid to the holders of the shares of DBI stock pursuant to the Merger is fair
to the holders of DBI stock. With the consent of Simmons, DBI has retained the
Memphis, Tennessee firm of Southard Financial, a financial advisory firm, to
issue this opinion. That opinion is expected to be issued prior to the
consummation of the Merger.
THE BOARD OF DIRECTORS OF DBI BELIEVES THAT THE PROPOSED
ACQUISITION IS IN THE BEST INTEREST OF THE STOCKHOLDERS OF DBI AND RECOMMEND A
VOTE IN FAVOR OF THE ADOPTION OF THE AGREEMENT.
THE AGREEMENT
The following description of certain features of the Agreement is
qualified in its entirety by the full text of the Agreement, which is
incorporated herein by reference and attached hereto by Annex.
Under the terms of the Agreement, DBI will be merged with and
into Simmons in exchange for the issuance by the Company of a maximum of
137,255 newly issued shares of Simmons Common Stock to the holders of the
common stock of DBI and the payment of cash in the maximum amount of
$2,450,000.00. The aggregate merger consideration is expected to approximate
$5,000,000.00. Within the parameters described below, a holder of DBI common
stock may elect to receive as consideration for his shares of DBI common stock
in the Merger, all cash, all Simmons Common Stock, or a combination of cash and
Simmons Common Stock. The Merger is conditioned on being a tax-free
reorganization. Fractional shares of Simmons Common Stock will not be issued
in connection with the Merger. A holder of DBI common stock otherwise entitled
to a fractional share will be paid cash in lieu of such fractional shares.
Upon consummation of the Merger, DBI will merge with and into
Simmons, and Simmons will be the surviving corporation in the Merger. As a
result of the Merger, each share of DBI common stock outstanding immediately
prior to the effective time (the "Effective Time") of the Merger (other than
shares as to which dissenter's rights have been perfected ("Dissenters'
Shares") under either the Arkansas Business Corporation Act of 1965 or the
Arkansas Business Corporation Act of 1987) will be converted into the right to
receive (i) a number of shares of Simmons Common Stock equal to $161.2903
divided by the average closing price per share of Simmons Common Stock during
the period of twenty (20) trading days on which one or more trades actually
takes place ending immediately prior to the fifth trading day preceding the
Effective Time (the "Exchange Ratio"), (ii) $161.2903 in cash, without
interest, or (iii) a combination of Simmons Common Stock and cash
(collectively, the "Merger Consideration"), provided that the total number of
shares of Simmons Common Stock to be issued as a part of the Merger
Consideration shall not be less than 51% nor more than 70% of the Merger
Consideration and the total cash to be paid as a part of the Merger
Consideration shall not be less than 30% nor more than 49% of the Merger
Consideration. Notwithstanding the foregoing, the number of shares of Simmons
Common Stock to be exchanged shall not be less than 80,952 and shall not be
greater than 137,255 which equates to the Exchange Ratio computed using an
average price of Simmons Common Stock of $31.50 while giving effect to the
maximum cash election, and $25.50 while giving effect to the minimum cash
election, respectively.
Both the number of shares of DBI common stock to be converted into
the right to receive cash and the number of such shares to be converted into
the right to receive shares of Simmons Common Stock in the Merger are fixed
within certain ranges under the terms of the Agreement. Accordingly, no
assurance can be given that an election by any given stockholder can be
accommodated. Rather, the election by each holder of DBI common stock will be
subject to the results of the allocation procedures described above.
In the event that the number of shares of DBI common stock as to
which valid elections to receive cash, including Partial Cash Elections, have
been made (the "Cash Election Shares") exceeds 49% of the shares of DBI common
stock outstanding immediately prior to the Effective Time (the "Maximum Cash
Election Number"), all of the DBI stockholders electing to receive cash for
their shares of DBI common stock will receive for such shares (i) an amount in
cash, without interest, equal to the product of (x) $161.2903 and (y) a
fraction (the "Cash Fraction"), the numerator of which shall be the Maximum
Cash Election Number and the denominator of which shall be the total number of
Cash Election Shares and (ii) a number of shares of Simmons Common Stock equal
to the product of (x) the Exchange Ratio and (y) a fraction equal to one minus
the Cash Fraction.
In the event that the number of shares of DBI common stock as to
which valid elections to receive Simmons Common Stock, including Partial Stock
Elections, have been made (the "Stock Election Shares") exceeds 70% of the
shares of DBI common stock outstanding immediately prior to the Effective Time
(the "Maximum Stock Election Number"), all DBI stockholders electing to receive
Simmons Common Stock for their shares of DBI common stock will receive for
their shares of DBI common stock (i) a number of shares of Simmons Common Stock
equal to the product of (x) the Exchange Ratio and (y) a fraction (the "Stock
Fraction"), the numerator of which shall be the Maximum Stock Election Number
and the denominator of which shall be the total number of Stock Election
Shares, and (ii) an amount in cash, without interest, equal to the product of
(x) $161.2903 and (y) a fraction equal to one minus the Stock Fraction.
In the event that the number of Cash Election Shares does not
exceed the Maximum Cash Election Number and the number of Stock Election Shares
does not exceed the Maximum Stock Election Number, all Cash Election Shares
will be converted into the right to receive cash, all Stock Election Shares
will be converted into the right to receive Simmons Common Stock and all shares
of DBI common stock covered by Non-Elections, if any, will be considered Cash
Elections, unless such action would cause the Maximum Cash Election Number to
be exceeded, in which event the shares covered by Non-Elections shall be
converted into the right to receive (i) an amount in cash, without interest,
equal to the product of (x) $161.2903 and (y) a fraction (the "Non-Election
Fraction"), the numerator of which shall be the excess of the Maximum Cash
Election Number over the total number of Cash Election Shares and the
denominator of which shall be the excess of (A) the number of shares of DBI
common stock outstanding immediately prior to the Effective Time over (B) the
sum of the total number of Cash Election Shares and the total number of Stock
Election shares and (ii) a number of shares of Simmons Common Stock equal to
the product of (x) the Exchange Ratio and (y) a fraction equal to one minus
the Non-Election Fraction. See "The Merger--Certain Federal Income Tax
Consequences".
If the average price of Simmons Common Stock is less than $25.50,
the number of shares issued shall not exceed the ceiling of 137,255 shares.
Also, if the average price of Simmons common stock is more than $31.50, the
amount of shares issued shall not be less than the floor of 80,952 shares. T
he total consideration exchanged will vary from $5,000,000 if the average price
is either higher than $31.50 or lower than $25.50. For example, if the
aggregate cash elections cover 49% of the DBI common stock and the average
price for Simmons Common Stock is $33.50, the DBI stockholders shall receive
in the aggregate 80,952 shares of Simmons Common Stock, each share having a
value of $33.50 and cash in the amount of $2,450,000.00, representing total
consideration of $5,161,904. If the aggregate cash elections cover 30% of the
DBI common stock and average price for Simmons Common Stock is $23.50, the DBI
stockholders shall receive 137,255 shares of Simmons common stock, each share
having a value of $23.50 and cash in the amount of $1,500,000, representing
total consideration of $4,725,490.
The Agreement provides DBI two termination options, exercisable by
a majority of the DBI Board of Directors, in the event the Simmons Common Stock
average closing price is less than $23.50, (i) computed for the twenty trading
days on which one or more trades actually takes place and which ends
immediately prior to the fifth trading day preceding the mailing of this Proxy
Statement and (ii) computed for the twenty trading days on which one or more
trades actually takes place and which ends immediately prior to the fifth
trading day preceding the Effective Date of the Merger. In addition, either
party may terminate the Agreement, if the Merger is not closed on or before
June 30, 1995 provided that the failure to close is not caused by a breach of
the Agreement by the party seeking to terminate it.
Simmons and DBI have agreed, for the period prior to the
consummation of the merger, to operate their respective businesses only in the
usual, regular and ordinary course. In addition, Simmons and DBI will use
reasonable efforts to maintain and keep their respective properties in as good
repair and condition as at present, except for ordinary wear and tear and to
perform all obligations required under all material contracts, leases, and
documents relating to or affecting their respective assets prior to the
consummation of the Merger. Simmons and DBI have further agreed that, prior to
consummation of the Merger, they will not incur any material liabilities or
obligations, except in the ordinary course of business, or take any action
which would or is reasonably likely to adversely affect the ability of either
Simmons or DBI to obtain any necessary approvals, adversely affect the ability
of Simmons or DBI to perform their covenants and agreements under the
Agreement, or result in any of the conditions to the Merger not being
satisfied. DBI has further agreed that, unless otherwise required by
applicable law, it shall not initiate, solicit or encourage any inquiry or
proposal which constitutes a competing transaction.
The Agreement requires that certain conditions occur or be waived
prior to the closing date ("Conditions Precedent"), including (a) approval by
DBI stockholders by two-thirds of all outstanding shares; (b) approval by the
appropriate bank regulatory authorities; (c) receipt by the DBI of an opinion
from Southard Financial that the Merger consideration is fair to the DBI
shareholders; and (d) satisfaction of other customary conditions normally
associated with closing a merger transaction. It is also a condition to the
Merger that Simmons have an effective registration statement on file with the
Securities and Exchange Commission covering the issuance of shares to be
exchanged pursuant to the Merger. Prior to the effective date of the Merger,
any condition of the Agreement, except those required by law, may be waived by
the party benefited by the condition.
The effective date of the Merger will be the date the Articles of
Merger are filed with the Arkansas Secretary of State, or the date so stated in
the Articles of Merger. The Agreement provides that a closing date will be set
by mutual agreement to occur within a reasonable time following the date on
which the last of all regulatory and other approvals necessary to consummate
the Merger have been received and all necessary time periods imposed by
regulatory authorities have elapsed. The parties may, however, amend the
Agreement to provide a later closing date.
All shares of DBI common stock converted into the right to receive
the merger consideration in the Merger shall no longer be outstanding and shall
automatically be cancelled and shall cease to exist, and each certificate
previously representing any such shares shall thereafter represent the right to
receive cash and/or a certificate representing shares of Simmons Common Stock
into which such shares of DBI common stock are convertible. Certificates
previously representing shares of DBI common stock shall be exchanged for cash
and/or certificates representing whole shares of Simmons Common Stock issued
in consideration therefor upon the surrender of such certificates as provided
below, without interest.
A FORM OF ELECTION FOR USE IN THE STOCKHOLDERS' ELECTION TO
RECEIVE CASH, SIMMONS COMMON STOCK OR BOTH IN EXCHANGE FOR THEIR SHARES OF DBI
COMMON STOCK WILL BE MAILED SEPARATELY TO THE HOLDERS OF DBI COMMON STOCK AS OF
THE RECORD DATE. To be effective, a Form of Election must be properly
completed signed and submitted to Simmons First National Bank, as exchange
agent (the "Exchange Agent") or to DBI and must be received by the Exchange
Agent no later than 5:00 p.m. Central Standard Time on the business day seven
(7) days next following the date of the DBI special shareholders meeting at
which the Merger is approved ("Election Deadline"). The Form of Election will
be revocable until the close of business on the Election Deadline.
STOCKHOLDERS WHO DO NOT TIMELY SUBMIT A FORM OF ELECTION WILL BE
DEEMED TO HAVE MADE A NON-ELECTION.
The Agreement provides that Simmons and DBI will cause the
Effective Time to occur as promptly as practicable after the approval by the
stockholders of DBI of the Agreement and the satisfaction (or waiver, if
permissible) of the other conditions set forth in the Agreement. As soon as
the date on which the Effective Time is anticipated to occur is determined,
Simmons and DBI will publicly announce such date, although no assurance can be
given that the Effective Time will occur on such date. Persons who become
stockholders of DBI after the Record Date or any other stockholders who need a
Form of Election may obtain copies of the Form of Election upon request from
the Exchange Agent either in writing at P. O. Box 7009, Pine Bluff, AR
71611-7009 or by telephone at (501) 541-1110 or from DBI either in writing at
P. O. Box 915, Dumas, AR 71639 or by telephone at (501) 382-4204. Simmons and
DBI will each use its best efforts to mail or cause to be mailed to all persons
who become holders of DBI common stock between the Record Date and the special
meeting date a Form of Election and will make available a Form of Election to
all persons who become stockholders of DBI after that date.
If DBI or the Exchange Agent determines that any purported Cash
Election, Stock Election, Partial Cash Election or Partial Stock Election was
not properly made, such purported Election will be deemed to be of no force and
effect and the stockholder making such purported Election will, for purposes
hereof, be deemed to have made a Non-Election. Neither Simmons, DBI and the
Exchange Agent may use reasonable efforts to, but shall be under no obligation
to notify any person of any defect in a Form of Election.
The tax consequences of receiving cash and/or shares of Simmons
Common Stock are different. See "Certain Federal Income Tax Consequences."
BANK MERGER
Incidental to and immediately following the consummation of the
Merger, First State Bank, Gould, Arkansas will merge with and into Simmons
First National Bank ("Bank Merger"). Simmons First National Bank will be the
surviving entity and will continue to operate all of the banking offices of
First State Bank as branches of Simmons First National Bank. The completion of
the Bank Merger is conditioned upon the prior completion of the Merger.
REGULATORY APPROVALS
The Merger is subject to prior approval by the appropriate banking
regulatory authorities. An application has been filed for approval of the
Merger with the Board of Governors of the Federal Reserve System ("Federal
Reserve") for Simmons to acquire DBI. In conjunction with the Federal Reserve
application, the Merger is also subject to review by the Department of Justice
as to its competitive effects. An application has also been filed with the
Arkansas Bank Department ("Department") for approval of the Merger.
Additionally, an application was filed with the U.S. Treasury Department,
Office of the Comptroller of the Currency ("OCC") for approval of the Bank
Merger. All applications are pending upon the date hereof. Even though no
approvals have been received, Simmons and DBI expect all applications to be
approved as filed in due course.
ANTITRUST MATTERS
After approval by the Federal Reserve, the Department of Justice
has fifteen (15) calendar days in which to challenge the proposed Merger on
anti-trust considerations. It is expected that any approval letter from the
Federal Reserve will provide that the Merger may not be consummated until
fifteen (15) calendar days after the effective date of such letter.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following summary discusses the principal federal income tax
consequences of the Merger. The summary is based upon the Code, applicable
Treasury Regulations thereunder and administrative rulings and judicial
authority as of the date hereof. All of the foregoing are subject to change,
and any such change could affect the continuing validity of the discussion. The
discussion assumes that holders of shares of DBI common stock hold such shares
as a capital asset, and does not address the tax consequences that may be
relevant to a particular stockholder subject to special treatment under certain
federal income tax laws, such as dealers in securities, banks, insurance
companies, tax-exempt organizations, non-United States persons, nor any
consequences arising under the laws of any state, locality or foreign
jurisdiction.
Ramsay, Bridgforth, Harrelson & Starling ("Ramsay Bridgforth"),
counsel to Simmons is of the opinion, subject to the assumptions set forth
below, that the Merger will constitute a tax-free reorganization pursuant to
Sections 368(a)(1)(A) of the Code and that, accordingly, (i) neither Simmons
nor DBI will recognize gain or loss as a result of the Merger, and (ii) holders
of DBI common stock that exchange their shares solely for shares of Simmons
Common Stock will not recognize gain or loss in the Merger, and holders of DBI
common stock that exchange their shares for shares of Simmons Common Stock and
cash will recognize gain, if any is realized, in the Merger but not in excess
of the amount of cash received.
The foregoing opinion is based upon (i) certain representations of
Simmons and DBI, (ii) the assumption that the Merger will be consummated in
accordance with its terms, and (iii) the assumption that the "continuity of
interest" requirement for tax-free reorganization treatment will be satisfied.
In general, under applicable U.S. Supreme Court precedent, the continuity of
interest requirement will be satisfied if the fair market value of the shares
of Simmons Common Stock issued in the Merger is approximately 40% or more of
the total merger consideration (cash paid plus the fair market value of the
Simmons Common Stock issued in the Merger.) The consummation of the Merger is
conditioned on the receipt by Simmons and DBI of an opinion of Ramsay
Bridgforth confirming that the requirements for tax-free reorganization
treatment, including the continuity of interest requirement, have been met and
that accordingly, the Merger qualifies as a tax-free reorganization. The
discussion below summarizes certain federal income tax consequences of the
Merger to a DBI stockholder, assuming that the Merger will qualify as a
tax-free reorganization.
GENERAL. As discussed below, the federal income tax consequences
of the Merger to a DBI stockholder depend on whether such stockholder receives
cash or shares of Simmons Common Stock or some combination thereof for such
stockholder's shares of DBI common stock, as well as for any shares of DBI
common stock that such stockholder constructively owns within the meaning of
Section 318 of the Code (which generally deems a person to own stock that is
owned by certain family members or related entities or that is the subject of
options owned or deemed owned by such person), and may further depend on
whether such stockholder actually or constructively owns any Simmons Common
Stock.
ONLY SIMMONS COMMON STOCK RECEIVED. Except as discussed below
with respect to cash received in lieu of a fractional share of Simmons Common
Stock, a stockholder of DBI that receives only Simmons Common Stock in the
exchange of such stockholder's shares of DBI common stock will not recognize
gain or loss. The tax basis of the Simmons Common Stock received in the Merger
will be the same as the tax basis of the shares of DBI common stock exchanged
therefor in the Merger. The holding period of the shares of Simmons Common
Stock received will include the holding period of shares of DBI common stock
exchanged therefor.
ONLY CASH RECEIVED. A DBI stockholder that receives solely cash in
the Merger in exchange for such stockholder's shares of DBI common stock or
that exercises such stockholder's right to perfect dissenter's rights with
respect to such shareholder's shares of DBI common stock generally will
recognize capital gain or loss measured by the difference between the amount of
cash received and the tax basis of the shares of DBI common stock exchanged
therefore. If, however, any such stockholder constructively owns shares of DBI
common stock that are exchanged for Simmons Common Stock in the Merger or,
possibly, owns Simmons Common Stock actually or constructively after the
Merger, the consequences to such stockholder may in unusual circumstances be
similar to the consequences discussed in the second paragraph of the next
Section, except that the amount of consideration, if any, treated as a dividend
will not be limited to the amount of such stockholder's gain.
SHARES OF SIMMONS COMMON STOCK AND CASH RECEIVED. Except as
discussed below with respect to cash received in lieu of a fractional share of
Simmons Common Stock, a DBI stockholder that, as a result of an election or
prorations or allocations resulting from limitations on cash and Simmons Common
Stock (see "The Merger--The Agreement") or is deemed to have made a Non-
Election, receives both shares of Simmons Common Stock and cash in the exchange
for DBI common stock will not recognize loss in such exchange. However, under
Section 356(a)(1) of the Code, the stockholder will recognize gain (measured by
the sum of the fair market value of the shares of Simmons Common Stock received
plus the amount of any cash received minus the tax basis of the shares of DBI
common stock exchanged), if any, but only to the extent of the amount of any
cash received. Under applicable U.S. Supreme Court precedent, such gain will be
capital gain except in the circumstances described in the next paragraph.
In unusual circumstances, a DBI stockholder that constructively
owns shares of DBI common stock that are exchanged for shares of Simmons Common
Stock in the Merger or that actually or constructively owns shares of Simmons
Common Stock after the Merger (other than Simmons Common Stock received in the
Merger) will be required to treat any gain recognized as dividend income
(rather than capital gain) up to the amount of cash received in the Merger, if
the receipt of cash by such stockholder has the effect of a distribution of a
dividend. Whether the receipt of cash has the effect of the distribution of a
dividend would depend upon the stockholder's particular circumstances. The
Internal Revenue Service has indicated in published rulings that a distribution
that results in any actual reduction in interest of a small, minority
stockholder in a publicly held corporation will not constitute a dividend if
the stockholder exercises no control with respect to corporate affairs.
The tax basis of the shares of Simmons Common Stock received will
be the same as the tax basis of the shares of DBI common stock exchanged,
decreased by the basis of any fractional share interest for which cash is
received in the Merger, and further decreased by the amount of cash received
(other than cash received for a fractional share interest), and increased by
the amount of gain recognized on the exchange (including any portion that is
treated as a dividend). The holding period of the shares of Simmons Common
Stock received will include the holding period of the shares of DBI common
stock exchanged therefor.
FRACTIONAL SHARES. If a holder of shares of DBI common stock
receives cash in lieu of a fractional share of Simmons Common Stock in the
Merger, such cash amount will be treated as received in exchange for the
fractional share of Simmons Common Stock. Gain or loss recognized as a result
of that exchange will be equal to the cash amount received for the fractional
share of Simmons Common Stock reduced by the proportion of the holder's tax
basis in shares of DBI common stock exchanged and allocable to the fractional
share of Simmons Common Stock.
THE PRECEDING DISCUSSION IS INTENDED ONLY AS A SUMMARY OF CERTAIN FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER AND DOES NOT PURPORT TO BE A COMPLETE
ANALYSIS OR DISCUSSION OF ALL POTENTIAL TAX EFFECTS RELEVANT THERETO. THUS, DBI
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE MERGER, INCLUDING TAX RETURN REPORTING
REQUIREMENTS, THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL, AND OTHER
APPLICABLE TAX LAWS AND THE EFFECT OF ANY PROPOSED CHANGES IN THE TAX LAWS.
The tax opinion of Ramsay Bridgforth described in the first
sentence under "Tax Opinion" has been filed as an exhibit to the Registration
Statement of which this Proxy Statement/Prospectus is a part.
ACCOUNTING TREATMENT
Simmons intends to treat the merger as a purchase for accounting
purposes. Consequently, in accordance with generally accepted accounting
principles, Simmons anticipates that the asset and liability accounts of the
acquired banks will be adjusted to equal their fair values. After pushdown
accounting adjustments, total capital (stock and surplus) of the banks will
equal the purchase price, and the undivided profits of the purchased banks will
equal zero.
RIGHT OF DISSENT UNDER THE 1965 ACT
HOLDERS OF DBI COMMON STOCK WILL BE ENTITLED TO EXERCISE
DISSENTER'S RIGHTS EITHER UNDER THE 1965 ACT OR THE 1987 ACT. IF APPROVED, THE
ELECTION TO BE GOVERNED BY THE 1987 ACT BY THE STOCKHOLDERS OF DBI, AS
DISCUSSED BELOW, WILL BE MADE PRIOR TO CONSUMMATION OF THE MERGER BUT
SUBSEQUENT TO A VOTE ON SUCH MERGER. THEREFORE, SIMMONS WILL RECOGNIZE
COMPLIANCE WITH EITHER THE 1965 ACT OR THE 1987 ACT AS A VALID EXERCISE OF
DISSENTER'S RIGHTS WITH RESPECT TO SUCH MERGER. FOR A DISCUSSION OF THE
PROCEDURE TO BE FOLLOWED UNDER THE 1987 ACT, SEE "THE MERGER - RIGHT OF DISSENT
UNDER THE 1987 ACT."
Under Arkansas law, holders of DBI common stock are entitled to
dissenters' rights pursuant to Ark. Code Ann. Section 4-26-1007 of the 1965
Act. However, if a holder of shares of DBI common stock chooses to follow the
procedure under the 1965 Act, he shall only be entitled to such rights if he
complies with that statute. The following summary does not purport to be a
complete statement of the method of compliance with Section 4-26-1007 and is
qualified by reference to those statutory sections which are attached, hereto
by Annex.
A holder of DBI stock who wishes to perfect his dissenter's
rights in the event that the Merger is approved must:
(a) File with the corporation, prior to or at the
meeting of stockholders at which the vote on the Agreement is to be made,
written objection to the Agreement; and
(b) Not have voted in favor of the Agreement.
Any written notice of objection to the Agreement pursuant to
clause (a) of the immediately proceeding paragraph should be mailed or
delivered to Dumas Bancshares, Inc., Hwy 54 & 65, Dumas, Arkansas 71639,
Attention: James R. Hall, President and Chief Executive Officer. Because the
written objection must be delivered prior to or at the stockholder vote on the
Agreement, it is recommended, although not required, that a stockholder using
the mail should use certified or registered mail, return receipt requested, to
confirm that he has made timely delivery.
Within ten (10) days after the consummation of the Merger, any
stockholder objecting to the Merger must make a written demand on Simmons for
payment of the fair value of his shares as of the day before the vote on the
Agreement was taken. This second notice should be mailed to Simmons First
National Corporation, 501 Main Street, Pine Bluff, Arkansas, 71601, Attention:
Barry L. Crow, Executive Vice President and Chief Financial Officer. The
demand must state the number and class of shares owned. If a demand is not
made within the 10-day period, the stockholder is bound by the Agreement.
Within ten (10) days after the Merger is effected, Simmons shall
give notice to each dissenting stockholder who made demand as provided above
for the payment of the value of his shares. If the dissenting stockholder and
Simmons agree upon the value of the shares within thirty (30) days after the
date of the Merger, then payment shall be made within ninety (90) days of the
Merger. Simultaneously with the payment, the dissenting stockholder shall
surrender the certificates representing his shares.
If within the thirty-day period no agreement is reached as to the
value of the dissenting stockholder's shares, the dissenting stockholder must
file a petition in Jefferson County Circuit Court within 60 days after the
expiration of the 30-day period asking for a determination of the fair value of
his shares. The judgment will be final and is payable only upon and
simultaneously with the surrender of the certificates representing the shares
to Simmons. If a dissenting stockholder fails to file a petition within the
60-day period, he and all persons claiming under him shall be bound by the
terms of the Agreement.
RIGHT OF DISSENT UNDER THE 1987 ACT
HOLDERS OF DBI COMMON STOCK SHALL ALTERNATIVELY BE ENTITLED TO
DISSENTER'S RIGHTS PURSUANT TO ARK. CODE ANN. SECTION 4-27-1301 ET. SEQ. OF
THE 1987 ACT WITH RESPECT TO THE MERGER. SEE "THE MERGER -RIGHT OF DISSENT
UNDER THE 1965 ACT."
The following summary does not purport to be a complete statement
of the method of compliance with the 1987 Act and is qualified by reference to
those statutory sections which are attached hereto by Annex.
A holder of DBI Common Stock who wishes to perfect his
dissenter's rights in the event that the Merger is adopted must:
(a) File with the corporation, prior to or at the
meeting of stockholders at which the vote on the Agreement is to be made,
written objection to the Agreement; and
(b) Not have voted in favor of the Agreement.
Any written notice of objection to the Agreement pursuant to
clause (a) of the immediately preceding paragraph should be mailed or delivered
to Dumas Bancshares, Inc., P. O. Box 915, Hwys. 54 & 65, Dumas, Arkansas
71639, Attention: Mr. James R. Hall, President and Chief Executive Officer.
Because the written objection must be delivered prior to or at the stockholder
vote on the Merger, it is recommended, although not required, that a
stockholder using the mail should use certified or registered mail, return
receipt requested, to confirm that he has made timely delivery.
If the Merger is adopted at the stockholders meeting, the
corporation must send to the dissenting stockholder, no later than ten (10)
days after the corporate action was taken, a dissenter's notice which will
inform the stockholder where a demand for payment must be sent, where the
stockholder's share certificates must be deposited and provide a form for
demanding payment. The dissenter's notice will also notify the stockholder of
a time period within not less than thirty (30) nor more than sixty (60) days
within which the stockholder must deliver the payment demand form and stock
certificates to the corporation.
As soon as the Merger is consummated, or upon receipt of a payment
demand by the dissenting stockholder, Simmons must pay the dissenting
stockholder the amount Simmons estimates to be the fair value of the shares,
plus accrued interest and deliver to the dissenting stockholder the
corporation's balance sheet as of the most recent fiscal year, an income
statement for that year, a statement of changes in stockholder equity for that
year, and the latest available interim financial statement. At this time,
Simmons shall also deliver to the dissenting stockholder a statement of the
corporation's estimate of fair value of the shares, an explanation of how
interest was calculated, a statement of the dissenter's right to demand a
higher value for his shares and a copy of the appropriate statutory provisions
governing the dissenters rights procedure.
Within thirty (30) days after the dissenting stockholder has
received payment in the amount the corporation estimates to be the fair value
of the shares, the dissenting stockholder must notify the corporation, in
writing, of his own estimate of fair value. If the dissenting stockholder does
not notify the corporation within this thirty (30) day period, he waives his
right to demand a higher payment.
If the demand for payment remains unsettled for sixty (60) days
from the date the corporation receives the dissenting stockholders demand for
payment, the corporation must commence a proceeding and file a petition in
Jefferson County Circuit Court to determine the fair value of the shares and
the amount of accrued interest to be paid.
EXCHANGE RATIO FOR THE MERGER
The exchange ratio for the Merger is calculated by taking
$161.2903 divided by the average closing price per share of Simmons Common
Stock during the period of twenty (20) trading days on which one or more trades
actually takes place ending immediately prior to the fifth trading day
preceding the Effective Date, provided such average closing price is between
$25.50 and $31.50. If the average closing price is less than $25.50,then the
Exchange Ratio will be computed by substituting $25.50 for the average closing
price. If the average closing price exceeds $31.50, then the Exchange Ratio
will be computed by substituting $31.50 for the average closing price. In the
event the average closing price is less than or equals $25.50 and the DBI
shareholders elect the maximum stock election, then the total number of shares
of Simmons Common Stock issued will be the ceiling amount of 137,255. In the
event the average closing price is equal to or greater than $31.50 and the DBI
shareholders elect the minimum stock election, then the total number of shares
of Simmons Common Stock issued will be the floor amount of 80,952. The
following table illustrates a range of average closing prices for Simmons
Common Stock and based upon these average closing prices, calculates the number
of shares of Simmons Common Stock to be issued and the resulting exchange
ratio. Furthermore, the table illustrates the total consideration to be
exchanged which shall vary depending upon the average closing price of Simmons
Common Stock and the number and type of Elections made by the DBI stockholders.
This table is for illustration purposes only and should not be relied upon as
the actual amount of shares to be issued, the actual average closing price, the
actual exchange ratio, or the actual amount of consideration to be exchanged.
<TABLE>
CALCULATION OF EXCHANGE RATIO
Minimum Stock Election(1)
<CAPTION>
Simmons Simmons Total
Average Exchange Stock Cash Consideration
Closing Price Ratio(2) Issued Consideration Exchanged
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$23.50 6.325 100,000 $2,450,000 $4,800,000
$25.50 6.325 100,000 $2,450,000 $5,000,000
$28.50 5.659 89,474 $2,450,000 $5,000,000
$31.50 5.120 80,952 $2,450,000 $5,000,000
$33.50 5.120 80,952 $2,450,000 $5,161,904
</TABLE>
<TABLE>
Maximum Stock Election(3)
<CAPTION>
Simmons Simmons Total
Average Exchange Stock Cash Consideration
Closing Price Ratio(2) Issued Consideration Exchanged
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$23.50 6.325 137,255 $1,500,000 $4,725,490
$25.50 6.325 137,255 $1,500,000 $5,000,000
$28.50 5.659 122,807 $1,500,000 $5,000,000
$31.50 5.120 111,111 $1,500,000 $5,000,000
$33.50 5.120 111,111 $1,500,000 $5,222,222
- ---------------------
<FN>
(1) Assuming the election of DBI stockholders allocated the merger
consideration, 49% to cash and 51% to shares of Simmons Common Stock.
(2) The Exchange Ratio represents the number of shares of Simmons Common
Stock that a stockholder of Dumas Bancshares, Inc. would receive as partial
consideration for one share of DBI common stock.
(3) Assuming the election of DBI stockholders allocated the merger
consideration, 30% to cash and 70% to shares of Simmons Common Stock.
</TABLE>
EXPENSES OF THE MERGER
Simmons and DBI will bear their own expenses incident to preparing
for, entering into and carrying out the Agreement and the consummation of the
Merger, except that Simmons will pay all expenses incident to the preparation
of this Proxy Statement and its printing and distribution and for the filing of
necessary applications for approval of the Merger with the Federal Reserve and
Department.
FINANCIAL INFORMATION
The following unaudited Pro Forma Consolidated Balance Sheet as of
September 30, 1994 and Unaudited Pro Forma Consolidated Income Statements for
the nine months ended September 30, 1994 and the year ended December 31, 1993,
illustrate the effect of the proposed Merger, based on 137,255 shares of
Simmons Common Stock at a price of $25.50 per share.
These Pro Forma Consolidated Financial Statements should be read in
conjunction with the historical financial statements of Simmons which are
incorporated by reference herein and DBI which are included herein.
The Pro Forma Consolidated Financial Statements are presented for
comparative purposes only and are not intended to be indicative of actual
results had the transactions occurred as of the dates indicated above nor do
they purport to indicate future results.
<TABLE>
PRO FORMA CONSOLIDATED BALANCE SHEETS
<CAPTION>
September 30, 1994
--------------------------------------------------------------------
Pro Forma Pro Forma
($ in thousands) SFNCA DBI Adjustments Consolidated
- -----------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
ASSETS
Cash and non-interest bearing balances
due from banks $ 31,371 $ 2,173 $ $ 33,544
Interest bearing balances due from banks 85 85
Federal funds sold and securities purchased
under agreements to resell 21,190 1,440 (2,100)(2b) 20,530
---------- ---------- ---------- ----------
Cash and cash equivalents 52,646 3,613 (2,100) 54,159
Interest bearing balances due from banks
which are not cash equivalents 190 190
Investment securities
Securities held to maturity 139,879 3,735 143,614
Securities available for sale 29,608 6,746 81 (1b) 36,435
Mortgage loans held for delivery 24,220 24,220
Assets held in trading accounts 996 996
Loans, net of unearned discounts 407,040 27,113 434,153
Allowance for possible loan losses (7,711) (302) (8,013)
---------- ---------- ----------
Net loans 399,329 26,811 426,140
Premises and equipment 11,257 1,023 284 (1b) 12,564
Foreclosed assets held for sale, net 1,956 1,956
Interest receivable 6,207 517 6,724
Purchased identifiable intangibles and excess
of cost over fair value of net assets
acquired, at amortized cost 2,385 75 1,454 (1b) 3,914
Other assets 24,032 316 (443)(1b) 23,905
---------- ---------- ---------- ----------
Total Assets $ 692,515 $ 43,026 $ (724) $ 734,817
========== ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing transaction accounts $ 95,128 $ 6,310 $ $ 101,438
Interest bearing transaction and
savings deposits 232,517 12,045 244,562
Time deposits 239,496 19,026 258,522
--------- ---------- ---------- ----------
Total Deposits 567,141 37,381 604,522
Federal funds purchased and securities
sold under agreement to repurchase 14,359 360 14,719
Borrowed funds: short-term 7,368 734 8,102
Borrowed funds: long-term 12,154 600 (600)(1b) 12,154
Other liabilities 9,223 327 9,550
--------- ---------- ---------- ----------
Total liabilities 610,245 39,402 (600) 649,047
--------- ---------- ---------- ----------
STOCKHOLDERS' EQUITY
Capital stock 18,387 310 376 (1b) 19,073
Surplus 19,827 838 1,976 (1b) 22,641
Net unrealized gain (loss) on securities
available for sale 554 (168) 168 (1b) 554
Undivided profits 43,502 2,644 (2,644)(1b) 43,502
--------- ---------- ---------- ----------
Total Stockholders' Equity 82,270 3,624 (124) 85,770
--------- ---------- ---------- ----------
Total Liabilities and
Stockholders' Equity $ 692,515 $ 43,026 $ (724) $ 734,817
========= ========== ========== ==========
</TABLE>
<TABLE>
PRO FORMA CONSOLIDATED INCOME STATEMENT
<CAPTION>
September 30, 1994
--------------------------------------------------------------------
Pro Forma Pro Forma
($ in thousands, except per share data) SFNCA DBI Adjustments Consolidated
- ---------------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 22,595 $ 1,467 $ $ 24,062
Federal funds sold and securities
purchased under agreements to resell 588 99 (79)(2b) 608
Investment securities - taxable
Held to maturity 4,342 4,342
Available for sale 2,261 306 (26)(2b) 2,541
Investment securities - non-taxable
Held to maturity 2,066 182 (18)(2b) 2,230
Mortgage loans held for delivery
against commitments 1,753 1,753
Trading account 76 76
Other interest 26 15 41
--------- --------- ---------- ----------
TOTAL INTEREST INCOME 33,707 2,069 (123) 35,653
INTEREST EXPENSE --------- --------- ---------- ----------
Deposits 10,482 777 11,259
Borrowed funds 1,335 43 (38)(2b) 1,340
--------- --------- ---------- ----------
TOTAL INTEREST EXPENSE 11,817 820 (38) 12,599
--------- --------- ---------- ----------
NET INTEREST INCOME 21,890 1,249 (85) 23,054
Provision for loan losses 1,575 4 1,579
NET INTEREST INCOME AFTER PROVISION --------- --------- ---------- ----------
FOR LOAN LOSSES 20,315 1,245 (85) 21,475
--------- --------- ---------- ----------
NON-INTEREST INCOME
Trust department income 1,288 1,288
Service charges on deposit accounts 1,657 174 1,831
Other service charges & fees 655 39 694
Income on sale of mortgage loans and
trading account profits, net of commissions 652 652
Securities gains (losses) 130 1 131
Other operating income 14,815 24 14,839
--------- --------- ---------- ----------
TOTAL NON-INTEREST INCOME 19,197 238 19,435
NON-INTEREST EXPENSE --------- --------- ---------- ----------
Salaries and employee benefits 15,255 528 15,783
Occupancy expense, net 1,549 148 7 (2b) 1,704
Furniture & equipment expense 1,483 72 1,555
Other operating expense 10,622 353 64 (2b) 11,039
--------- --------- ---------- ----------
TOTAL NON-INTEREST EXPENSE 28,909 1,101 71 30,081
--------- --------- ---------- ----------
INCOME BEFORE INCOME TAXES 10,603 382 (156) 10,829
Provision for income taxes 2,972 70 (51)(2b) 2,991
--------- --------- ---------- ----------
NET INCOME $ 7,631 $ 312 $ (105) $ 7,838
========= ========= ========== ==========
NET INCOME PER COMMON SHARE $ 2.08 $ 10.06 $ 2.06
========= ========= ==========
Weighted average shares outstanding 3,677 31 3,814
========= ========= ==========
</TABLE>
<TABLE>
PRO FORMA CONSOLIDATED INCOME STATEMENT
<CAPTION>
December 31, 1993
-----------------------------------------------------------------------
Pro Forma Pro Forma
($ in thousands, except per share data) SFNCA DBI Adjustments Consolidated
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans $ 28,389 $ 1,804 $ $ 30,193
Federal funds sold and securities
purchased under agreements to resell 738 203 (105)(2b) 836
Investment securities - taxable
Held to maturity 10,197 397 (42)(2b) 10,552
Investment securities - non-taxable
Held to maturity 2,603 255 (28)(2b) 2,830
Mortgage loans held for delivery
against commitments 2,402 2,402
Other interest 65 18 83
----------- ---------- ---------- ----------
TOTAL INTEREST INCOME 44,394 2,677 (175) 46,896
INTEREST EXPENSE ----------- ---------- ---------- ----------
Deposits 14,251 1,049 15,300
Borrowed funds 1,693 62 (51)(2b) 1,704
----------- ---------- ---------- ----------
TOTAL INTEREST EXPENSE 15,944 1,111 (51) 17,004
----------- ---------- ---------- ----------
NET INTEREST INCOME 28,450 1,566 (124) 29,892
Provision for loan losses 3,006 6 3,012
NET INTEREST INCOME AFTER PROVISION ----------- ---------- ---------- ----------
FOR LOAN LOSSES 25,444 1,560 (124) 26,880
----------- ---------- ---------- ----------
NON-INTEREST INCOME
Trust department income 1,807 1,807
Service charges on deposit accounts 2,296 244 2,540
Other service charges & fees 879 46 925
Income on sale of mortgage loans and
trading account profits, net of commissions 2,385 2,385
Securities gains (losses) 140 1 141
Other operating income 18,622 40 18,662
----------- ---------- ---------- ----------
TOTAL NON-INTEREST INCOME 26,129 331 26,460
----------- ---------- ---------- ----------
NON-INTEREST EXPENSE
Salaries and employee benefits 19,609 763 20,372
Occupancy expense, net 1,937 172 9 (2b) 2,118
Furniture & equipment expense 1,969 88 2,057
Other operating expense 15,196 428 86 (2b) 15,710
----------- ---------- ---------- ----------
TOTAL NON-INTEREST EXPENSE 38,711 1,451 95 40,257
----------- ---------- ---------- ----------
INCOME BEFORE INCOME TAXES 12,862 440 (219) 13,083
Provision for income taxes 3,466 77 (71)(2b) 3,472
NET INCOME, BEFORE CUMULATIVE EFFECT ----------- ---------- ---------- ----------
OF CHANGE IN ACCOUNTING PRINCIPLE 9,396 363 (148) 9,611
Cumulative effect of change in accounting
principle 27 27
----------- ---------- ---------- ----------
NET INCOME $ 9,396 $ 390 $ (148) $ 9,638
NET INCOME PER COMMON SHARE: =========== ========== =========== ==========
Income before cumulative effect of change in
accounting principle $ 2.78 $ 11.69 $ 2.73
Cumulative effect of change in accounting
principle 0.88 0.01
----------- ---------- ----------
Net income $ 2.78 $ 12.57 $ 2.74
=========== ========== ==========
Weighted average shares outstanding 3,380 31 3,517
=========== ========== ==========
</TABLE>
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On November 15, 1994, the Company entered into a definitive
agreement pursuant to which the Company proposed to acquire all of the issued
and outstanding stock of DBI by merger of DBI with and into Simmons. The
acquisition of DBI will be consummated through the issuance to the shareholders
of DBI of up to 137,255 shares of Simmons Common Stock and the payment of up to
$2,450,000 in cash. The pro forma consolidated financial statements illustrate
the effect of the proposed merger based on the issuance of 137,255 shares of
Simmons Common Stock at a price of $25.50, $1,500,000 in cash to DBI
shareholders and repayment of DBI long-term debt of $600,000.
1. The pro forma consolidated balance sheet of the Company and DBI as
of September 30, 1994 has been prepared in accordance with the following
assumptions:
a. The above transaction occurs on September 30, 1994.
b. The transaction is accounted for utilizing the
purchase method of accounting and, accordingly, the net assets of DBI are
adjusted to their fair market value. The components of the transaction assumed
in the consolidated balance sheet are outlined as follows:
<TABLE>
<CAPTION>
($ in thousands)
<S> <C> <C>
Common stock, 137,255 shares at
$25.50 per share $ 3,500
Cash 1,500
--------
Total Consideration 5,000
Less: Historical book value of DBI $ 3,624
Adjustment to reflect fair
value of DBI's assets:
Investment in debt securities 81
Premises and equipment 284
Deferred income taxes (443) 3,546
Purchased identifiable intangibles and -------- --------
excess of cost over fair value of net
assets acquired $ 1,454
========
</TABLE>
Except for items specifically adjusted above,
Company management believes that historical book value of the net assets of DBI
approximates fair value.
Repay long-term debt of DBI $ 600
====
2. The pro forma consolidated income statements have been prepared in
accordance with the following assumptions:
a. The acquisition occurs at January 1, 1993 and is
accounted for utilizing the purchase method of accounting. Accordingly, the
operations of DBI are included in the pro forma consolidated results of
operations from January 1, 1993 forward.
b. Adjustments to reflect amortization of the purchase
accounting adjustments and the decrease in interest income on $2,100,000 in
cash utilized in the acquisition and interest expense on $600,000 in long-term
debt and the related tax effects in the pro forma condensed consolidated income
statements are as follows:
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, December 31,
1994 1993
---------------------------------------------------------------------------------------
<S> <C> <C>
Decrease in interest income for
decrease in federal funds sold $ (79) $ (105)
Decrease in interest income for
amortization of increase in
investment in debt securities to
fair value (44) (70)
Decrease in interest expense for
long-term debt repaid 38 51
Increase in depreciation of premises
and equipment compared to recorded
depreciation (7) (9)
Increase in other expense for amortization
of purchased identifiable intangibles and
excess of cost over fair value of
net assets acquired (64) (86)
Decrease in applicable income taxes 51 71
-------- --------
Reduction in net income $ (105) $ (148)
======== ========
</TABLE>
C. The assumed interest rate on the federal funds sold is 5%.
The increase in the investment in debt securities is amortized
using a method that approximates the interest method over the estimated life of
the portfolio of six years.
The assumed interest rate on the long-term debt is 8.5%.
Depreciation of premised is calculated using the straight-line
method and lives of 30 years for buildings.
The purchased identifiable intangibles and excess of cost over
fair value of net assets acquired are amortized using the straight-line method
over 15 years.
Income taxes are calculated using a combined incremental tax rate
of 36%.
ELECTION BY DUMAS BANCSHARES, INC. STOCKHOLDERS UNDER THE 1987 ACT
ELECTION INCIDENTAL TO THE MERGER
THE ELECTION BY THE STOCKHOLDERS OF DBI TO BE GOVERNED BY THE
ARKANSAS BUSINESS CORPORATION ACT OF 1987 IS INCIDENTAL TO THE MERGER PROPOSAL
AND APPROVAL OF SUCH ELECTION WILL HAVE NO FORCE OR EFFECT UNLESS THE MERGER IS
LIKEWISE APPROVED.
REASON FOR THE ELECTION
DBI Inc. is an Arkansas corporation organized under the Arkansas
Business Corporation Act of 1965, codified at Ark. Code Ann. Section 4-26-101
et. seq. The 1987 Act is applicable to corporations that were incorporated on
or after January 1, 1988 or those "1965 Act" corporations that elect to be
governed by the 1987 Act by amending their Articles of Incorporation to adopt
the 1987 Act. The stockholders of Simmons elected to be governed by the 1987
Act by amending its Articles of Incorporation during 1994.
The 1965 Act and 1987 Act have statutory merger procedures that
must be followed in order to legally consummate a merger. Although both acts
contain similar provisions, it is advisable for DBI to elect to be governed by
the 1987 Act in order to facilitate compliance with the applicable statutory
requirements.
RESULT OF THE ELECTION
The affirmative vote of two-thirds of all outstanding shares of
DBI common stock will authorize DBI to amend its Articles of Incorporation and
thereby elect to be governed by the 1987 Act. Simmons is governed by the 1987
Act and shares of Simmons Common Stock received by DBI stockholders upon
consummation of the Merger will entitle such stockholders to rights under the
1987 Act. The following discussion is a summary analysis of the material
differences between the 1965 and 1987 Act with respect to Stockholders' rights.
Powers of Directors in Setting Preferences, Rights and Limitation
of Classes and Series of Stocks. The 1965 Act states that the preferences,
rights and limitations of classes of stock must be specified in the Articles,
and that the power to establish certain limited rights and preferences for a
series may be delegated to the Board. The 1987 Act, authorizes the inclusion
of a provision in the Articles granting the Board the power to set the
preferences, rights and limitations of any class or series of stock before
issuance of any shares of the class or series. The power so granted is
exercised by the adoption by the Board and the filing with the Secretary of
State of Articles of Amendment, specifying the terms of such class or series of
stock.
Preemptive Rights. The 1987 Act denies stockholders preemptive
rights (i.e., the right of existing stockholders to acquire newly-issued shares
of stock on a pro rata basis of current ownership interest) unless the Articles
specifically authorize preemptive rights. In contrast, the 1965 Act grants
certain preemptive rights unless denied by the Articles.
Restrictions On Distributions. The 1987 Act allows a corporation
to elect in its Articles to restrict its ability to make distributions. The
1965 Act has no such provision.
Quorum. The 1987 Act, like the 1965 Act, provides that a quorum,
for purposes of a stockholders meeting, will be a majority of the shares
entitled to vote unless the Articles provide otherwise. The 1965 Act provides
that a quorum may not be less that one-third of the shares entitled to vote,
but the 1987 Act does not provide a minimum size for the quorum.
Cumulative Voting. Cumulative voting is a method of voting for
directors in which each share entitled to vote is granted as many votes as
there are board positions being voted on. The shareholder may "cumulate" his
votes by casting all such votes for a one or more directors, rather than
spreading his votes among all available directors. The 1987 Act does not allow
cumulative voting for directors unless the Articles of Incorporation so
provide. However, the 1965 Act grants stockholders absolute cumulative voting
rights.
Removal of Directors. The 1987 Act allows the Articles to provide
that directors may be removed only for cause. The 1965 Act provides generally
that directors may be removed with or without cause by a majority of the shares
entitled to vote.
Vacancy on Board of Directors. Unless the Articles provide
otherwise, the 1987 Act grants authority to either the stockholders or the
directors to fill any vacancy on the Board, the 1965 Act only authorizes the
Board to fill any such vacancy.
Amendment of By-Laws. The 1987 Act provides that the Articles may
reserve to the stockholders the power to amend a corporation's by-laws. If the
power is not so reserved, both the board and the stockholders are authorized to
amend the by-laws. The 1965 Act grants the sole power to amend the by-laws to
the board of directors unless the Articles specifically reserve this power to
the stockholders.
By-Law Increasing Quorum or Voting Requirements for Stockholders.
The 1987 Act allows the adoption of a by-law by the shareholders that fixes a
greater quorum or voting requirement for stockholder action than the statutory
requirement if such by-law is authorized by the Articles of Incorporation. The
1965 Act does not contain any such provision.
Voting to Adopt Merger. The 1987 Act sets the voting requirement
for approval of mergers at a majority of the shares entitled to vote, and
further provides that the Articles may establish a greater voting requirement
for mergers than the statutory minimum requirement. The 1965 Act requires
two-thirds of the votes entitled to be cast to approve a merger.
Notice of Stockholder Meetings. Both the 1987 Act and the 1965
Act requires notice of the date, time, and place of each annual or special
meeting of the stockholders. The Arkansas Constitution requires that
corporations give notice to shareholders of a meeting, no less than 60 days nor
more than 75 days, if a proposal to increase the authorized capital stock or
bonded indebtedness of the corporation, is to be considered at the meeting.
Under the 1987 Act, in all other cases the notice must be given no fewer than
10 and no more than 60 days before the meeting date. Under the 1965 Act in all
other cases, notice cannot be given fewer than 10 nor more than 50 days prior
to the meeting.
Proxies. Both the 1965 Act and the 1987 Act allows a stockholder
to vote by proxy under the same procedures.
Voting. The 1987 Act, unlike the 1965 Act, does not count
abstaining votes in determining whether there are sufficient affirmative votes
to approve a measure. The 1965 Act states that (unless a greater number is
required by statute or by the Articles) approval by stockholders takes the
affirmative vote of a majority of the shares represented at the meeting and
entitled to vote on the subject matter. The 1987 Act, however, provides that
the action is approved if the votes cast within the voting group favoring the
action exceed the votes cast opposing the action.
Dissenting Stockholders. Those transactions giving rise to dissenters' rights
under the 1965 Act are as follows:
1. Consummation of a sale of all, or substantially all,
of the assets of a corporation, other than in the usual or ordinary course of
its business.
2. Consummation of a merger or consolidation to which
the corporation is a party unless on the date the Articles of Merger are filed
the surviving corporation wholly owns the other corporations that are parties
to the Merger.
Under the 1987 Act, a stockholder is entitled to dissent from the
following corporate actions:
1. Consummation of a plan of merger to which the
corporation is a party if stockholder approval is required or if the
corporation is a subsidiary that is merged with its parent;
2. Consummation of a plan of share exchange to which
the corporation is a party and which requires stockholder approval;
3. Consummation of a sale or exchange of all, or
substantially all, of the property of the corporation, other than in the usual
and regular course of business, if stockholder approval is required;
4. An amendment of the Articles of Incorporation that
materially and adversely affects the rights of dissenters' shares; or
5. Any other corporate action taken pursuant to a
stockholder vote to the extend the Articles of Incorporation, the By-Laws, or
a resolution of the board of directors provides that stockholders are entitled
to dissent.
For a summary of the procedure that would be followed in order to
exercise dissenters' rights under the 1965 Act, See "The Merger - Right of
Dissent under the 1965 Act." For a summary of the procedure that would be
followed in order to exercise dissenters' rights under the 1987 Act, See "The
Merger - Right of Dissent under the 1987 Act."
SIMMONS FIRST NATIONAL CORPORATION
GENERAL
Simmons is a multi-bank holding company incorporated in 1968 for
the purpose of holding all of the outstanding stock of Simmons First National
Bank. Subsequently in 1984, Simmons acquired two additional banks, one in
Jonesboro, Arkansas and one in Lake Village, Arkansas. After acquisition by
Simmons, the banks were renamed Simmons First Bank of Jonesboro and Simmons
First Bank of Lake Village. Each of the banks are wholly-owned by Simmons.
Simmons is an Arkansas corporation which has registered with the
Federal Reserve as a bank holding company pursuant to the Bank Holding Company
Act of 1956, as amended, and is regulated by the Federal Reserve. Simmons
First National Bank is organized under the laws of the United States and is
regulated by the Office of the Comptroller of the Currency. Simmons First Bank
of Jonesboro and Simmons First Bank of Lake Village are organized under the
laws of the State of Arkansas and are regulated by the Arkansas Bank Department
and the Federal Deposit Insurance Corporation.
Below are the assets, deposits and stockholders' equity as
September 30, 1994 for Simmons on a consolidated basis and separately for its
three bank subsidiaries:
<TABLE>
<CAPTION>
SFB SFB
SFNC SFNB Jonesboro Lake Village
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets $ 692.5 $ 583.9 $ 73.5 $ 32.6
Deposits $ 567.1 $ 473.7 $ 65.7 $ 29.0
Stockholders' Equity $ 82.3 $ 52.4 $ 6.0 $ 3.3
</TABLE>
The banks offer customary services of banks of similar size and
similar markets, including interest-bearing and non-interest-bearing deposit
accounts; credit card, commercial, real estate and personal loans; trust
services; mortgage banking; securities brokerage; correspondent banking
services and safe deposit box activities.
The financial services and banking industry is highly competitive.
The subsidiary banks of Simmons actively compete with national and state banks,
savings and loan associations, credit unions, securities dealers, mortgage
bankers, finance companies and insurance companies.
REGULATION
Simmons is a registered bank holding company pursuant to the Bank
Holding Company Act of 1956, as amended (the "Act"), and as such, is subject to
regulation and examination by the Federal Reserve and is required to file with
the Federal Reserve annual reports and other information regarding its business
operations and those of its subsidiaries. The Act provides that a bank holding
company may be required to obtain Federal Reserve Board approval for the
acquisition of more than 5% of the voting securities of, or substantially all
of the assets of, any bank or bank holding company, unless it already owns a
majority of the voting securities of such bank or bank holding company. The
Act prohibits Simmons and its subsidiaries from engaging in any business other
than banking or activities closely related to banking specifically allowed by
the Federal Reserve. The Act also prohibits Simmons and its subsidiaries from
engaging in certain tie-in arrangements in connection with the extension of
credit, the lease or sale of property or the provision of any services.
As a registered bank holding company, Simmons is subject to the
Federal Reserve's position that a bank holding company should serve as a
"source of strength" for its bank subsidiaries. In an early application of the
doctrine the Federal Reserve Board announced that failure to assist a troubled
bank subsidiary when its holding company was in a position to do so was an
unsafe and unsound practice and the Federal Reserve Board claimed the
authority to order a bank holding company to capitalize its subsidiary banks.
In 1991 Congress modified the source of strength doctrine by
creating a system of prompt corrective actions under which the federal banking
agencies are required to take certain actions to resolve the problems of
depository institutions based on their level of capitalization. In a bank
holding company organization, an undercapitalized insured depository
institution must submit a capital restoration plan to the appropriate agency
which may not accept the plan unless the company controlling the institution
has guaranteed that the institution will comply with the plan until the
institution has been adequately capitalized on average during each of four
consecutive calendar quarters. The aggregate liability to the guaranteeing
companies is the lesser of an amount equal to 5 percent of the institution's
total assets at the time the institution became undercapitalized, or the amount
which is necessary to bring the institution into compliance with applicable
capital standards.
For a significantly undercapitalized institution, the appropriate
agency must prohibit a bank holding company from making any capital
distribution without prior Federal Reserve approval. The agency also may
require a bank holding company to divest or liquidate the institution.
Simmons and its subsidiaries are also subject to various federal
banking laws including the Financial Institutions, Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") which, among other things, made substantive
changes to the deposit insurance system. As a part of the reorganization of
the deposit insurance funds, the deposit premiums for insurance of Bank
Insurance Fund members were significantly increased. FIRREA also authorized
bank holding companies to acquire savings and thrift institutions without
tandem operation restrictions. Furthermore, FIRREA expanded the authority of
regulatory agencies to assess severe penalties ranging from $5,000 per day to
$1,000,000 per day, on persons or institutions that the agency finds in
violation of a broad range of activities.
Simmons and its subsidiaries are also subject to the provisions of
the Federal Deposit Insurance Corporation Improvement Act of 1991, which
provided for industry-wide standards in such areas as real estate lending,
further restrictions on brokered deposits and insider lending, establishment of
a risk-based deposit insurance system, enhanced examinations and audits of
banking institutions, the adoption of a Truth-in-Savings Act, various merger-
and-acquisitions related provisions, and the implementation of legislation on
foreign bank operations in the United States.
The provisions of the Community Reinvestment Act of 1977, as
amended, are applicable to the subsidiaries of Simmons. Federal regulators are
required to consider performance under the Community Reinvestment Act before
approving an application to establish a branch or acquire another financial
institution. The Federal Reserve has promulgated regulations governing
compliance with the Community Reinvestment Act in Regulation BB. Recent
regulatory and statutory developments show that compliance with the Community
Reinvestment Act is subject to strict scrutiny and is often grounds for denial
of an application to federal regulators. Simmons's subsidiary banks are all
rated "satisfactory" for CRA purposes.
On January 19, 1989, the Federal Reserve issued final guidelines
to implement risk-based capital requirements for bank holding companies. The
guidelines establish a framework that makes regulatory capital requirements
more sensitive to differences in risk profiles among banking organizations,
incorporates off-balance sheet exposures into the assessment of capital
adequacy, and minimizes disincentives to holding liquid, low-risk assets. The
guidelines provided for phasing in risk-based capital standards through the
end of 1992, at which time the standards became fully effective. The Company's
September 30, 1994 Tier I capital ratio of 18.73% and Total capital ratio of
21.03% exceed the current minimum regulatory requirements of 6.00% and 10.00%
respectively, for classification as a well-capitalized institution.
The table below illustrates all of the capital requirements
applicable to Simmons and its subsidiaries.
<TABLE>
REGULATORY COMPARISON OF CAPITAL RATIOS
SIMMONS FIRST NATIONAL CORPORATION
<CAPTION>
September 30, Regulatory
1994 Requirements
-------------- -------------
<S> <C> <C>
Total Capital/Total Assets 11.88 % 6.00 %
Primary Capital/Total Assets 12.99 % 5.50 %
Total Risk-Based Capital 21.03 % 10.00 %
Tier 1 Capital 18.73 % 6.00 %
Leverage Ratio 11.41 % 5.00 %
</TABLE>
Simmons's Subsidiary Banks are subject to a variety of regulations
concerning the maintenance of reserves against deposits, limitations on the
rates that can be charged on loans or paid on deposits, branching, restrictions
on the nature and amounts of loans and investments that can be made and limits
on daylight overdrafts.
The Subsidiary Banks are limited in the amount of dividends they
may declare. Prior approval must be obtained from the appropriate regulatory
authorities before dividends can be paid by the Banks to Simmons if the amount
of adjusted capital, surplus and retained earnings is below defined regulatory
limits. Simmons's subsidiary banks had available for payment of dividends
without regulatory approval, approximately $13.8 million of undistributed
earnings as of September 30, 1994. The Subsidiary Banks are also restricted
from extending credit or making loans to or investments in Simmons and certain
other affiliates as defined in the Act. Furthermore, loans and extensions of
credit are subject to certain other collateral requirements.
OFFICES
Simmons' executive offices are located in the offices of Simmons
First National Bank, 501 Main Street, Pine Bluff, Arkansas, 71601.
EMPLOYEES
As of September 30, 1994, Simmons and its subsidiary banks had
approximately 635 full-time equivalent employees, 584 of whom are employed by
Simmons First National Bank, 42 of whom are employed by Simmons First of
Jonesboro and 9 of whom are employed by Simmons First of Lake Village.
DESCRIPTION OF SIMMONS COMMON STOCK
The following summary of the terms of Simmons Common Stock does
not purport to be complete and is qualified in its entirety by reference to the
1987 Act and Simmons's Amended and Restated Articles of Incorporation.
Simmons's Amended and Restated Articles of Incorporation authorizes the
issuance of 10,000,000 shares of Common Stock, $5.00 par value. There are
3,677,378 fully paid and non-assessable shares of Simmons Common Stock issued
and outstanding.
Each share of Simmons Common Stock is entitled to one vote on all
matters to be voted on by stockholders, and to dividends when and if declared
from time to time by the Board of Directors. There are no rights of preemption
or cumulative voting associated with the Simmons Common Stock. Upon
liquidation, each share would be entitled to share pro rata in all of the
assets of Simmons available for distribution to the holders of Common Stock.
The transfer agent for Simmons Common Stock is Simmons First National Bank.
Simmons Common Stock is traded on NASDAQ-National Market System over-the-
counter under the symbol of "SFNCA."
RESALE OF SIMMONS COMMON STOCK
The Simmons Common Stock issued pursuant to the Merger will be
freely transferable under the Securities Act of 1933 (the "Securities Act"),
except for shares issued to any DBI stockholder who may be deemed to be an
"affiliate" of DBI for purposes of Rule 145 under the Securities Act.
NO SHAREHOLDER APPROVAL REQUIRED
The Board of Directors of Simmons approved the Merger on November
14, 1994. The shareholders of Simmons are not required to approve the merger.
Consequently, no proxies will be solicited from shareholders of Simmons for
approval of this transaction. No dissenter's rights with respect to holders of
shares of Simmons Common Stock will arise due to the Merger.
DUMAS BANCSHARES, INC.
DESCRIPTION OF BUSINESS
Dumas Bancshares, Inc. is a multi-bank holding company which owns
100% of the common stock of Dumas State Bank, Dumas, Arkansas ("DSB") and First
State Bank, Gould, Arkansas ("FSB"), respectively. DBI may engage, directly or
through subsidiaries, in those activities closely related to banking which are
specifically permitted under the Bank Holding Company Act of 1956, as amended.
Dumas Bancshares, Inc. was organized as an Arkansas bank holding
company in 1982. The sole asset of Dumas Bancshares, Inc. is the stock it
holds in its two bank subsidiaries. The subsidiary banks grant commercial,
installment, real estate and personal loans to customers principally in Desha
County and Lincoln County, Arkansas. As of September 30, 1994, these
subsidiaries had a total of $27,113,000 of loans outstanding and a loan loss
reserve of $302,000.
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis highlights the significant
factors affecting Dumas Bancshares, Inc. ("DBI") consolidated financial
statements. For a more complete understanding of the following discussion,
reference should be made to DBI's consolidated financial statements and related
notes thereto presented elsewhere in this Proxy Statement.
BALANCE SHEET ANALYSIS
Financial Condition. At September 30, 1994 total assets were
$43,026,000 reflecting a modest decrease over the December 31, 1993 level of
$43,747,000. DBI receives a major portion of its income from earning assets,
which consist of interest bearing deposits with other banks, federal funds
sold, investment securities and loans. See Tables 1 and 2.
DBI's loan portfolio represents the largest component of the
earning asset base and has the largest impact upon income from earning assets.
At September 30, 1994, total loans were $27,113,000 reflecting a 15.6% increase
over the December 31, 1993 level of $23,456,000. Inherent in DBI's loan
portfolio is credit risk. DBI maintains an allowance against which loan losses
are charged. Management evaluates the allowance adequacy quarterly.
Management's methodology to determine the adequacy of the allowance considers
specific credit reviews, past loan loss experience, current economic conditions
and trends and the volume and composition of the loan portfolio. See Tables 5
through 9 and "Earnings Analysis - Provision for Possible Loan Losses" for
additional information.
Investment securities represents approximately 27% of the total
earning assets. At September 30, 1994, investment securities had a balance of
$10,481,000 as compared to December 31, 1993 level of $10,651,000. See Tables
3 and 4.
As the primary source to fund earning assets, deposits have
decreased to a level of $37,381,000 at September 30, 1994 as compared to
December 31, 1993 level of $39,160,000. Interest bearing deposits decreased by
$1,533,000 or 5% for the nine months ended September 30, 1994 due to declining
interest rates and the resulting shift from interest bearing deposits. See
Table 10 for further analysis of time deposits in excess of $100,000.
Liquidity and Interest Rate Sensitivity Management. Liquidity is
the ability of the bank to fund the needs of its borrowers, depositors and
creditors. Based on maturity structure and anticipated loan and deposit
funding requirements, DBI anticipates that its liquidity requirements will be
met in the foreseeable future. DBI's management is of the opinion that
traditional sources of maturing loans and investment securities, federal funds
and the base of core deposits will be adequate to provide liquidity needs. See
Tables 4, 6 and 10 for additional information on certain investment, loan and
time deposit maturities.
The matching of assets and liabilities may be analyzed by
examining the extent to which such assets and liabilities are "interest rate
sensitive" and by monitoring an institution's interest rate sensitivity "gap."
An asset or liability is said to be interest rate sensitive within a specific
time period if it will mature or reprice within that time period. The interest
rate sensitivity gap is defined as the difference between the amount of
interest-earning assets expected to mature or reprice within a specific time
period and the amount of interestbearing liabilities expected to mature or
reprice within that time period. A gap is considered positive when the amount
of interest rate sensitive assets maturing within a specific time frame exceeds
the amount of interest rate sensitive liabilities maturing within that same
time frame. During a period of falling interest rates, a positive gap tends to
result in a decrease in net interest income. Whereas in a rising interest rate
environment, an institution with a positive gap could experience the opposite
results.
The table below represents DBI's gap position as of September 30, 1994 (in
thousands):
<TABLE>
<CAPTION>
0-30 31-90 91-180 181-365 Over
Days Days Days Days 1 Year
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Rate sensitive assets $ 2,334 $ 2,993 $ 3,353 $ 8,018 $ 21,883
Rate sensitive liabilities 16,310 5,264 5,712 4,892 586
-------- -------- -------- -------- --------
Net Gap $ (13,976) $ (2,271) $ (2,359) $ 3,126 $ 21,297
======== ======== ======== ======== ========
Cumulative Gap $ (13,976) $ (16,247) $ (18,606) $ (15,480) $ 5,817
======== ======== ======== ======== ========
</TABLE>
At September 30, 1994, DBI's interest-bearing liabilities maturing
or repricing within one year exceeded the interest-bearing assets maturing or
repricing within the same time period. Based upon its evaluation of the
interest rate market, management feels DBI's gap position is in compliance with
its asset/liability management policies.
Capital. The Federal Reserve requires banks to maintain capital
based on "risk-adjusted" assets so that categories of assets with potentially
higher risk will require more capital backing than assets with lower risk. In
addition, banks are required to maintain capital to support, on a risk-adjusted
basis, certain off-balance sheet activities such as loan commitments.
At September 30, 1994, DBI's Tier I capital and total capital as a
percentage of total risk-adjusted assets were each 12.02% and 15.08%,
respectively, which exceeded the required minimum levels. The required minimum
levels for Tier I capital and total capital are 4.0% and 8.0%, respectively.
EARNINGS ANALYSIS
For the period ended September 30, 1994 and the years ended
December 31, 1993, and 1992, net income was approximately $312,000, $390,000,
and $386,000, respectively. For the period ended September 30, 1994 and the
years ended December 31, 1993 and 1992, the return on average assets was 0.96%,
0.92% and 0.88%, respectively, while the return on average equity was 10.30%,
10.11% and 10.73%, respectively.
The primary components of total income and expense which affect
net income are net interest income, provision for possible loan losses,
non-interest income, non-interest expense and the provision for income taxes.
Significant factors affecting these categories are presented below.
Net Interest Income on a Fully Taxable Equivalent Basis. For the
period ended September 30, 1994 (annualized for 1994) and the years ended
December 31, 1993 and 1992, net interest income was $1,796,000, $1,697,000 and
$1,724,000, respectively. The decrease in 1993 over 1992 levels results from
levels of yields on investment securities and yields decreasing relatively more
as compared to rate decreases on interest-bearing deposits. See Tables 1 and
2.
Allowance for Possible Loan Losses. For the period ended
September 30, 1994 and the years ended December 31, 1993 and 1992, the
allowance for possible loan losses was $302,000, $284,000 and $269,000,
respectively. DBI had net recoveries on loans of $14,000 in 1994 and $9,000 in
1993, while they had net charge offs of $121,000 in 1992, respectively.
The allowance for loans and lease losses was 1.1% of loans at
September 30, 1994, compared to 1.2% at December 31, 1993.
Non-Interest Income. Total non-interest income for the period
ended September 30, 1994 was $238,000 as compared to the year ended December
31, 1993 of $331,000, and the year ended December 31, 1992 of $383,000,
respectively.
Non-Interest Expense. Total non-interest expense for the period
ended September 30, 1994 was $1,101,000 as compared to the year ended December
31, 1993 of $1,451,000, and the year ended December 31, 1992 of $1,487,000,
respectively.
Provision for Income Taxes. Income tax expense for the period
ended September 30, 1994 was $70,000 as compared to the year ended December 31,
1993 of $77,000 and the year ended December 31, 1992 of $67,000. Notes to the
consolidated financial statements provides further details of the applicable
income tax expense.
REGULATORY ISSUES
Pursuant to the Interest Rate Control Amendment to the
Constitution of the State of Arkansas, "consumer loans and credit sales" have a
maximum limitation of 17% per annum and all "general loans" have a maximum
limitation of 5% over the Federal Reserve Discount Rate in effect at the time
the loans are made. The Arkansas Supreme Court has determined that "consumer
loans and credit sales" are "general loans" and are subject to the limitation
of 5% over the Federal Reserve Discount Rate as well as a maximum limitation of
17% per annum. As a general rule, DBI is required to comply with the Arkansas
usury laws on loans made within the State of Arkansas.
ACCOUNTING STANDARDS
During 1993 the Financial Accounting Standards Board (FASB)
issued SFAS No. 114 (Accounting by Creditors for Impairment of a Loan) which
becomes effective beginning in 1995. This statement defines the measurement
requirements for loans that are impaired or deemed to be troubled debt
restructurings. The adoption of SFAS No. 114 is not expected to have a
significant impact on the Company's consolidated financial statements.
Also during 1993 the FASB issued SFAS No. 115 "Accounting for
Certain Investments in Debt and Equity Securities," which DBI adopted on
January 1, 1994. This statement addresses the accounting and reporting for
investments in debt and certain equity securities. Debt securities not
classified as trading account securities or investment securities expected to
be held to maturity and all equity securities will be classified as available-
for-sale securities and reported at fair value, with net unrealized gains and
losses reported, net of tax, as a separate component of stockholders' equity.
SFAS No. 115 was adopted effective January 1, 1994, resulting in an increase in
stockholders' equity of $53,000, net of related income tax effect of $28,000
and is reflected in the accompanying September 30, 1994 interim financial
statements.
During 1994, the FASB issued SFAS No. 119 "Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments".
This statement requires disclosures about derivative financial instruments -
futures, forward, swap, and option contracts, and other financial instruments
with similar characteristics. DBI does not have any financial instruments that
would be disclosed in accordance with SFAS No. 119.
DUMAS BANCSHARES, INC.
STATISTICAL DISCLOSURES
TABLE 1 - COMPARATIVE AVERAGE BALANCES - YIELDS AND RATES
The Average Assets and Liabilities table below shows the average
balances of the assets and liabilities of the corporation, the interest income
or expense associated with those assets and liabilities, and the computed yield
or rate based upon the interest income or expense for each of the last three
years.
<TABLE>
<CAPTION>
December 31, December 31,
1993 1992
------------------------------------------------------------------------------------------
Average Revenue/ Yield/ Average Revenue/ Yield/
($ in thousands) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-earning assets:
Deposits in banks $ 425 $ 18 4.24 % $ 182 $ 6 3.30 %
Federal funds sold 6,899 203 2.94 % 7,892 270 3.42 %
Investment securities:
Taxable 6,118 397 6.49 % 6,475 500 7.72 %
Non-taxable (FTE) 3,838 386 10.07 % 3,687 386 10.48 %
Loans - net of unearned income 21,142 1,804 8.53 % 21,082 2,047 9.71 %
---------- ---------- ---------- ----------
Total interest-earning assets 38,422 2,808 7.31 % 39,318 3,209 8.16 %
---------- ---------- ---------- ----------
Cash and due from banks 0 0
Other assets 3,949 4,683
Allowance for loan losses 0 0
---------- ----------
Total Assets $ 42,371 $ 44,001
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-earning liabilities:
Interest-bearing demand deposits $ 3,719 $ 182 4.89 % $ 3,336 $ 199 5.97 %
Savings deposits 8,009 148 1.85 % 7,695 158 2.05 %
Time deposits 20,232 719 3.55 % 22,824 1,057 4.63 %
Federal funds purchased 0 0 0.00 % 0 0 0.00 %
Short-term borrowings 0 0 0.00 % 0 0 0.00 %
Long-term debt 737 62 8.41 % 801 71 8.86 %
---------- ---------- ---------- ----------
Total interest-bearing liabilities 32,697 1,111 3.40 % 34,656 1,485 4.28 %
---------- ---------- ---------- ----------
Noninterest-bearing demand deposits 0 0
Other liabilities 5,818 5,747
---------- ----------
Stockholders' equity 3,856 3,598
---------- ----------
Total liabilities and stockholders'
equity $ 42,371 $ 44,001
========== ==========
NET INTEREST MARGIN 1,697 4.42 % 1,724 4.39 %
Less tax equivalent adjustments:
Investments 131 131
---------- ----------
Net interest margin $ 1,566 $ 1,593
========== ==========
</TABLE>
Non-accruing loans have been included in the average
loan balances and interest collected prior to these loans having been placed on
non-accrual has been included in interest income. Interest income and average
yield on tax-exempt assets have been calculated on a fully tax equivalent basis
using a 34% tax rate for the years 1994, 1993 and 1992.
TABLE 2 - VOLUME AND YIELD/RATE VARIANCE ANALYSIS
The Volume and Yield/Rate variance table shows the
change from year to year for each component of the tax equivalent net interest
margin separated into the amount generated by volume changes and the amount
generated by changes in the yield or rate (Tax Equivalent Basis - $ in
Thousands):
<TABLE>
<CAPTION>
1993 over 1992
-----------------------------------------
Yield/
($ in thousands) Volume Rate Total
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Increase (decrease) in:
Interest income:
Interest earning time deposits $ 10 $ 2 $ 12
Federal funds sold and securities
purchased under agreement to
resell (32) (35) (67)
Investment securities (24) (79) (103)
Loans, net of unearned discount 6 (249) (243)
-------- -------- ----------
Total $ (40) $ (361) $ (401)
Interest expense: -------- -------- ----------
Interest bearing demand deposits $ 30 $ (47) $ (17)
Savings deposits 6 (16) (10)
Time deposits (111) (227) (338)
Federal funds purchased and
securities sold under agreement
to repurchase 0 0 0
Borrowed funds (6) (3) (9)
-------- -------- ----------
Total $ (81) $ (293) $ (374)
-------- -------- ----------
Increase (decrease) in
Net Interest Income $ 41 $ (68) $ (27)
======== ======== ==========
</TABLE>
The change in interest due to both volume and yield/rate has been
allocated to change due to volume and change due to yield/rate in proportion to
the absolute value of the change of each.
Tax exempt income has been adjusted to a tax equivalent basis using a tax rate
of 34% for the years 1993 and 1992. The balances of non-accrual loans and
related income recognized have been included for purposes of these
computations.
TABLE 3 - INVESTMENT PORTFOLIO
The table below indicates book values of investment securities by
type for the nine months ended September 30, 1994 and for each of the years
ended December 31, 1993 and 1992:
<TABLE>
<CAPTION>
September 30, December 31,
($ in thousands) 1994 1993 1992
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Held to Maturity
U.S. Treasury and U.S. Government agencies $ $ 5,480 $ 5,608
Mortgage-backed securities 84 175
Obligations of states and political subdivisions 3,676 3,877 3,777
Other securities 59 500 300
-------- -------- ---------
Total Debt Securities 3,735 9,941 9,860
Equity Securities 709 631
-------- -------- ---------
Total Held to Maturity $ 3,735 $ 10,650 $ 10,491
======== ========= =========
Available for Sale
U.S. Treasury and U.S. Government agencies $ 5,905
Mortgage-backed securities 47
Other securities 192
--------
Total Debt Securities 6,144
Equity Securities 602
--------
Total Available for Sale $ 6,746
========
</TABLE>
TABLE 4 - MATURITY DISTRIBUTION AND YIELDS OF INVESTMENT PORTFOLIO
The following table details the maturities of investment
securities at September 30, 1994 and the weighted average yield for each range
of maturities (Tax Equivalent Basis - in thousands):
<TABLE>
<CAPTION>
Maturing
----------------------------------------------------------------------------------------------------
After One After Five After
Within But Within But Within Ten
One Year Yield Five Years Yield Ten Years Yield Years Yield Total
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Held to Maturity
U.S. Treasury $ $ $ $ $
U.S. Government Agencies
Mortgage-backed securities
Obligations of states and
political subdivisions 150 11.69 % 324 10.22 % 922 10.39 % 2,280 10.08 % 3,676
Other securities 59 10.85 % 59
------ ------- ------- ------ ------
Total Held to Maturity $ 150 $ 324 $ 981 $ 2,280 $ 3,735
====== ======= ======= ====== ======
Available for Sale
U.S. Treasury $ 693 4.83 % $ 1,866 5.04 % $ $ $ 2,559
U.S. Government Agencies 294 7.94 % 2,278 4.98 % 774 6.25 % 3,346
Mortgage-backed securities 12 8.37 % 14 9.00 % 21 8.04 % 47
Obligations of states and
political subdivisions
Other securities 192 4.71 % 192
------ ------ ------- ------ ------
Total debt securities $ 987 $ 4,348 $ 788 $ 21 $ 6,144
====== ====== ======= ======
Equity securities 602
------
Total Available for Sale $ 6,746
======
</TABLE>
At September 30, 1994 there were no securities in the portfolio of
any one issuer with a carrying value exceeding ten percent of total
stockholders' equity.
TABLE 5 - COMPOSITION OF THE LOAN PORTFOLIO
The following table details the various categories for the loan
portfolio for the nine months ended September 30, 1994 and the four previous
years:
<TABLE>
<CAPTION>
December 31,
September 30, ----------------------------------------------------------------------------------
($ in thousands) 1994 1993 1992 1991 1990 1989
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Consumer:
Individuals - other $ 2,800 $ 2,689 $ 2,522 $ 3,532 $ 3,671 $ 2,988
---------- ---------- ---------- ---------- ---------- ----------
Total Consumer 2,800 2,689 2,522 3,532 3,671 2,988
Real Estate:
Real estate construction 540 1,016 109 275 245 0
Single family residential 5,314 4,577 3,647 3,823 3,371 0
Other commercial 7,564 6,397 5,146 3,770 4,621 6,200
---------- ---------- ---------- ---------- ---------- ----------
Total Real Estate 13,418 11,990 8,902 7,868 8,237 6,200
Commercial:
Commercial 6,963 5,645 6,167 6,397 6,813 6,247
Agriculture 3,714 2,340 2,207 3,953 5,268 4,128
Financial Institutions 0 0 690 0 482 1,137
---------- ---------- ---------- ---------- ---------- ----------
Total Commercial 10,677 7,985 9,064 10,350 12,563 11,512
Other 238 817 105 444 349 409
---------- ---------- ---------- ---------- ---------- ----------
27,133 23,481 20,593 22,194 24,820 21,109
Unearned discount (20) (25) (23) (20) (41) (59)
---------- ---------- ---------- ---------- ---------- ----------
Total loans 27,113 23,456 20,570 22,174 24,779 21,050
Less: allowance for possible
loan losses (302) (284) (269) (354) (453) (402)
---------- ---------- ---------- ---------- ---------- ----------
Net loans $ 26,811 $ 23,172 $ 20,301 $ 21,820 $ 24,326 $ 20,648
========== ========== ========== ========== ========== ==========
</TABLE>
TABLE 6 - LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES
The following table details the loan maturities and sensitivity to
changes in interest rates as of September 30, 1994 and December 31, 1993:
<TABLE>
<CAPTION>
September 30, 1994
---------------------------------------------------------------------------
Within One One Year After
Year or Through Five
Less Five Years Years Total
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial, Financial and Agricultural $ 8,003 $ 2,610 $ 64 $ 10,677
Commercial Real Estate 3,771 4,333 0 8,104
Other 3,317 4,747 288 8,352
---------- ---------- ---------- ----------
$ 15,091 $ 11,690 $ 352 $ 27,133
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Maturing:
--------------------------------------------------------
One Year After
Through Five
Five Years Years Total
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Above loans due after one year which have:
Predetermined interest rates $ 11,690 $ 352 $ 12,042
Floating interest rates 0 0 0
---------- ---------- ----------
$ 11,690 $ 352 $ 12,042
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1993
---------------------------------------------------------------------------
Within One One Year After
Year or Through Five
Less Five Years Years Total
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial, Financial and Agricultural $ 5,769 $ 2,128 $ 88 $ 7,985
Commercial Real Estate 3,881 3,532 0 7,413
Other 3,795 3,869 394 8,058
---------- ---------- ---------- ----------
$ 13,445 $ 9,529 $ 482 $ 23,456
========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
Maturing:
---------------------------------------------------------
One Year After
Through Five
Five Years Years Total
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Above loans due after one year which have:
Predetermined interest rates $ 9,529 $ 482 $ 10,011
Floating interest rates 0 0 0
---------- ---------- ----------
$ 9,529 $ 482 $ 10,011
=========== =========== ==========
</TABLE>
TABLE 7 - NON-PERFORMING ASSETS AND PAST DUE LOANS
The table below shows Dumas Bancshares, Inc.'s non-performing
assets and past due loans at the end of September 30, 1994 and each of the last
four years (in thousands):
<TABLE>
<CAPTION>
December 31,
September 30, -----------------------------------------------------------------
1994 1993 1992 1991 1990 1989
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Non-accrual loans $ 1 $ 6 $ 1 $ 41 $ 325 $ 322
Loan past due 90 days or more
(principal or interest payments) 3 0 45 155 38 20
Restructured 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Total non-performing loans 4 6 46 196 363 342
Other non-performing assets
Total foreclosed assets held for sale 0 0 44 69 0 0
In-substance foreclosure 0 0 0 0 0 0
Other non-performing assets 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Total other non-performing assets 0 0 44 69 0 0
-------- -------- -------- -------- -------- --------
Total non-performing assets $ 4 $ 6 $ 90 $ 265 $ 363 $ 342
======== ======== ======== ======== ======== ========
</TABLE>
If interest on non-accrual loans had been accrued, such income
would have approximated $0 in 1994, and $1,000 in 1993. The interest which was
included in earnings for 1994 for non-accrual loans is immaterial.
At September 30, 1994, DBI had no loan concentrations greater than
ten percent of total loans except as shown in Table 5.
DBI does not accrue interest on any loan for which payment of
interest or principal is not expected, on any loan which is delinquent 90 days
or more, unless the obligation is both well secured and in the process of
collection, or on any loan that is maintained on a cash basis due to
deterioration in the financial condition of the borrower. Management considers
a debt to be "well secured" if it is secured by collateral in the form of liens
on or pledges of real or personal property that have a realizable value
sufficient to discharge the debt in full or by the guaranty of a financially
responsible party. A debt is considered to be "in process of collection" if,
based on a probable specific event, it is expected that the loan will be repaid
or brought current. At September 30, 1994, DBI has no loans about which
Management has serious doubts as to their collectibility other than those
disclosed above.
TABLE 8 - ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
The table below summarizes loan loss experience for each of the
last five years for Dumas Bancshares, Inc. (in thousands):
<TABLE>
<CAPTION>
Year Ended December 31,
Sept. 30, -------------------------------------------------------------------
1994 1993 1992 1991 1990 1989
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, Beginning of period $ 284 $ 269 $ 354 $ 453 $ 402 $ 180
Loans charged off:
Consumer:
Other consumer 0 4 38 10 12 1
-------- -------- -------- -------- -------- --------
Total consumer 0 4 38 10 12 1
Real Estate:
Construction 0 0 0 0 0 0
Single family residential 0 0 10 8 0 0
Other commercial 0 0 0 0 1 95
-------- -------- -------- -------- -------- --------
Total real estate 0 0 10 8 1 95
Commercial:
Commercial 0 0 46 7 0 0
Agriculture 0 0 37 245 0 0
Financial institutions 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Total commercial 0 0 83 252 0 0
Total loans charged off 0 4 131 270 13 96
Recoveries:
Consumer:
Credit card 0 0 0 0 0 0
Student loans 0 0 0 0 0 0
Other consumer 14 8 4 4 1 9
-------- -------- -------- -------- -------- --------
Total consumer 14 8 4 4 1 9
Real estate:
Construction 0 0 0 0 0 0
Single family residential 0 0 0 0 0 0
Other commercial 0 0 0 0 0 6
-------- -------- -------- -------- -------- --------
Total real estate 0 0 0 0 0 6
Commercial:
Commercial 0 5 5 11 7 6
Agriculture 0 0 1 0 0 0
Financial institutions 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Total commercial 0 5 6 11 7 6
Total recoveries 14 13 10 15 8 21
-------- -------- -------- -------- -------- --------
Net loans charged off (14) (9) 121 216 5 75
Provision charged to operating expense 4 6 36 156 56 69
Changes incident to mergers and
absorptions, net 228
-------- -------- -------- -------- -------- --------
Balance, end of period $ 302 $ 284 $ 269 $ 354 $ 453 $ 402
======== ======== ======== ======== ======== ========
</TABLE>
TABLE 9 - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
The following table is a summary by allocation category of Dumas
Bancshares, Inc.'s allowance for loan losses (in thousands):
<TABLE>
<caption
September 30, December 31,
------------------- ---------------------------------------------------------------------
% of % of % of % of
1994 Loans* 1993 Loans* 1992 Loans* 1991 Loans*
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Consumer:
Credit card $ 0 $ 0 $ 0 $ 0
Student loans 0 0 0 0
Other 21 10.25 % 39 11.36 % 67 12.15 % 9 15.84 %
Real estate:
Real estate construction 0 1.99 % 0 4.33 % 0 0.53 % 0 1.24 %
Single family residential 8 19.60 % 15 19.51 % 20 17.73 % 12 17.24 %
Other commercial 0 27.90 % 0 27.27 % 0 25.02 % 0 17.00 %
Commercial:
Commercial 45 25.68 % 85 24.07 % 152 29.98 % 11 28.85 %
Agriculture 69 13.70 % 127 9.98 % 0 10.73 % 316 17.83 %
Financial institutions 0 0 0 3.35 % 0
Other 0 0.88 % 0 3.48 % 0 0.51 % 0 2.00 %
Unallocated 159 18 30 6
------ ------ ------ ------
$ 302 100.00 % $ 284 100.00 % $ 269 100.00 % $ 354 100.00 %
====== ====== ====== ======
<FN>
* Percentage of loans in each category to total loans
</TABLE>
TABLE 10 - TIME DEPOSITS OF $100,000 OR MORE
The table below shows maturities on outstanding time deposits of
$100,000 or more at September 30, 1994 (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1994 1993
- ---------------------------------------------------------------------------
<S> <C> <C>
3 months or less $ 1,787 $ 3,521
Over 3 months through 6 months 3,847 1,219
Over 6 months through 12 months 0 240
Over 12 months 100 300
--------- ---------
$ 5,734 $ 5,280
========= =========
</TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
THE BOARD OF DIRECTORS OF DBI WILL BE DISSOLVED AND POSITIONS HELD
BY EXECUTIVE OFFICERS OF DBI WILL NO LONGER EXIST UPON THE CONSUMMATION OF THE
MERGER. THE BOARD OF DIRECTORS OF FSB WILL BE DISSOLVED AND POSITIONS HELD BY
EXECUTIVE OFFICERS OF FSB WILL NO LONGER EXIST UPON THE CONSUMMATION OF THE
BANK MERGER IMMEDIATELY AFTER THE MERGER. DIRECTORS AND EXECUTIVE OFFICERS OF
THE DSB ARE EXPECTED TO REMAIN IN THEIR POSITIONS. AT THIS TIME NONE OF THE
DIRECTORS OR EXECUTIVE OFFICERS OF DBI ARE EXPECTED TO BE ON THE BOARD OF
DIRECTORS OR AN EXECUTIVE OFFICER OF SIMMONS AFTER CONSUMMATION OF THE MERGER.
THE DIRECTORS OF DUMAS BANCSHARES, INC. AND ITS SUBSIDIARIES ARE SET FORTH
BELOW:
<TABLE>
DIRECTORS OF DUMAS BANCSHARES, INC. AND ITS SUBSIDIARIES
<CAPTION>
DBI
Common Stock Owned
Beneficially as of
December 31, 1993
Director(1) Principal Occupation Shares and
Name Age Since and Directorship Percent of Class
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Merle Peterson 78 1982 Chairman of Board of Dumas Bancshares, Inc. 10,872 (3
5.07%)
Director of Dumas State Bank; Partner,
Peterson Enterprises, Dumas, AR; Partner,
Red Fork Farms, Inc., Dumas, AR; Retired
Ford Dealer
James R. Hall 63 1982 President & CEO of Dumas Bancshares, Inc. 1,555 (5.02%)
Chairman of Board, President, CEO of Dumas
State Bank; Chairman of Board, President,
CEO of First State Bank
Dennis H. Ferguson 33 1992 Vice President & Secretary of Dumas 155 *
Bancshares, Inc.; Executive Vice President
& Secretary of Dumas State Bank; Vice
President of First State Bank
William A. West 63 1982 Director of Dumas Bancshares, Inc.; Director, 700 (2.26%)
Vice President & Loan Officer of Dumas State
Bank
A. O. French, Jr. 60 1982 Director of Dumas Bancshares, Inc.; Director 2,598 (8.38%)
of Dumas State Bank; Director of First State
Bank, President, French Farms, Inc., Dumas,
AR; Partner, French Planting Co., Dumas, AR;
Farmer
William F. Teeter 58 1982 Direcor of Dumas Bancshares, Inc.; Director 1,388 (4.47%)
of Dumas State Bank, President, P.W. Teeter
& Sons Co., Inc., Dumas, AR; Director, M S
& T Flying Service, Tillar, AR; Farmer
Howard R. Harris 69 1982 Director of Dumas Bancshares, Inc.; Director 2,000 (6.45%)
of Dumas State Bank; Owner, Robinson Clinic,
Dumas, AR; Physician
Herman Vickers 76 1982 Director of Dumas Bancshares, Inc.; Director 100 *
of Dumas State Bank; President, Vickers
Chevrolet, Inc., Dumas, AR; Shareholder,
American Western Insurance Co., Little Rock,
AR; Chevrolet Dealer
Dorothy Moore 84 1982 Director of Dumas Bancshares, Inc.; Director 300 *
of Dumas State Bank; No related interest;
Landowner
John Shannon 49 1990 Executive Vice President First State Bank; 200 *
Sec/Treas Harry Shannon Chevrolet/GMC Truck
Inc., Star City, AR; Sec/Treas Lincoln Leasing
& Rental Inc., Star City, AR
Donald Eifling 71 1989 Director of First State Bank; VP, Sec/Treas 166 *
Grassy Lake Farms, Inc., Grady, AR; Partner,
Don Eifling & Son Farms, Inc., Grady, AR;
VP, Sec/Treas Don L. Eifling, Inc., Grady, AR;
VP, Sec/Treas Sam Don, Inc., Grady, AR; VP,
Sec/Treas Rebecca Lynne, Inc., Grady, AR,
Farmer
Johnny Rogers 61 1989 Director of First State Bank; Partner, 166 *
J&M Rogers, Ptr., Gould, AR; Partner, Rogers
Flying Service, Gould, AR; Farmer/Aviator
Stanley Norris 57 1989 Director of First State Bank; Owner, Twin 170 *
Rivers Shopping Center, Dumas, AR; Owner,
Norris Oil Co., Gould, AR; Owner, Delta
Canning, Inc., Dumas, AR; Oil Jobber
- ------------
<FN>
(1) This column represents the year in which the directorship commenced. If a person serves as director for
both Dumas Bancshares, Inc. and one or both of its subsidiaries, the year disclosed reflects the date the
directorship in Dumas Bancshares, Inc. commenced.
* Less than 1% of outstanding shares.
</TABLE>
EXECUTIVE OFFICERS OF DUMAS BANCSHARES, INC. AND ITS SUBSIDIARIES
In addition to Merle Peterson, James R. Hall, Dennis Ferguson, and
John Shannon the executive officers of Dumas Bancshares, Inc. and its
subsidiaries are:
<TABLE>
<CAPTION>
Shares of
DBI Common
Executive Stock Owned
Officer Beneficially as of
Name Age Since Position December 31, 1993
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Anita Grimes 44 1988 Treasuer, Dumas Bancshares, Inc.; VP & 0
Cashier, Dumas State Bank & First State Bank
</TABLE>
During 1994, the Board of Directors of DBI held 11 meetings and
all the incumbent directors then in office were in attendance at more than
seventy-five percent of the meetings. The Board of Directors does not have a
nominating, compensation or audit committee.
TRANSACTIONS WITH MANAGEMENT
Directors and executive officers of DBI and its subsidiaries,
their associates and members of their immediate families were customers of and
had transactions including loans and commitments to lend with subsidiaries of
DBI in the ordinary course of business during 1994. All such loans and
commitments were made by the subsidiaries 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. Similar
transactions may be expected to take place in the ordinary course of business
in the future. On September 30, 1994, the aggregate of these related party
loans was approximately $2,279,000 or approximately 8.4% of total loans
outstanding of the subsidiaries and 2.7% of pro forma consolidated capital
accounts.
PRINCIPAL STOCKHOLDERS OF DUMAS BANCSHARES, INC.
The following table sets forth, as of September 30, 1994, the only
persons who were known by DBI to own of record or beneficially more than five
(5%) of Dumas Bancshares, Inc. Common Stock and the number of shares owned
beneficially by each of them.
<TABLE>
<CAPTION>
Shares Owned Aggregate
Name Directly Indirectly Pct of Class
------ ------------------------- ---------------
<S> <C> <C> <C>
James R. Hall 1,555 0 5.02 %
Merle F. Peterson 5,422 5,450(1) 35.07 %
Deloris Peterson 5,450 5,422(2) 35.07 %
Howard R. Harris 2,000 0 6.45 %
Smith Barney Shearson, Inc. 1,600 0 5.16 %
- --------------
<FN>
(1) The indirect ownership includes shares owned by Deloris Peterson, his wife.
(2) The indirect ownership includes shares owned by Merle Peterson, her husband.
</TABLE>
All directors and executive officers of DBI and its subsidiaries
as a group (13 persons) as of September 30, 1994 owned 21,034 shares or 67.85%
of the outstanding shares of DBI Common Stock. No director or executive
officer of DBI owns any shares of Simmons Common Stock. Neither Simmons nor
any of its subsidiaries nor any director or executive officer of Simmons owns
any shares of DBI Common Stock.
COMPETITION
The banking subsidiaries of DBI compete actively with national and
state banks, savings and loan associations, credit unions, securities dealers,
mortgage bankers, finance companies and insurance companies.
LITIGATION
There is no material pending litigation in which DBI or its
subsidiaries is a party.
OFFICES
DBI's executive offices are located in the offices of Dumas State
Bank, at Hwy 54 & 65, Dumas, Arkansas 71639.
EMPLOYEES
As of September 30, 1994, DBI and its subsidiaries has 29
employees, 14 of whom are located in Dumas, 7 at Star City, 6 at Gould and 2 at
Grady.
DESCRIPTION OF DUMAS BANCSHARES, INC. STOCK
DBI has one class of common stock issued and outstanding. As of
September 30, 1994, DBI had 31,000 shares of common stock outstanding, held by
75 stockholders.
<TABLE>
Dividends Paid Per Share
<CAPTION>
Sept. 30, December 31,
1994 1993 1992
------------------------------------------------------
<S> <C> <C> <C>
Common Stock $ 0.00 $ 1.50 $ 1.50
</TABLE>
COMPARISON OF RIGHTS OF HOLDERS OF DUMAS BANCSHARES, INC. COMMON STOCK AND
SIMMONS COMMON STOCK
DBI is a corporation organized and existing under the laws of the
State of Arkansas, i.e., the Arkansas Business Corporation Act of 1965.
Simmons is a corporation organized and existing under the laws of the State of
Arkansas, i.e., the Arkansas Business Corporation Act of 1987. Holders of DBI
common stock have the rights, privileges and duties provided by the 1965 Act,
while the holders of Simmons Common Stock have the rights, privileges and
duties provided by the 1987 Act. For a detailed discussion of all material
differences between the rights of security holders of DBI, and the rights of
security holders of Simmons, see "Election by Dumas Bancshares, Inc.
Stockholders under the 1987 Act - Result of Election".
The holders of DBI common stock are entitled to cumulative voting
for directors. The holders of Simmons Common Stock are not entitled to
cumulative voting for directors. Pursuant to Simmons's By-Laws, the number of
directors of the corporation may not be less than five nor more than twenty-
five. The DBI By-Laws sets that the number of directors at twelve.
Furthermore, neither holders of DBI common stock nor holders of Simmons Common
Stock have preemptive rights with respect to issuance of additional securities.
Both DBI and Simmons have corporate power to indemnify their
officers and directors with respect to certain liabilities. Under the 1987
Act, the ability to indemnify officers and directors with respect to
liabilities incurred by them in their conduct and good faith of the business of
the corporation is broader than under the 1965 Act. Such power is limited,
however, by applicable federal laws and regulations including federal banking
laws and regulations and the applicable state law. Further, pursuant to the
1987 Act Simmons has adopted a provision in its Articles of Incorporation which
limits the liability of its directors for certain breaches of their fiduciary
duties. DBI has not adopted such a liability limitation provision since such
provisions are not authorized by the 1965 Act under which the corporate
activities of DBI are governed.
Simmons' Articles of Incorporation contain several paragraphs that
may have the effect of operating as anti-takeover provisions. Article ELEVENTH
contains a restriction upon the ability of a stockholder owning more than 10%
of Simmons Common Stock to acquire any additional shares except through a cash
tender offer at a price not less than the highest closing price of Simmons
Common Stock during the most recent 24 months, unless such shareholder is
excepted from the application of the Article by the board of directors prior
to becoming a 10% shareholder. Further, Article ELEVENTH requires the approval
of 80% of the shareholders of Simmons for any acquisition of Simmons by merger
or consolidation or by asset acquisition unless approved by the affirmative
vote of 80% of the directors who were in office prior to the proponent of the
acquisition acquiring 10% or more of Simmons Common Stock. Article THIRTEENTH
of the Articles of Incorporation of Simmons requires the Board to consider the
following matters in addition to any other matters required to be considered
prior to making any recommendation concerning a proposed business combination
in which Simmons will not be the surviving corporation: 1) the impact on the
corporation, its subsidiaries, shareholders and employees and the communities
served by the corporation, 2) the timeliness of the proposed transaction
considering the business climate and strategic plans of the Company, 3) the
existence of any legal defects or regulatory issues involved in the proposed
transaction, 4) the lack of non-consummation of the transaction due to lack of
financing, regulatory issues or identified issues, 5) current market price of
Simmons Common Stock and its consolidated assets, 6) book value of Simmons
Common Stock, 7) the relationship of the offered price for Simmons Common Stock
to the Board's opinion of the current value of Simmons in a negotiated
transaction, 8) the relationship of the offered price for Simmons Common Stock
to the Board's opinion of the future value of Simmons as an independent entity,
and 9) such other criteria as the Board may determine are appropriate. Article
FOURTEENTH, requires the affirmative vote of 80% of the shareholders to amend,
repeal or modify any provision of the Articles of Incorporation unless such
revision is approved by 80% of the directors who were in office prior to the
proponent of any business combination acquiring 10% or more of Simmons Common
Stock. The Dumas Bancshares, Inc. Articles of Incorporation do not contain a
similar provisions. However, under the 1965 Act, DBI must have a two-thirds
(2/3) majority vote of all votes entitled to be cast to adopt a merger or
business combination.
LEGAL MATTERS AND EXPERTS
LEGAL OPINIONS
The legality of the Simmons Common Stock to be issued after the
Merger has been consummated by and between Simmons and Dumas Bancshares, Inc.
and certain tax matters relating to the Merger will be passed upon by Ramsay,
Bridgforth, Harrelson & Starling, 501 Main St., 11th Floor, Pine Bluff,
Arkansas 71601.
EXPERTS
The consolidated financial statements of Simmons First National
Corporation as of December 31, 1993 and 1992 and for each of the years in the
three-year period ended December 31, 1993 are incorporated by reference in this
Proxy Statement and have been audited by Baird, Kurtz and Dobson, independent
public accountants, as indicated in their reports with respect thereto, and
such consolidated financial statements of Simmons have been incorporated by
reference herein in reliance upon the report of said firm given as experts in
accounting and auditing.
The consolidated financial statements of Dumas Bancshares, Inc. as
of December 31, 1993 and for each of the years in the two-year period ended
December 31, 1993, have been audited by Kemp and Company, independent auditors,
whose report thereon appears elsewhere herein and in the Registration Statement
and have been so included in reliance upon the report of Kemp and Company given
upon the authority of said firm as experts in accounting and auditing.
GENERAL
As of the date of this Proxy Statement, the board of directors of
DBI does not intend to present, and has not been informed that another person
intends to present, any matter for action at the meeting of stockholders other
than as discussed in this Proxy Statement. If any other matters properly come
before the meeting, it is intended that the holders of the proxies will act in
accordance with their best judgment.
INDEX TO DUMAS BANCSHARES, INC. FINANCIAL STATEMENTS
Financial Statements - September 30, 1994 and September 30, 1993 (Unaudited)
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income. . . . . . . . . . . . . . . . . . .
Consolidated Statements of Stockholders' Equity. . . . . . . . . . . .
Consolidated Statements of Cash Flows. . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . .
Financial Statements - December 31, 1993, 1992 and 1991
Report of Independent Auditors . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets - December 31, 1993 and 1992 (unaudited) .
Consolidated Statements of Income -
Years ended December 31, 1993, 1992 and 1991 (unaudited). . . . .
Consolidated Statements of Stockholders' Equity -
Years ended December 31, 1993, 1992 and 1991 (unaudited). . . . .
Consolidated Statements of Cash Flows -
Years ended December 31, 1993, 1992 and 1991 (unaudited). . . . .
Notes to Consolidated Financial Statements . . . . . . . . . . . . . .
<TABLE>
PART I
------
A.
SUMMARIZED FINANCIAL INFORMATION
--------------------------------
DUMAS BANCSHARES, INC.
-----------------------
CONSOLIDATED BALANCE SHEET
--------------------------
ASSETS
<CAPTION>
September 30,
($ in thousands) 1994
- --------------------------------------------------------------------------------------
(Unaudited)
<S> <C>
Cash and non-interest bearing balances due from banks $ 2,173
Federal funds sold and securities purchased
under agreement to resell 1,440
------------
Cash and cash equivalents 3,613
Interest bearing balances due from banks 190
Investment securities (Note 2)
Securities held to maturity 3,735
Securities available for sale 6,746
Loans (Note 3) 27,113
Allowance for possible loan losses (Note 4) (302)
------------
Net loans 26,811
Premises and equipment (Note 5) 1,023
Interest receivable 517
Excess Cost over fair value of
net assets acquired 75
Other assets 316
------------
Total Assets $ 43,026
============
<FN>
See Notes to Consoldiated Financial Statements.
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
September 30,
($ in thousands) 1994
- -----------------------------------------------------------------------------------------
(Unaudited)
<S> <C>
Non-interest bearing transaction accounts $ 6,310
Interest bearing transaction and
savings deposits 12,045
Time deposits 19,026
-----------
Total Deposits 37,381
Federal funds purchased and securities
sold under agreement to repurchase 360
Borrowed funds 734
Long-term debt (Note 8) 600
Other liabilities 327
-----------
Total Liabilities 39,402
-----------
STOCKHOLDERS' EQUITY
Capital stock
Common stock, $10 par value:
authorized, issued, and
outstanding - 31,000 shares 310
Surplus 838
Net unrealized gain (loss) on securities
available for sale (168)
Undivided profits (Note 11) 2,644
-----------
Total Stockholders' Equity $ 3,624
-----------
Total Liabilities and
Stockholders' Equity $ 43,026
===========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
DUMAS BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ---------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
INTEREST INCOME:
Loans $ 1,467 $ 1,310
Federal funds sold and securities
purchased under agreement to resell 99 172
Investment securities - taxable
Available for sale 306 297
Investment securities - nontaxable
Held to maturity 182 189
Other interest 15 15
---------- ----------
TOTAL INTEREST INCOME 2,069 1,983
INTEREST EXPENSE: ---------- ----------
Deposits 777 794
Borrowed funds 43 46
---------- ----------
TOTAL INTEREST EXPENSE 820 840
---------- ----------
NET INTEREST INCOME 1,249 1,143
Provision for loan losses 4 5
NET INTEREST INCOME AFTER PROVISION ---------- ----------
FOR LOAN LOSSES 1,245 1,138
---------- ----------
NON-INTEREST INCOME:
Service charges on deposit accounts 174 179
Other service charges and fees 39 17
Securities gains 1 1
Other operating income 24 41
---------- ----------
TOTAL NON-INTEREST INCOME 238 238
NON-INTEREST EXPENSE: ---------- ----------
Salaries and employee benefits 528 524
Occupancy expense, net 148 140
Furniture & equipment expense 72 73
Other operating expense 353 314
---------- ----------
TOTAL NON-INTEREST EXPENSE 1,101 1,051
---------- ----------
INCOME BEFORE INCOME TAXES 382 325
Provision for income taxes (Note 8) 70 49
---------- ----------
NET INCOME, BEFORE CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE 312 276
Cumulative effect of change in accounting
principle 27
---------- ----------
NET INCOME $ 312 $ 303
========== ==========
NET INCOME PER COMMON SHARE:
Income before cumulative effect of change in
accounting principle $ 10.06 $ 8.90
Cumulative effect of change in accounting
principle .87
---------- ----------
Net income $ 10.06 $ 9.77
========== ==========
<FN>
See Notes to Consoldiated Financial Statements.
</TABLE>
<TABLE>
DUMAS BANCSHARES, INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
(Unaudited)
<CAPTION>
NET UNREALIZED
GAIN (LOSS)
COMMON SECURITIES UNDIVIDED
($ in thousands) STOCK SURPLUS AFS PROFITS TOTAL
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1993 $ 310 $ 838 $ (59) $ 1,988 $ 3,077
Net Income 303 303
Change in net unrealized loss on
marketable equity securities 15 15
---------- ---------- ---------- -------- --------
Balance, September 30, 1993 310 838 (44) 2,291 3,395
Net Income 87 87
Cash Dividends declared ($1.50 per share) (46) (46)
Change in net unrealized loss on
marketable equity securities (11) (11)
---------- ---------- ---------- -------- --------
Balance, January 1, 1994 310 838 (55) 2,332 3,425
Adoption of SFAS No. 115,
net (Note 2) 53 53
Net income 312 312
Change in net unrealized loss on
marketable equity securities (166) (166)
---------- ---------- ---------- -------- --------
Balance, September 30, 1994 $ 310 $ 838 $ (168) $ 2,644 $ 3,624
========== ========== ========== ======== ========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
DUMAS BANCSHARES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ----------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Cash Flow From Operating Activities
Net income $ 312 $ 303
Items not requiring (providing) cash:
Depreciation and amortization 104 103
Provision for loan losses 4 5
Amortization of premiums and discounts on
investment securities 2
Deferred income taxes (88)
Securities gains (1) (1)
Changes in:
Accrued interest receivable (20) 103
Accounts payable and accrued expenses (141) (50)
Income taxes payable 6 (6)
Prepaid expenses (57)
------------- -------------
Net cash provided by operating activities 209 369
------------- -------------
Cash Flows From Investing Activities
Net origination of loans (3,643) (2,893)
Purchase of premises and equipment (181) (66)
Proceeds from maturing and called investment securities
Held to maturity 275 2,750
Available for sale 1,643
Proceeds from sales of available for sale 297
Purchase of investment securities
Held to maturity (261) (1,312)
Available for sale (1,601)
------------- -------------
Net cash used in investment activities (3,471) (1,521)
------------- -------------
Cash Flows From Financing Activities
Net increase (decrease) in demand deposits,
Money Market, All-In-One and savings accounts (1,819) 2,233
Net decrease in certificates of deposit 40 (3,590)
Repayments of borrowings (100) (100)
Proceeds from borrowings 734
Dividends paid
Net increase in federal funds purchased 360
------------- -------------
Net cash used in financing activities (785) (1,457)
------------- -------------
DECREASE IN CASH AND CASH EQUIVALENTS (4,047) (2,609)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 7,660 10,140
------------- -------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,613 $ 7,531
============= =============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
DUMAS BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting principles and reporting policies followed by Dumas
Bancshares, Inc. and its subsidiaries (the "Company") conform with generally
accepted accounting principles and with general practices within the financial
services industry. The following is a description of the more significant of
these policies:
Organization
Dumas Bancshares, Inc. (the Company) is a bank holding company
which owns all of the outstanding stock of Dumas State Bank, Dumas, Arkansas
(DSB) and First State Bank of Gould, Gould, Arkansas (FSB). The Company
provides banking services primarily to the local trade areas.
Principles of consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiaries, Dumas State Bank (DSB), Dumas Arkansas (100%
owned) and First State Bank (FSB), Gould, Arkansas, (100% owned). All
significant intercompany balances and transactions have been eliminated.
Basis of presentation
The information contained in the financial statements is
unaudited. In the opinion of management, all adjustments necessary for a fair
presentation of the results of interim periods have been made.
Cash flows
For purposes of reporting cash flows, cash and cash equivalents
include cash and due from banks and federal funds sold.
Investment securities
Investment securities are classified as either Held to Maturity or
Available for Sale. Held to maturity debt securities are investments which
the Company has the ability and intent to hold until maturity and are stated at
cost, adjusted for amortization of premiums and accretion of discounts which
are recognized as adjustments to interest income. Other debt securities not
classified as held to maturity, and all equity securities are stated at fair
value. Unrealized gains and losses on available for sale securities are
recorded, net of related income tax effects, in stockholders' equity. Premiums
and discounts are amortized and accrued, respectively, to interest income using
the level-yield method over the period to maturity.
Allowance for loan losses
The allowance for loan losses is established through charges to
expense and is maintained at a level which, in management's judgement, is
necessary to provide for future losses from the current portfolios. This
judgement is based on analysis of the current and expected economic conditions,
risk characteristics of the loan portfolios and prior loan loss experience in
relation to loans outstanding.
Interest on loans
Interest on loans is recognized based on the principal amounts
outstanding. The accrual of interest on loans is discontinued when, in the
opinion of management, there is doubt as to the ability of the borrower to pay
interest or principal or when the payment of principal and interest has become
contractually 90 days past due unless the obligation is both well secured and
in the process of collection. The balance of nonaccrual loans was $1,000 at
September 30, 1994 and $15,000 at September 30, 1993. Interest previously
accrued but uncollected on these loans was $0 at September 30, 1994 and $1,000
at September 30, 1993.
Premises and equipment
Premises and equipment are stated at cost, less accumulated
depreciation. Depreciation is computed principally by the straight-line method
over the estimated lives of the assets.
Income taxes
During 1993, the Company and its subsidiaries adopted the
provisions of Financial Accounting Standards Board Statement No. 109,
"Accounting for Income Taxes", (see Note 6). Under Statement No. 109, the
liability method is used in accounting for income taxes. Under this method,
deferred tax assets and liabilities are determined based on differences between
financial reporting and tax basis of assets and liabilities and are measured
using the enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Prior to the adoption of Statement No.
109, income tax expense was determined using the deferred method. Deferred tax
expense was based on items of income and expense that were reported in
different years in the financial statements and tax returns and were measured
at the tax rate in effect in the year the differences originated.
The Company and its bank subsidiaries file consolidated income tax
returns. Each subsidiary provides for income taxes on a separate-return basis
and remits to or receives from the Company amounts currently payable or
receivable.
Goodwill
Goodwill attributable to the January 11, 1989 acquisition by the
Company of FSB, net of accumulated amortization, is included in other assets
in the accompanying balance sheet and amounted to $75,000 at September 30,
1994.
Goodwill was amortized using the straight-line method over 40
years prior to January 1, 1994. During 1994, the Company changed the
amortization period to 25 years and will amortize the remaining balance of
goodwill over the remaining 20 years of the total amortization period.
Earnings per share
Earnings per share is based on the average shares outstanding
during the year which were 31,000 shares, for the periods ended September 30,
1994 and September 30, 1993.
Restrictions on cash and due from bank accounts
The bank subsidiaries are required to maintain average reserve
balances with the Federal Reserve Bank. The average amount of those reserve
balances for the period ended September 30, 1994 was $593,000.
Off-balance-sheet financial instruments
In the ordinary course of business the Company has entered into
off-balance-sheet financial instruments consisting of commitments to extend
credit, commercial letters of credit and standby letters of credit. Such
financial instruments are recorded in the financial statements when they become
payable.
NOTE 2: INVESTMENT SECURITIES
Effective January 1, 1994, the Company adopted SFAS No. 115
"Accounting for Certain Investments in Debt and Equity Securities", resulting
in an increase in stockholders' equity of $53,000, net of related income tax
effect of $28,000.
<TABLE>
<CAPTION>
September 30, 1994
-------------------------------------------------------------------------
Gross Gross Estimated
($ in Amortized Unrealized Unrealized Fair
Thousands) Cost Gains (Losses) Value
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Held to Maturity
State and political
subdivisions $ 3,676 $ 114 $ (33) $ 3,757
Other debt
securities-HTM 59 59
----------- ----------- ----------- -----------
Total Securities $ 3,735 $ 114 $ (33) $ 3,816
=========== =========== =========== ===========
Available For Sale
U.S. Treasury $ 2,595 $ $ (36) $ 2,559
U.S. Government
agencies 3,449 11 (114) 3,346
Mortgage-backed
securities 47 47
Other debt
securities-AFS 200 (8) 192
Total Debt ----------- ----------- ----------- -----------
Securities 6,291 11 (158) 6,144
Equity securities 657 (55) 602
----------- ----------- ----------- -----------
Total Securities $ 6,948 $ 11 $ (213) $ 6,746
=========== =========== =========== ===========
</TABLE>
Maturities of investment securities at September 30, 1994:
<TABLE>
<CAPTION>
Held to Maturity Available for Sale
Amortized Fair Amortized Fair
($ in thousands) Cost Value Cost Value
- --------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
One year or less $ 150 $ 151 $ 900 $ 987
After one through five years 324 333 4,548 4,336
After five through ten years 922 964 796 774
After ten years 2,280 2,309 0 0
Mortgage-backed securities and
other securities not due on
a single maturity date 59 59 47 47
Equity securities 0 0 657 602
----------- ----------- ----------- -----------
$ 3,735 $ 3,816 $ 6,948 $ 6,746
=========== =========== =========== ===========
</TABLE>
Proceeds from the sale of investment securities during 1993 and
1994, were as follows:
<TABLE>
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ----------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Proceeds from sales of investments in
debt securities $ 0 $ 0
Realized gains on disposition 1 1
Realized losses on disposition 0 0
</TABLE>
Investment securities with carrying amounts of $5,064,000 at
September 30, 1994 were pledged to secure public deposits and for other
purposes required or permitted by law.
NOTE 3: LOANS
Major classifications of loans are as follows:
<TABLE>
<CAPTION>
September 30,
($ in thousands) 1994
- ------------------------------------------------------------------
(Unaudited)
<S> <C>
Real estate:
Single family residential $ 5,314
Real estate construction 540
Other commercial 7,564
Commercial 6,963
Agriculture 3,714
Loans to individuals 2,800
Other 238
-----------
27,133
Less: unearned discount (20)
-----------
Total loans 27,113
Less: allowance for loan losses (302)
-----------
$ 26,811
===========
</TABLE>
The Company's subsidiary banks grant agribusiness, commercial and
other loans throughout their market areas. Although they have diversified loan
portfolios, a substantial portion of their borrowers' ability to honor their
contracts is dependent upon the agribusiness economic sector.
NOTE 4: ALLOWANCE FOR POSSIBLE LOAN LOSSES
Changes in the allowance for possible loan losses
were as follows:
<TABLE>
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ---------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Balance, Beginning of Period $ 284 $ 269
Additions
Provision charged to expense for
the first nine months 4 5
Deductions
Losses charged to allowance, net of
recoveries of $14,000 and $8,000 for
the first nine months of 1994 and
1993, respectively (14) (4)
------------- -------------
Balance, September 30 $ 302 $ 278
=============
Additions
Provision charged to expense for
the last quarter of 1993 1
Deductions
Losses charged to allowance, net of
recoveries of $5,000 for the last
quarter of 1993 (5)
-------------
Balance, End of Year $ 284
=============
</TABLE>
NOTE 5: PREMISES AND EQUIPMENT
Major classifications of these assets are summarized
as follows:
<TABLE>
<CAPTION>
September 30, Useful lives
($ in thousands) 1994 (years)
- -----------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Land $ 144
Buildings and improvements 1,302 25-31
Furniture and equipment 1,120 3-7
-----------
2,566
-----------
Less: allowance for depreciation 1,543
-----------
$ 1,023
===========
</TABLE>
Depreciation expense was $104,000 and $102,000 for the nine months
ended September 30, 1994 and 1993, respectively.
NOTE 6: INCOME TAXES
The income tax provision, including taxes on
securities gains and losses consists of the following:
<TABLE>
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ---------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Federal income tax
Currently payable
Federal $ 70 $ 49
State 0 0
---------- ----------
70 49
Deferred
Federal 0 0
---------- ----------
Applicable income taxes $ 70 $ 49
========== ==========
</TABLE>
Effective January 1, 1993, the Company changed its method of
accounting for income taxes from the deferred method to the liability method
required by Financial Accounting Standards Board Statement No. 109 (See Note
1). As permitted by the new Statement, the Company elected not to restate the
financial statements of prior years. The cumulative effect of adopting FAS 109
was an increase in income of $27,000.
The reason for the difference between income tax expense and the
amount computed by applying the statutory federal income tax rate to income
before taxes are as follows:
<TABLE>
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- --------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Federal income taxes at
statutory rate $ 130 $ 111
Add (deduct):
Tax-exempt interest income (62) (64)
Other 2 2
----------- -----------
$ 70 $ 49
=========== ===========
</TABLE>
Components of the Company's deferred tax liabilities and assets at
September 30, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
September 30,
($ in thousands) 1994
- -----------------------------------------------------------------------
(Unaudited)
<S> <C>
Deferred tax liabilities:
Tax over book depreciation $ 3
Change from cash to accrual
for tax 3
-----------
Total deferred tax liabilities 6
Deferred tax assets:
Provision for loan losses
not deducted for tax 36
Deferred compensation 64
-----------
Total deferred tax assets 100
-----------
Net deferred tax assets $ 94
===========
</TABLE>
NOTE 7: EMPLOYEE BENEFIT PLANS
The Company has a defined contribution retirement
plan that covers all employees that are age 21 and have completed one year of
service. Under the plan's contribution formula, the Company must contribute to
the plan each year. Contributions to the plan by the Company thru September
30, 1994 and 1993 amounted to $44,000 and $42,000.
NOTE 8: LONG-TERM DEBT
The Capital Debentures bear a floating rate of interest (8.5% at
September 30, 1994) and have a maturity date of January 1, 1999. The Capital
Debentures were issued to stockholders of the company in connection with the
funding of the 1989 acquisition of First State Bank.
<TABLE>
<CAPTION>
September 30,
($ in thousands) 1994
- -------------------------------------------------------
(Unaudited)
<S> <C>
Balance $ 600
===========
</TABLE>
NOTE 9: COMMITMENTS AND CONTINGENCIES
The consolidated financial statements do not reflect various
commitments and contingent liabilities which arise in the normal course of the
Company's business and which involve elements of credit risk, interest rate
risk and liquidity risk. These commitments and contingent liabilities consist
of commitments to extend credit and letters of credit. A summary of the
commitments and contingent liabilities at September 30, 1994 is summarized
below:
<TABLE>
<CAPTION>
September 30,
($ in thousands) 1994
- -----------------------------------------------------------
(Unaudited)
<S> <C>
Commitments to extend credit $ 4,861
Letters of credit 164
-------------
$ 5,025
=============
</TABLE>
Commitments to extend credit, and letters of credit all include
some exposure to credit loss in the event of nonperformance of the customer.
The Company's credit policies and procedures for credit commitments and
financial guarantees are the same as those for extensions of credit that are
recorded in the consolidated financial statements. Because these instruments
have fixed maturity dates, and because many of them expire without being drawn
upon, they do not generally present any significant liquidity risk to the
Company.
In the ordinary course of business, there are various legal
proceedings involving the Company and its subsidiaries, most of which are
considered litigation incidental to the conduct of business. These proceedings
include, among other matters, defense of routine corporate, employment, banking
and lender liability related litigation. Management, after consulting with
legal counsel and based on the facts available and proceedings to date, some of
which are preliminary, is of the opinion that the ultimate resolution of these
proceedings will not have a material adverse effect on the consolidated
financial position of the Company.
NOTE 10: CONCENTRATIONS OF CREDIT
Substantially all of the Company's loans, commitments to loan and
letters of credit have been granted to customers in their trade area who are
also depositors of the Company. The concentrations of credit by type of loan
are set forth in Note 3. The distribution of commitments to extend credit
approximates the distribution of loans outstanding.
NOTE 11: UNDIVIDED PROFITS
In accordance with Arkansas state banking laws,
certain restrictions exist regarding the ability of the banking subsidiaries to
transfer funds to the Company in the form of cash dividends, loans or advances.
Under such restrictions, the bank subsidiaries may not, without prior approval
of the bank regulatory agencies, declare and pay dividends of more than 50% of
net income. At September 30, 1994 approximately $135,000 of undistributed
earnings of the banking subsidiaries, included in consolidated retained
earnings, was available for distribution to the Company without prior approval
of the regulatory agencies.
The Company and the bank subsidiaries are also
required to maintain sufficient capital to meet minimum capital ratios, as
defined by the regulatory agencies. At September 30, 1994, each of the
subsidiary banks met the capital standards for a well-capitalized institution.
The Company's total capital to total risk-weighted assets ratio was 15.08%,
well above the 10% minimum for a well capitalized institution.
NOTE 12: RELATED PARTY TRANSACTIONS
Some of the directors and executive officers and the companies in
which they had a significant interest were customers of and had transactions
with the Company's subsidiary banks. Such transactions were made in the
ordinary course of the Banks' business on substantially the same terms and
conditions, including interest rates and collateral, as those prevailing at the
same time for comparable transactions with other customers and did not, in the
opinion of Management, involve more than a normal credit risk or present other
unfavorable features. The aggregate amount of loans to such related parties
are presented below:
<TABLE>
<caption
September 30, September 30,
($ in thousands) 1994 1993
- --------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Balance, Beginning of Period $ 2,691 $ 2,902
New loans 2,062 2,411
Repayments (2,474) (2,586)
------------- -------------
Balance, End of Period $ 2,279 $ 2,727
============= =============
</TABLE>
DSB and FSB have deferred compensation plans with four members of
the Board of Directors and the President of DSB. Life insurance policies were
purchased as funding vehicles for the plans. At December 31, 1993, the cash
surrender value of the insurance policies (included in other assets in the
balance sheet) amounted to approximately $101,000 and the deferred compensation
liability (included in other liabilities in the balance sheet) was
approximately $188,000. The policies are adjusted annually and at September
30, 1994, there was substantially no change in the balance reported at December
31, 1993.
NOTE 13: ADDITIONAL CASH FLOW INFORMATION
<TABLE>
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- --------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Interest paid $ 825 $ 858
Income taxes paid $ 79 $ 67
</TABLE>
NOTE 14: PENDING MERGER
On November 15, 1994, 1993 the Company entered into an agreement
and plan of merger with Simmons First National Corporation of Pine Bluff,
Arkansas. Under the terms of this agreement Simmons First National Corporation
would acquire all of the outstanding stock of Dumas Bancshares, Inc. through
issuance of Simmons common stock and cash with a cumulative value of
approximately $5,000,000. This transaction is expected to be consummated in
the first half of 1995.
NOTE 15: EFFECTS OF RECENTLY ADOPTED ACCOUNTING STANDARDS
During 1993, the Financial Accounting Standards Board (FASB)
issued SFAS No. 114 (Accounting by Creditors for Impairment of a Loan) which
becomes effective beginning in 1995. This statement requires that impaired
loans that are within the scope of the Statement essentially be measured based
on the present value of expected future cash flows discounted at the loan's
effective rate, or as a practical expedient, at the loan's observable market
price or the fair value of the collateral if the loan is collateral dependent.
The adoption of SFAS No. 114 is not expected to have a significant impact on
the Company's consolidated financial statements.
NOTE 16: CONDENSED FINANCIAL INFORMATION OF PARENT COMPANY
The financial position of Dumas Bancshares, Inc. (parent company
only), its results of operations and cash flows are summarized as follows:
<TABLE>
CONDENSED BALANCE SHEETS
<CAPTION>
September 30,
($ in thousands) 1994
- ----------------------------------------------------------------------------------
(Unaudited)
<S> <C>
Assets:
Cash and cash equivalents $ 15
Investment in wholly-owned subsidiaries 4,143
Receivable from bank subsidiaries
Excess cost over fair value of
net assets acquired 75
Other assets 4
-------------
Total assets $ 4,237
=============
Liabilities
Long-term debt $ 600
Other liabilities 13
-------------
Total liabilities 613
-------------
Stockholders' Equity
Common stock stated value 310
Capital surplus 838
Net unrealized gains (losses) on
available for sale securities (168)
Retained earnings 2,644
------------
Total Stockholders' Equity 3,624
------------
Total Liabilities and
Stockholders' Equity $ 4,237
============
</TABLE>
<TABLE>
CONDENSED STATEMENTS OF INCOME
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Income
Dividends from subsidiaries $ 50 $ 25
Expenses 85 57
-------------- --------------
LOSS BEFORE INCOME TAX
AND EQUITY IN UNDISTRIBUTED
NET INCOME OF SUBSIDIARIES (35) (32)
APPLICABLE INCOME TAX CREDIT (29) (19)
-------------- ---------------
LOSS BEFORE EQUITY IN
UNDISTRIBUTED NET INCOME
OF SUBSIDIARIES (6) (13)
EQUITY IN UNDISTRIBUTED NET
INCOME OF SUBSIDIARIES 318 316
-------------- --------------
NET INCOME $ 312 $ 303
============== ==============
</TABLE>
<TABLE>
CONDENSED STATEMENTS OF CASH FLOWS
<CAPTION>
September 30, September 30,
($ in thousands) 1994 1993
- ------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
Cash Flows From Operating Activities
Net income $ 312 $ 303
Equity in undistributed net income
of bank subsidiaries (318) (289)
Equity in extraordinary items of
bank subsidiaries (27)
(Increase) decrease in other assets (3) 27
(Increase) decrease in other liabilities (50) (2)
Other, net (1)
-------------- --------------
Net cash used by operating activities (60) 12
-------------- --------------
Cash Flows From Financing Activities
Principal reduction on long-term debt (100) (100)
Dividends paid (47)
-------------- --------------
(100) (147)
Net increase (decrease) in cash and cash -------------- --------------
equivalents (160) (135)
Cash and cash equivalents, beginning of period 175 170
-------------- --------------
Cash and cash equivalents, end of period $ 15 $ 35
============== ==============
</TABLE>
REPORT OF INDEPENDENT AUDITORS
------------------------------
The Board of Directors and Stockholders
Dumas Bancshares, Inc.
We have audited the accompanying consolidated balance sheet of Dumas
Bancshares, Inc. and subsidiaries as of December 31, 1993, and the related
consolidated statements of income, stockholders' equity and cash flows for each
of the two years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the accompanying financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Dumas
Bancshares, Inc. and subsidiaries as of December 31, 1993, and the consolidated
results of their operations and their cash flows for each of the two years in
the period ended December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Note 9, the Company changed its method of accounting for income
taxes during 1993.
/s/ KEMP & COMPANY
KEMP & COMPANY
Little Rock, Arkansas
October 7, 1994, except for
Note 15 as to which the date
is November 15, 1994
<TABLE>
DUMAS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1993 AND 1992
ASSETS
------
<CAPTION>
(unaudited)
1993 1992
---- ----
<S> <C> <C>
Cash and cash equivalents
Cash and due from banks (Note 2) $ 2,774,797 $ 2,634,640
Federal funds sold 4,885,000 7,505,000
------------ ------------
7,659,797 10,139,640
Interest-bearing deposits in banks 487,278 987,109
Investment securities (estimated market values of
$10,990,000 and $10,748,000, respectively) (Note 3) 10,650,674 10,491,330
Loans (Notes 4,8 and 10) 23,456,070 20,569,838
Allowance for loan losses (Note 4) (283,866) (268,686)
Premises and equipment (Note 5) 943,939 959,681
Accrued interest receivable and other assets (Note 10) 833,122 797,201
------------ ------------
$ 43,747,014 $ 43,676,113
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Deposits (Note 6):
Non interest bearing $ 6,556,644 $ 6,533,875
Interest bearing 32,603,519 32,913,100
------------ ------------
39,160,163 39,446,975
Capital Debentures (Note 7) 700,000 800,000
Accrued interest payable and other liabilities (Note 10) 463,008 352,259
------------ ------------
Total liabilities 40,323,171 40,599,234
Commitments (Note 8)
Stockholders' equity (Notes 10, 12 and 15):
Common stock, $10 par value:
Authorized, issued and
outstanding - 31,000 shares 310,000 310,000
Surplus 837,857 837,857
Retained earnings 2,331,396 1,988,085
------------ ------------
3,479,253 3,135,942
Unrealized loss on marketable securities (55,410) (59,063)
------------ ------------
Total stockholders' equity 3,423,843 3,076,879
------------ ------------
$ 43,747,014 $ 43,676,113
============ ============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
DUMAS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
(unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Interest income:
Loans, including fees $ 1,803,749 $ 2,046,802 $ 2,877,412
Investment securities:
Taxable 397,475 500,320 501,986
Tax-exempt 255,030 254,819 223,919
Federal funds sold 202,763 269,846 251,557
Other 17,766 5,811 3,975
----------- ----------- -----------
2,676,783 3,077,598 3,858,849
Interest expense:
Deposits 1,049,428 1,416,796 2,159,064
Capital debentures 61,596 68,002 70,601
----------- ----------- -----------
1,111,024 1,484,798 2,229,665
----------- ----------- -----------
Net interest income 1,565,759 1,592,800 1,629,184
Provision for loan losses 6,000 36,000 156,000
----------- ----------- -----------
Net interest income after provision for loan losses 1,559,759 1,556,800 1,473,184
Other income:
Service charges on deposit accounts 244,375 267,675 255,683
Investment securities gains - net 667 24,476 6,417
Other (Note 13) 86,208 91,366 114,000
----------- ----------- -----------
331,250 383,517 376,100
Other expense:
Salaries and benefits 762,740 727,848 693,794
Net occupancy 259,859 247,414 231,343
Other (Note 13) 428,650 512,146 509,652
----------- ----------- -----------
1,451,249 1,487,408 1,434,789
----------- ----------- -----------
Income before income taxes and cumulative effect
of change in accounting principle 439,760 452,909 414,495
Provision for income taxes (Note 9) 77,239 66,954 79,286
----------- ----------- -----------
Income before cumulative effect of change in
accounting principle 362,521 385,955 335,209
Cumulative effect of change in accounting principle (Note 9) 27,290
----------- ----------- -----------
Net income $ 389,811 $ 385,955 $ 335,209
=========== =========== ===========
Net income per common share:
Income before cumulative effect of change in
accounting principle $ 11.69 $ 12.45 $ 10.81
Cumulative effect of change in accounting
principle .88
----------- ----------- -----------
Net income $ 12.57 $ 12.45 $ 10.81
=========== =========== ===========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
DUMAS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
Unrealized
losses on
Common Retained marketable
stock Surplus earnings securities Total
----- ------- -------- ---------- ------
<S> <C> <C> <C> <C> <C>
Balance - January
1, 1991 - as
restated (Note 10)
(unaudited) $ 310,000 $ 837,857 $ 1,359,921 $ (94,337) $ 2,413,441
Net income (unaudited) 335,209 335,209
Cash dividends -
$1.50 per share
(unaudited) (46,500) (46,500)
Unrealized gain on
marketable
securities
(unaudited) 54,877 54,877
---------- ---------- ---------- --------- ----------
Balance - December
31, 1991 310,000 837,857 1,648,630 (39,460) 2,757,027
Net income 385,955 385,955
Cash dividends -
$1.50 per share (46,500) (46,500)
Unrealized loss
on marketable
securities (19,603) (19,603)
---------- ---------- ---------- --------- ----------
Balance - December
31, 1992 310,000 837,857 1,988,085 (59,063) 3,076,879
Net income 389,811 389,811
Cash dividends -
$1.50 per share (46,500) (46,500)
Unrealized gain
on marketable
securities 3,653 3,653
---------- ---------- ---------- --------- ----------
Balance - December
31, 1993 $ 310,000 $ 837,857 $ 2,331,396 $ (55,410) $ 3,423,843
========== ========== ========== ========= ==========
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
<TABLE>
DUMAS BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<CAPTION>
(unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Operating activities:
Net income $ 389,811 $ 385,955 $ 335,208
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 6,000 36,000 156,000
Depreciation 115,335 107,895 101,850
Net gain on sale of investment securities (667) (24,476) (6,417)
Other real estate writedown 14,367 2,487
Changes in assets and liabilities:
Accrued interest receivable and other assets 89,040 102,805 (40,768)
Accrued interest payable and other liabilities 63,128 (68,899) 112,214
------------ ------------ ------------
Net cash provided by operating activities 662,647 553,647 660,574
INVESTING ACTIVITIES:
Purchases of premises and equipment (99,593) (84,566) (94,283)
Proceeds from sales of investment securities 125,000 1,217,906 404,038
Proceeds from maturities of investment securities 2,422,546 2,201,457 1,677,277
Purchases of investment securities (2,579,909) (4,998,938) (1,563,125)
Net (increase) decrease in loans (3,077,053) 1,747,174 2,170,364
Net decrease (increase) in deposits in banks 499,831 (987,109) 297,736
------------ ------------ ------------
Net cash (used in) provided by investing activities (2,709,178) (904,076) 2,892,007
FINANCING ACTIVITIES:
Net (decrease) increase in deposits (286,812) (278,006) 1,303,318
Cash dividends paid (46,500) (46,500) (46,500)
Payments on Capital Debentures (100,000) (10,000) (10,000)
------------ ------------ ------------
Net cash (used in) provided by financing activities (433,312) (334,506) 1,246,818
------------ ------------ ------------
Net (decrease) increase in cash and cash equivalents (2,479,843) (684,935) 4,799,399
Balance - January 1 10,139,640 10,824,575 6,025,176
------------ ------------ ------------
Balance - December 31 $ 7,659,797 $ 10,139,640 $ 10,824,575
============ ============ ============
<FN>
See Notes to Consolidated Financial Statements.
</TABLE>
DUMAS BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Dumas Bancshares, Inc. (the Company) is a bank holding company which owns all
of the outstanding stock of Dumas State Bank, Dumas, Arkansas (DSB) and First
State Bank of Gould, Gould, Arkansas (FSB). The Company provides banking
services primarily to the local trade areas.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company and
its subsidiaries, all of which are wholly-owned. All significant intercompany
accounts and transactions have been eliminated in consolidation.
INVESTMENT SECURITIES
Investment securities (i.e., securities which the Company has the ability and
intent to hold until maturity) are stated at cost, adjusted for amortization of
premiums and accretion of discounts which are recognized as adjustments to
interest income, except for mutual fund investments which are stated at the
lower of cost or market. Accumulated changes in the valuation allowance for
marketable securities are included in stockholders' equity in the consolidated
balance sheets. Gains or losses on the sale of securities are computed using
the adjusted cost of the specific securities sold.
REVENUE RECOGNITION
Interest on loans is recognized in operations based generally upon the
principal amount outstanding. Loans are placed on nonaccrual status when
management believes that, after giving consideration to economic and business
conditions and collection efforts, the collection of interest is doubtful or
when the payment of principal and interest has become contractually 90 days
past due unless the obligation is both well secured and in process of
collection.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is maintained at a level adequate to absorb
probable losses. Management determines the adequacy of the allowance based on
reviews of individual loans, recent loan loss experience, current economic
conditions, the risk characteristics of the various categories of loans and
other pertinent factors. Loans are charged against the allowance for loan
losses at such time as management believes the collectibility of the principal
is unlikely. Provisions for loan losses and recoveries on loans previously
charged off are added to the allowance.
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated depreciation.
Depreciation expense is computed on the straight-line and accelerated methods
over the estimated useful lives of the assets.
GOODWILL
Goodwill attributable to the January 11, 1989 acquisition by the Company of
FSB, net of accumulated amortization, is included in Accrued interest
receivable and other assets in the accompanying balance sheets and amounted to
$77,339 and $79,547 at December 31, 1993 and 1992 (unaudited), respectively.
Goodwill was amortized using the straight-line method over 40 years prior to
January 1, 1994.
During 1994, the Company changed the amortization period to 25 years and will
amortize the remaining balance of goodwill over the remaining 20 years of the
total amortization period.
INCOME TAXES
During 1993, the Company and its subsidiaries adopted the provisions of
Financial Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes", (see Note 9). Under Statement No. 109, the liability method is used
in accounting for income taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax
rates and laws that will be in effect when the differences are expected to
reverse. Prior to the adoption of Statement No. 109, income tax expense was
determined using the deferred method. Deferred tax expense was based on items
of income and expense that were reported in different years in the financial
statements and tax returns and were measured at the tax rate in effect in the
year the differences originated.
The Company and its bank subsidiaries file consolidated income tax returns.
Each subsidiary provides for income taxes on a separate-return basis and
remits to or receives from the Company amounts currently payable or receivable.
EARNINGS PER SHARE
Earnings per share is based on the average shares outstanding during each year
which were 31,000 shares, for the years ended December 31, 1993, 1992 and 1991
(unaudited).
RECENT ACCOUNTING PRONOUNCEMENTS
During 1993, the Financial Accounting Standards Board issued Statement No. 114,
"Accounting by Creditors for Impairment of a Loan" and Statement No. 115,
"Accounting for Certain Investments in Debt and Equity Securities". The
adoption of Statement No. 114 (required in 1995), which prescribes the
recognition criterion for loan impairment and the measurement methods for
certain impaired loans, is not expected to have a significant impact on the
Company's consolidated financial statements. Statement No. 115, which was
adopted in 1994, requires the bank subsidiaries to segregate investment
securities into the held-to-maturity category (measured at amortized cost) or
the available-for-sale category (measured at fair value with unrealized gains
and losses reported as a separate component of stockholders' equity). At
September 30, 1994, the net unrealized loss attributable to the available-for-
sale category of investment securities amounted to approximately $202,000.
CASH FLOW INFORMATION
For purposes of the statements of cash flows, the Company considers cash, due
from banks and federal funds sold as cash and cash equivalents. Generally,
federal funds are purchased and sold for one-day periods. Cash paid during the
years ended December 31, 1993, 1992 and 1991 (unaudited) for interest was
$1,124,335, $1,559,815 and $1,562,815, respectively. Total income tax payments
during 1993, 1992 and 1991 (unaudited) were $84,629, $57,324 and $225,487,
respectively.
NOTE 2: RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS
The bank subsidiaries are required to maintain average reserve balances with
the Federal Reserve Bank. The average amount of those reserve balances for the
year ended December 31, 1993 was approximately $756,000.
NOTE 3: INVESTMENT SECURITIES
The amortized cost and estimated market values of investment securities are as
follows at December 31:
<TABLE>
<CAPTION>
1993
------------------------------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U. S. Treasury securities and
obligations of U.S.
government agencies $ 5,564,394 $ 86,606 $ (6,000) $ 5,645,000
Obligations of states and
political subdivisions 3,876,962 262,038 (3,000) 4,136,000
Other debt securities 500,059 0 (59) 500,000
------------ ------------ ----------- ------------
Total debt securities 9,941,415 348,644 (9,059) 10,281,000
Equity securities 709,259 0 (259) 709,000
------------ ------------ ----------- ------------
$ 10,650,674 $ 348,644 $ (9,318) $ 10,990,000
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
(unaudited)
1992
-------------------------------------------------------------------------
Gross Gross Estimated
Amortized unrealized unrealized market
cost gains losses value
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U. S. Treasury securities and
obligations of U.S.
government agencies $ 5,782,217 $ 122,783 $ 19,000 $ 5,886,000
Obligations of states and
political subdivisions 3,778,590 148,410 8,000 3,919,000
Other debt securities 299,807 12,193 0 312,000
------------ ------------ ------------ ------------
Total debt securities 9,860,614 283,386 27,000 10,117,000
Equity securities 630,716 284 631,000
------------ ------------ ------------ ------------
$ 10,491,330 $ 283,670 $ 27,000 $ 10,748,000
============ ============ ============ ============
</TABLE>
Amortized cost and estimated market value of debt securities at December 31,
1993 are shown below by contractual maturity. Expected maturities will differ
from contractual maturities because borrowers may have the right to prepay
obligations.
<TABLE>
<CAPTION>
Estimated
Amortized market
cost value
----------- ---------
<S> <C> <C>
Due in one year or less $ 1,648,286 $ 1,646,000
Due after one year through five years 3,513,238 3,594,000
Due after five years through ten years 2,120,253 2,227,000
Due after ten years 2,659,638 2,814,000
----------- -----------
$ 9,941,415 $ 10,281,000
=========== ===========
</TABLE>
Proceeds from the sale of investments in debt securities amounted to $125,000,
$1,217,906 and $404,038, during 1993, 1992 and 1991 (unaudited), respectively.
Gross gains of $780, $25,384 and $6,417 and gross losses of $113, $908 and $0
were realized on the sales during 1993, 1992 and 1991 (unaudited),
respectively.
At December 31, 1993, investment securities with an amortized cost of
approximately $5,227,000, were pledged to collateralize public deposits and
for other purposes.
NOTE 4: LOANS AND ALLOWANCE FOR LOANS LOSSES
The major categories of loans as of December 31 are as follows:
<TABLE>
<CAPTION>
(unaudited)
1993 1992
---- ----
<S> <C> <C>
Real estate:
Residential $ 4,624,000 $ 3,647,000
Construction 1,016,000 109,000
Other 6,350,000 5,146,000
Commercial 6,462,000 6,857,000
Agricultural loans 2,340,000 2,207,000
Installment 2,664,070 2,603,838
---------- -----------
$23,456,070 $ 20,569,838
========== ===========
</TABLE>
Changes in the allowance for loan losses are as follows:
<TABLE>
<CAPTION>
(unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Beginning balance $ 268,686 $ 353,374 $ 452,325
Provision for loan losses 6,000 36,000 156,000
Net charges-offs:
Charge-offs (3,731) (130,562) (270,555)
Recoveries 12,911 9,874 15,604
--------- --------- ---------
Ending balance $ 283,866 $ 268,686 $ 353,374
========= ========= =========
</TABLE>
NOTE 5: PREMISES AND EQUIPMENT
Premises and equipment consists of the following at December 31:
<TABLE>
<CAPTION>
(unaudited)
1993 1992
---- ----
<S> <C> <C>
Land $ 144,057 $ 144,057
Building and improvements 1,199,548 1,155,480
Furniture and equipment 1,041,840 986,531
---------- ----------
2,385,445 2,286,068
Less accumulated depreciation (1,441,506) (1,326,387)
---------- ----------
$ 943,939 $ 959,681
========== ==========
</TABLE>
NOTE 6: DEPOSITS
The following summarizes information on deposits as of December 31:
<TABLE>
<CAPTION>
(unaudited)
1993 1992
---- ----
<S> <C> <C>
Non-interest bearing accounts $ 6,556,644 $ 6,533,875
NOW and money market accounts 10,284,309 9,291,282
Savings accounts 3,334,451 3,079,723
Time deposits, $100,000 and over 5,279,504 5,768,505
Other time deposits 13,705,255 14,773,590
----------- -----------
$ 39,160,163 $ 39,446,975
=========== ===========
</TABLE>
NOTE 7: CAPITAL DEBENTURES
The Capital Debentures bear a floating rate of interest (8.5% at December 31,
1993) and have a maturity date of January 1, 1999. The Capital Debentures were
issued to stockholders of the company in connection with the funding of the
1989 acquisition of FSB.
NOTE 8: COMMITMENTS AND CONCENTRATION OF CREDIT RISK
The bank subsidiaries are parties to financial instruments with off-balance-
sheet risk in the normal course of business to meet the financing needs of
their customers. These financial instruments include commitments to extend
credit (approximately $5,780,000 and $3,620,000 at December 31, 1993 and 1992
(unaudited), respectively) and standby letters of credit ($208,000 and $81,000
outstanding at December 31, 1993 and 1992 (unaudited), respectively). Those
instruments involve, to varying degrees, elements of credit and interest rate
risk in excess of the amounts recognized in the consolidated balance sheets.
The exposure to credit loss in the event of nonperformance by the other party
to the financial instrument for commitments to extend credit and standby
letters of credit is represented by the contractual terms of those instruments.
The bank subsidiaries use the same credit policies in making commitments and
conditional obligations as they do for on-balance-sheet instruments.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements.
The credit risk involved in issuing letters of credit is essentially the same
as that involved in extending loan facilities to customers. Standby letters of
credit are conditional commitments issued by the bank subsidiaries to guarantee
the performance of a customers to third parties. Those guarantees are
primarily issued to support private borrowing arrangements.
The bank subsidiaries evaluate each customer's creditworthiness 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
counterparty. Collateral held varies but may include securities, accounts
receivable, agricultural equipment and crops, inventory, property, plant, and
equipment, income-producing commercial properties and residential and
agricultural real estate.
Most of the Company's lending activities are with customers located in the
market areas of the bank subsidiaries. The concentrations of credit by major
category of loan type are set forth in Note 4. Each bank subsidiary, as a
matter of policy, does not extend credit to any single borrower or group of
related borrowers in excess of amounts allowable under regulatory limits of
loans to such borrowers. The loan policies of the bank subsidiaries provide
for loan to value ratios by type of loan.
NOTE 9: INCOME TAXES
The provision for income taxes for the years ended December 31, 1993 and 1992
consisted of the following:
<TABLE>
<CAPTION> (unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Current:
Federal $ 91,018 $ 80,529 $ 76,431
State 3,778 2,578 76
------- ------- -------
94,796 83,107 76,507
Deferred:
Federal (17,557) (16,153) 2,779
------- ------- -------
Applicable income taxes $ 77,239 $ 66,954 $ 79,286
======= ======= =======
</TABLE>
Effective January 1, 1993, the Company changed its method of accounting for
income taxes from the deferred method to the liability method required by
Financial Accounting Standards Board Statement No. 109 (see Note 1). As
permitted by the new Statement, the Company elected not to restate the
financial statements of prior years. The cumulative effect of adopting the
Statement was an increase in income of $27,290.
The reason for the differences between income tax expense and the amount
computed by applying the statutory federal income tax rate to income before
taxes are as follows:
<TABLE>
<CAPTION> (unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Federal income taxes at
statutory rate $ 149,518 $ 153,989 $ 140,928
Add (deduct):
Tax-exempt interest income (86,710) (86,638) (76,132)
Other 14,431 (397) 14,490
--------- --------- ---------
Applicable income taxes $ 77,239 $ 66,954 $ 79,286
========= ========= =========
</TABLE>
Significant components of the Company's deferred tax liabilities and assets as
of December 31, 1993 are as follows:
<TABLE>
<CAPTION>
<S> <C>
Deferred tax liabilities:
Tax over book depreciation $ 3,397
Change from cash to accrual
method for tax 3,081
---------
Total deferred tax liabilities 6,478
Deferred tax assets:
Provision for loan losses not
deducted for tax 36,440
Deferred compensation 63,881
---------
Total deferred tax assets 100,321
---------
Net deferred tax assets $ 93,843
=========
</TABLE>
NOTE 10: RELATED PARTY TRANSACTIONS
Certain principal stockholders, directors and executive officers of the Company
and the bank subsidiaries, their family members and entities in which they are
principal owners, are loan customers of the bank subsidiaries. Related party
loans are made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unrelated persons and do not involve more than normal risk of collectibility.
Loans to such parties were approximately $2,691,260 and $1,450,201 at December
31, 1993 and 1992 (unaudited), respectively. During 1993, $3,347,678 of new
loans were made, and repayments totalled $3,558,076. During 1992 (unaudited),
$4,380,079 of new loans were made, and repayments totalled $3,139,021.
DSB and FSB have deferred compensation plans with four members of the Board of
Directors and the President of DSB. Life insurance policies were purchased as
funding vehicles for the plans. At December 31, 1993 and 1992 (unaudited), the
cash surrender value of the insurance policies (included in Accrued interest
receivable and other assets in the consolidated balance sheets) amounted to
$100,530 and $84,033, respectively and the deferred compensation liability
(included in Accrued interest payable and other liabilities in the consolidated
balance sheets) was $187,886 and $161,071, respectively. A correction of an
error in prior years' financial statements of $23,475, relating to the deferred
compensation liability, has been recorded as a reduction of retained earnings
as of December 31, 1990.
NOTE 11: EMPLOYEE BENEFIT PLANS
The Company has a defined contribution retirement plan that covers all
employees that are age 21 and have completed one year of service. Under the
plan's contribution formula, the Company must contribute to the plan each year.
Contributions to the plan by the Company during 1993, 1992 and 1991 (unaudited)
amounted to $47,629, $36,884 and $32,802, respectively.
NOTE 12: REGULATORY MATTERS
In accordance with Arkansas state banking laws, certain restrictions exist
regarding the ability of the banking subsidiaries to transfer funds to the
Company in the form of cash dividends, loans or advances. Under such
restrictions, the bank subsidiaries may not, without prior approval of the bank
regulatory agencies, declare and pay dividends of more than 50% of net income.
At December 31, 1993, approximately $46,000 of undistributed earnings of the
banking subsidiaries, included in consolidated retained earnings, was available
for distribution to the Company without prior approval of the regulatory
agencies.
The Company and the bank subsidiaries are also required to maintain sufficient
capital to meet minimum capital ratios, as defined by the regulatory agencies.
At December 31, 1993, the capital ratios of the Company and its subsidiaries
exceeded the minimum required amounts.
NOTE 13: SUPPLEMENTAL INCOME STATEMENT INFORMATION
The following categories of other income and other expenses exceeded one
percent of the aggregate of total interest income and other income for the
years indicated: Other income - none in any year; Other expenses -
(1) Telephone: $32,719 in 1993; (2) FDIC and State Banking Department insurance
assessments: $120,662, $119,937 and $97,272 in 1993, 1992, and 1991
(unaudited), respectively; (3) Printing and supplies: $56,358, $52,362 and
$54,384 in 1993, 1992 and 1991 (unaudited), respectively; and (4) Directors
fees: $32,200 in 1993.
NOTE 14: DUMAS BANCSHARES, INC. (PARENT COMPANY ONLY) FINANCIAL INFORMATION
<TABLE>
BALANCE SHEETS
<CAPTION>
December 31,
(unaudited)
1993 1992
---- ----
<S> <C> <C>
Assets
Cash $ 174,445 $ 169,626
Receivable from bank subsidiaries 11,310 27,027
Investment in bank subsidiaries 3,935,564 3,668,369
Goodwill, net of accumulated
amortization 77,339 79,547
------------ ------------
Total assets $ 4,198,658 $ 3,944,569
============ ============
Liabilities
Federal income taxes payable $ 13,318 $ 4,097
Dividends payable 46,500 46,500
Capital debentures 700,000 800,000
Accrued interest payable 14,997 17,093
------------ ------------
Total liabilities 774,815 867,690
Stockholders' equity 3,423,843 3,076,879
Total liabilities and ------------ ------------
stockholders' equity $ 4,198,658 $ 3,944,569
============ ============
</TABLE>
<TABLE>
STATEMENTS OF INCOME
<CAPTION>
Years Ended December 31,
(unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Income:
Dividends from bank subsidiaries $ 171,500 $ 160,000 $ 105,000
Other 3,255
--------- --------- ---------
171,500 160,000 108,255
Expenses:
Interest on capital debentures 61,596 68,002 70,601
Other 10,929 8,049 4,938
--------- --------- ---------
72,525 76,051 75,539
Income before income taxes and equity
in undistributed net income of bank
subsidiaries 98,975 83,949 32,716
Federal income taxes (credit) (27,294) (23,612) (23,826)
--------- --------- ---------
Income before equity in undistributed
net income of bank subsidiaries 126,269 107,561 56,542
Equity in undistributed net income
of bank subsidiaries 263,542 278,394 278,667
--------- --------- ---------
Net income $ 389,811 $ 385,955 $ 335,209
========= ========= =========
</TABLE>
<TABLE>
STATEMENTS OF CASH FLOWS
<CAPTION>
Years Ended December 31,
(unaudited)
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Operating activities:
Net income $ 389,811 $ 385,955 $ 335,209
Adjustments to reconcile net cash
provided by operating activities:
Equity in undistributed net income
of bank subsidiaries (263,542) (278,394) (278,667)
Amortization of goodwill 2,207 2,207 2,207
Other - net 22,843 34,654 (11,327)
Net cash provided by operating --------- --------- ---------
activities 151,319 144,422 47,422
Financing activities:
Cash dividends paid (46,500) (46,500) (46,500)
Payments on Capital Debentures (100,000) (10,000)
--------- --------- ---------
Net cash used by financing activities (146,500) (56,500) (46,500)
--------- --------- ---------
Net increase in cash 4,819 87,922 922
Balance - January 1 169,626 81,704 80,782
--------- --------- ---------
Balance - December 31 $ 174,445 $ 169,626 $ 81,704
========= ========= =========
</TABLE>
The parent company paid $63,692, $68,263 and $73,442 in interest during 1993,
1992 and 1991 (unaudited), respectively.
NOTE 15: SUBSEQUENT EVENT - PENDING MERGER
On November 15, 1994, the Company entered into an agreement to merge with
Simmons First National Corporation of Pine Bluff, Arkansas (Simmons). Under
the terms of this agreement, Simmons would acquire all of the outstanding stock
of the Company. The Agreement and plan of merger provides, among other things,
that the Company will not declare dividends, sell additional shares of its
capital stock, and purchase or sell certain of its assets, other than in the
ordinary course of business, without the prior written consent of Simmons.
Completion of the merger is subject to regulatory and stockholder approvals.
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
SIMMONS FIRST NATIONAL CORPORATION
AND
DUMAS BANCSHARES, INC.
Dated as of November 15, 1994
TABLE OF CONTENTS
ARTICLE I RECITALS
SECTION 1.01 SFNC ........................................
SECTION 1.02 SFNB.........................................
SECTION 1.03 DBI..........................................
SECTION 1.04 Gould Bank...................................
SECTION 1.05 Dumas Bank...................................
SECTION 1.06 Compensatory Stock Options...................
SECTION 1.07 Rights; Voting Debt..........................
SECTION 1.08 Materiality..................................
SECTION 1.09 Bank Merger..................................
SECTION 1.10 Holding Company Merger.......................
ARTICLE II BANK MERGER
SECTION 2.01 Bank Merger..................................
ARTICLE III HOLDING COMPANY MERGER
SECTION 3.01 Holding Company Merger.......................
SECTION 3.02 Conversion of Securities.....................
SECTION 3.03 Echange of Certificates.....................
SECTION 3.04 Stock Transfer Books.........................
SECTION 3.05 Dissenting Shares............................
SECTION 3.06 Lost DBI Stock Certificates..................
SECTION 3.07 Options and Rights...........................
ARTICLE IV ACTIONS PENDING MERGER
SECTION 4.01 Required Action Pending Merger...............
SECTION 4.02 Prohibited Action Pending Merger.............
SECTION 4.03 Conduct of DBI to Date.......................
ARTICLE V REPRESENTATIONS AND WARRANTIES
SECTION 5.01 Mutual Representations and Warranties........
SECTION 5.02 Representations and Warranties of DBI........
ARTICLE VI COVENANTS
SECTION 6.01 Mutual Covenants ............................
ARTICLE VII CONDITIONS TO CONSUMMATION
SECTION 7.01 Mutual Conditions............................
SECTION 7.02 Additional Conditions for SFNC ..............
SECTION 7.03 Additional Conditions for DBI................
SECTION 7.04 Effect of Required Adjustments...............
ARTICLE VIII TERMINATION AMENDMENT AND WAIVER
SECTION 8.01 Termination..................................
SECTION 8.02 Effect of Termination........................
ARTICLE IX EFFECTIVE DATE AND EFFECTIVE TIME
SECTION 9.01 Effective Date and Effective Time............
ARTICLE IX OTHER MATTERS
SECTION 10.01 Survival.....................................
SECTION 10.02 Amendment; Modification; Waiver..............
SECTION 10.03 Counterparts.................................
SECTION 10.04 Governing Law................................
SECTION 10.05 Expenses.....................................
SECTION 10.06 Disclosures..................................
SECTION 10.07 Notices......................................
SECTION 10.08 No Third Party Beneficiaries.................
SECTION 10.09 Entire Agreement.............................
SECTION 10.10 Assignment...................................
SECTION 10.11 Affiliated Parties...........................
Exhibit A - Agreement and Plan of Merger (SFNB and Gould Bank)
Exhibit B-1 - Non-Competition Agreement (Outside Directors)
Exhibit B-2 - Non-Competition Agreement (Employee-Directors)
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("AGREEMENT"), is made as of
the 15th day of November, 1994, by and among SIMMONS FIRST NATIONAL
CORPORATION, an Arkansas corporation ("SFNC") and DUMAS BANCSHARES, INC., an
Arkansas corporation ("DBI").
ARTICLE I
RECITALS
Section 1.01 SFNC. SFNC has been duly incorporated and is a
validly existing corporation in good standing under the laws of the State of
Arkansas, with its principal executive offices located in Pine Bluff,
Arkansas. SFNC is registered as a bank holding company with the Board of
Governors of the Federal Reserve System ("FRB") under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). As of the date hereof, SFNC
has 10,000,000 authorized shares of Class A common stock, par value $5.00 per
share ("SFNC Stock"), of which 3,677,328 were outstanding as of September 30,
1994. No shares of the other classes of SFNC's authorized capital stock are
outstanding.
Section 1.02 SFNB. SFNB has been duly incorporated and is a
validly existing banking association in good standing under the laws of the
United States of America, with its principal executive offices located in Pine
Bluff, Arkansas. As of the date hereof, SFNB has 4,000,000 authorized shares
of common stock, par value $5.00 per share ("SFNB STOCK"), of which 1,400,000
shares are outstanding as of September 30, 1994, No other class of capital
stock being authorized. All outstanding SFNB Stock is owned by SFNC.
Section 1.03 DBI. DBI has been duly incorporated and is a
validly existing corporation in good standing under the laws of the State of
Arkansas, with its principal executive offices located in Dumas, Arkansas.
DBI is registered as a bank holding company with the FRB under the BHC Act.
As of the date hereof, DBI has 60,000 authorized shares of common stock, par
value $10.00 per share ("DBI STOCK"), of which 31,000 shares are outstanding
as of September 30, 1994. No other class of capital stock being authorized.
Section 1.04 GOULD BANK. Gould Bank has been duly incorporated
and is a validly existing banking corporation in good standing under the laws
of the State of Arkansas, with its principal executive offices located in
Gould, Arkansas. As of the date hereof, Gould Bank has 24,000 authorized shares
of common stock, par value $10.00 per share ("GOULD BANK STOCK"), of which
24,000 shares are outstanding as of September 30, 1994, no other class of
capital stock being authorized. All outstanding Gould Bank Stock is owned by
DBI.
Section 1.05 DUMAS BANK. Dumas Bank has been duly incorporated
and is a validly existing banking corporation in good standing under the laws
of the State of Arkansas, with its principal executive offices located in
Dumas, Arkansas. As of the date hereof, Dumas Bank has 30,000 authorized shares
of common stock, par value $10.00 per share ("DUMAS BANK STOCK"), of which
30,000 shares are outstanding as of September 30, 1994, no other class of
capital stock being authorized. All outstanding Dumas Bank Stock is owned by
DBI.
Section 1.06 COMPENSATORY STOCK OPTIONS. SFNC has reserved
140,000 shares of SFNC Stock ("ISO STOCK") for issuance pursuant to the terms
of the stock option grants under the Simmons First National Corporation
Incentive and Non-qualified Stock Option Plan ("OPTION PLAN"), of which options
for 63,000 shares have been granted as incentive stock options to various
executive officers of SFNC and its subsidiaries and are currently
outstanding.
Section 1.07 RIGHTS; VOTING DEBT. Except for the Option Plan,
neither SFNC nor DBI has any shares of its capital stock reserved for issuance,
any outstanding option, call or commitment relating to shares of its capital
stock or any outstanding securities, obligations or agreements convertible
into or exchangeable for, or giving any person any right (including, without
limitation, preemptive rights) to subscribe for or acquire from it, any
shares of its capital stock (collectively, "RIGHTS"). Neither DBI nor SFNC
nor any of their respective subsidiaries have any bonds, debentures, notes or
other indebtedness issued and outstanding, having the right to vote, or
convertible into securities having the right to vote, on any matters on which
shareholders may vote ("VOTING DEBT").
Section 1.08 MATERIALITY. Unless the context otherwise requires,
any reference in this Agreement to materiality with respect to either party
shall, as to DBI, be deemed to be with respect to DBI and its wholly owned
subsidiaries, Dumas Bank and Gould Bank, taken as a whole and as to SFNC
shall be deemed to be with respect to SFNC and its subsidiaries, taken as a
whole.
Section 1.09 HOLDING COMPANY MERGER. The Board of Directors of
SFNC and the Board of Directors of DBI have each determined that it is
desirable and in the best interests of the corporation and its shareholders
that DBI merge into SFNC ("HOLDING COMPANY MERGER") on the terms and subject to
the conditions set forth in this Agreement.
Section 1.10 BANK MERGER. SFNC and DBI have each determined that
it is desirable and in their respective best interests and the best interests
of their respective shareholders that incident to and immediately succeeding
the Holding Company Merger, that Gould Bank merge into SFNB ("BANK MERGER" and,
together with the Holding Company Merger, collectively called the "MERGERS")
on the terms and subject to the conditions set forth in this Agreement and
the Agreement and Plan of Bank Merger, attached hereto as Exhibit A ("BANK
MERGER AGREEMENT"). Within ten (10) days after the execution of this
Agreement, SFNC will cause the Board of Directors of SFNB and DBI will cause
the Board of Directors of Gould Bank to review, adopt and refer to the sole
shareholders of the respective banks for approval the Bank Merger Agreement.
In consideration of their mutual promises and obligations
hereunder, and intending to be legally bound hereby, SFNC and DBI adopt and
make this Agreement and prescribe the terms and conditions hereof and the
manner and basis of carrying it into effect, which shall be as follows:
ARTICLE II
BANK MERGER
Section 2.01 BANK MERGER. Pursuant to the terms of the Bank
Merger Agreement, on the Effective Date, as defined in Section 9.01 hereof,
Gould Bank, the merging bank, will be merged with and into SFNB, the surviving
bank, under the articles of association of SFNB, as amended, pursuant to the
provisions of, and with the effect provided under the National Bank Act
("NBA"). At the Effective Time, SFNB, the surviving bank, shall continue to
be a national banking association, and its business shall continue to be
conducted at its main office in Pine Bluff, Arkansas, and at its legally
established branches (including, without limitation, the legally established
offices from which Gould Bank conducted business immediately prior to the
Effective Time).
ARTICLE III
HOLDING COMPANY MERGER
Section 3.01 HOLDING COMPANY MERGER. On the Effective Date, as
defined in Section 9.01, DBI will merge with and into SFNC, with SFNC being the
surviving corporation ("SURVIVING CORPORATION"), pursuant to the provisions
of, and with the effects provided in, the Arkansas Business Corporation Act
("ABCA"). At the Effective Time, the articles and bylaws of SFNC, as the
Surviving Corporation, shall be the articles and bylaws of SFNC in effect
immediately prior to the Effective Time; the directors and officers of SFNC
shall be the directors and officers of the Surviving Corporation; SFNC shall
continue to possess all of the rights, privileges and franchises possessed by
it and shall become vested with and possess all rights, privileges and
franchises possessed by DBI; and SFNC shall be responsible for all of the
liabilities and obligations of DBI in the same manner as if SFNC had itself
incurred such liabilities or obligations, and the Holding Company Merger
shall not affect or impair the rights of the creditors or of any persons
dealing with SFNC or DBI.
Section 3.02 CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Holding Company Merger and without any action on the part of
SFNC, DBI or the holders of any of the following securities:
(a) Subject to the other provisions of this Section 3.02, each
share of DBI Stock issued and outstanding immediately prior to the Effective
Time (excluding any Dissenting Shares, as defined in Section 3.05) shall be
converted into (1) the right to receive $161.2903 in cash, without interest
("PER SHARE CASH AMOUNT"), (2) the right to receive a number of shares of
SFNC Stock equal to the Per Share Cash Amount divided the SFNC Average Stock
Price, as defined in Section 3.02(g) below, ("EXCHANGE RATIO") or (3) the
right to receive a combination of shares of SFNC Stock and cash determined in
accordance with Section 3.02(d), Section 3.02(e) or Section 3.02(f);
provided, however, that, in any event, if between the date of this Agreement
and the Effective Time the outstanding shares of SFNC Stock or DBI Stock
shall have been changed into a different number of shares or a different
class, by reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Exchange
Ratio and the Per Share Cash Amount shall be correspondingly adjusted to
reflect such stock dividend, subdivision, reclassification, recapitalization,
split, combination or exchange of shares. No adjustment of the Exchange
Ratio or the Per Share Cash Amount shall occur by reason of issuance of any
ISO Shares under the Option Plan. All such shares of DBI Stock shall no
longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and each certificate previously evidencing any such
shares shall thereafter represent the right to receive the Holding Company
Merger Consideration (as defined in Section 3.03(b)). The holders of such
certificates previously evidencing such shares of DBI Stock; outstanding
immediately prior to the Effective Time shall cease to have any rights with
respect to such shares of DBI Stock except as otherwise provided herein or by
law. Such certificates previously evidencing shares of DBI Stock shall be
exchanged for (1) certificates evidencing whole shares of SFNC Stock issued
in consideration therefor or (2) the Per Share Cash Amount multiplied by the
number of shares previously evidenced by the canceled certificate, in each
case in accordance with the allocation procedures of this Section 3.02 and
upon the surrender of such certificates in accordance with the provisions of
Section 3.03, without interest. No fractional shares of SFNC Stock shall be
issued, and, in lieu thereof, a cash payment shall be made pursuant to
Section 3.03(e).
(b) Subject to Section 3.02(g) the number of shares of DBI Stock
to be converted into the right to receive cash in the Holding Company Merger
shall be not more than 49% ("MAXIMUM CASH ELECTION NUMBER") nor less than 30%
("MINIMUM CASH ELECTION NUMBER") of the number of shares of DBI Stock
outstanding immediately prior to the Effective Time. Subject to Section
3.02(g) the number of shares of DBI Stock to be converted into the right to
receive SFNC Stock in the Holding Company Merger shall be not more than 70%
("MAXIMUM STOCK ELECTION NUMBER") nor less than 51% ("MINIMUM STOCK ELECTION
NUMBER") of the number of shares of DBI Stock outstanding immediately prior
to the Effective Time.
(c) Subject to the allocation and election procedures set forth
in this Section 3.02, each record holder immediately prior to the Effective
Time of shares of DBI Stock will be entitled (1) to elect to receive cash for
all of such shares ("CASH ELECTION"), (2) to elect to receive SFNC Stock for
all of such shares ("STOCK ELECTION"), (3) to elect to receive SFNC Stock for
a stated percentage of such shares ("PARTIAL STOCK ELECTION") and to receive
cash for the balance of such shares ("PARTIAL CASH ELECTION") or (4) to
indicate that such record holder has no preference as to the receipt of cash
or SFNC Stock for such shares ("NON-ELECTION"). All such elections shall be
made on a form designed for that purpose ("FORM OF ELECTION"). Holders of
record of shares of DBI Stock who hold such shares as nominees, trustees or
in other representative capacities ("REPRESENTATIVE") may submit multiple
Forms of Election, provided that such Representative certifies that each such
Form of Election covers the shares of DBI Stock held by each Representative
for a particular beneficial owner.
(d) If the sum of the number of shares covered by Cash Elections
and Partial Cash Elections ("CASH ELECTION SHARES") exceeds the Maximum Cash
Election Number, all shares of DBI Stock covered by Stock Elections and
Partial Stock Elections ("STOCK ELECTION SHARES") and all shares of DBI Stock
covered by Non-Elections ("NON-ELECTION SHARES") shall be converted into the
right to receive SFNC Stock, and the Cash Election Shares shall be converted
into the right to receive SFNC Stock and cash in the following manner:
Each Cash Election Share shall be converted into the right to
receive (i) an amount in cash, without interest, equal to the product of (x)
the Per Share Cash Amount and (y) a fraction ("CASH FRACTION"), the numerator
of which shall be the Maximum Cash Election Number and the denominator of which
shall be the total number of Cash Election Shares, and (ii) a number of
shares of SFNC Stock equal to the product of (x) the Exchange Ratio and (y)
a fraction equal to one minus the Cash Fraction.
(e) If the aggregate number of Stock Election Shares exceeds the
Maximum Stock Election Number, all Cash Election Shares and all Non-Election
Shares shall be converted into the right to receive cash, and all Stock
Election Shares shall be converted into the right to receive SFNC Stock and
cash in the following manner:
Each Stock Election Share shall be converted into the right to
receive (i) a number of shares of SFNC Stock equal to the product of (x) the
Exchange Ratio and (y) a fraction ("STOCK FRACTION"), the numerator of which
shall be the Maximum Stock Election Number and the denominator of which shall
be the total number of Stock Election Shares, and (ii) an amount in cash,
without interest, equal to the product of (x) the Per Share Cash Amount and (y)
a fraction equal to one minus the Stock Fraction.
(f) In the event that neither Section 3.02(d) nor Section 3.02(e) above is
applicable, all Cash Election Shares shall be converted into the right to
receive cash. All Stock Election Shares shall be converted into the right to
receive SFNC Stock, and the Non-Election Shares, if any, shall be converted
into the right to receive either cash or cash and SFNC Stock in the following
manner:
(1) If the sum of the number of Cash Election Shares plus the
number of Non-Election Shares is equal to or less than the Maximum Cash
Election Number, then all Non-Election Shares shall be deemed to be Cash
Election Shares and each Non-Election Share shall be converted into the right
to receive an amount in cash, without interest, equal to the Per Share Cash
Amount, or
(2) If the sum of the Cash Election Shares plus the Non-Election
Shares exceeds the Maximum Cash Election Number, then each Non-Election Share
shall be converted into the right to receive (i) an amount in cash, without
interest, equal to the product of (x) the Per Share Cash Amount and (y) a
fraction ("NON-ELECTION FRACTION"), the numerator of which shall be the
excess of the (A) Maximum Cash Election Number over (B) the number of Cash
Election Shares and the denominator of which shall be the excess of (A) the
number of shares of DBI Stock outstanding immediately prior to the Effective
Time over (B) the sum of the total number of Cash Election Shares and the
total number of Stock Election Shares and (ii) a number of shares of SFNC
Stock equal to the product of (x) the Exchange Ratio and (y) a fraction equal
to one minus the Non-Election Fraction.
(g) The SFNC Average Stock Price shall be the average (arithmetic
mean) of the closing price per share of SFNC Stock reported by the NASD during
the period of 20 trading days on which one or more trades actually occurs,
which ends immediately prior to the fifth trading day preceding the Effective
Date.
Notwithstanding the foregoing, the SFNC Average Stock Price shall not be less
than $25.50 and shall not be greater than $31.50. Subject to Section 8.01(d),
in the event the SFNC Average Stock Price as so computed without regard to
the preceding sentence, would be less than $25.50 ("COLLAR") or greater than
$31.50 ("CAP"), then the Holding Company Merger shall be consummated using
$25.50 or $31.50, respectively, as the SFNC Average Stock Price.
Notwithstanding anything to the contrary herein, the number of shares of SFNC
Stock to be issued shall not be less than 80,952 and shall not be greater
than 137,255.
(h) Elections shall be made by holders of DBI Stock by mailing to
DBI or the Exchange Agent, as defined in Section 3.03(a) below, the Form of
Election delivered to the DBI shareholders with the Prospectus/Proxy Statement
for the Holding Company Merger. To be effective, a Form of Election must be
properly completed, signed and submitted by the shareholder (or by an
appropriate trust company in the United States or a member of a registered
national securities exchange or the National Association of Securities Dealers,
Inc. ("NASD")) to DBI or the Exchange Agent not later than seven (7) days
following the date of the DBI shareholders meeting at which the Holding
Company Merger is approved. Upon receipt of any Form of Election by DBI it
shall immediately forward same to the Exchange Agent. SFNC will have the
discretion, which it may delegate in whole or in part to the Exchange Agent,
to determine whether Forms of Election have been properly completed, signed
and submitted or revoked and to disregard immaterial defects in Forms of
Election. The decision of SFNC, or the Exchange Agent, in such matters shall
be conclusive and binding. Neither SFNC nor the Exchange Agent will be under
any obligation to notify any person of any defect in a Form of Election
submitted to the Exchange Agent. The Exchange Agent shall also make all
computations contemplated by this Section 3.02 and all such computations
shall be conclusive and binding on the holders of DBI Stock.
(i) For the purposes hereof, a holder of DBI Stock who does not
submit a Form of Election which is received by the Exchange Agent prior to the
Election Deadline, as hereinafter defined, shall be deemed to have made a
Non-Election. If SFNC or the Exchange Agent shall determine that any
purported Cash Election, Partial Cash Election, Stock Election or Partial
Stock Election was not properly made, such purported election shall be deemed
to be of no force and effect and the shareholder making such purported Cash
Election, Partial Cash Election, Stock Election or Partial Stock Election
shall for purposes hereof, be deemed to have made a Non-Election.
(j) SFNC and DBI shall mail the Form of Election with the
Prospectus/Proxy Statement to all holders of DBI Stock on the record date for
the DBI shareholders meeting and to make the Form of Election available to
all persons who become holders of DBI Stock subsequent to such day and no
later than the close of business on the business day prior to the Election
Deadline. A Form of Election must be received by DBI or the Exchange Agent
on or before the close of business seven (7) days next following the date of
the DBI shareholders meeting at which the Holding Company Merger is approved
("ELECTION DEADLINE") in order to be effective. All elections may be revoked
until the Election Deadline.
(k) Each share of DBI Stock held in the treasury of DBI and each
share of DBI Stock owned by any direct or indirect wholly owned subsidiary of
DBI immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof and no payment shall be made with respect
thereto.
Section 3.03 EXCHANGE OF CERTIFICATES. (a) Promptly after
consummation of the Holding Company Merger, SFNC shall deposit, or shall cause
to be deposited, with SFNB ("EXCHANGE AGENT"), for the benefit of the holders
of shares of DBI Stock, for exchange in accordance with this Article III,
through the Exchange Agent, (i) certificates evidencing such number of shares
of SFNC Stock equal to the Exchange Ratio multiplied by the total number of
Stock Election Shares and (ii) cash in the amount equal to the Per Share Cash
Amount multiplied by the total number of Cash Election Shares (such
certificates for shares of SFNC Stock, together with any dividends or
distributions with respect thereto and cash, being hereinafter referred to as
the "EXCHANGE FUND"). The Exchange Agent shall, pursuant to irrevocable
instructions, deliver the SFNC Stock and cash contemplated to be issued
pursuant to Section 3.02 out of the Exchange Fund. Except as contemplated by
Section 3.03(e) hereof, the Exchange Fund shall not be used for any other
purpose.
(b) As soon as reasonably practicable after the Effective Time,
SFNC will instruct the Exchange Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
evidenced outstanding shares of DBI Stock (other than Dissenting Shares)
("CERTIFICATES"), (1) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as SFNC may
reasonably specify) and (2) instructions for use in effecting the surrender
of the Certificates in exchange for certificates evidencing shares of SFNC
Stock or cash. Upon surrender of a Certificate for cancellation to the
Exchange Agent together with such letter of transmittal, duly executed, and
such other customary documents as may be required pursuant to such
instructions, the holder of such Certificate shall be entitled to receive in
exchange therefor (A) certificates evidencing that number of whole shares of
SFNC Stock which such holder has the right to receive in respect of the
shares of DBI Stock formerly evidenced by such Certificate in accordance with
Section 3.02, (B) cash to which such holder is entitled to receive in
accordance with Section 3.02, (C) cash in lieu of fractional shares of SFNC
Stock to which such holder is entitled pursuant to Section 3.03(e) and (D)
any dividends or other distributions to which such holder is entitled
pursuant to Section 3.03(c), (the shares of SFNC Stock, dividends,
distributions and cash described in clauses (A), (B), (C) and (D) being
collectively, the "HOLDING COMPANY MERGER CONSIDERATION") and the Certificate
so surrendered shall forthwith be canceled. In the event of a transfer of
ownership of shares of DBI Stock which is not registered in the transfer
records of the DBI, a certificate evidencing the proper number of shares of
SFNC Stock and/or cash may be issued and/or paid in accordance with this
Article III to a transferee if the Certificate evidencing such shares of DBI
Stock is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and by evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 3.03, each Certificate shall be deemed at any
time after the Effective Time to evidence only the right to receive upon such
surrender the Holding Company Merger Consideration.
(c) No dividends or other distributions declared or made after
the Effective Time with respect to SFNC Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
with respect to the shares of SFNC Stock evidenced thereby, and no other part
of the Holding Company Merger Consideration shall be paid to any such holder,
until the holder of such Certificate shall surrender such Certificate.
Subject to the effect of applicable laws, following surrender of any such
Certificate, there shall be paid to the holder of the certificates evidencing
whole shares of SFNC Stock issued in exchange therefor, without interest, (1)
promptly, the amount of any cash payable with respect to a fractional share
of SFNC Stock to which such holder is entitled pursuant to Section 3.03(e)
and the amount of dividends or other distributions with a record date after
the Effective Time theretofore paid with respect to such whole shares of SFNC
Stock, and (2) at the appropriate payment date, the amount of dividends or
other distributions, with a record date after the Effective Time but prior to
surrender and a payment date occurring after surrender, payable with respect
to such whole shares of SFNC Stock. No interest shall be paid on the Holding
Company Merger Consideration.
(d) All shares of SFNC Stock issued and cash paid upon conversion
of the shares of DBI Stock in accordance with the terms hereof shall be deemed
to have been issued or paid in full satisfaction of all rights pertaining to
such shares of DBI Stock.
(e) (1) No certificates or scrip evidencing fractional
shares of SFNC Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of SFNC. In lieu of any such
fractional shares, each holder of DBI Stock upon surrender of a Certificate for
exchange pursuant to this Section 3.03 shall be paid an amount in cash, without
interest, rounded to the nearest cent, determined by multiplying (a) the SFNC
Average Stock Price by (b) the fractional interest to which such holder would
otherwise be entitled, after taking into account all shares of DBI Stock then
held of record by such holder.
(2) As soon as practicable after the determination
of the amount of cash, if any, to be paid to holders of DBI Stock with respect
to any fractional share interests, the Exchange Agent shall promptly pay such
amounts to such holders of DBI Stock subject to and in accordance with the
terms of Section 3.03(c).
(f) Any portion of the Exchange Fund and the Trust which remains
undistributed to the holders of DBI Stock for six months after the Effective
Time shall be delivered to SFNC, upon demand, and any holders of DBI Stock
who have not theretofore complied with this Article III shall thereafter look
only to SFNC for the Holding Company Merger Consideration to which they are
entitled.
(g) SFNC shall not be liable to any holder of shares of DBI Stock
for any such shares of SFNC Stock, cash (or dividends or distributions with
respect thereto) or cash from the Trust delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(h) SFNC shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of DBI Stock such amounts as SFNC is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
SFNC, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of the shares of DBI Stock in respect of
which such deduction and withholding was made by SFNC.
Section 3.04 STOCK TRANSFER BOOKS. At the Effective Time, the
stock transfer books of the DBI shall be closed and there shall be no further
registration of transfers of shares of DBI Stock thereafter on the records of
the DBI. On or after the Effective Time, any certificates presented to the
Exchange Agent or SFNC for any reason shall be converted into the Holding
Company Merger Consideration.
Section 3.05 DISSENTING SHARES. Notwithstanding any other
provisions of this Agreement to the contrary, shares of DBI Stock that are
outstanding immediately prior to the Effective Time and which are held by
stockholders who shall have not voted in favor of the Holding Company Merger or
consented thereto in writing and who shall have demanded properly in writing
appraisal for such shares (collectively, the "DISSENTING SHARES") in accordance
with Section 76 of the Arkansas Business Corporation Act of 1965 (A.C.A.
Section 4-26-1007) or the ABCA (A.C.A Section 4-27-1301 et seq.) shall not be
converted into or represent the right to receive the Holding Company Merger
Consideration. Such stockholders shall be entitled to receive payment of the
appraised value of such shares of DBI Stock held by them in accordance with
such provisions of such statutes, except that all Dissenting Shares held by
stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such shares of DBI Stock under
such statutes shall thereupon be deemed to have been converted into and to have
become exchangeable, as of the Effective Time, for the right to receive,
without any interest thereon, the Holding Company Merger Consideration, as if
such shares of DBI Stock were covered by Non-Elections, upon surrender, in the
manner provided in Section 3.03, of the certificate or certificates that
formerly evidenced such shares of DBI Stock.
Section 3.06 LOST DBI STOCK CERTIFICATES. In the event any
Certificate for DBI Stock shall have been lost, stolen or destroyed, upon
receipt of appropriate evidence as to such loss, theft or destruction and to
the ownership of such Certificate by the person claiming such Certificate to be
lost, stolen or destroyed and the receipt by SFNC of appropriate and
customary indemnification, SFNC will issue in exchange for such lost, stolen
or destroyed Certificate, a certificate of shares of SFNC Stock and the cash
payment, if any, deliverable in respect thereof as determined in accordance
with this Article III.
Section 3.07 OPTIONS AND RIGHTS. There are no options or rights
granted by DBI to purchase shares of DBI Stock, which are outstanding and
unexercised and there are no outstanding securities issued by DBI, or any other
party convertible into DBI Stock.
ARTICLE IV
ACTIONS PENDING MERGER
Section 4.01 REQUIRED ACTIONS PENDING MERGER. DBI hereby
covenants and agrees with SFNC that prior to the Effective Time, unless the
prior written consent of SFNC shall have been obtained, and except as otherwise
contemplated herein, DBI will and will cause each of its subsidiaries to:
(a) give all required notices, make all necessary amendments
(other than amendments terminating the accrual of benefits) and cause its Board
of Directors to adopt a resolution terminating the Dumas Bancshares, Inc.
Target Benefit Pension Plan to be effective on or before the Effective Date and
take all reasonable steps to preclude SFNC from having any liability to the
plan or the officers, employees or directors of DBI or any of its subsidiaries
under such plan;
(b) use reasonable efforts to preserve intact their business
organization and assets, maintain their rights and franchises, retain the
services of their officers and key employees, except that they shall have the
right to lawfully terminate the employment of any officer or key employee if
such termination is in accordance with DBI's existing employment procedures;
(c) use reasonable efforts to maintain and keep their properties
in as good repair and condition as at present, except for depreciation due to
ordinary wear and tear;
(d) use reasonable efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to that now
maintained;
(e) perform in all material respects all obligations required to
be performed by them under all material contracts, leases, and documents
relating to or affecting their assets properties, and business;
(f) give SFNC notice of all board of directors meetings of DBI
and each of its subsidiaries, allow SFNC to have a non-voting representative at
each such meeting provided however such representative shall be subject to
exclusion from any portion of any such meeting during any discussion or
action concerning the Holding Company Merger or to the extent that DBI's
legal counsel advises the directors that permitting SFNC's presence would
constitute a breach of their fiduciary duties, and provide SFNC with all
written materials and communications provided to the directors in connection
with such meetings; and
(g) prior to the Effective Time, obtain written consents of the
participants for the termination all of the deferred compensation
arrangements for the directors of DBI and its subsidiaries to be effective
immediately after the Effective Date, except the deferred compensation
arrangement for James R. Hall which shall be continued in accordance with its
terms, in exchange for the distribution to each participant of the life
insurance policy funding such arrangement or the net recognizable cash value
of such policy.
Section 4.02 PROHIBITED ACTIONS PENDING MERGER. Except as
specifically contemplated by this Agreement, from the date hereof until the
earlier of the termination of the Agreement or the Effective Time, DBI shall
not do, and DBI will cause each of its subsidiaries not to do, without the
prior written consent of SFNC, any of the following:
(a) make, declare or pay any dividend on DBI Stock or declare or
make any distribution on, or directly or indirectly combine, redeem,
reclassify, purchase or otherwise acquire, any share of its capital stock
(other than in a fiduciary capacity or in respect of a debt previously
contracted in good faith) or authorize the creation or issuance of or issue or
sell or permit any subsidiary to issue or sell any additional shares of DBI's
capital stock or the capital stock of any subsidiary, or any options, calls or
commitments relating to its capital stock or the capital stock of any
subsidiary, or any securities, obligations or agreements convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire,
shares of its capital stock or the capital stock of any of its subsidiaries;
(b) hire any additional staff or replace any staff members which
terminate employment or are discharged;
(c) enter into or permit any subsidiary to enter into any
employment contracts with, pay any bonus to, or increase the rate of
compensation of, any of its directors, officers or employees, except in the
ordinary course of business consistent with the past practice, including the
payment of a Christmas Bonus to employees equal in amount to two weeks salary
and the incentive compensation of James R. Hall based upon the current formula,
provided such incentive compensation shall not be applicable for any period
after the Effective Date;
(d) except as required by this Agreement, enter into or modify or
permit any subsidiary to enter into or modify (except as may be required by
applicable law and except for the renewal of any existing plan or arrangement
in the ordinary course of business consistent with past practice) any
pension, retirement, stock option, stock purchase, savings, profit sharing,
deferred compensation, consulting, bonus, group insurance or other employee
benefit, incentive or welfare contract, plan or arrangement, or any trust
agreement related thereto, in respect of any of its directors, officers or
other employees;
(e) except as contemplated by Section 6.01(m), substantially
modify the manner in which it and its subsidiaries have heretofore conducted
their business, taken as a whole, or amend its articles of incorporation or
by-laws;
(f) subject to the fiduciary duties of directors and except as
may be required by applicable law, initiate, solicit or encourage, including by
way or furnishing information or assistance, or take any other action to
facilitate, any inquiries or the making of any proposal which constitutes, or
may reasonably be expected to lead to, any Competing Transaction, as such
term is defined below, or negotiate with any person in furtherance of such
inquiries or to obtain a Competing Transaction, or agree to or endorse any
Competing Transaction, or authorize any of their officers, directors or
employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by DBI or any of its subsidiaries to take
any such action and, upon learning of such action by any representative,
shall take appropriate steps to terminate such action, DBI shall promptly
notify SFNC orally and in writing of all of the relevant details relating to
all inquiries and proposals which it may receive relating to any of such
matters; for purposes of this Agreement, "COMPETING TRANSACTION" shall mean
any of the following involving DBI or any of its subsidiaries; any merger,
consolidation, share exchange or other business combination; a sale, lease,
exchange, mortgage, pledge, transfer or other disposition of a substantial
portion of assets; a sale of shares of capital stock or securities
convertible or exchangeable into or otherwise evidencing, or any agreement or
instrument evidencing, the right to acquire capital stock;
(g) sell, dispose of or discontinue or, except as provided
herein, permit any subsidiary to sell, dispose or discontinue any of its
business, assets (including investment securities) or property, other than in
the ordinary course of business,
(h) except in the ordinary course of business, acquire any assets
or business or permit any subsidiary to acquire any assets or business that are
material to such party;
(i) acquire any investment securities other than U. S. Treasury
Securities, municipal securities and U. S. Agency securities which are
traditional fixed rate debt securities and shall not include any floating
rate securities, multi-step rate securities, mortgage-backed securities or
mutual funds;
(j) except in their fiduciary capacities, purchase any shares of
SFNC Stock;
(k) change any method of accounting in effect at December 31,
1993, or change any method of reporting income or deductions for federal income
tax purposes from those employed in the preparation of the federal income tax
returns for the taxable year ending December 31, 1993, except as may be
required by law or generally accepted accounting principles;
(l) take action which would or is reasonably likely to (1)
adversely affect the ability of either of SFNC or DBI to obtain any necessary
approvals of governmental authorities required for the transactions
contemplated hereby; (2) adversely affect DBI's ability to perform its
covenants and agreements under this Agreement; or (3) result in any of the
conditions to the Mergers set forth herein not being satisfied;
(m) unless and except in accordance with existing loan policies,
make any single new loan or series of loans to one borrower or a related group
of borrowers in an aggregate amount greater than $50,000.00;
(n) sell or dispose of any real estate or other assets having a
value in excess of $25,000.00;
(o) take any other action or permit any subsidiary to take any
action not in the ordinary course of business of it and its subsidiaries, taken
as a whole; or
(p) directly or indirectly agree to take any of the foregoing
actions.
Section 4.03 CONDUCT OF DBI TO DATE. Except as contemplated by
this Agreement from and after December 31, 1993 through the date of this
Agreement:
(a) DBI and its subsidiaries have carried on their respective
businesses in the ordinary and usual course consistent with past practices,
(b) neither DBI nor any of its subsidiaries have issued or sold
any capital stock or issued or sold any corporate debt securities which would
be classified as long term debt on the balance sheet of DBI or any of its
subsidiaries,
(c) DBI has not declared, set aside, or paid any cash or stock
dividend or other distribution in respect to its capital stock, except for the
dividend declared in December, 1993 and paid in January, 1994,
(d) neither DBI nor any of its subsidiaries have incurred any
material obligation or liability (absolute or contingent), except normal trade
or business obligations or liabilities incurred in the ordinary course of
business, or in conjunction with this Agreement, or mortgaged, pledged, or
subjected to lien, claim, security interest, charge, encumbrance or
restriction any of its assets or properties,
(e) neither DBI nor any of its subsidiaries has discharged or
satisfied any material lien, mortgage, pledge, claim, security interest,
charges, encumbrance, or restriction or paid any material obligation or
liability (absolute or contingent), other than in the ordinary course of
business,
(f) neither DBI nor any of its subsidiaries has, since September
30, 1994, sold, assigned, transferred, leased, exchanged, or otherwise disposed
of any of its properties or assets other than for a fair consideration in the
ordinary course of business,
(g) except for the payment of a 1994 Christmas Bonus to employees
equal in amount to two weeks salary and the incentive compensation of Mr. Jim
Hall form Dumas Bank based upon the current formula, applicable to 1994 and any
portion of 1995 prior to the Effective Date, neither DBI nor any of its
subsidiaries has increased the rate of compensation of, or paid any bonus to,
any of its directors, officers, or other employees, except merit or promotion
increases, including bonuses paid in January, 1994, in accordance with
existing policy; entered into any new, or amended or supplemented any
existing, employment, management, consulting, deferred compensation,
severance, or other similar contract; adopted, entered into, terminated,
amended or modified any employee benefit plan in respect of any of present or
former directors, officers or other employees; or agreed to do any of the
foregoing,
(h) neither DBI nor any of its subsidiaries has suffered any
material damage, destruction, or loss, whether as the result of flood, fire,
explosion, earthquake, accident, casualty, labor trouble, requisition or
taking of property by any government or any agency of any government,
windstorm, embargo, riot, act of God, or other similar or dissimilar casualty
or event or otherwise, whether or not covered by insurance,
(i) neither DBI nor any of its subsidiaries has cancelled or
compromised any debt to an extent exceeding $50,000.00 owed to it or any of its
subsidiaries or any claim to an extent exceeding $50,000.00 asserted by DBI
or any of its subsidiaries,
(j) neither DBI nor any of its subsidiaries has entered into any
transaction, contract, or commitment outside the ordinary course of its
business,
(k) neither DBI nor any of its subsidiaries has entered, or
agreed to enter, into any agreement or arrangement granting any preferential
right to purchase any of its material assets, properties or rights or requiring
the consent of any party to the transfer and assignment of any such material
assets, properties or rights,
(l) there has not been any change in the method of accounting or
accounting practices of DBI or any of its subsidiaries, and
(m) DBI and each of its subsidiaries have kept all records
substantially in accordance with its record retention policy and has not
received any comment, notice or criticism by any bank regulatory agency which
would lead a reasonable person to believe that such policy is not substantially
in compliance with regulatory and statutory requirements and customary industry
standards and have retained such records for the periods required by its
policy.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 REPRESENTATIONS AND WARRANTIES. SFNC and its
subsidiaries, to the extent applicable to such subsidiaries, represent and
warrant to DBI, and DBI and its subsidiaries, to the extent applicable to its
subsidiaries, represent and warrant to SFNC, that:
(a) The facts set forth in Article I of this Agreement with
respect to it are true and correct;
(b) The outstanding shares of capital stock of it and its
subsidiaries are duly authorized, validly issued and outstanding, fully paid
and non-assessable, and except for shares of Dumas Bank and Gould Bank, are
subject to no preemptive rights;
(c) Each of it and its subsidiaries has the power and authority,
and is duly qualified in all jurisdictions, except for such qualifications the
absence of which will not have a Material Adverse Effect, as hereinafter
defined, where such qualification is required, to carry on its business as it
is now being conducted and to own all its material properties and assets, and
it has all federal, state, local, and foreign governmental authorizations
necessary for it to own or lease its properties and assets and to carry on
its business as it is now being conducted, except for such powers and
authorizations the absence of which, either individually or in the aggregate,
would not have a Material Adverse Effect;
(d) The shares of capital stock of each of its subsidiaries are
owned by it free and clear of all liens, claims, encumbrances and restrictions
on transfer and there are no Rights with respect to such capital stock;
(e) Subject, in the case of SFNC to approval of its board of
directors and subject in the case of SFNB, DBI and Gould Bank, to the receipt
of approvals of their respective boards of directors and shareholders of this
Agreement, and, subject to receipt of required regulatory approvals, this
Agreement is a valid and binding agreement of it enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(f) The execution, delivery and performance of this Agreement by
it does not, and the consummation of the transactions contemplated hereby by it
will not, constitute (1) a breach or violation of, or a default under, any law,
rule or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of it or its subsidiaries or
to which it or its subsidiaries (or any of their respective properties) is
subject, which breach, violation or default is reasonably likely to have a
material adverse effect on the condition, financial or otherwise, properties,
results of operations or business of it and its subsidiaries, taken as a
whole or on its ability to perform its obligations hereunder and to
consummate the transactions contemplated hereby ("MATERIAL ADVERSE EFFECT"),
or enable any person to enjoin any of the transactions contemplated hereby or
(2) a breach or violation of, or a default under, the articles of
incorporation or by-laws of it or any of its subsidiaries; and the
consummation of the transactions contemplated hereby will not require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license or the consent or approval of any other
party to any such agreement, indenture or instrument, other than the required
approvals of applicable regulatory authorities referred to in Section 6.01(b)
and (c) and the approval of the respective boards of directors of SFNC, SFNB,
DBI and Gould Bank and the respective shareholders of SFNB, DBI and Gould
Bank referred to in Section 5.01(e) and any consents and approvals the
absence of which will not have a Material Adverse Effect;
(g) In the case of SFNC, as of their respective dates, neither
its Annual Report on form 10-K for the fiscal year ended December 31, 1993, nor
any other document filed subsequent to December 31, 1993 under Section 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
("EXCHANGE ACT"), each in the form, including exhibits, filed with the SEC,
contained, and in the case of DBI, its audited financial statements for the
fiscal years ended December 31, 1991, 1992 and 1993, and the Statements of
Condition filed on behalf of its subsidiaries with the state and federal
banking agencies during 1993 and 1994, and in the case of Gould Bank, its
Statements of Condition filed with the state and federal bank agencies during
1993 and 1994 and its unaudited monthly financial reports prepared subsequent
to December 31, 1993 (collectively, the "REPORTS"), did not contain any
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. Each of the balance sheets in or incorporated by reference into
the Reports, including the related notes and schedules, fairly presents the
financial position of the entity or entities to which it relates as of its
date and each of the statements of operations and retained earnings and of
cash flow and changes in financial position or equivalent statements in or
incorporated by reference into its Reports, including any related notes and
schedules, fairly presents the results of operations, retained earnings and
cash flows and changes in financial position, as the case may be, of the
entity or entities to which it relates for the periods set forth therein,
subject, in the case of unaudited interim statements or reports to normal
year-end audit adjustments that are not material in amount or effect, in each
case in accordance with generally accepted accounting principles applicable
to bank holding companies consistently applied during the periods involved,
except as may be noted therein. It has no material obligations or
liabilities, contingent or otherwise, except as disclosed in the Reports, and
its consolidated allowance for loan and lease losses, as shown on its most
recent balance sheet or statement of condition contained in its Reports was
adequate, as of the date thereof, within the meaning of generally accepted
accounting principles and safe and sound banking practices;
(h) Since December 31, 1993, there has been no material adverse
change in the financial condition of either SFNC and its subsidiaries, taken
as a whole, or DBI and its subsidiaries, taken as a whole;
(i) All material federal, state, local, and foreign tax returns
required to be filed by or on behalf of it or any of its subsidiaries have been
timely filed or requests for extensions have been timely filed and any such
extension shall have been granted and not have expired, and all such returns
filed are complete and accurate in all material respects. All taxes shown on
returns filed by it have been paid in full or adequate provision has been
made for any such taxes on its balance sheet in accordance with generally
accepted accounting principles. As of the date of this Agreement, there is no
audit examination, deficiency, or refund litigation with respect to any taxes
of it that would result in a determination that would have a Material Adverse
Effect. All taxes, interest, additions, and penalties due with respect to
completed and settled examinations or concluded litigation relating to it
have been paid in full or adequate provision has been made for any such taxes
on its balance sheet in accordance with generally accepted accounting
principles. It has not executed an extension or waiver of any statute of
limitations on the assessment or collection of any material tax due that is
currently in effect;
(j) (1) No material litigation, proceeding or controversy before
any court or governmental agency is pending, and there is no pending claim,
action or proceeding against it or any of its subsidiaries, which in its
reasonable judgment is likely to have a Material Adverse Effect or to prevent
consummation of the transactions contemplated hereby, and, to the best of its
knowledge, no such litigation, proceeding, controversy, claim or action has
been threatened or is contemplated, and (2) neither it nor any of its
subsidiaries is subject to cease and desist order, written agreement or
memorandum of understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any
board resolutions at the request of, federal or state governmental
authorities charged with the supervision or regulation of banks or bank
holding companies or engaged in the insurance of bank deposits ("BANK
REGULATORS"), nor has it been advised by any Bank Regulator that it is
contemplating issuing or requesting, or is considering the appropriateness of
issuing or requesting, any such order, directive, written agreement,
memorandum of understanding, extraordinary supervisory letter, commitment
letter, board resolution or similar understanding;
(k) Except for this Agreement, and arrangements made in the
ordinary course of business, neither it nor its subsidiaries are bound by any
material contract, as defined in Item 601(b)(10)(i) and (ii) of Regulation
S-K, to be performed after the date hereof that has not been filed with or
incorporated by reference in the Reports;
(l) All "employee benefit plans", as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), that cover any
of its or its subsidiaries' employees, comply in all material respects with all
applicable requirements of ERISA, the Code and other applicable laws; neither
it nor any of its subsidiaries has engaged in a "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) with respect to
any such plan which is likely to result in any material penalties or taxes
under Section 502(i) of ERISA or Section 4975 of the Code; no material
liability to the Pension Benefit Guaranty Corporation has been or is expected
by it or them to be incurred with respect to any such plan which is subject
to Title IV of ERISA ("pension plan"), or with respect to any
"single-employer plan" (as defined in Section 4001(a)(15) of ERISA) currently
or formerly maintained by it, them or any entity which is considered one
employer with it under Section 4001 of ERISA or Section 414 of the Code; no
pension plan had an "accumulated funding deficiency", as defined in Section
302 of ERISA (whether or not waived), as of the last day of the end of the
most recent plan year ending prior to the date hereof; the fair market value
of the assets of each pension plan exceeds the present value of the "benefit
liabilities", as defined in Section 4001(a)(16) of ERISA, under such pension
plan as of the end of the most recent plan year with respect to the
respective plan ending prior to the date hereof, calculated on the basis of
the actuarial assumptions used in the most recent actuarial valuation for
such pension plan as of the date hereof; no notice of a "reportable event",
as defined in Section 4043 of ERISA, for which the 30-day reporting
requirement has not been waived has been required to be filed for any pension
plan within the 12-month period ending on the date hereof; neither it nor any
of its subsidiaries has provided, or is required to provide, security to any
pension plan pursuant to Section 401(a)(29) of the Code; it and its
subsidiaries have not contributed to a "multiemployer plan", as defined in
Section 3(37) of ERISA, on or after September 26, 1980; and it and its
subsidiaries do not have any obligations for retiree health and life benefits
under any benefit plan, contract or arrangement.
(m) Each of it and its subsidiaries has good title to its
properties and assets, other than property as to which it is lessee, free and
clear of any liens, security interests, claims, charges, options or other
encumbrances not set forth in the Reports, except such defects in title which
would not, in the aggregate, have a Material Adverse Effect and in the case of
DBI substantially all of the buildings and equipment in regular use by DBI and
each of its subsidiaries have been reasonably maintained and are in good and
serviceable condition, reasonable wear and tear excepted.
(n) It knows of no reason why the regulatory approvals referred
to in Sections 7.01(b) and (c) should not be obtained without the imposition of
any condition of the type referred to in the proviso following Sections 7.01(b)
and (c);
(o) Its reserve for possible loan losses as shown in its
financial statements and reports for the fiscal quarter ended September 30,
1994, was adequate in all material respects under generally accepted accounting
principles applicable to banks and bank holding companies;
(p) It and each of its subsidiaries have all permits, licenses,
certificates of authority, orders, and approvals of, and have made all
filings, applications, and registrations with, federal, state, local, and
foreign governmental or regulatory bodies that are required in order to
permit it to carry on its business as it is presently conducted and the
absence of which would have a Material Adverse Effect; all such permits,
licenses, certificates of authority, orders, and approvals are in full force
and effect, and to the best knowledge of it no suspension or cancellation of
any of them is threatened;
(q) In the case of SFNC, the shares of SFNC Stock to be issued
pursuant to this Agreement, when issued in accordance with the terms of this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable and subject to no preemptive rights;
(r) Neither it nor any of its subsidiaries is a party to, or is
bound by, any collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization, nor is it or any of
its subsidiaries the subject of a proceeding asserting that it or any such
subsidiary has committed an unfair labor practice or seeking to compel it or
such subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving it or any of its subsidiaries pending or threatened;
(s) Except for the employment of Southard Financial by DBI to
render a fairness opinion, neither it nor any of its subsidiaries, nor any of
their respective officers, directors, or employees, has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions, or finder's fees, and no broker or finder has acted
directly or indirectly for it or any of its subsidiaries, in connection with
this Agreement or the transactions contemplated hereby;
(t) The information to be supplied by it for inclusion in (1) the
Registration Statement on Form S-4 and/or such other form(s) as may be
appropriate to be filed under the Securities Act of 1933, as amended
("SECURITIES ACT"), with the SEC by SFNC for the purpose of, among other
things, registering or obtaining an exemption from registration for, the SFNC
Stock to be issued to the shareholders of DBI in the Holding Company Merger
("REGISTRATION STATEMENT"), or (2) the proxy statement to be distributed in
connection with DBI's meeting of its shareholders to vote upon this
Agreement, as amended or supplemented from time to time ("PROXY STATEMENT"),
and together with the prospectus included in the Registration Statement, as
amended or supplemented from time to time, ("PROXY STATEMENT/PROSPECTUS")
will not at the time such Registration Statement becomes effective, and in
the case of the Proxy Statement/Prospectus at the time it is mailed and at
the time of the meeting of stockholders contemplated under this Agreement,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made,
not misleading;
(u) For purposes of this section, the following terms shall have
the indicated meaning:
"Environmental Law" means any federal, state or
local laws statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree, injunction or
agreement with any governmental entity relating to (1) the protection,
preservation or restoration of the environment (including, without limitation,
air, water vapor, surface water, groundwater, drinking water supply, surface
soil, plant and animal life or any other natural resource), and/or (2) the use,
storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous Substances.
The term Environmental Law includes without limitation (1) the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601, et seq., the Resource Conservation and Recovery Act, as amended,
42 U.S.C. Section 6901, et seq., the Clean Air Act, as amended, 42 U.S.C.
Section 7401, et seq., the Federal Water Pollution Control Act, as amended, 33
U.S.C. Section et seq., the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 9601, et seq., the Emergency Planning and Community Right to Know Act,
42 U.S.C. Section 11001, et seq., the Safe Drinking Water Act, 42 U.S.C.
Section 300f, et seq., all comparable state and local laws, and (2) any common
law, including without limitation common law that may impose strict liability,
that may impose liability or obligations for injuries or damages due to, or
threatened as a result of, the presence of or exposure to any Hazardous
Substance.
"Hazardous Substance" means any substance presently
listed, defined, designated or classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated, under any Environmental Law, whether
by type or by quantity, including any material containing any such substance
as a component. Hazardous Substances include without limitation petroleum or
any derivative or by-product thereof, asbestos, radioactive material, and
polychlorinated biphenyls.
"Loan Portfolio Properties and Other Properties
Owned" means those properties owned or operated by SFNC or DBI or any of their
subsidiaries.
(1) To the best knowledge of it and its subsidiaries, neither it
nor any of its subsidiaries has been or is in violation of or liable under any
Environmental Law, except any such violations or liabilities which would not
reasonably be expected to singly or in the aggregate have a Material Adverse
Effect;
(2) To the best knowledge of it and its subsidiaries, none of the
Loan Portfolio Properties and Other Properties Owned by it or its subsidiaries
has been or is in violation of or liable under any Environmental Law, except
any such violations or liabilities which singly or in the aggregate will not
have a Material Adverse Effect; and
(3) To the best knowledge of it and its subsidiaries, there are
no actions, suits, demands, notices, claims, investigations or proceedings
pending or threatened relating to the liability of the Loan Portfolio
Properties and Other Properties Owned by it or its subsidiaries under any
Environmental Law, including without limitation any notices, demand letters
or requests for information from any federal or state environmental agency
relating to any such liabilities under or violations of Environmental Law,
except such which will not have, result in or relate to a Material Adverse
Effect;
(v) DBI does not and is not required to file reports pursuant to
the Exchange Act.
(w) It and its subsidiaries have complied in all material
respects with the provisions of the Community Reinvestment Act ("CRA") and the
rules and regulations thereunder, has a CRA rating of not less than
"satisfactory," and has received no material criticism from regulators with
respect to discriminatory lending practices.
Section 5.02 REPRESENTATIONS AND WARRANTIES OF DBI. DBI and
Gould Bank, to the extent applicable to Gould Bank, to the best of their
knowledge, represent and warrant to SFNC, that none of DBI's executive
management, consisting of James R. Hall, Dennis Ferguson and Anita Grimes,
knows of any circumstances, events, commitments, instruments or facts that are
known to be misrepresented or intentionally omitted from any instrument, file,
or other record of DBI or any of its subsidiaries, with respect to loans to
borrowers which are payable to DBI or any of its subsidiaries either directly
or as a participant and except for such imperfections in documentation which
when considered as a whole would not have a net adverse effect on the business,
operations or financial condition of any of DBI, Dumas Bank or Gould Bank:
(a) All loans were made for good, valuable and adequate
consideration in the normal and ordinary course of business, and the notes and
other evidences of indebtedness and any loan agreements or security documents
executed in connection therewith are true and genuine and constitute the valid
and legally binding obligations of the borrowers to whom the loans were made
and are legally enforceable against such borrowers in accordance with their
terms subject to applicable bankruptcy, insolvency, reorganization, moratorium,
and similar debtor relief laws from time to time in effect, as well as general
principles of equity applied by a court of proper jurisdiction, regardless of
whether such enforceability is considered in a proceeding in equity or at
law;
(b) The amounts represented to SFNC as the balances owing on the
loans are the correct amounts actually and unconditionally owing, are
undisputed, and are not subject to any offsets, credits, deductions or
counterclaims;
(c) The collateral securing each loan as referenced in a loan
officer worksheet, loan summary report or similar interoffice loan
documentation is in fact the collateral held by DBI, Dumas Bank or Gould Bank
to secure each loan;
(d) DBI or its subsidiaries have possession of all loan document
files and credit files for all loans held by them containing promissory notes
and other relevant evidences of indebtedness with original signatures of their
borrowers and guarantors;
(e) DBI or its subsidiaries hold validly perfected liens or
security interests in the collateral granted to them to secure all loans as
referenced in the loan officer worksheets, loan summary reports or similar
interoffice loan documentation and the loan or credit files contain the
original security agreements, mortgages, or other lien creation and perfection
documents unless originals of such documents are filed of public record;
(f) Each lien or security interest of DBI or its subsidiaries in
the collateral held for each loan is properly perfected in the priority
described as being held by DBI or its subsidiaries in the loan officer
worksheets, loan summary reports or similar interoffice loan documentation
contained in the loan document or credit files;
(g) DBI and its subsidiaries are in possession of all collateral
that the loan document files or credit files indicate they have in their
possession;
(h) All guaranties granted to DBI or its subsidiaries to insure
payment of loans constitute the valid and legally binding obligations of the
guarantors and are enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, and similar
debtor relief laws from time to time in effect, as well as general principles
of equity applied by a court of proper jurisdiction, regardless of whether in
a proceeding in equity or at law;
(i) With respect to any loans in which DBI or any of its
subsidiaries have sold participation interests to another bank or financial
institution, none of the buyers of such participation interests are in default
under any participation agreements.
ARTICLE VI
COVENANTS
Section 6.01 COVENANTS. SFNC hereby covenants with and to DBI,
and DBI hereby covenants with and to SFNC, that:
(a) It shall use its best efforts in good faith to take or cause
to be taken all action necessary or desirable under this Agreement on its part
as promptly as practicable so as to permit the consummation of the transactions
contemplated by this Agreement at the earliest possible date and cooperate
fully with the other party hereto to that end;
(b) In the case of DBI, it shall (1) take all steps necessary to
duly call, give notice of, convene and hold meetings of its and Gould Bank's
boards of directors and of its and Gould Bank's shareholders for the purpose
of approving this Agreement as soon as is reasonably practicable; (2) in each
case subject to the fiduciary duties of its directors, recommend to its
shareholders that they approve this Agreement and use its best efforts to
obtain such approval; (3) distribute to its shareholders the Proxy
Statement/Prospectus in accordance with applicable federal and state law
(except, in the case of SFNC, for state securities laws and "BLUE SKY"
permits which are covered by Section 6.01(f) and with its certificates of
incorporation or charter, as the case may be, and bylaws; and (4) cooperate
and consult with SFNC with respect to each of the foregoing matters;
(c) In the case of DBI, prior to the Effective Date, it shall
cause to be divested, sold and removed from the books and records of DBI and
each of its subsidiaries any and all of the shares of Colonial Federal
Securities Fund - Class A, American Capital Government Securities Fund A,
Kemper Government Securities Fund A and any other mutual funds owned by DBI or
its subsidiaries;
(d) It will cooperate in the preparation and filing of the Proxy
Statement/Prospectus and Registration Statement or exemption filings in order
to consummate the transactions contemplated by this Agreement as soon as is
reasonably practicable;
(e) SFNC will advise DBI, promptly after SFNC receives notice
thereof, of the time when the Registration Statement or exemption filing has
become effective or any supplement or amendment has been filed, of the issuance
of any stop order or the suspension of the qualification of the shares of SFNC
Stock issuable pursuant to this Agreement for offering or sale in any
jurisdiction, of the initiation or threat of any proceeding for any such
purpose or of any request by the SEC for the amendment or supplement of the
Registration Statement or for additional information;
(f) In the case of SFNC, it shall use its best efforts to obtain,
prior to the effective date of the Registration Statement or exemptions, all
necessary state securities law or "Blue Sky" permits and approvals required
to carry out the transactions contemplated by this Agreement;
(g) Subject to its disclosure obligations imposed by law, unless
approved by the other party hereto in advance, it will not issue any press
release or written statement for general circulation relating to the
transactions contemplated hereby;
(h) It shall promptly furnish the other party with copies of
written communications received by it, or any of its respective subsidiaries,
Affiliates or Associates,(as such terms are defined in Rule 12b-2 under the
Exchange Act as in effect on the date hereof, from, or delivered by any of
the foregoing to, any governmental body or agency in connection with or
material to the transactions contemplated hereby;
(i) (1) Upon reasonable notice, it shall, and shall
cause each of its subsidiaries to, afford the other party hereto, and its
officers, employees, counsel, accountants and other authorized representatives
(collectively, such party's "REPRESENTATIVES") access, during normal business
hours, to all of its and its subsidiaries' properties, books, contracts,
commitments and records; it shall enable the other party's Representatives to
discuss its business affairs, condition, financial and otherwise, assets and
liabilities with such third persons, including, without limitation, its
directors, officers, employees, accountants, counsel and creditors, as the
other party considers necessary or appropriate; and it shall, and it shall
cause each of its subsidiaries to, furnish promptly to the other party hereto
(a) a copy of each report, schedule and other document filed by it pursuant to
the requirements of federal or state securities or banking laws since December
31, 1993, and (b) all other information concerning its business properties
and personnel as the other party hereto may reasonably request, provided that
no investigation pursuant to this Paragraph (i) shall affect or be deemed to
modify any representation or warranty made by, or the conditions to the
obligations to consummate this Agreement of, the other party hereto; (2) it
will, upon request, furnish the other party with all information concerning
it, its subsidiaries, directors, officers, partners and stockholders and such
other matters as may be reasonably necessary or advisable in connection with
the Proxy Statement/Prospectus, the Registration Statement or any other
statement or application made by or on behalf of SFNC, DBI or any of their
respective subsidiaries to any governmental body or agency in connection with
or material to the Mergers and the other transactions contemplated by this
Agreement; and (3) it will not use any information obtained pursuant to this
Paragraph (i) for any purpose unrelated to the consummation of the
transactions contemplated by this Agreement and, if this Agreement is not
consummated, it will hold all information and documents obtained pursuant to
this Paragraph (i) in confidence unless and until such time as such
information or documents otherwise become publicly available or as it is
advised by counsel that any such information or document is required by law
to be disclosed, and in the event of the termination of this Agreement, it
will deliver to the other party hereto all documents so obtained by it and
any copies thereof,
(j) It shall notify the other party hereto as promptly as
practicable of (1) any material breach of any of its warranties,
representations or agreements contained herein and (2) any change in its
condition (financial or otherwise), properties, business, results of operations
or prospects that could have a Material Adverse Effect.
(k) It shall cooperate and use its best efforts to promptly
prepare and file all documentation, to effect all necessary applications,
notices, petitions, filings and other documents, and to obtain all necessary
permits, consents, approvals and authorizations of all third parties and
governmental agencies, including, in the case of SFNC, submission of
applications for approval of this Agreement and the transactions contemplated
herein to the FRB in accordance with the provisions of the BHC Act, and to any
other regulatory agencies as required by law,
(l) It shall (1) permit the other to review in advance and, to
the extent practicable, will consult with the other party on all
characterizations of the information relating to the other party and any of
its respective subsidiaries, which appear in any filing made with, or written
materials submitted to, any third party or any governmental body or agency in
connection with the transactions contemplated by this Agreement; and (2)
consult with the other with respect to obtaining all necessary permits,
consents, approvals and authorizations of all third parties and governmental
bodies or agencies necessary or advisable to consummate the transactions
contemplated by this Agreement and will keep the other party apprised of the
status of matters relating to completion of the transactions contemplated
herein;
(m) Prior to the Effective Date, DBI shall, consistent with
generally accepted accounting principles, cause Gould Bank to modify and change
its loan, litigation and real estate valuation policies and practices,
including loan classifications and levels of reserves, so as to be applied
consistently on a mutually satisfactory basis with those of SFNC; provided,
however, that no such action pursuant to this subsection (m) need be taken
unless and until SFNC acknowledges that all conditions to its obligation to
consummate the Mergers have been satisfied;
(n) From and after the Effective Date, SFNC shall cause its
subsidiaries, including SFNB and Dumas Bank, to offer to all persons who were
employees of DBI, Dumas Bank or Gould Bank (as reflected in the payroll
records of such institutions) immediately prior to the Effective Date and who
become employees of SFNC or any of its subsidiaries, including those who
remain as employees of Dumas Bank or Gould Bank immediately following the
Effective Date, the right to participate in the employee benefits of SFNC and
its subsidiaries (including but not limited to the Simmons First National
Corporation Employee Stock Ownership Plan, Simmons First National Corporation
Section 401(k) Plan, and such other benefits as are set forth in the Simmons
First National Corporation Personnel Policy Manual) on the same terms as the
employees of the other subsidiaries of SFNC. To the extent permitted by such
plans and policies and SFNC's prior administration of such plans and
policies, (1) prior service of employees of DBI and its subsidiaries will be
credited for purposes of eligibility to participate, vesting, and benefit
accrual under such plans and policies and (2) any waiting periods or
exclusions pre-exisitng conditions shall be waived.
ARTICLE VII
CONDITIONS TO CONSUMMATION
Section 7.01 MUTUAL CONDITIONS. The respective obligations of
SFNC, SFNB, DBI and Gould Bank to effect the Mergers shall be subject to the
satisfaction prior to the Effective Time of the following conditions:
(a) This Agreement and the transactions contemplated hereby shall
have been approved by the requisite votes of (1) the boards of directors of
SFNC, SFNB, DBI and Gould Bank, and (2) the shareholders of SFNB, DBI and Gould
Bank in accordance with applicable law;
(b) The procurement by SFNC of approval of this Agreement and the
transactions contemplated hereby by the FRB and the expiration of any
statutory waiting periods;
(c) Procurement of all other regulatory consents and approvals,
including, without limitation, any required consents or approvals from the
United States Treasury, Office of the Comptroller of the Currency and state
banking authorities, which are necessary to the consummation of the
transactions contemplated by this Agreement; provided, however, that no
approval or consent described in Sections 7.01(b) and (c) shall be deemed to
have been received if it shall include any conditions or requirements which
would reduce the benefits of the transactions contemplated hereby to such a
degree that SFNC or DBI would not have entered into this Agreement had such
conditions or requirements been known at the date hereof;
(d) The satisfaction of all other requirements prescribed by law
which are necessary to the consummation of the transactions contemplated by
this Agreement;
(e) No party hereto shall be subject to any order, decree or
injunction of a court or agency of competent jurisdiction which enjoins or
prohibits the consummation of the Mergers;
(f) No statute, rule, regulation, order, injunction or decree
shall have been enacted entered, promulgated or enforced by any governmental
authority which prohibits, restricts or makes illegal consummation of the
Mergers; and
(g) The Registration Statement shall have become effective and no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been initiated or
threatened by the SEC or an exemption from registration shall be effective.
Section 7.02 ADDITIONAL CONDITIONS FOR SFNC. The obligation of
SFNC to effect the Mergers shall be subject to the satisfaction prior to the
Effective Time of the following additional conditions:
(a) SFNC shall have received an opinion, dated the Effective
Date, of DBI's counsel in the form and to the effect customarily received in
transactions of this type;
(b) SFNC shall have received agreements, in the form attached
hereto as Exhibit B-1 for outside directors and B-2 for inside directors, from
each director of DBI and each of its subsidiaries agreeing not to become
associated with, employed by or a member of the board of directors of any
other financial institution maintaining one or more places of business in
Desha County or Lincoln County, Arkansas for a period of two (2) years after
the Effective Date;
(c) Each of the representations, warranties and covenants herein
of DBI shall, in all material respects, be true on, or complied with by, the
Effective Date as if made on such date, or on the date when made in the case
of any representation or warranty which specifically relates to an earlier
date, and SFNC shall have received a certificate signed by the Chief
Executive Officer and the Treasurer of DBI, dated the Effective Date, to such
effect;
(d) Phase I environmental audits of all real property owned by
DBI or any of its subsidiaries shall have been conducted at SFNC's expense and
shall, to SFNC's satisfaction, reflect no material problems under
Environmental Laws.
(e) SFNC shall have received all state securities laws and "Blue
Sky" permits and other authorizations necessary to consummate the transactions
contemplated hereby;
(f) No litigation or proceeding is pending which (1) has been
brought against SFNC or DBI or any of their subsidiaries by any governmental
agency seeking to prevent consummation of the transactions contemplated hereby
or (2) in the reasonable judgment of the Chief Executive officer of SFNC is
likely to have a Material Adverse Effect on DBI or SFNC;
Section 7.03 ADDITIONAL CONDITIONS FOR DBI. The obligation of
DBI to effect the Mergers shall be subject to the satisfaction prior to the
Effective Time of the following additional conditions:
(a) DBI shall have received an opinion, dated the Effective Date,
of SFNC's counsel in the form and to the effect customarily received in
transactions of this type;
(b) DBI shall have received the written opinion of Southard
Financial, or such other advisor selected by DBI and approved by SFNC, to the
effect that the Holding Company Merger Consideration to be paid to the holders
of the shares of DBI Stock pursuant to this Agreement is fair to the holders of
the DBI Stock.
(c) Each of the representations, warranties and covenants
contained herein of SFNC shall, in all material respects, be true on, or
complied with by, the Effective Date as if made on such date, or on the date
when made in the case of any representation or warranty which specifically
relates to an earlier date, and DBI shall have received a certificate signed by
the Chief Executive Officer and the Chief Financial Officer of SFNC, dated the
Effective Date, to such effect;
(d) No litigation or proceeding is pending which (1) has been
brought against SFNC or DBI or any of their subsidiaries by any governmental
agency, seeking to prevent consummation of the transactions contemplated hereby
or (2) in the reasonable judgment of the chief executive officer of DBI is
likely to have a Material Adverse Effect on DBI or SFNC;
(e) Ramsay, Bridgforth, Harrelson & Starling shall have delivered
its opinion to SFNC and DBI, dated as of the Effective Date, substantially to
the effect that, on the basis of facts, representations and assumptions set
forth in such opinion which are consistent with the state of facts existing at
the Effective Time, the Mergers will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code and
that, accordingly: (1) no gain or loss will be recognized by the shareholders
of DBI who exchange their shares of DBI Stock solely for shares of SFNC Stock
pursuant to the Holding Company Merger (except with respect to cash received
in lieu of a fractional share interest in SFNC Stock); (2) the tax basis of
the shares of SFNC Stock received by shareholders who exchange all of their
shares of DBI Stock solely for shares of SFNC Stock in the Holding Company
Merger will be the same as the tax basis of the shares of DBI Stock
surrendered in exchange therefor (reduced by any amount allocable to a
fractional share interest for which cash is received); (3) the holding period
of the shares of SFNC Stock received in the Holding Company Merger will
include the period during which the shares of DBI Stock surrendered in
exchange therefor were held, provided such shares of DBI Stock were held as
capital assets at the Effective Time; and (4) satisfactorily addresses the
significant federal income tax issues concerning the receipt of both cash and
SFNC Stock in the Holding Company Merger. In rendering such opinion, counsel
may require and rely upon representations contained in certificates of
officers of DBI and others.
Section 7.04 EFFECT OF REQUIRED ADJUSTMENTS. Any effect on DBI
as a result of action taken by DBI pursuant to Section 6.01(m) shall be
disregarded for purposes of determining the truth or correctness of any
representation or warranty of DBI and for purposes of determining whether any
conditions are satisfied.
ARTICLE VIII
TERMINATION
Section 8.01 TERMINATION. This Agreement may be terminated
prior to the Effective Date, either before or after its approval by the
stockholders of DBI:
(a) By the mutual consent of SFNC and DBI, if the Board of
Directors of each so determines by vote of a majority of the members of its
entire Board;
(b) By SFNC or DBI, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event of the
failure of the shareholders of DBI to approve this Agreement at its meeting
called to consider such approval, or a material breach by the other party
hereto of any representation, warranty or agreement contained herein which is
not cured or not curable within 60 days after written notice of such breach is
given to the party committing such breach by the other party hereto;
(c) By SFNC or DBI, if its Board of Directors so determines by
vote of a majority of the members of its entire Board, in the event that the
Mergers are not consummated by June 30, 1995 unless the failure to so
consummate by such time is due to the breach of this Agreement by the party
seeking to terminate; or
(d) By DBI, if its Board of Directors so determines by vote of a
majority of the members of its entire Board, in the event that the average
(arithmetic mean) of closing price per share of SFNC Stock reported by the
NASD during either of two periods, (1) the first such period consisting of 20
trading days on which one or more trades actually takes place and which ends
immediately prior to the fifth trading day preceding the mailing of the proxy
materials to the DBI shareholders and (2) the second such period consisting
of 20 trading days on which one or more trades actually takes place and which
ends immediately prior to the fifth trading day preceding the Effective Date,
is less than $23.50, as adjusted accordingly, by reason of any
reclassification, recapitalization, split-up, combination or exchange of
shares, or if a stock dividend thereon shall be declared with a record date
on or after September 30, 1994 but prior to the Effective Date, or other like
changes in SFNC's capitalization occur.
Section 8.02 EFFECT OF TERMINATION. In the event of the
termination of this Agreement by either SFNC or DBI, as provided above, this
Agreement shall thereafter become void and there shall be no liability on the
part of any party hereto or their respective officers or directors, except that
any such termination shall be without prejudice to the rights of any party
hereto arising out of the willful breach by any other party of any covenant or
willful misrepresentation contained in this Agreement.
ARTICLE IX
EFFECTIVE DATE AND EFFECTIVE TIME
Section 9.01 EFFECTIVE DATE AND EFFECTIVE TIME. On the last
business day of the month during which the expiration of all applicable waiting
periods in connection with governmental approvals occurs and all conditions
to the consummation of this Agreement are satisfied or waived, or on such
earlier or later date as may be agreed by the parties, Articles of Merger
shall be executed in accordance with all appropriate legal requirements and
shall be filed as required by law, and the Mergers provided for herein shall
become effective upon such filings or on such date as may be specified in
such Articles of Merger. The date of such filing or such later effective date
is herein called the "EFFECTIVE DATE". The "EFFECTIVE TIME" of the Holding
Company Merger shall be 6:01 P.M. in the State of Arkansas on the Effective
Date and the "EFFECTIVE TIME" of the Bank Merger shall be at 6:02 P.M. in the
State of Arkansas on the Effective Date, or such other time on the Effective
Date as may be agreed by the parties.
ARTICLE X
OTHER MATTERS
Section 10.01 SURVIVAL. The agreements and covenants of the
parties which by their terms apply in whole or in part after the Effective Time
shall survive the Effective Date. All other representations, warranties,
agreements and covenants shall be deemed to be conditions of this Agreement and
shall not survive the Effective Date. If this Agreement shall be terminated,
the agreements of the parties in Sections 6.01(i)(3), 8.02, 10.05 and 10.06
shall survive such termination.
Section 10.02 AMENDMENT; MODIFICATION; WAIVER. Prior to the
Effective Date, any provision of this Agreement may be waived by the party
benefited by the provision or by both parties or amended or modified at any
time, including the structure of the transaction by an agreement in writing
between the parties hereto approved by their respective Boards of Directors,
to the extent allowed by law, except that, after the vote by the shareholders
of DBI, Sections 3.02(a)-(g) shall not be amended or revised.
Section 10.03 COUNTERPARTS. This Agreement may be executed in
counterparts each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same instrument.
Section 10.04 GOVERNING LAW. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of Arkansas.
Section 10.05 EXPENSES. Each party hereto will bear all expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby.
Section 10.06 DISCLOSURE. Each of the parties and its respective
agents, attorneys and accountants will maintain the confidentiality of all
information provided in connection herewith which has not been publicly
disclosed unless it is advised by counsel that any such information is
required by law to be disclosed.
Section 10.07 NOTICES. All notices, acknowledgements, requests
and other communications hereunder to a party shall be in writing and shall be
deemed to have been duly given when delivered by hand, telecopy, telegram or
telex (confirmed in writing) to such party at its address set forth below or
such other address as such party may specify by notice to the other party
hereto:
If to DBI and
Gould Bank, to: DUMAS BANCSHARES, INC.
James R. Hall, President
P. O. Box 915
Dumas, Arkansas 71639
With Copies to: GERRISH & McCREARY, P.C.
ATTN: Jeffrey C. Gerrish
700 Colonial Road, Suite 200
Memphis, Tennessee 38117
If to SFNC
and SFNB, to: SIMMONS FIRST NATIONAL CORPORATION
J. Thomas May, President
P. O. Box 7009
Pine Bluff, Arkansas 71611-7009
With Copies to: RAMSAY, BRIDGFORTH, HARRELSON & STARLING
ATTN: Patrick A. Burrow
501 Main St., 11th Floor
P. O. Box 8509
Pine Bluff, Arkansas 71611-8509
Section 10.08 NO THIRD PARTY BENEFICIARIES. All terms and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Except as expressly provided for herein, nothing in this Agreement is intended
to confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.
Section 10.09 ENTIRE AGREEMENT. This Agreement represents the
entire understanding of the parties hereto with reference to the transactions
contemplated hereby and supersedes any and all other oral or written
agreements heretofore made.
Section 10.10 ASSIGNMENT. This Agreement may not be assigned by
any party hereto without the written consent of the other parties.
Section 10.11 AFFILIATED PARTIES. DBI shall use its best
efforts to cause each director, executive officer and other person who is an
"AFFILIATE" (for purposes of Rule 145 under the Securities Act) to deliver to
SFNC as soon as practicable after the date hereof, but in no event after the
date of the DBI Shareholders meeting called to approve the Merger, a written
agreement satisfactory to SFNC providing, among other matters, that such
person will not sell, pledge, transfer or otherwise dispose of any shares of
DBI Stock held by such "affiliate" or the shares of SFNC Stock to be received
by such "affiliate" in the Holding Company Merger in the case of shares of
SFNC Stock only, except in compliance with the applicable provisions of the
Securities Act and the rules and regulations thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in counterparts by their duly authorized officers as
of the day and year first above written.
SIMMONS FIRST NATIONAL CORPORATION
By /s/ J. Thomas May
---------------------------------
J. Thomas May, President and
Chief Executive Officer
ATTEST:
/s/ John L. Rush
- ------------------------
John L. Rush, Secretary
DUMAS BANCSHARES, INC.
By /s/ James R. Hall
------------------------------
James R. Hall, President and
Chief Executive Officer
ATTEST:
/s/ Dennis H. Ferguson
- -----------------------------
Dennis H. Ferguson, Secretary
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("AGREEMENT"), is made as of
the 23rd day of November, 1994, by and between SIMMONS FIRST NATIONAL BANK, a
national banking association ("SFNB") and FIRST STATE BANK OF GOULD, an
Arkansas banking corporation ("GOULD BANK").
ARTICLE I
RECITALS
Section 1.01 HOLDING COMPANY MERGER. On November 15, 1994, Dumas
Bancshares, Inc. ("DBI"), which presently owns 100% of the outstanding shares
of capital stock of Gould Bank, entered into an Agreement and Plan of Merger
("HOLDING COMPANY MERGER AGREEMEENT") pursuant to which DBI agreed to merge
with and into Simmons First National Corporation, which presently owns 100%
of the outstanding capital stock of SFNB.
Section 1.02 CONDITION TO CONSUMMATION OF HOLDING COMPANY Merger.
A condition to the consummation of the Holding Company Merger is approval by
the Board of Directors of SFNB and Gould Bank of the merger of Gould Bank
with and into SFNB and the execution of an agreement and plan of merger of
Gould Bank with and into SFNB by the respective banks within ten (10) days
following the execution of the Holding Company Merger Agreement.
Section 1.03 INCORPORATION OF DEFINITIONS. All defined terms in
the Holding Company Merger Agreement are hereby incorporated herein by
reference and adopted by the parties in connection with the transactions
described herein.
In consideration of their mutual promises and obligations
hereunder, and intending to be legally bound hereby, SFNB and Gould Bank adopt
and make this Agreement and prescribe the terms and conditions hereof and the
manner and basis of carrying it into effect, which shall be as follows:
ARTICLE II
BANK MERGER
Section 2.01 BANK MERGER. On the Effective Date, as defined in
Section 9.01 of the Holding Company Merger Agreement, Gould Bank, the merging
bank, shall be merged with and into SFNB, the surviving bank, under the
articles of association of SFNB, as amended, pursuant to the provisions of, and
with the effect provided under the laws of the United States. At the Effective
Time, SFNB, the surviving bank, shall continue to be a national banking
association, and its business shall continue to be conducted at its main
office in Pine Bluff, Arkansas, and at its legally established branches
(including, without limitation, the legally established offices from which
Gould Bank conducted business immediately prior to the Effective Time). The
articles of association of SFNB shall not be altered or amended by virtue of
the Bank Merger and the incumbency of the directors and officers of SFNB
shall not be affected by the Bank Merger nor shall any person succeed to such
positions by virtue of the Bank Merger.
Section 2.02 CANCELLATION OF GOULD BANK STOCK. At the Effective
Time, by virtue of the Bank Merger, all shares of Gould Bank Stock shall be
cancelled.
Section 2.03 CAPITAL STOCK OF THE SURVIVING BANK. The shares of
SFNB Stock, the surviving bank, issued and outstanding immediately prior to the
Effective Time, shall, at the Effective Time, continue to be issued and
outstanding, and no of additional shares of SFNB Stock shall be issued by
reason of the Bank Merger.
Section 2.04 ASSETS AND LIABILITIES OF THE MERGING BANK. At the
Effective Time, the corporate existence of Gould Bank shall be merged into
and continued in SFNB, the surviving bank, and the surviving bank shall be
deemed to be the same corporation as each bank participating in the Bank
Merger. All rights, franchises, and interests of Gould Bank in and to every
kind and type of property (real, personal and mixed) and choses in action
shall be transferred to and vested in SFNB by virtue of the Bank Merger
without any deed or other transfer. SFNB, the surviving bank, without any
order or other action on the part of any court or otherwise, shall hold and
enjoy all rights of property, franchises, and interests, including
appointments, designations, and nominations, and all other rights and
interests as trustee, executor, administrator, registrar of stocks and bonds,
guardian of estates, and in every other fiduciary capacity, in the same
manner and to the same extent as such rights, franchises and interests were
held or enjoyed by Gould Bank at the time of the Bank Merger. SFNB, the
surviving bank shall, from and after the Effective Time, be liable for all
liabilities of Gould Bank.
ARTICLE III
CONDITION TO CONSUMMATION
Section 3.01 CONSUMMATION OF HOLDING COMPANY MERGER. In
addition to all other conditions to consummation which may be incorporated by
reference herein, neither SFNB nor Gould Bank shall be obligated to consummate
this transaction if the Holding Company Merger is not consummated.
ARTICLE IV
INCORPORATION BY REFERENCE
Section 4.01 INCORPORATION OF TERMS OF HOLDING COMPANY MERGER
AGREEMENT. The parties hereby incorporate all obligations, duties, defined
terms, conditions, covenants, warranties, representations, restrictions,
limitations or other provisions in any way applicable to SFNB, Gould Bank or
the Bank Merger contained in the Holding Company Merger Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed and seals affixed in counterparts by their duly
authorized officers as of the day and year first above written.
SIMMONS FIRST NATIONAL BANK
By /s/ J. Thomas May
-----------------------------
J. Thomas May, President and
Chief Executive Officer
ATTEST:
/s/ John L. Rush
- ------------------------
John L. Rush, Secretary
FIRST STATE BANK OF GOULD
By /s/ James R. Hall
------------------------------
James R. Hall, President and
Chief Executive Officer
ATTEST:
/s/ Anita Grimes
- ----------------------
Anita Grimes, Cashier
EXHIBIT B-1
NON-COMPETITION AGREEMENT
This Non-Competition Agreement entered into this ____ day of
_____________, 199__, By and between ___________________ ("Director") and
Simmons First National Corporation ("SFNC"), WITNESSETH,
1. RECITALS. Director has served as a director of Dumas
Bancshares, Inc. ("DBI") or its subsidiaries, Dumas State Bank and First State
Bank of Gould. As an inducement for the consummation of the merger of DBI with
and into SFNC ("MERGER"), DBI agreed to cause its directors to agree to certain
limited restrictions on competitive activity within a limited geographic area
to assist in preserving the intangible assets of DBI after the merger.
2.NON-COMPETITION. Director acknowledges the importance to SFNC
of the existing employees and customer relationships of DBI and its
subsidiaries and for a period of two years after the Effective date of the
Merger agrees not to become (i) associated or affiliated with, (ii) employed by
or (iii) a member of the board of directors of, any financial institution,
other than Dumas State Bank, SFNC or SFNB, which now or at any time during the
two year period, maintains one or more places of business in Desha County or
Lincoln County, Arkansas.
3. ENFORCEMENT. Director acknowledges and warrants that the
covenants contained in this Agreement are reasonable, that valid consideration
has been and will be received therefor. Director recognizes that the
provisions of this Agreement are vitally important to the continuing welfare of
the SFNC and its affiliates and that money damages constitute a totally
inadequate remedy for any violation thereof. Accordingly, in the event of any
violation by Director, SFNC, in addition to any other remedies it may have,
shall have the right to institute and maintain a proceeding to compel specific
performance thereof or to issue an injunction restraining any action by
Director in violation of this Agreement. It is the desire of the parties
that the provisions of this Agreement be enforced to the fullest extent
possible under the law and public policy of Arkansas.
4. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement and such other provisions shall remain
in full force and effect.
5. APPLICABLE LAW. The law of the State of Arkansas shall govern
the validity, interpretation and proper performance of this Agreement.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed on the date first above written.
_______________________________
SIMMONS FIRST NATIONAL CORPORATION
_______________________________
J. Thomas May, President and
Chief Executive Officer
ATTEST:
________________________
John L. Rush, Secretary
EXHIBIT B-2
NON-COMPETITION AGREEMENT
This Non-Competition Agreement entered into this ____ day of
_____________, 199__, by and between ___________________ ("Employee-
Director") and Simmons First National Corporation ("SFNC"), WITNESSETH,
1. RECITALS. Employee-Director has served as an executive
officer and director of Dumas Bancshares, Inc. ("DBI") and/or its subsidiaries,
Dumas State Bank and First State Bank of Gould. As an inducement for the
consummation of the merger of DBI with and into SFNC ("MERGER"), DBI agreed
to cause its employee-directors to agree to certain limited restrictions on
competitive activity within a limited geographic area to assist in preserving
the intangible assets of DBI after the merger.
2. NON-COMPETITION. Employee-Director acknowledges the
importance to SFNC of the existing employees and customer relationships of DBI
and its subsidiaries and for a period of two years after the Effective Date of
the Merger agrees not to become (i) associated or affiliated with, (ii)
employed by or (iii) a member of the board of directors of, any financial
institution, other than Dumas State Bank, SFNC or SFNB, which now or at any
time during the two year period, maintains one or more places of business in
Desha County or Lincoln County, Arkansas. In the event Employee is discharged,
as hereafter defined, by SFNC or any of its subsidiaries then the restrictions
on Employee-Director contained herein shall terminate and cease to be
effective.
3.DISCHARGE. The term "discharge" shall mean the involuntary
termination of employment of Employee-Director by SFNC or any of its
subsidiaries and shall include any constructive discharge which may occur
through material reduction in compensation or job responsibilities. For the
purposes hereof, neither a voluntary termination of employment by Employee-
Director, nor a relocation of the primary site of performance of Employee-
Director's duties to Pine Bluff, Arkansas or any city in which DBI or any of
its subsidiaries maintained banking offices, shall be considered to be a
discharge.
4. ENFORCEMENT. Director acknowledges and warrants that the
covenants contained in this Agreement are reasonable, that valid consideration
has been and will be received therefor. Director recognizes that the
provisions of this Agreement are vitally important to the continuing welfare of
the SFNC and its affiliates and that money damages constitute a totally
inadequate remedy for any violation thereof. Accordingly, in the event of any
violation by Director, SFNC, in addition to any other remedies it may have,
shall have the right to institute and maintain a proceeding to compel specific
performance thereof or to issue an injunction restraining any action by
Director in violation of this Agreement. It is the desire of the parties
that the provisions of this Agreement be enforced to the fullest extent
possible under the law and public policy of Arkansas.
5.SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement and such other provisions shall remain
in full force and effect.
6.APPLICABLE LAW. The law of the State of Arkansas shall govern
the validity, interpretation and proper performance of this Agreement.
IN WITNESS WHEREOF, the parties have caused this agreement to be
executed on the date first above written.
_______________________________
SIMMONS FIRST NATIONAL CORPORATION
________________________________
J. Thomas May, President and
Chief Executive Officer
ATTEST:
________________________
John L. Rush, Secretary
Annex II
4-26-1007. Rights of dissenting shareholders.
(a) If a shareholder of a corporation which is a party to a merger or
consolidation files with the corporation, prior to or at the meeting of
shareholders at which the plan of merger or consolidation is submitted to a
vote, a written objection to the plan of merger or consolidation and does not
vote in favor thereof, and the shareholder within ten (10) days after the
date on which the vote was taken makes written demand on the surviving or new
domestic or foreign corporation for payment of the fair value of his shares
as of the day prior to the date on which the vote was taken approving the
merger or consolidation, then, if the merger or consolidation is effected,
the surviving or new corporation shall pay to the shareholder, upon surrender
of his certificate or certificates representing the shares, the fair value
thereof.
(b) The demand shall state the number and class of the shares owned by the
dissenting shareholder.
(c) Any shareholder failing to make demand within the ten-day period shall
be bound by the terms of the merger or consolidation.
(d) Within ten (10) days after the merger or consolidation is effected, the
surviving or new corporation, as the case may be, shall give notice to each
dissenting shareholder who has made demand as herein provided for the payment
of the fair value of his shares.
(e)(1) If within thirty (30) days after the date on which the merger or
consolidation was effected the value of such shares is agreed upon between
the dissenting shareholder and the surviving or new corporation, payment
shall be made within ninety (90) days after the date on which such merger or
consolidation was effected, upon the surrender of his certificate or
certificates representing those shares.
(2) Upon payment of the agreed value, the dissenting shareholder shall
cease to have any interest in those shares or in the corporation.
(f)(1) If within the period of thirty (30) days the shareholder and the
surviving or new corporation do not so agree, then the dissenting
shareholder, within sixty (60) days after the expiration of the thirty-day
period, may file a petition in the circuit court of the county in which the
registered office of the surviving corporation is located, if the surviving
corporation is a domestic corporation or in the Pulaski County Circuit Court
if the surviving corporation is a foreign corporation, asking for a finding
and determination of the fair value of the shares and shall be entitled to
judgment against the surviving or new corporation for the amount of the fair
value as of the day prior to the date on which the vote was taken approving
such merger or consolidation, together with interest thereon to the date of
the judgment.
(2) The judgment shall be payable only upon and simultaneously with the
surrender to the surviving or new corporation of the certificate or
certificates representing the shares.
(3) Upon payment of the judgment, the dissenting shareholder shall cease to
have any interest in the shares or in the surviving or new corporation.
(4) Unless the dissenting shareholder files the petition within the time
herein limited, the shareholder and all persons claiming under him shall be
bound by the terms of the merger or consolidation.
(g) Shares acquired by the surviving or new corporation pursuant to the
payment of the agreed value thereof or to payment of the judgment entered, as
in this section provided, may be held and disposed of by the corporation as
in the case of other treasury shares.
(h) The provisions of this section shall not apply to a merger if, on the
date of the filing of the articles of merger, the surviving corporation is
the owner of all the outstanding shares of the other domestic or foreign
corporations that are parties to the merger.
HISTORY. Acts 1965, No. 576, 76; A.S.A. 1947, 64-707.
Annex III
RIGHT TO DISSENT AND OBTAIN PAYMENT FOR SHARES
4-27-1301. Definitions.
In this subchapter:
1. "Corporation" means the issuer of the shares held by a dissenter before
the corporate action, or the surviving or acquiring corporation by merger or
share exchange of that issuer;
2. "Dissenter" means a shareholder who is entitled to dissent from
corporate action under 4-27-1302 and who exercises that right when and in the
manner required by 4-27-1320 - 4-27-1328;
3. "Fair value", with respect to a dissenter's shares, means the value of
the shares immediately before the effectuation of the corporate action to
which the dissenter objects, excluding any appreciation or depreciation in
anticipation of the corporate action unless exclusion would be inequitable;
4. "Interest" means interest from the effective date of the corporate
action until the date of payment, at the average rate currently paid by the
corporation on its principal bank loans or, if none, at a rate that is fair
and equitable under all the circumstances;
5. "Record shareholder" means the person in whose name shares are
registered in the records of a corporation or the beneficial owner of shares
to the extent of the rights granted by a nominee certificate on file with a
corporation;
6. "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder
7. "Shareholder" means the record shareholder or the beneficial
shareholder.
HISTORY. Acts 1987, No. 958, 1987 (1st Ex. Sess.), No. 11, 10.
A.S.A. 1947, 64-1301.
4-27-1302. Right of dissent.
A. A shareholder is entitled to dissent from and obtain payment of the fair
value of his shares in the event of any of the following corporate actions:
1. Consummation of a plan of merger to which the corporation is a party:
(i) If shareholder approval is required for the merger by
4-27-1103 or the articles of incorporation and the shareholder is
entitled to vote on the merger; or
(ii) If the corporation is a subsidiary that is merged with its parent
under 4-27-1104;
2. Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;
3. Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all
of the net proceeds of the sale will be distributed to the shareholders
within one (1) year after the date of sale;
4. An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the shares;
(ii) Creates, alters, or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares;
(iii) Alters or abolishes a preemptive right of the holder of the shares
to acquire shares or other securities;
(iv) Excludes or limits the right of the shares to vote on any matter,
or to cumulate votes, other than a limitation by dilution through issuance of
shares or other securities with similar voting rights; or
(v) Reduces the number of shares owned by the shareholder to a fraction
of a share if the fractional share so created is to be acquired for cash
under 4-27-604; or
5. Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
B. A shareholder entitled to dissent and obtain payment for his shares
under this subchapter may not challenge the corporate action creating his
entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.
HISTORY. Acts 1987, No. 958, 1987 (1st Ex. Sess.), No. 11, 11.
A.S.A. 1947, 64-1302.
4-27-1303. Dissent by nominees and beneficial owners.
A. A record shareholder may assert dissenters' rights as to fewer than all
the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one (1) person and notifies the corporation
in writing of the name and address of each person on whose behalf he asserts
dissenters' rights. The rights of a partial dissenter under this subsection
are determined as if the shares as to which he dissents and his other shares
were registered in the names of different shareholders.
B. A beneficial shareholder may assert dissenters' rights as to shares held
on his behalf only if:
1. He submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
2. He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1303.
4-27-1320. Notice of dissenters' rights.
A. If proposed corporate action creating dissenters' rights under 4-27-1302
is submitted to a vote at a shareholders' meeting, the meeting notice must
state that shareholders are or may be entitled to assert dissenters' rights
under this chapter and be accompanied by a copy of this chapter.
B. If corporate action creating dissenters' rights under 4-27-1302 is taken
without a vote of shareholders, the corporation shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken
and send them the dissenters' notice described in 4-27-1322.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1304.
4-27-1321. Notice of intent to demand payment.
A. If proposed corporate action creating dissenters' rights under 4-27-1302
is submitted to a vote at a shareholders' meeting, a shareholder who wishes
to assert dissenters' rights:
(1) Must deliver to the corporation before the vote is taken written notice
of his intent to demand payment for his shares if the proposed action is
effectuated; and
(2) Must not vote his shares in favor of the proposed action.
B. A shareholder who does not satisfy the requirements of subsection A. of
this section is not entitled to payment for his shares under this subchapter.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1305.
4-27-1322. Dissenters' notice.
A. If proposed corporate action creating dissenters' rights under 4-27-1302
is authorized at a shareholders' meeting, the corporation shall deliver a
written dissenters' notice to all shareholders who satisfied the requirements
of 4-27-1321.
B. The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:
1. State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
2. Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
3. Supply a form for demanding payment that includes the date of the first
announcement to news media or to shareholders of the terms of the proposed
corporate action and requires that the person asserting dissenters' rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
4. Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty (30) nor more than sixty (60) days
after the date the notice required by subsection A. of this section is
delivered; and
5. Be accompanied by a copy of this subchapter.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1306.
4-27-1323. Duty to demand payment.
A. A shareholder sent a dissenters' notice described in 4-27-1322 must
demand payment, certify whether he acquired beneficial ownership of the
shares before the date required to be set forth in the dissenters' notice
pursuant to 4-27-1322B.3., and deposit his certificates in accordance with
the terms of the notice.
B. The shareholder who demands payment and deposits his share certificates
under subsection A. of this section retains all other rights of a shareholder
until these rights are cancelled or modified by the taking of the proposed
corporate action.
C. A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice,
is not entitled to payment for his shares under this subchapter.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1307.
4-27-1324. Share restrictions.
A. The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed
corporate action is taken or the restrictions released under 4-27-1326.
B. The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1308.
4-27-1325. Payment.
A. Except as provided in 4-27-1327, as soon as the proposed corporate
action is taken, or upon receipt of a payment demand, the corporation shall
pay each dissenter who complied with 4-27-1323 the amount the corporation
estimates to be the fair value of his shares, plus accrued interest.
B. The payment must be accompanied by:
1. The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen (16) months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for
that year, and the latest available interim financial statements, if any;
2. A statement of the corporation's estimate of the fair value of the
shares;
3. An explanation of how the interest was calculated;
4. A statement of the dissenter's right to demand payment under 4-27-1328;
and
5. A copy of this subchapter.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1309.
4-27-1326. Failure to take action.
A. If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share
certificates, the corporation shall return the deposited certificates and
release the transfer restrictions imposed on uncertificated shares.
B. If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under 4-27-1322 and repeat the payment demand procedure.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1310.
4-27-1327. After-acquired shares.
A. A corporation may elect to withhold payment required by 4-27-1325 from
a dissenter unless he was the beneficial owner of the shares before the date
set forth in the dissenters' notice as the date of the first announcement to
news media or to shareholders of the terms of the proposed corporate action.
B. To the extent the corporation elects to withhold payment under
subsection A. of this section, after taking the proposed corporate action, it
shall estimate the fair value of the shares, plus accrued interest, and shall
pay this amount to each dissenter who agrees to accept it in full
satisfaction of his demand. The corporation shall send with its offer a
statement of its estimate of the fair value of the shares, an explanation of
how the interest was calculated, and a statement of the dissenter's right to
demand payment under 4-27-1328.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1311.
4-27-1328. Procedure if shareholder dissatisfied with payment or
offer.
A. A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment
of his estimate (less any payment under 4-27-1325), or reject the
corporation's offer under 4-27-1327 and demand payment of the fair value of
his shares and interest due, if:
1. The dissenter believes that the amount paid under 4-27-1325 or offered
under 4-27-1327 is less than the fair value of his shares or that the
interest due is incorrectly calculated;
2. The corporation fails to make payment under 4-27-1325 within sixty (60)
days after the date set for demanding payment; or
3. The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within sixty (60) days after the date set
for demanding payment.
B. A dissenter waives his right to demand payment under this section unless
he notifies the corporation of his demand in writing under subsection A. of
this section within thirty (30) days after the corporation made or offered
payment for his shares.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1312.
4-27-1330. Court action.
A. If a demand for payment under 4-27-1328 remains unsettled, the
corporation shall commence a proceeding within sixty (60) days after
receiving the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation does not
commence the proceeding within the sixty-day period, it shall pay each
dissenter whose demand remains unsettled the amount demanded.
B. The corporation shall commence the proceeding in the circuit court of
the county where the corporation's principal office (or, if none in this
state, its registered office) is located. If the corporation is a foreign
corporation without a registered office in this state, it shall commence the
proceeding in the county in this state where the registered office of the
domestic corporation merged with or whose shares were acquired by the foreign
corporation was located.
C. The corporation shall make all dissenters (whether or not residents of
this state) whose demands remain unsettled parties to the proceeding as in an
action against their shares and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
D. The jurisdiction of the court in which the proceeding is commenced under
subsection B. of this section is plenary and exclusive. The court may appoint
one (1) or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers
described in the order appointing them, or in any amendment to it. The
dissenters are entitled to the same discovery rights as parties in other
civil proceedings.
E. Each dissenter made a party to the proceeding is entitled to judgment:
(1) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation; or
(2) For the fair value, plus accrued interest, of his after-acquired shares
for which the corporation elected to withhold payment under 4-27-1327.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1313.
4-27-1331. Court costs and counsel fees.
A. The court in an appraisal proceeding commenced under 4-27-1330 shall
determine all costs of the proceeding, including the reasonable compensation
and expenses of appraisers appointed by the court. The court shall assess the
costs against the corporation, except that the court may assess costs against
all or some of the dissenters, in amounts the court finds equitable, to the
extent the court finds the dissenters acted arbitrarily, vexatiously, or not
in good faith in demanding payment under 4-27-1328.
B. The court may also assess the fees and expenses of counsel and experts
for the respective parties, in amounts the court finds equitable:
1. Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of 4-27-1320 - 4-27-1328; or
2. Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously, or not in good faith with
respect to the rights provided by this chapter.
C. If the court finds that the services of counsel for any dissenter were
of substantial benefit to other dissenters similarly situated, and that the
fees for those services should not be assessed against the corporation, the
court may award to these counsel reasonable fees to be paid out of the
amounts awarded the dissenters who were benefited.
HISTORY. Acts 1987, No. 958, A.S.A. 1947, 64-1314.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Arkansas Code Annotated Section 4-27-850 ("Arkansas Code") provides as follows:
SECTION 4-27-850 - INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS - INSURANCE.
A. A corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, or investigative (other
than an action by or in the right of the corporation) by reason of
the fact that he is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit, or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
B. A corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact
that he is or was a director, officer, employee, or agent of the corporation,
or is or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made in
respect of any claim, issue, or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent
that the court of chancery or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
of chancery or such other court shall deem proper.
C. To the extent that a director, officer, employee,
or agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to
in subsections A. and B. of this section, or in defense of any claim, issue,
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
D. Any indemnification under subsections A. and B.
of this section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in subsections A. and B. of this section. Such determination shall be made:
(1) By the board of directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit, or
proceeding; or
(2) If such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion; or
(3) By the stockholders.
E. Expenses incurred by an officer or director in
defending a civil or criminal action, suit, or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit, or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the corporation as authorized in this
section. Such expenses incurred by other employees and agents may be so paid
upon such terms and conditions, if any, as the board of directors deems
appropriate.
F. The indemnification and advancement of expenses
provided by or granted pursuant to the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors, or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office.
G. A corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the provisions
of this section.
H. For purposes of this section, references to "the
corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee, or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, shall
stand in the same position under the provisions of this section with respect
to the resulting or surviving corporation as he would have with respect to
such constituent corporation if its separate existence had continued.
I. For purposes of this section, references to
"other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at
the request of the corporation" shall include any service as a director,
officer, employee, or agent of the corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect
to an employee benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests
of the corporation" as referred to in this section.
J. The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee, or agent and shall inure to the benefit of
the heirs, executors and administrators of such person.
Further, the Arkansas Code Section 4-27-202 provides as follows:
SECTION 4-27-202. ARTICLES OF INCORPORATION.
A. The articles of incorporation must set forth:
* * *
B. The articles of incorporation may set forth:
* * *
3. A provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, provided that
such provision shall not eliminate or limit the liability of a director:
(i) For any breach of the director's duty of loyalty to the
corporation or its stockholders;
(ii) For acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
(iii) Under Section 4-27-833 of this chapter;
(iv) For any transaction from which the director derived an
improper personal benefit; or
(v) For any action, omission, transaction, or breach of a
director's duty creating any third-party liability to any person or
entity other than the corporation or stockholder.
No such provision shall eliminate or limit the liability of a
director for any act or omission occurring prior to the date when
such provision becomes effective. All references in this subsection to a
director shall also be deemed to refer to a member of the governing body of
a corporation which is not authorized to issue capital stock.
THE REGISTRANT'S ARTICLES OF INCORPORATION AND BYLAWS PROVISIONS
The Registrant's Articles of Incorporation and Bylaws extend
indemnification rights to the fullest extent authorized by the Arkansas Code
to its directors and officers. In addition, the Articles of Incorporation
and Bylaws permit the Registrant to maintain insurance to protect itself and
any of its directors, officers or representatives against any liability
assessed against such person and incurred in any such capacity or arising out
of such status whether or not the Registrant would have the power to
indemnify such person under the Arkansas Code.
The Registrant's Articles of Incorporation were amended on May
10, 1994, to include the following provision, in reliance on Section 4-27-202
of the Arkansas Code:
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.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
Exhibit
Number Description
- ------ -----------
2 Form of capital note, dated June 1, 1987
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
4 Agreement and Plan of Merger by and between
the Company and Dumas Bancshares, Inc.,
dated November 15, 1994. (Included as Annex
I to Part I of the Registration Statement).
5 Opinion of Ramsay, Bridgforth, Harrelson
& Starling. (To be filed by amendment.)
8 Opinion of Ramsay, Bridgforth, Harrelson
& Starling.
10(a) Master Agreement, dated June 17, 1991,
between Comdisco Disaster Recovery
Services, Inc. and Simmons First
National Bank (the "Bank") (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(i) Lease Agreement, dated August 30, 1967,
between B & S Building Industries, Inc.,
as Lessor, and the Bank, as lessee
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(ii) Agreement of Lease, dated December 14,
1960, between Jefferson Square, Inc.,
as lessor, and the Bank, as lessee
(Incorporated herein by reference to
the Registrant's annual report on Form
10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(iii) Sublease Agreement; dated March 12, 1975,
between the Bank, as lessee, and B. R.
Henry, Trustee, as lessor (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(iv) Lease Agreement, dated April 23, 1980,
between Dialmore Enterprises, Inc., as
lessor, and the Bank, as lessee
(Incorporated herein by reference to
the Registrant's annual report on Form
10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(v) Option/Lease, dated September 30, 1975,
between John Terry and Margaret Terry,
d/b/a T & T Properties, as lessors, and
the Bank, as lessee, and amendment thereto
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(vi) Lease Agreement, dated July 23, 1979,
between Cooper Communities, Inc., as
lessor, and the Bank, as lessee, and
related memorandum of lease and addendum
thereto (Incorporated herein by reference
to the Registrant's annual report on
Form 10-K for the year ended December
31, 1992, as filed on March 31, 1993).
10(b)(vii) Shopping Center Lease, dated May 5, 1971,
between The Mall, as landlord, and United
Savings Association to which the Bank has
assumed tenant's rights and obligations
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(viii) Indenture of Lease, dated April 29, 1992,
between National Property Analysts Master
Limited Partnership, as landlord, and the
Bank, as tenant (Incorporated herein by
reference to the Registrant's annual report
on Form 10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(ix) Lease Agreement, dated January 29, 1988,
between Adah Baim Sonnenshein, Lula H.
Baim, Eloise Baim Sherman, et al, as
lessors, and the Bank, as lessee
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992, as
filed on March 31, 1993).
10(b)(x) Lease Agreement, dated February 1, 1965,
between Jack Eisenkramer and Gene
Eisenkramer, as lessors, and the Bank,
as lessee (Incorporated herein by
reference to the Registrant's annual
report on Form 10-K for the year ended
December 31, 1992, as filed on
March 31, 1993).
10(b)(xi) Lease Agreement, dated December 21, 1956,
between Minnie Eisenkramer, as lessor,
and the Bank, as lessee (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(xii) Lease Agreement, dated February 12, 1968,
between J. G. Smith, Jay W. Dickey, Trustee,
et al and McNew, Inc., as lessors, and the
Bank, as lessee (Incorporated herein by
reference to the Registrant's annual report
on Form 10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(xiii) Extensions of Lease Agreement between the
Company, as lessor, and the Bank, as
lessee, relating to extensions of term of
Lease Agreement dated March 16, 1973
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(xiv) Lease Agreement, dated September 4, 1990,
between Lillian C. Roberts, Trustee of
Lillian C. Roberts Revocable Trust dated
September 29, 1981; and Dorothye C.
Abels, Trustee of the Dorothye C. Abels
Revocable Trust, dated April 26, 1982
d/b/a Robel Investment Co., as lessors,
and the Bank, as lessee (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(xv) Lease Agreement, dated September 20, 1991,
between Simmons Center Partnership, as
landlord, and the Bank, as tenant
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(c)(i) Incentive and Nonqualified Stock Option
Plan of the Company (Incorporated herein
by reference to the Registrant's annual
report on Form 10-K for the year ended
December 31, 1992, as filed on March
31, 1993).
10(c)(ii) Amended and Restated Deferred Compensation
Agreement by and between the Simmons First
Bank of Jonesboro and Donald Stone.
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(c)(iii) Amended and Restated Deferred Compensation
Agreement by and between the Bank and J.
Thomas May. (Incorporated herein by reference
to the Registrant's annual report on Form
10-K for the year ended December 31, 1992,
as filed on March 31, 1993).
10(c)(iv) Amended and Restated Deferred Compensation
Agreement by and between the Bank and W. E.
Ayres. (Incorporated herein by reference to
the Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(d)(i) Note payable to The Mutual Benefit Life
Insurance Company, dated July 23, 1979,
as assumed by the Company (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31. 1993).
10(d)(ii) Mortgage, dated July 23, 1979, to which
the Company has assumed grantor's rights
and obligations to The Mutual Benefit
Life Insurance Company, as mortgagee
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
13(a) Annual Report on Form 10-K for the year
ended December 31, 1993. (Incorporated
herein by reference, as filed on
March 28, 1993).
13(b) Quarterly report on Form 10-Q for the quarter
ended September 30, 1994. ( Incorporated by
reference, as filed on November 14, 1994.)
15 Form of Letter re: unaudited interim
financial information.
23(a) Consent of Baird, Kurtz & Dobson,
independent public accountants.
23(b) Consent of Kemp & Company,
independent public accountants.
*23(c) Consent of Ramsay, Bridgforth, Harrelson,
& Starling, will be included in that firm's
opinion filed as Exhibit 5 hereto.
*To be supplied or filed by amendment.
(b) FINANCIAL STATEMENT SCHEDULES. Pursuant to the requirements of Article
IX of Regulation S-X, no finanacial schedules are requyired.
ITEM 22. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) The undersigned registrant hereby undertakes as follows that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
(4) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (3) immediately preceding, or (ii) that purports to
meet the requirements of section 10(a)(3) of the Act and is used in
connection with an offering of securities subject to Rule 415 (Section 230.415
of this chapter), will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and that,
for purposes of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(5) The undersigned registrant undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(6) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-4 and has duly caused this Registration
Statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Pine Bluff, State of Arkansas, on
the 26th day of January, 1995.
SIMMONS FIRST NATIONAL CORPORATION,
By: /s/ J. Thomas May
President and Chief Executive
Officer
By: /s/ Barry L. Crow
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints J. Thomas May and Barry L. Crow, and each of
them, his true and lawful attorney-in-fact and agent, with full power of
substitution and re-substitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorney-in-fact and agent, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might
or could do in person hereby ratifying and conforming all that said
attorneys-in-fact and agents or any one of them, or their or his substitutes
or substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement or amendment thereto has been signed by the following persons in
the capacities and on the dates indicated.
Signature Title Date
- ---------- ------ ----
/s/ W. E. Ayres
____________________
W. E. Ayres Chairman 1/23/95
/s/ J. Thomas May
____________________
J. Thomas May Director and Chief 1/23/95
Executive Officer
/s/ Ben V. Floriani
____________________
Ben V. Floriani Director 1/23/95
/s/ C. Ramon Greenwood
____________________
C. Ramon Greenwood Director 1/23/95
/s/ Paul M. Henson
____________________
Paul M. Henson Director 1/23/95
/s/ David R. Perdue
____________________
David R. Perdue Director 1/23/95
/s/ Harry L. Ryburn
____________________
Harry L. Ryburn Director 1/23/95
/s/ Donald W. Stone
____________________
Donald W. Stone Director 1/23/95
INDEX TO EXHIBITS
Exhibit
Number Description
- ------ ---------------
2 Form of capital note, dated June 1, 1987
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
4 Agreement and Plan of Merger by and between
the Company and Dumas Bancshares, Inc.,
dated November 15, 1994. (Included as Annex
I to Part I of the Registration Statement).
5 Opinion of Ramsay, Bridgforth, Harrelson
& Starling. (To be filed by Amendment.)
8 Opinion of Ramsay, Bridgforth, Harrelson
& Starling.
10(a) Master Agreement, dated June 17, 1991,
between Comdisco Disaster Recovery
Services, Inc. and Simmons First
National Bank (the "Bank") (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(i) Lease Agreement, dated August 30, 1967,
between B & S Building Industries, Inc.,
as Lessor, and the Bank, as lessee
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(ii) Agreement of Lease, dated December 14,
1960, between Jefferson Square, Inc.,
as lessor, and the Bank, as lessee
(Incorporated herein by reference to
the Registrant's annual report on Form
10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(iii) Sublease Agreement; dated March 12, 1975,
between the Bank, as lessee, and B. R.
Henry, Trustee, as lessor (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(iv) Lease Agreement, dated April 23, 1980,
between Dialmore Enterprises, Inc., as
lessor, and the Bank, as lessee
(Incorporated herein by reference to
the Registrant's annual report on Form
10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(v) Option/Lease, dated September 30, 1975,
between John Terry and Margaret Terry,
d/b/a T & T Properties, as lessors, and
the Bank, as lessee, and amendment thereto
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(vi) Lease Agreement, dated July 23, 1979,
between Cooper Communities, Inc., as
lessor, and the Bank, as lessee, and
related memorandum of lease and addendum
thereto (Incorporated herein by reference
to the Registrant's annual report on
Form 10-K for the year ended December
31, 1992, as filed on March 31, 1993).
10(b)(vii) Shopping Center Lease, dated May 5, 1971,
between The Mall, as landlord, and United
Savings Association to which the Bank has
assumed tenant's rights and obligations
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(viii) Indenture of Lease, dated April 29, 1992,
between National Property Analysts Master
Limited Partnership, as landlord, and the
Bank, as tenant (Incorporated herein by
reference to the Registrant's armual report
on Form 10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(ix) Lease Agreement, dated January 29, 1988,
between Adah Baim Sonnenshein, Lula H.
Baim, Eloise Baim Sherman, et al, as
lessors, and the Bank, as lessee
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992, as
filed on March 31, 1993).
10(b)(x) Lease Agreement, dated February 1, 1965,
between Jack Eisenkramer and Gene
Eisenkramer, as lessors, and the Bank,
as lessee (Incorporated herein by
reference to the Registrant's annual
report on Form 10-K for the year ended
December 31, 1992, as filed on
March 31, 1993).
10(b)(xi) Lease Agreement, dated December 21, 1956,
between Minnie Eisenkramer, as lessor,
and the Bank, as lessee (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(xii) Lease Agreement, dated February 12, 1968,
between J. G. Smith, Jay W. Dickey, Trustee,
et al and McNew, Inc., as lessors, and the
Bank, as lessee (Incorporated herein by
reference to the Registrant's annual report
on Form 10-K for the year ended December 31,
1992, as filed on March 31, 1993).
10(b)(xiii) Extensions of Lease Agreement between the
Company, as lessor, and the Bank, as
lessee, relating to extensions of term of
Lease Agreement dated March 16, 1973
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(b)(xiv) Lease Agreement, dated September 4, 1990,
between Lillian C. Roberts, Trustee of
Lillian C. Roberts Revocable Trust dated
September 29, 1981; and Dorothye C.
Abels, Trustee of the Dorothye C. Abels
Revocable Trust, dated April 26, 1982
d/b/a Robel Investment Co., as lessors,
and the Bank, as lessee (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31, 1993).
10(b)(xv) Lease Agreement, dated September 20, 1991,
between Simmons Center Partnership, as
landlord, and the Bank, as tenant
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(c)(i) Incentive and Nonqualified Stock Option
Plan of the Company (Incorporated herein
by reference to the Registrant's annual
report on Form 10-K for the year ended
December 31, 1992, as filed on March
31, 1993).
10(c)(ii) Amended and Restated Deferred Compensation
Agreement by and between the Simmons First
Bank of Jonesboro and Donald Stone.
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(c)(iii) Amended and Restated Deferred Compensation
Agreement by and between the Bank and J.
Thomas May. (Incorporated herein by reference
to the Registrant's annual report on Form
10-K for the year ended December 31, 1992,
as filed on March 31, 1993).
10(c)(iv) Amended and Restated Deferred Compensation
Agreement by and between the Bank and W. E.
Ayres. (Incorporated herein by reference to
the Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
10(d)(i) Note payable to The Mutual Benefit Life
Insurance Company, dated July 23, 1979,
as assumed by the Company (Incorporated
herein by reference to the Registrant's
annual report on Form 10-K for the year
ended December 31, 1992, as filed on
March 31. 1993).
10(d)(ii) Mortgage, dated July 23, 1979, to which
the Company has assumed grantor's rights
and obligations to The Mutual Benefit
Life Insurance Company, as mortgagee
(Incorporated herein by reference to the
Registrant's annual report on Form 10-K
for the year ended December 31, 1992,
as filed on March 31, 1993).
13(a) Annual Report on Form 10-K for the year
ended December 31, 1993. (Incorporated
herein by reference, as filed on
March 28, 1993).
13(b) Quarterly report on Form 10-Q for the quarter
ended September 30, 1994 (Incorporated by
reference, as filed November 14, 1994.)
15 Form of Letter re: unaudited interim
financial information.
23(a) Consent of Baird, Kurtz & Dobson,
independent public accountants.
23(b) Consent of Kemp & Company,
independent public accountants.
23(c) Consent of Ramsay, Bridgforth, Harrelson,
& Starling, will be included in that firm's
opinion filed as Exhibit 5 hereto.
EXHIBIT 8
RAMSAY, BRIDGFORTH, HARRELSON AND STARLING
ATTORNEYS AT LAW
(FOUNDED AS COLEMAN & GANTT IN 1911)
11TH FLOOR SIMMONS FIRST NATIONAL BUILDING
501 MAIN STREET
P. O. BOX 8509
PINE BLUFF, ARKANSAS 71611
TELEPHONE: (501) 535-9000
January 23, 1995
Simmons First National Corporation
P. O. Box 7009
Pie Bluff, Arkansas 71611
Dumas Bancshares, Inc.
P. O. Box 915
Dumas, Arkansas 71639
Re: Simmons First National Corporation Registration
Statement on Form S-4
Gentlemen:
We have acted as counsel to Simmons First National Corporation, an
Arkansas corporation ("Simmons"), in connection with the proposed
merger (the "Merger") of Dumas Bancshares, Inc., an Arkansas
corporation ("DBI") with and into Simmons, pursuant to the terms of the
Agreement and Plan of Merger, dated as of November 15, 1994 (the
"Agreement") by and between Simmons and DBI as described in the
Registration Statement on Form S-4 to be filed by Simmons with the
Securities and Exchange Commission (the "Registration Statement"). This
opinion is being rendered pursuant to the requirements of Item 21(a) of
Form S-4 under the Securities Act of 1933, as amended.
In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Agreement, (ii) the Registration Statement and
(iii) such other documents as we have deemed necessary or appropriate
in order to enable us to render the opinions below. In our examination,
we have assumed the genuineness of all signatures, the legal capacity
of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. This opinion is subject
to the receipt by counsel prior to the Effective Date of certain
written representations and covenants of Simmons and DBI.
Based upon and subject to the foregoing, the discussion contained
in the prospectus included as part of the Registration Statement (the
"Prospectus") under the caption "Certain Federal Income Tax
Consequences", except as otherwise indicated, expresses our opinion as
to the material Federal income tax consequences applicable to holders
of DBI Common Stock. You should be aware, however, that the discussion
under the caption "Certain Federal Income Tax Consequences" in the
Prospectus represents our conclusions as to the application of existing
law to the instant transactions. There can be no assurance that
contrary positions may not be taken by the Internal Revenue Service.
This opinion is furnished to you solely for use in connection with
the Registration Statement. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement. We also consent to
the references to Ramsay, Bridgforth, Harrelson & Starling under the
heading "Certain Federal Income Tax Consequences" in the Registration
Statement and the Prospectus.
Very truly yours,
RAMSAY, BRIDGFORTH, HARRELSON
& STARLING
/s/ Patrick A. Burrow
Patrick A. Burrow
PAB/bp
EXHIBIT 15
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
We are aware that SIMMONS FIRST NATIONAL CORPORATION has
incorporated by reference from Form 10-Q our report dated
November 3, 1994 (issued pursuant to the provisions of Statement
on Auditing Standards Nos. 36 and 42) in the Registration Statement on
Form S-4. We are also aware of our responsibilities under the
Securities Act of 1933.
/s/ Baird, Kurtz and Dobson
Pine Bluff, Arkansas
January 20, 1995
EXHIBIT 23(a)
Independent Accountant's Consent
We consent to the use of our report dated January 28, 1994, on the
consolidated financial statements of SIMMONS FIRST NATIONAL CORPORATION
as of December 31, 1993 and 1992, and for each of the three years in
the period ended December 31, 1993, incorporated by reference in
Registration Statement on Form S-4 from Simmons First National
Corporation 1993 Form 10-K. We also consent to the reference to our
firm under the caption "Experts" appearing in Registration Statement.
/s/ Baird, Kurtz and Dobson
Pine Bluff, Arkansas
January 20, 1995
EXHIBIT 23(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Selected
Financial Data" and "Experts" and to the use of our report on the
consolidated financial statements of Dumas Bancshares, Inc. and
Subsidiaries dated October 7, 1994, in the Registration Statement on
Form S-4 and related Prospectus of Simmons First National Corporation
for the registration of 137,255 shares of common stock of Simmons First
National Corporation.
/s/ KEMP & COMPANY
Little Rock, Arkansas
January 20, 1995
