-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, hPVS//u5egSKc/4coM6tANQzpFr9gwIzjV/LitesMDTJ2BEYqxuZC2DwCjMB5DqC w0IF90DI719Rkv2AxCEOXw== 0000950109-94-001538.txt : 19940816 0000950109-94-001538.hdr.sgml : 19940816 ACCESSION NUMBER: 0000950109-94-001538 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMSOUTH BANCORPORATION CENTRAL INDEX KEY: 0000003133 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 630591257 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07476 FILM NUMBER: 94544221 BUSINESS ADDRESS: STREET 1: 1400 AMSOUTH SONAT TOWER STREET 2: P.O. BOX 11007 CITY: BIRMINGHAM STATE: AL ZIP: 35288 BUSINESS PHONE: 2053207151 MAIL ADDRESS: STREET 1: 1400 AMSOUTH SONAT TOWER CITY: BRIMINGHAM STATE: AL ZIP: 35288 FORMER COMPANY: FORMER CONFORMED NAME: ALABAMA BANCORPORATION DATE OF NAME CHANGE: 19810527 FORMER COMPANY: FORMER CONFORMED NAME: FIRST BIRMINGHAM CORP DATE OF NAME CHANGE: 19741107 10-Q 1 QUARTERLY REPORT - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1994 COMMISSION FILE NUMBER 1-7476 AMSOUTH BANCORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 63-0591257 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 1400 AMSOUTH--SONAT TOWER BIRMINGHAM, ALABAMA 35203 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (205) 320-7151 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ---- As of August 8, 1994 AmSouth Bancorporation had 58,953,921 shares of common stock outstanding. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- AMSOUTH BANCORPORATION FORM 10-Q INDEX PAGE ---- Part I. Financial Information Item 1. Financial Statements (Unaudited) Consolidated statement of condition--June 30, 1994 and December 31, 1993.................................................................. 1 Consolidated statement of earnings--Six months and three months ended June 30, 1994 and 1993................................................ 2 Consolidated statement of shareholders' equity--Six months ended June 30, 1994.............................................................. 3 Consolidated statement of cash flows--Six months ended June 30, 1994 and 1993.............................................................. 4 Review Report of Independent Accountants............................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................... 8 Part II. Other Information Item 5. Other Information................................................ 18 Item 6. Exhibits and Reports on Form 8-K................................. 18 Signatures................................................................. 20 Exhibit Index.............................................................. 21 PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CONDITION (UNAUDITED)
JUNE 30 DECEMBER 31 1994 1993 ----------- ----------- (IN THOUSANDS) ASSETS Cash and due from banks............................. $ 860,654 $ 614,698 Federal funds sold and securities purchased under agreements to resell............................... 36,504 171,952 Trading securities.................................. 13,202 94,844 Available-for-sale securities....................... 1,030,512 1,293,989 Held-to-maturity securities (market value of $3,419,795 and $1,874,587 respectively)............ 3,478,115 1,823,317 Mortgage loans held for sale........................ 181,506 335,435 Loans............................................... 10,659,374 8,611,708 Less: Allowance for loan losses..................... 164,746 131,510 Unearned income................................... 79,010 71,296 ----------- ----------- Net loans......................................... 10,415,618 8,408,902 Premises and equipment, net......................... 267,060 234,155 Customers' acceptance liability..................... 3,846 6,264 Accrued interest receivable and other assets........ 1,050,388 486,065 ----------- ----------- $17,337,405 $13,469,621 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Deposits and interest-bearing liabilities: Deposits: Noninterest-bearing demand......................... $ 1,891,539 $ 1,747,694 Interest-bearing demand............................ 4,002,525 3,484,812 Savings............................................ 968,994 866,977 Time............................................... 4,585,741 3,520,768 Certificates of deposit of $100,000 or more........ 770,156 742,738 ----------- ----------- Total deposits.................................... 12,218,955 10,362,989 Federal funds purchased and securities sold under agreements to repurchase.......................... 2,010,966 793,177 Other borrowed funds............................... 964,950 667,318 Long-term debt..................................... 521,677 173,142 ----------- ----------- Total deposits and interest-bearing liabilities... 15,716,548 11,996,626 Acceptances outstanding............................. 3,846 6,264 Accrued expenses and other liabilities.............. 289,675 324,006 ----------- ----------- Total liabilities................................. 16,010,069 12,326,896 ----------- ----------- Shareholders' equity: Preferred stock--no par value: Authorized--2,000,000 shares; Issued and outstanding--none....................... -0- -0- Common stock--par value $1 a share: Authorized--200,000,000 shares Issued--60,423,571 shares and 54,534,691 shares, respectively...................................... 60,424 54,535 Capital surplus.................................... 605,829 469,842 Retained earnings.................................. 699,898 645,465 Cost of common stock in treasury--1,500,000 shares. (24,173) (24,173) Deferred compensation on restricted stock.......... (4,087) (2,944) Unrealized losses on available-for-sale securities. (10,555) -0- ----------- ----------- Total shareholders' equity........................ 1,327,336 1,142,725 ----------- ----------- $17,337,405 $13,469,621 =========== ===========
See notes to consolidated financial statements. 1 AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (UNAUDITED)
SIX MONTHS THREE MONTHS ENDED JUNE 30 ENDED JUNE 30 ----------------- ------------------ 1994 1993 1994 1993 -------- -------- -------- -------- (IN THOUSANDS EXCEPT PER SHARE DATA) REVENUE FROM EARNING ASSETS Loans................................... $347,484 $298,994 $179,330 $153,144 Securities: Trading securities..................... 1,511 778 601 423 Available-for-sale securities.......... 25,918 13,918 11,333 6,048 Held-to-maturity securities............ 73,903 91,509 42,030 46,308 -------- -------- -------- -------- Total securities..................... 101,332 106,205 53,964 52,779 Mortgage loans held for sale............ 7,098 6,207 3,484 3,319 Federal funds sold and securities pur- chased under agreements to resell...... 1,437 3,349 533 1,627 -------- -------- -------- -------- Total revenue from earning assets.... 457,351 414,755 237,311 210,869 INTEREST EXPENSE Interest-bearing demand deposits........ 49,185 42,672 26,505 21,320 Savings deposits........................ 11,246 10,303 5,647 5,334 Time deposits........................... 74,967 71,246 38,133 36,624 Certificates of deposit of $100,000 or more................................... 14,226 15,522 7,220 8,093 Federal funds purchased and securities sold under agreements to repurchase.... 20,578 15,778 13,210 7,869 Other borrowed funds.................... 8,670 6,606 5,591 3,716 Long-term debt.......................... 7,855 5,814 4,645 2,768 -------- -------- -------- -------- Total interest expense............... 186,727 167,941 100,951 85,724 -------- -------- -------- -------- GROSS INTEREST MARGIN................... 270,624 246,814 136,360 125,145 Provision for loan losses............... 5,181 15,519 2,974 8,035 -------- -------- -------- -------- NET INTEREST MARGIN..................... 265,443 231,295 133,386 117,110 NONINTEREST REVENUES Service charges on deposit accounts..... 32,564 29,125 16,420 14,858 Trust income............................ 23,434 20,820 12,041 10,453 Investment services income.............. 7,375 11,143 3,207 5,435 Mortgage administration fees............ 9,960 8,735 5,137 4,226 Investment securities gains............. 228 1,164 189 184 Other operating revenues................ 22,211 25,345 10,347 11,818 -------- -------- -------- -------- Total noninterest revenues........... 95,772 96,332 47,341 46,974 NONINTEREST EXPENSES Salaries and employee benefits.......... 110,393 101,849 54,630 51,443 Net occupancy expense................... 21,653 17,952 10,985 8,508 Equipment expense....................... 19,719 18,329 9,428 9,306 FDIC premiums........................... 11,230 10,642 5,624 5,389 Foreclosed properties expense........... 211 (145) (15) (1,083) Other operating expenses................ 73,755 63,813 35,661 31,318 -------- -------- -------- -------- Total noninterest expenses........... 236,961 212,440 116,313 104,881 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES.............. 124,254 115,187 64,414 59,203 Income taxes............................ 42,380 37,413 21,514 19,504 -------- -------- -------- -------- NET INCOME........................... $ 81,874 $ 77,774 $ 42,900 $ 39,699 ======== ======== ======== ======== Average common shares outstanding....... 54,558 50,345 54,782 50,965 Earnings per common share............... $ 1.50 $ 1.54 $ 0.78 $ 0.78
See notes to consolidated financial statements. 2 AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED)
UNREALIZED COMMON CAPITAL RETAINED TREASURY DEFERRED LOSSES ON STOCK SURPLUS EARNINGS STOCK COMPENSATION SECURITIES TOTAL ------- -------- -------- -------- ------------ ---------- ---------- (IN THOUSANDS) Balance at January 1, 1994................... $54,535 $469,842 $645,465 $(24,173) $(2,944) $ -0- $1,142,725 Balance at beginning of period for immaterial pooling-of-interests entities............... 1,070 9,192 11,231 -0- -0- -0- 21,493 Net income.............. -0- -0- 81,874 -0- -0- -0- 81,874 Cash dividends declared. -0- -0- (38,672) -0- -0- -0- (38,672) Common stock transac- tions: Employee stock plans... 345 5,432 -0- -0- (1,143) -0- 4,634 Acquisition of Fortune Bancorp, Inc. ........ 4,474 121,363 -0- -0- -0- -0- 125,837 Unrealized losses on available-for-sale securities............. -0- -0- -0- -0- -0- (10,555) (10,555) ------- -------- -------- -------- ------- -------- ---------- Balance at June 30, 1994................... $60,424 $605,829 $699,898 $(24,173) $(4,087) $(10,555) $1,327,336 ======= ======== ======== ======== ======= ======== ==========
See notes to consolidated financial statements. 3 AMSOUTH BANCORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30 ---------------------- 1994 1993 ----------- --------- (IN THOUSANDS) OPERATING ACTIVITIES Net income............................................. $ 81,874 $ 77,774 Adjustments to reconcile net income to net cash pro- vided by operating activities: Provision for loan losses............................ 5,181 15,519 Provision for foreclosed property losses............. (1,077) 97 Depreciation and amortization of premises and equip- ment................................................ 11,883 11,340 Amortization of premiums and discounts on held-to-ma- turity securities and available-for-sale securities. 208 1,221 Net decrease (increase) in mortgage loans held for sale................................................ 170,548 (14,694) Net decrease in trading securities................... 82,490 11,752 Proceeds from maturities and prepayments of avail- able-for-sale securities............................ 145,441 94,578 Proceeds from sales of available-for-sale securities. 569,189 164,028 Purchases of available-for-sale securities........... (256,251) (270,693) Net gains on sales of available-for-sale securities.. (3,812) (1,893) Net gains on calls and sales of held-to-maturity se- curities............................................ (228) (1,164) Net decrease in accrued interest receivable and other assets.............................................. 51,521 320,717 Net decrease in accrued expenses and other liabili- ties................................................ (147,687) (17,844) Net decrease (increase) in deferred income tax bene- fits................................................ 2,362 (5,731) Amortization of intangible assets.................... 8,253 7,112 Other................................................ (10,018) 685 ----------- --------- Net cash provided by operating activities.......... 709,877 392,804 INVESTING ACTIVITIES Proceeds from maturities, prepayments and calls of held-to-maturity securities........................... 199,556 353,459 Proceeds from sales of held-to-maturity securities..... -0- 78,843 Purchases of held-to-maturity securities............... (1,425,977) (511,865) Net decrease (increase) in federal funds sold and securities purchased under agreements to resell....... 148,266 (180,021) Net increase in loans.................................. (465,232) (325,638) Net purchases of premises and equipment................ (12,050) (33,450) Net cash (used) provided by acquisitions............... (109,351) 9,661 ----------- --------- Net cash used by investing activities.............. (1,664,788) (609,011) FINANCING ACTIVITIES Net increase (decrease) in demand deposits and savings accounts.............................................. 79,565 (509,300) Net (decrease) increase in time deposits............... (69,081) 513,830 Net increase (decrease) in federal funds purchased and securities sold under agreements to repurchase........ 738,640 (399,867) Net increase in other borrowed funds................... 332,148 496,969 Issuance of long-term debt............................. 149,084 21,500 Payments for maturing long-term debt................... (2,659) (4,649) Cash dividends paid.................................... (38,712) (26,648) Proceeds from employee stock plans..................... 3,657 2,844 ----------- --------- Net cash provided by financing activities.......... 1,192,642 94,679 ----------- --------- Increase (decrease) in cash and cash equivalents....... 237,731 (121,528) Cash and cash equivalents at beginning of period....... 614,698 589,084 Beginning consolidated cash balances of immaterial pooling-of-interests entities......................... 8,225 4,221 ----------- --------- Cash and cash equivalents at end of period............. $ 860,654 $ 471,777 =========== =========
See notes to consolidated financial statements. 4 AMSOUTH BANCORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1994 AND 1993 General--The consolidated financial statements conform to generally accepted accounting principles and to general industry practices. The accompanying interim financial statements are unaudited; however, in the opinion of management, all adjustments necessary for the fair presentation of the consolidated financial statements have been included. All such adjustments are of a normal recurring nature. The notes included herein should be read in conjunction with the notes to consolidated financial statements included in AmSouth Bancorporation's (AmSouth) 1993 annual report to shareholders on Form 10-K. The consolidated financial statements include the accounts of AmSouth and its subsidiaries. All significant intercompany balances and transactions have been eliminated. Prior year financial statements have been restated to include the accounts of business combinations accounted for as poolings-of-interests unless immaterial. Results of operations of companies purchased are included from the dates of acquisitions. Effective January 1, 1994, AmSouth adopted Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (Statement 115). The Statement generally requires that debt and equity securities that have readily determinable fair values be carried at fair value unless they are intended to be held to maturity. Securities are classified as held-to-maturity and carried at amortized cost only if AmSouth has the positive intent and ability to hold those securities to maturity. If not classified as held-to-maturity, such securities are classified as trading securities or securities available for sale. Net unrealized holding gains or losses for securities available for sale are excluded from earnings and reported as a separate component of shareholders' equity. The adoption of Statement 115 resulted in no material impact on AmSouth's financial condition. The Financial Accounting Standards Board has issued Statement of Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment of a Loan." The statement requires that certain impaired loans be measured based on the present value of the collateral if the loan is collateral dependent. AmSouth anticipates adoption of Statement 114 by January 1, 1995 as required, and the effect on AmSouth's financial condition or results of operations has not been determined. Business Combinations--During the second quarter of 1994, AmSouth completed business combinations with Citizens National Corporation (Citizens), headquartered in Naples, Florida, Parkway Bancorp, Inc. (Parkway), headquartered in Fort Myers, Florida, and First Federal Savings Bank, Calhoun, Georgia (Calhoun), all of which were accounted for using the pooling-of- interests method of accounting. AmSouth issued approximately 1,604,000, 629,000, and 442,000 shares of common stock for all of the outstanding shares of common stock of Citizens, Parkway, and Calhoun, respectively. At March 31, 1994, Citizens, Parkway, and Calhoun had total assets of approximately $313 million, $130 million, and $72 million, respectively. In the aggregate, when the three month period ended March 31, 1994 is restated for these three poolings-of-interests, AmSouth's gross interest margin will be $134.3 million, net income will be $39.0 million and earnings per common share will be $0.72. On June 23, 1994, AmSouth completed the acquisition of Fortune Bancorp, Inc. (Fortune), which was accounted for using the purchase method of accounting, through the issuance of approximately 4,474,000 shares of common stock and payment of approximately $144.6 million in cash. At June 23, 1994, Fortune had total consolidated assets of approximately $2.7 billion including loans net of unearned income of approximately $1.5 billion and securities of approximately $906.7 million. Fortune's total deposits at June 23, 1994 were approximately $1.7 billion. Approximately $167.0 million of goodwill resulting from the acquisition will be amortized on a straight line basis over 20 years. The operating results of the Fortune acquisition are included in AmSouth's consolidated statement of earnings since the date of acquisition. The following unaudited pro forma summary presents the consolidated 5 AMSOUTH BANCORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED) (UNAUDITED) statement of earnings as if the acquisition occurred at the beginning of 1993, after giving effect to certain adjustments, including amortization of goodwill and related income tax effects. These pro forma results have been prepared for comparison purposes only and do not purport to be indications of what would have occurred had the acquisition been made as of the beginning of 1993 or of results which may occur in the future.
SIX MONTHS ENDED JUNE 30 --------------------- 1994 1993 ---------- ---------- (IN THOUSANDS EXCEPT PER SHARE DATA) Gross interest margin.................................. $304,234 $284,055 Net income............................................. 69,280 78,971 Earnings per common share.............................. 1.17 1.44
On March 9, 1994, AmSouth signed an agreement to enter into a business combination with The Tampa Banking Company (Tampa), headquartered in Tampa, Florida, and its subsidiary, The Bank of Tampa. At June 30, 1994, Tampa had total consolidated assets of approximately $218.9 million and total consolidated deposits of approximately $203.7 million. Under the terms of the agreement, AmSouth will issue 1.5592 shares of AmSouth common stock for each of the outstanding shares of Tampa common stock, subject to adjustment. At June 30, 1994, Tampa, had approximately 629,000 shares of common stock outstanding. The transaction will be accounted for using the pooling-of-interests method of accounting. On March 31, 1994, AmSouth signed an agreement to acquire Community Federal Savings Bank (Community), headquartered in Fort Oglethorpe, Georgia. At June 30, 1994, Community had total assets of approximately $102.8 million and total deposits of approximately $88.4 million. Under the terms of the agreement, AmSouth will pay $65.50 for each of the outstanding shares of Community common stock for a total purchase price of approximately $17.2 million. The transaction will be accounted for using the purchase method of accounting. Cash Flows--For the six months ended June 30, 1994 and 1993, AmSouth paid interest of $179,286,000 and $164,731,000, respectively, and income taxes of $54,608,000 and $43,593,000, respectively. Noncash transfers from loans to foreclosed properties for the six months ended June 30, 1994 and 1993 were $19,233,000 and $4,288,000, respectively. For the six months ended June 30, 1994 and 1993, noncash transfers from foreclosed properties to loans were $2,607,000 and none, respectively. Noncash transfers from available-for-sale securities to held-to-maturity securities for the six months ended June 30, 1994 and 1993, were $327,886,000 and none, respectively. Long-Term Debt--On May 19, 1994, AmSouth issued $150.0 million in 7 3/4% Subordinated Notes Due 2004 at a discounted price of 99.389%. The net proceeds to AmSouth after commissions totaled $148.1 million for an effective rate to maturity of 7.94%. The notes will mature on May 15, 2004 and are not redeemable prior to maturity. Substantially all of the proceeds from the notes were used for the Fortune acquisition. 6 (LETTERHEAD OF ERNST & YOUNG) INDEPENDENT ACCOUNTANTS' REVIEW REPORT The Board of Directors AmSouth Bancorporation We have reviewed the accompanying consolidated statement of condition of AmSouth Bancorporation and subsidiaries as of June 30, 1994 and 1993, and the related consolidated statement of earnings for the three-month and six-month periods ended June 30, 1994 and 1993, and the consolidated statement of cash flows for the six-month periods ended June 30, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated statement of condition of AmSouth Bancorporation and subsidiaries as of December 31, 1993, and the related consolidated statements of earnings, shareholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated January 31, 1994, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated statement of conditions as of December 31, 1993, is fairly stated, in all material respects, in relation to the consolidated statement of condition from which it has been derived. /s/ Ernst & Young August 10, 1994 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the six months ended June 30, 1994, AmSouth reported net income of $81.9 million compared to $77.8 million for the same period of 1993. On a per common share basis, AmSouth earned $1.50 compared to $1.54 for the first six months of 1993. AmSouth's net income for the second quarter of 1994 was $42.9 million, compared to $39.7 million for the second quarter of 1993. Earnings per common share was the same for both quarters at $0.78. For the six months ended June 30, 1994 and 1993, the annualized return on average assets (ROA) was 1.20% and 1.30%, respectively. The annualized return on average equity (ROE) for the same periods was 13.85% and 15.79%. For the second quarter, ROA and ROE were 1.22% and 14.31%, respectively, compared to 1.29% and 15.55% for the second quarter of 1993. Net Interest Margin The net interest margin for the six months ended June 30, 1994 totaled $265.4 million compared to $231.3 million for the same period of 1993. An increase in revenue from earning assets and a decrease in provision for loan losses were partially offset by an increase in interest expense. For the second quarter of 1994 and 1993, the net interest margin was $133.4 million and $117.1 million, respectively. The gross interest spread declined 20 basis points for the six months and 22 basis points for the quarter compared to the prior year. The provision for loan losses for the six months and three months ended June 30, 1994 totaled $5.2 million and $3.0 million, respectively, the result of continued good asset quality and an increase in recoveries of loans previously charged off. A 13.8% increase in year-to-date average earning assets combined with a 26 basis point decline in the six month annualized yield resulted in a $42.6 million increase in revenue from earning assets. The primary reason for the increase in average earning assets was a 20.5% increase in average loans net of unearned income. Exclusive of the acquisition of Mid-State Federal Savings Bank (Mid-State) in December 1993 and Fortune in June 1994, which were accounted for as purchases, AmSouth experienced loan growth of approximately 13%. Residential first mortgages represented approximately 36% of this growth. At June 30, 1994, the majority of AmSouth's residential loan portfolio consisted of adjustable rate mortgages; therefore the declining rates on residential first mortgages over the past twelve months contributed to the decrease in average earning asset yields. The year-to-date average balance of total securities increased 3.6% with the six month annualized yield falling from 6.99% to 6.43%. The decline in yields on securities was partially due to the overall decline in the market. Maturing securities and securities sold were partially replaced with lower yielding instruments. Year-to-date average interest-bearing liabilities increased $1.2 billion, funding approximately 79% of the increase in average earning assets. Another 14% of the increase was funded by a $209.3 million increase in average noninterest bearing demand deposits. In general the rates paid on interest- bearing liabilities are declining slower than the decline of yields on earning assets. This slower decline resulted in a 20 basis point decline in both the incremental and gross interest spread for the six months ended June 30, 1994. For the quarter ended June 30, 1994, the incremental and gross interest spreads decreased 25 and 22 basis points, respectively, compared to the same period of the prior year. AmSouth maintains an asset and liability process to control interest rate risk and assist management in maintaining stability in the gross interest margin. In addition, AmSouth utilizes various off-balance sheet instruments such as interest rate swaps, caps and floors to manage interest rate risk. Tables 4 and 5 summarize recent use of interest rate contracts and the maturity of current contracts outstanding. The contracts 8 outstanding at June 30, 1994, are being used to hedge the following balance sheet items for the notional amounts shown:
NOTIONAL AMOUNT ------------- (IN MILLIONS) Securities.................................................... $ 285 Loans......................................................... 650 Federal funds purchased and securities sold under agreements to repurchase................................................ 705 Deposits...................................................... 900 ------ $2,540 ======
In addition, AmSouth had interest rate contracts on behalf of its customers in the amount of $83.2 million at June 30, 1994. For the six months ended June 30, 1994 and 1993, interest rate contracts increased the gross interest margin $1.3 million and $4.6 million, respectively. For the quarter ended June 30, 1994, interest rate contracts had no material impact on the gross interest margin. The impact on the gross interest margin for the second quarter of 1993 was an increase of $2.1 million. Credit Quality AmSouth maintains an allowance for loan losses to absorb potential future losses. AmSouth's management continuously evaluates the adequacy of the allowance for loan losses. As changes in the mix of the loan portfolio occur, including the current increase in residential first mortgage loans which inherently have less risk, management will monitor not only the absolute level of the allowance but also the coverage ratio of nonperforming loans. Table 6 shows a comparison of the types of loans outstanding, nonperforming loans by type, and net charge-offs by type for June 30, 1994 and 1993. The coverage ratio of the allowance for loan losses to nonperforming loans decreased to 161.95% compared to 188.11% at June 30, 1993. A five quarter comparison of the components of nonperforming assets is shown in Table 7. Nonperforming assets as a percentage of loans net of unearned income, foreclosed properties and repossessions increased from 1.22% at June 30, 1993 to 1.30% at June 30, 1994. Without the effect of the Fortune purchase, the level of nonperforming assets remained essentially flat. Table 8 presents a five quarter analysis of the allowance for loan losses. At June 30, 1994, the ratio of allowance for loan losses to loans net of unearned income was 1.56% compared to 1.50% for the prior year. The purchase of Fortune added $35.0 million to the allowance for loan losses. Annualized net charge- offs to average loans net of unearned income for the three months ended June 30, 1994 was 16 basis points compared to 47 basis points for the same period of 1993. Noninterest Revenues and Noninterest Expenses Noninterest revenues remained level for both the six months and quarter ended June 30, 1994 compared to the same periods of 1993. Within the components of noninterest revenues, year-to-date increases occurred in service charges on deposit accounts of $3.4 million, trust income of $2.6 million and gains on securities available-for-sale of $1.9 million. For the second quarter, the largest increases occurred in service changes on deposit accounts and trust income with each increasing $1.6 million over the prior year. The increase in service charges on deposit accounts for both periods was primarily due to an increased volume of analysis fees on corporate accounts and overdraft fees. Portfolio income decreased $3.9 million for the six months and $1.1 million for the quarter primarily due to declines in the securities market in 1994. Year- to-date and second quarter investment services income decreased $3.8 million and $2.2 million, respectively, primarily due to continued interest rate instability in the bond market. Noninterest expenses increased $24.5 million for the six months and $11.4 million for the second quarter compared to 1993. Exclusive of Mid-State, noninterest expenses increased during the same periods, $17.1 million and $7.7 million, respectively. Year-to-date and quarterly salaries and employee benefits increased 9 $8.5 million and $3.2 million, respectively, with $2.7 million and $1.4 million attributable to Mid-State. Net occupancy expense increased $3.7 million for the six months and $2.5 million for the quarter. Other operating expenses increased $9.9 million year-to-date and $4.3 million for the quarter primarily due to investment expenses and general overhead costs. Capital Adequacy At June 30, 1994, shareholders' equity totaled $1.3 billion, or 7.66% of total assets. Since December 31, 1993, shareholders' equity increased $184.6 million primarily due to the equity issued for the Fortune purchase of $125.8 million and to net income less dividends of $43.2 million. In May 1994, AmSouth issued $150.0 million in long-term subordinated debt which qualifies as Tier 2 capital. At June 30, 1994, AmSouth remains well above the regulatory minimum required risk-adjusted Tier 1 capital ratio of 4.00% and the regulatory minimum required risk-adjusted total capital ratio of 8.00%. Table 12 presents the calculation of the risk-adjusted capital ratios for AmSouth at June 30, 1994 and 1993. In addition, the risk-adjusted capital ratios for AmSouth's banking subsidiaries were well above the regulatory minimum and each subsidiary was well-capitalized at June 30, 1994. The total risk-adjusted capital ratio for each of AmSouth's major subsidiaries was: AmSouth Bank of Alabama............................................... 11.05% AmSouth Bank of Florida............................................... 11.26% AmSouth Bank of Tennessee............................................. 17.75%
10 TABLE 1--FINANCIAL SUMMARY
JUNE 30 ------------------------ % 1994 1993 CHANGE ----------- ----------- ------ (IN THOUSANDS EXCEPT PER SHARE DATA) BALANCE SHEET SUMMARY End of period balances: Loans net of unearned income.................. $10,580,364 $ 7,648,448 38.3% Total securities.............................. 4,538,682* 3,345,691 35.7 Total assets.................................. 17,337,405 12,518,689 38.5 Total deposits................................ 12,218,955 9,543,028 28.0 Shareholders' equity.......................... 1,327,336 1,038,198 27.8 Year to date average balances: Loans net of unearned income.................. $ 8,889,208 $ 7,379,073 20.5% Total securities.............................. 3,369,102* 3,251,435 3.6 Total assets.................................. 13,707,897 12,050,504 13.8 Total deposits................................ 10,510,403 9,301,828 13.0 Shareholders' equity.......................... 1,192,222 993,320 20.0
SIX MONTHS THREE MONTHS ENDED JUNE 30 ENDED JUNE 30 -------------------- % -------------------- % 1994 1993 CHANGE 1994 1993 CHANGE -------- -------- ------ -------- -------- ------ EARNINGS SUMMARY Net income.............. $ 81,874 $ 77,774 5.3% $ 42,900 $ 39,699 8.1% Per common share........ 1.50 1.54 (2.6) 0.78 0.78 0.0 SELECTED RATIOS Return on average assets (annualized)........... 1.20% 1.30% 1.22% 1.29% Return on average equity (annualized)........... 13.85 15.79 14.31 15.55 Average equity to aver- age assets............. 8.70 8.24 8.55 8.30 Allowance for loan losses to loans net of unearned income................. 1.56 1.50 1.56 1.50 Efficiency ratio........ 63.35 60.41 62.06 59.52 COMMON STOCK DATA Cash dividends declared. $ 0.70 $ 0.58 $ 0.35 $ 0.29 Book value at end of pe- riod................... 22.53 20.36 22.53 20.36 Market value at end of period................. 31 3/8 32 3/4 31 3/8 32 3/4 Average common shares outstanding............ 54,558 50,345 54,782 50,965
- -------- * Excludes market valuation on available-for-sale securities of $(16,853) for end of period and $(2,806) for year to date average balances. 11 TABLE 2 - YEAR-TO-DATE YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST-BEARING LIABILITIES
1994 1993 ---------------------------- ---------------------------- SIX MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30 ---------------------------- ---------------------------- AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ BALANCE EXPENSE RATE BALANCE EXPENSE RATE ----------- -------- ------ ----------- -------- ------ (TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS) ASSETS Earning assets: Loans net of unearned income................ $ 8,889,208 $348,998 7.92% $ 7,379,073 $300,927 8.22% Trading securities..... 56,739 1,526 5.42 31,057 804 5.22 Available-for-sale se- curities.............. 1,059,859 25,918 4.93 481,027 13,918 5.83 Held-to-maturity secu- rities Taxable................ 1,920,466 61,632 6.47 2,346,175 77,321 6.65 Tax-free............... 332,038 18,374 11.16 393,176 20,722 10.63 ----------- -------- ----------- -------- Total held-to-matu- rity securities...... 2,252,504 80,006 7.16 2,739,351 98,043 7.22 ----------- -------- ----------- -------- Total securities..... 3,369,102 107,450 6.43 3,251,435 112,765 6.99 Other earning assets... 352,070 8,535 4.89 446,884 9,556 4.31 ----------- -------- ----------- -------- Total earning assets. 12,610,380 464,983 7.44 11,077,392 423,248 7.70 Cash and other assets... 1,233,405 1,085,711 Allowance for loan loss- es..................... (133,082) (112,599) Market valuation on available-for-sale se- curities............... (2,806) -0- ----------- ----------- $13,707,897 $12,050,504 ----------- ----------- LIABILITIES AND SHARE- HOLDERS' EQUITY Interest-bearing liabil- ities: Interest-bearing demand deposits.............. $ 3,574,434 49,185 2.77 $ 3,205,853 42,672 2.68 Savings deposits....... 899,529 11,246 2.52 758,095 10,303 2.74 Time deposits.......... 3,568,887 74,967 4.24 3,065,268 71,246 4.69 Certificates of deposit of $100,000 or more... 712,345 14,226 4.03 726,699 15,522 4.31 Federal funds purchased and securities sold under agreements to repurchase............ 1,123,527 20,578 3.69 1,027,162 15,778 3.10 Other interest-bearing liabilities........... 695,716 16,525 4.79 574,249 12,420 4.36 ----------- -------- ----------- -------- Total interest-bearing liabilities........... 10,574,438 186,727 3.56 9,357,326 167,941 3.62 -------- ----- -------- ----- Incremental interest spread............... 3.88% 4.08% ===== ===== Noninterest-bearing de- mand deposits.......... 1,755,208 1,545,913 Other liabilities....... 186,029 153,945 Shareholders' equity.... 1,192,222 993,320 ----------- ----------- $13,707,897 $12,050,504 =========== =========== Gross interest margin/spread on a taxable equivalent basis.................. 278,256 4.45% 255,307 4.65% ===== ===== Taxable equivalent ad- justment: Loans.................. 1,514 1,935 Securities............. 6,118 6,558 -------- -------- Total taxable equiva- lent adjustment...... 7,632 8,493 -------- -------- Gross interest mar- gin................. $270,624 $246,814 ======== ========
- -------- NOTE: The taxable equivalent adjustment has been computed based on a 35% federal income tax rate for the six months ended June 30, 1994 and using a 34% federal income tax rate for the six months ended June 30, 1993. 12 TABLE 3--QUARTERLY YIELDS ON AVERAGE EARNING ASSETS AND RATES ON AVERAGE INTEREST-BEARING LIABILITIES
1994 ---------------------------------------------------------- ---------------------------- SECOND QUARTER FIRST QUARTER FOURTH QUARTER ---------------------------- ---------------------------- ---------------------------- AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE ----------- -------- ------ ----------- -------- ------ ----------- -------- ------ ASSETS (TAXABLE EQUIVALENT BASIS-DOLLARS IN THOUSANDS) Earning assets: Loans net of unearned income.... $ 9,058,853 $180,089 7.97% $ 8,717,679 $168,909 7.86% $ 8,035,879 $160,270 7.91% Trading securities......... 37,597 598 6.38 76,094 928 4.95 74,248 867 4.63 Available-for-sale securities......... 919,733 11,333 4.94 1,201,542 14,585 4.92 798,382 10,981 5.46 Held-to-maturity securities Taxable........... 2,326,573 36,068 6.22 1,509,848 25,564 6.87 1,947,448 29,224 5.95 Tax-free.......... 321,311 8,934 11.15 342,884 9,440 11.17 357,236 9,832 10.92 ----------- -------- ----------- -------- ----------- -------- Total held-to- maturity securities....... 2,647,884 45,002 6.83 1,852,732 35,004 7.66 2,304,684 39,056 6.72 ----------- -------- ----------- -------- ----------- -------- Total securities...... 3,605,214 56,933 6.33 3,130,368 50,517 6.54 3,177,314 50,904 6.36 Other earning assets............. 289,617 4,017 5.56 415,216 4,518 4.41 554,087 5,058 3.62 ----------- -------- ----------- -------- ----------- -------- Total earning assets.......... 12,953,684 241,039 7.46 12,263,263 223,944 7.41 11,767,280 216,232 7.29 Cash and other assets............. 1,251,509 1,215,098 1,160,143 Allowance for loan losses............. (133,344) (132,818) (118,338) Market valuation on available-for-sale securities......... (13,826) 8,337 -0- ----------- ----------- ----------- $14,058,023 $13,353,880 $12,809,085 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing demand deposits.... $ 3,618,893 26,506 2.94 $ 3,529,482 22,679 2.61 $ 3,374,388 21,785 2.56 Savings deposits... 921,136 5,647 2.46 877,682 5,599 2.59 796,633 5,153 2.57 Time deposits...... 3,574,761 38,133 4.28 3,562,947 36,834 4.19 3,291,675 35,761 4.31 Certificates of deposit of $100,000 or more... 695,062 7,220 4.17 729,820 7,006 3.89 718,244 7,347 4.06 Federal funds purchased and securities sold under agreements to repurchase...... 1,302,683 13,210 4.07 942,380 7,368 3.17 1,110,841 8,099 2.89 Other interest- bearing liabilities........ 815,117 10,235 5.04 574,989 6,290 4.44 549,993 6,350 4.58 ----------- -------- ----------- -------- ----------- -------- Total interest- bearing liabilities...... 10,927,652 100,951 3.71 10,217,300 85,776 3.40 9,841,774 84,495 3.41 -------- ----- -------- ----- -------- ----- Incremental interest spread.... 3.75% 4.01% 3.88% ===== ===== ===== Noninterest-bearing demand deposits.... 1,761,226 1,749,126 1,704,833 Other liabilities.. 166,657 205,341 176,541 Shareholders' equity............. 1,202,491 1,182,113 1,085,937 ----------- ----------- ----------- $14,058,023 $13,353,880 $12,809,085 =========== =========== =========== Gross interest margin/spread on a taxable equivalent basis.............. 140,088 4.34% 138,168 4.57% 131,737 4.44% ===== ===== ===== Taxable equivalent adjustment: Loans.............. 759 755 811 Securities......... 2969 3,149 3,278 -------- -------- -------- Total taxable equivalent adjustment....... 3728 3,904 4,089 -------- -------- -------- Gross interest margin.......... $136,360 $134,264 $127,648 ======== ======== ======== 1993 ------------------------------------------------------------ THIRD QUARTER SECOND QUARTER ---------------------------- ------------------------------ AVERAGE REVENUE/ YIELD/ AVERAGE REVENUE/ YIELD/ BALANCE EXPENSE RATE BALANCE EXPENSE RATE ----------- -------- ------ ----------- -------- ------ ASSETS Earning assets: Loans net of unearned income.... $ 7,689,530 $155,951 8.05% $ 7,551,758 $154,048 8.18% Trading securities......... 60,832 824 5.37 34,240 439 5.14 Available - -for-sale securities......... 657,840 7,676 4.63 489,443 6,048 4.96 Held-to-maturity securities Taxable........... 2,322,403 37,278 6.37 2,431,410 39,279 6.48 Tax-free.......... 372,632 9,954 10.60 386,034 10,209 10.61 ----------- -------- ----------- -------- Total held-to- maturity securities....... 2,695,035 47,232 6.95 2,817,444 49,488 7.05 ----------- -------- ----------- -------- Total securities...... 3,413,707 55,732 6.48 3,341,127 55,975 6.72 Other earning assets............. 519,525 6,204 4.74 468,877 4,946 4.23 ----------- -------- ----------- -------- Total earning assets.......... 11,622,762 217,887 7.44 11,361,762 214,969 7.59 Cash and other assets............. 1,081,336 1,087,560 Allowance for loan losses............. (114,673) (115,106) Market valuation on available-for-sale securities......... -0- -0- ----------- ----------- $12,589,425 $12,334,216 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Interest-bearing liabilities: Interest-bearing demand deposits.... $ 3,266,837 21,761 2.64 $ 3,229,268 21,320 2.65 Savings deposits... 772,594 5,276 2.71 786,736 5,334 2.72 Time deposits...... 3,212,326 36,211 4.47 3,181,740 36,624 4.62 Certificates of deposit of $100,000 or more... 740,251 7,817 4.19 758,340 8,093 4.28 Federal funds purchased and securities sold under agreements to repurchase...... 1,033,735 8,364 3.21 1,008,559 7,869 3.13 Other interest- bearing liabilities........ 726,900 7,461 4.07 610,488 6,484 4.26 ----------- -------- ----------- -------- Total interest- bearing liabilities...... 9,752,643 86,890 3.53 9,575,131 85,724 3.59 -------- ----- -------- ----- Incremental interest spread.... 3.91% 4.00% ===== ===== Noninterest-bearing demand deposits.... 1,640,041 1,582,546 Other liabilities.. 145,589 152,307 Shareholders' equity............. 1,051,152 1,024,232 ----------- ----------- $12,589,425 $12,334,216 =========== =========== Gross interest margin/spread on a taxable equivalent basis.............. 130,997 4.47% 129,245 4.56% ===== ===== Taxable equivalent adjustment: Loans.............. 881 905 Securities......... 3,287 3,195 -------- -------- Total taxable equivalent adjustment....... 4,168 4,100 -------- -------- Gross interest margin.......... $126,829 $125,145 ======== ========
NOTE: Beginning with the third quarter of 1993, the taxable equivalent adjustment has been computed based on a 35% federal income tax rate. Prior quarters are computed using a 34% federal income tax rate. 13 TABLE 4--INTEREST RATE SWAPS AND CAPS
SWAPS ------------------------------------ RECEIVE FIXED PAY FIXED BASIS OTHER CAPS TOTAL ------------- --------- ----- ------ ------ ------ (IN MILLIONS) Balance at December 31, 1990..................... $ 300 $ -0- $-0- $ -0- $ -0- $ 300 Additions............... -0- -0- -0- -0- 600 600 Maturities.............. -0- -0- -0- -0- -0- -0- Calls................... -0- -0- -0- -0- -0- -0- ----- ----- ---- ------ ------ ------ Balance at December 31, 1991..................... 300 -0- -0- -0- 600 900 Additions............... 65 240 300 300 405 1,310 Maturities.............. -0- -0- -0- -0- -0- -0- Calls................... (60) -0- -0- -0- -0- (60) ----- ----- ---- ------ ------ ------ Balance at December 31, 1992..................... 305 240 300 300 1,005 2,150 Additions............... -0- -0- -0- 300 20 320 Maturities.............. -0- -0- -0- -0- -0- -0- Calls................... (120) (120) -0- -0- -0- (240) ----- ----- ---- ------ ------ ------ Balance at December 31, 1993..................... 185 120 300 600 1,025 2,230 Additions............... -0- 32 -0- 400 50 482 Maturities.............. -0- (32) -0- -0- (20) (52) Calls................... (60) (60) -0- -0- -0- (120) ----- ----- ---- ------ ------ ------ Balance at June 30, 1994.. $ 125 $ 60 $300 $1,000 $1,055 $2,540 ===== ===== ==== ====== ====== ======
TABLE 5--MATURITIES AND INTEREST RATES EXCHANGED ON SWAPS AND CAPS
MATURE DURING JUNE 30 -------------------------------- 1994 1994 1995 1996 1997 TOTAL ------- ---- ------ ---- ---- ------ (IN MILLIONS) Receive fixed swaps: Notional............................ $ 125 $ 60 $ 65 $-0- $-0- $ 125 Receive rate........................ 7.02% 9.04% 5.16% 7.02% Pay rate............................ 4.36% 4.56% 4.56% 4.56% Pay fixed swaps: Notional............................ $ 60 $ 60 $ -0- $-0- $-0- $ 60 Receive rate........................ 4.41% 4.56% 4.56% Pay rate............................ 4.00% 4.00% 4.00% Basis swaps: Notional............................ $ 300 $-0- $ -0- $300 $-0- $ 300 Receive rate........................ 4.56% 4.88% 4.88% Pay rate............................ 5.50% 5.79% 5.79% Other swaps: Notional............................ $1,000 $-0- $ 300 $300 $400 $1,000 Receive rate........................ 4.41% 5.83% 5.29% 5.33% 5.46% Pay rate............................ 4.57% 4.88% 4.88% 4.88% 4.88% Total swap portfolio: Notional............................ $1,485 $120 $ 365 $600 $400 $1,485 Receive rate........................ 4.66% 6.80% 5.71% 5.08% 5.33% 5.44% Pay rate............................ 4.72% 4.28% 4.82% 5.33% 4.88% 5.00% Total cap portfolio: Notional............................ $1,055 $-0- $ 945 $ 33 $ 77 $1,055 Pay rate............................ 0.46% 0.47% 1.24% 0.59% 0.51% Total portfolio: Notional............................ $2,540 $120 $1,310 $633 $477 $2,540 Receive rate........................ 2.73% 6.80% 1.60% 4.83% 4.47% 3.19% Pay rate............................ 2.95% 4.28% 1.68% 5.12% 4.18% 3.13%
- -------- NOTE: The maturities and interest rates exchanged are calculated assuming that interest rates remain unchanged from June 30, 1994. The information presented could change as future interest rates increase or decrease. 14 TABLE 6--LOANS AND CREDIT QUALITY
LOANS NONPERFORMING LOANS* NET CHARGE-OFFS JUNE 30 JUNE 30 JUNE 30 ---------------------- ------------------------------------- 1994 1993 1994 1993 1994 1993 ----------- ---------- ---------- ----------------- ------- (IN THOUSANDS) Commercial.............. $ 2,652,130 $2,319,674 $ 20,545 $24,172 $ 1,383 $ 3,121 Commercial real estate: Commercial real estate mortgages: Owner occupied......... 591,107 357,905 19,886 1,045 139 28 Nonowner occupied...... 784,307 811,463 34,487 22,944 (1,094) 1,315 ----------- ---------- ---------- --------- ------- ------- Total commercial real estate mortgages..... 1,375,414 1,169,368 54,373 23,989 (955) 1,343 ----------- ---------- ---------- --------- ------- ------- Real estate construc- tion Owner occupied......... 191,684 114,662 2,077 1,887 (169) -0- Nonowner occupied...... 261,042 242,163 215 2,076 (7) (78) ----------- ---------- ---------- --------- ------- ------- Total real estate construction......... 452,726 356,825 2,292 3,963 (176) (78) ----------- ---------- ---------- --------- ------- ------- Total commercial real estate.............. 1,828,140 1,526,193 56,665 27,952 (1,131) 1,265 ----------- ---------- ---------- --------- ------- ------- Consumer: Residential first mort- gages................. 3,787,197 1,967,065 22,862 5,669 (38) 342 Other residential mort- gages................. 541,278 497,951 -0- 100 61 109 Dealer indirect........ 775,378 561,446 -0- -0- 646 884 Other consumer......... 1,075,251 849,055 1,653 2,933 7,473 8,677 ----------- ---------- ---------- --------- ------- ------- Total consumer....... 6,179,104 3,875,517 24,515 8,702 8,142 10,012 ----------- ---------- ---------- --------- ------- ------- $10,659,374 $7,721,384 $101,725 $60,826 $ 8,394 $14,398 =========== ========== ========== ========= ======= =======
- -------- * Exclusive of accruing loans 90 days past due. TABLE 7--NONPERFORMING ASSETS
1994 1993 ----------------- ------------------------- JUN 30 MAR 31 DEC 31 SEPT 30 JUN 30 ----------------- ------- ------- ------- (DOLLARS IN THOUSANDS) Nonaccrual loans................. $ 90,550 $63,540 $53,020 $46,514 $57,085 Restructured loans............... 11,175 1,827 2,420 2,674 3,741 -------- ------- ------- ------- ------- Total nonperforming loans...... 101,725 65,367 55,440 49,188 60,826 Foreclosed properties............ 35,266 25,323 29,273 31,939 32,567 Repossessions.................... 887 888 1,081 683 666 -------- ------- ------- ------- ------- Total nonperforming assets*.... $137,878 $91,578 $85,794 $81,810 $94,059 ======== ======= ======= ======= ======= Nonperforming assets* to loans net of unearned income, foreclosed properties and repossessions................... 1.30% 1.02% 1.00% 1.05% 1.22% Accruing loans 90 days past due.. $ 29,959 $28,638 $20,917 $21,074 $21,067
- -------- * Exclusive of accruing loans 90 days past due. 15 TABLE 8--ALLOWANCE FOR LOAN LOSSES
1994 1993 ----------------------- ----------------------------------- 2ND QUARTER 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER ----------- ----------- ----------- ----------- ----------- (DOLLARS IN THOUSANDS) Balance at beginning of period................. $130,488 $131,509 $114,634 $114,420 $115,286 Loans charged off....... 9,512 8,894 8,017 9,189 11,044 Recoveries of loans previously charged off. 5,796 4,216 2,264 9,592 2,143 -------- -------- -------- -------- -------- Net charge-offs (recoveries)........... 3,716 4,678 5,753 (403) 8,901 Addition (reduction) to allowance charged (credited) to expense.. 2,974 2,207 12,635 (189) 8,035 Allowance acquired in acquisitions........... 35,000 1,450 9,993 -0- -0- -------- -------- -------- -------- -------- Balance at end of period................. $164,746 $130,488 $131,509 $114,634 $114,420 ======== ======== ======== ======== ======== Allowance for loan losses to loans net of unearned income........ 1.56% 1.46% 1.54% 1.47% 1.50% Allowance for loan losses to nonperforming loans.................. 161.95% 199.62% 237.21% 233.05% 188.11% Allowance for loan losses to nonperforming assets................. 119.49% 142.49% 153.28% 140.12% 121.65% Net charge-offs to average loans net of unearned income (annualized)........... 0.16% 0.22% 0.28% (0.02%) 0.47%
TABLE 9--ALLOWANCE FOR FORECLOSED PROPERTY LOSSES
1994 1993 ----------------------- ----------------------------------- 2ND QUARTER 1ST QUARTER 4TH QUARTER 3RD QUARTER 2ND QUARTER ----------- ----------- ----------- ----------- ----------- (IN THOUSANDS) Balance at beginning of period................. $3,574 $3,908 $ 2,890 $ 7,251 $7,961 Reduction to allowance credited to expense.... (627) (450) (1,684) (1,060) (541) Net recoveries (writedowns)/(losses).. (255) 116 1,848 (3,301) (169) Allowance acquired in bank purchases......... -0- -0- 854 -0- -0- ------ ------ ------- ------- ------ Balance at end of the period................. $2,692 $3,574 $ 3,908 $ 2,890 $7,251 ====== ====== ======= ======= ======
TABLE 10--SECURITIES
JUNE 30, 1994 JUNE 30, 1993 --------------------- --------------------- CARRYING MARKET CARRYING MARKET AMOUNT VALUE AMOUNT VALUE ---------- ---------- ---------- ---------- (IN THOUSANDS) Held-to-maturity U.S. Treasury and federal agency securities...................... $3,156,061 $3,081,153 $2,102,887 $2,158,902 State, county and municipal secu- rities.......................... 314,084 330,742 382,993 405,713 Other securities................. 7,970 7,900 264,906 268,873 ---------- ---------- ---------- ---------- $3,478,115 $3,419,795 $2,750,786 $2,833,488 ========== ========== ========== ========== Available-for-sale U.S. Treasury and federal agency securities...................... $ 969,594 $ 160,394 Other securities................. 60,918 406,835 ---------- ---------- $1,030,512 $ 567,229 ========== ==========
16 TABLE 11--OTHER INTEREST-BEARING LIABILITIES
JUNE 30 --------------------- 1994 1993 ---------- ---------- (IN THOUSANDS) Short-term: Treasury, tax, and loan note........................... $ 660,838 $ 719,000 Term federal funds purchased........................... 244,000 95,000 Other.................................................. 60,112 71,585 ---------- ---------- Total short-term..................................... 964,950 885,585 Long-term: Federal Home Loan Bank advances........................ 239,635 20,885 7 3/4% Subordinated Notes Due 2004..................... 149,091 -0- Subordinated Capital Notes............................. 99,376 99,247 Floating Rate Notes Due 1999........................... 7,659 8,205 7 1/2% Convertible Subordinated Debentures............. 3,709 3,488 Long-term notes payable................................ 22,207 41,115 ---------- ---------- Total long-term...................................... 521,677 172,940 ---------- ---------- Total other interest-bearing liabilities........... $1,486,627 $1,058,525 ========== ==========
TABLE 12--CAPITAL RATIOS
JUNE 30 ------------------------ 1994 1993 ----------- ----------- (DOLLARS IN THOUSANDS) Risk-adjusted capital ratio: Total assets....................................... $17,337,405 $12,518,689 Adjusted allowance for loan losses................. 145,604 114,380 Adjustment for risk-weighting of balance sheet items............................................. (7,028,582) (4,379,057) Adjustment for off-balance sheet items............. 1,390,551 1,238,869 Add unrealized losses on available-for-sale securi- ties.............................................. 16,853 -0- Less certain intangible assets..................... (232,683) (97,629) ----------- ----------- Total risk-adjusted assets....................... $11,629,148 $ 9,395,252 =========== =========== Shareholders' equity............................... $ 1,327,336 $ 1,038,198 Add unrealized losses on available-for-sale securi- ties (net of deferred taxes)................................... 10,555 -0- Less certain intangible assets..................... (232,683) (97,629) ----------- ----------- Tier I capital..................................... 1,105,208 940,569 Adjusted allowance for loan losses................. 145,604 114,380 Qualifying long-term debt.......................... 252,176 102,735 ----------- ----------- Tier II capital.................................... 397,780 217,115 ----------- ----------- Total capital.................................... $ 1,502,988 $ 1,157,684 =========== =========== Tier I capital to total risk-adjusted assets....... 9.50% 10.01% Total capital to risk-adjusted assets.............. 12.92% 12.32% Other capital ratios: Leverage........................................... 7.99% 7.69% Equity to assets................................... 7.66% 8.29% Tangible equity to assets.......................... 5.68% 7.34%
17 PART II OTHER INFORMATION ITEM 5. OTHER INFORMATION Since March 31, 1994, AmSouth has completed the following business combinations, the terms of which are summarized in the following table.
APPROXIMATE CONSIDERATION/ HEADQUARTERS TOTAL ACCOUNTING COMPLETION NAME OF ACQUIRED COMPANY LOCATION ASSETS (1) TREATMENT DATE - ------------------------ ------------ ----------- -------------- ---------- Citizens Naples, Florida $313 million common stock/ April 1994 National pooling-of-interests Corporation Parkway Ft. Myers, Florida 130 million common stock/ April 1994 Bancorp, pooling-of-interests Inc. First Federal Calhoun, Georgia 72 million common stock/ April 1994 Savings pooling-of-interests Bank, Cal- houn, Geor- gia Fortune Clearwater, Florida 2.7 billion cash and common June 1994 Bancorp, stock/purchase Inc.
- -------- (1) The dollar amounts indicated represent assets of the specified organization as of the last reported period prior to the business combination. As of the date of this Form 10-Q, AmSouth is a party to two other pending business combinations, which are summarized in the table below. Consummation of each of these transactions remains subject to fulfillment of a number of conditions, including receipt of shareholder and regulatory approvals. No assurances can be given that such conditions will be fulfilled or that such transactions will be consummated.
APPROXIMATE HEADQUARTERS TOTAL CONSIDERATION/EXPECTED NAME OF COMPANY TO BE ACQUIRED LOCATION ASSETS (1) ACCOUNTING TREATMENT - ------------------------------ ------------ ----------- ---------------------- The Tampa Banking Tampa, Florida $219 million common stock/ Company pooling-of-interests Community Federal Fort Oglethorpe, Georgia 103 million cash/purchase Savings Bank
- -------- (1) The dollar amounts indicated represent assets of the specified organization as of June 30, 1994. On May 19, 1994, AmSouth issued $150,000,000 of its 7 3/4% subordinated notes due 2004. The effect of the issuance of these notes is reflected in the financial statements that are a part of this report on Form 10-Q. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K Item 6(a)--Exhibits The exhibits listed in the Exhibit Index at page 21 of this Form 10-Q are filed herewith or are incorporated by reference herein. Item 6(b)--Forms 8-K The following Forms 8-K have been filed by AmSouth since March 31, 1994 and have not previously been reported in AmSouth's Form 10-Q for the quarter ended March 31, 1994: 18 Form 8-K filed on May 19, 1994 to report pro forma financial statements that give effect to pending mergers and acquisitions as of March 31, 1994. Form 8-K filed on May 20, 1994 to file the Consent of Dillon Read & Co., Inc. relating to Registration Statement No. 33-52961 on Form S-4. Form 8-K filed on June 10, 1994 to report the results of the pricing period computations required in the agreement for the acquisition of Fortune Bancorp, Inc., by AmSouth. Form 8-K filed on July 8, 1994 to report the merger of Fortune Bancorp, Inc. into AmSouth. 19 SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AMSOUTH HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. Date: August 11, 1994 /s/ John W. Woods By: _________________________________ Chairman of the Board, Chief Executive Officer and President Date: August 11, 1994 /s/ Ricky W. Thomas By: _________________________________ Senior Vice President and Controller (Principal Accounting Officer) 20 EXHIBIT INDEX The following is a list of exhibits including items incorporated by reference. 2-a Agreement and Plan of Merger dated as of June 29, 1992 between First Chattanooga Financial Corporation and AmSouth Bancorporation (1) 2-b Agreement and Plan of Reorganization dated as of January 21, 1993 among the First National Bank of Clearwater and Mickler Corporation and AmSouth Bancorporation (2) 2-c Agreement and Plan of Merger dated as of March 29, 1993 between Orange Banking Corporation and AmSouth Bancorporation (3) 2-d Amended and Restated Agreement and Plan of Reorganization by and between Mid-State Federal Savings Bank and AmSouth Bancorporation dated as of April 22, 1993, and amended and restated as of June 22, 1993 (4) 2-e Agreement and Plan of Merger dated as of May 11, 1993 between First Sunbelt Bankshares Inc. and AmSouth Bancorporation (5) 2-f Agreement and Plan of Merger dated as of June 30, 1993 between FloridaBank, a Federal Savings Bank and AmSouth Bancorporation (6) 2-g Agreement and Plan of Merger dated as of July 29, 1993 between Parkway Bancorp, Inc. and AmSouth Bancorporation (7) 2-h Agreement and Plan of Merger dated as of August 3, 1993 between First Federal Savings Bank, Calhoun, Georgia and AmSouth Bancorporation (8) 2-i Agreement and Plan of Merger dated as of August 9, 1993 between Citizens National Corporation and AmSouth Bancorporation (9) 2-j Agreement and Plan of Merger dated as of September 12, 1993, between Fortune Bancorp, Inc. and AmSouth Bancorporation, as amended by amendment dated as of May 11, 1994 (10) 3 Bylaws of AmSouth Bancorporation, as amended 4-a Instruments defining the rights of security holders (11) 4-b Stockholder Protection Rights Agreement dated as of June 15, 1989 between AmSouth Bancorporation and AmSouth Bank, National Association as Rights Agent, including as Exhibit A the forms of Rights Certificate and of Election to Exercise and as Exhibit B the form of Certificate of Designation and Terms of Series A Preferred Stock (12) 4-c Certificate of Designation and Terms of Series A Preferred Stock of AmSouth Bancorporation (13) 10-a AmSouth Bancorporation Executive Incentive Plan (14) 10-b AmSouth Bancorporation Transfer/Employee Relocation Policy (15) 10-c AmSouth Bank Supplemental Retirement Plan (16) 10-d AmSouth Bancorporation Long Term Incentive Compensation Plan (17) 10-e Amendment No. 1 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (18) 10-f Amendment No. 2 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (19) 21 10-g Amendment No. 3 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (20) 10-h Amendment No. 4 to the AmSouth Bancorporation Long Term Incentive Compensation Plan (21) 10-i 1989 AmSouth Bancorporation Long Term Incentive Compensation Plan (22) 10-j AmSouth Bancorporation 1987 Substitute Stock Option Plan (23) 10-k Change in Control Compensation Agreements (24) 10-l Deferred Compensation Plan for Directors of AmSouth and AmSouth Bank N.A. (25) 10-m Agreement between AmSouth Bank N.A. and Brasfield & Gorrie General Contractor, Inc. (Infrastructure) 10-n Agreement between AmSouth Bank N.A. and Brasfield & Gorrie General Contractor, Inc. (Buildings) 10-o Guaranty Agreement between AmSouth Bank N.A. and Brasfield & Gorrie General Contractor, Inc. 11 Statement re Computation of Earnings per Share 15 Letter re Unaudited Interim Financial Information 22 NOTES TO EXHIBITS (1) Filed as Exhibit 2 to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-53088), incorporated herein by reference (2) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-60164), incorporated herein by reference (3) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-49865), incorporated herein by reference (4) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-64960), incorporated herein by reference (5) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50041), incorporated herein by reference (6) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50605), incorporated herein by reference (7) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50727), incorporated herein by reference (8) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-51767), incorporated herein by reference (9) Filed as Exhibit 2(a) to AmSouth's Registration Statement on Form S-4 (Registration Statement No. 33-50865), incorporated herein by reference (10) Filed as Exhibit 2(a) to AmSouth's Report on Form 8-K filed on September 16, 1993, as amended by a Form 8-K/A filed on September 23, 1993, and Annex A to the Supplement to the Proxy Statement/Prospectus dated May 12, 1994 and filed by AmSouth pursuant to rule 424 (b)(3), incorporated herein by reference (11) Instruments defining the right of holders of long-term debt of AmSouth are not filed herewith pursuant to Item 601(b) (4)(v) of Regulation S-K, and AmSouth hereby agrees to furnish a copy of said instruments to the SEC upon request (12) Filed as Exhibit 4-a to AmSouth's Form 10-Q Quarterly Report for the quarter ended June 30, 1989, incorporated herein by reference (13) Filed as Exhibit 4-c to AmSouth's Form 10-Q Quarterly Report for the quarter ended June 30, 1989, incorporated herein by reference (14) Filed as Exhibit 10(b) to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1993, incorporated herein by reference (15) Filed as Exhibit 10-b to AmSouth's Form 10-K Annual Report for the year ended December 31, 1993, incorporated herein by reference (16) Filed as Exhibit 10-b to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1991, incorporated herein by reference (17) Filed as part of Exhibit 23 to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1984, incorporated herein by reference (18) Filed as Exhibit 10-e to AmSouth's Form 10-K Annual Report for the year ended December 31, 1985, incorporated herein by reference (19) Filed as Exhibit 10-b to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1987, incorporated herein by reference (20) Filed as Exhibit 10(b) to AmSouth's Form 10-Q Quarterly Report for the quarter ended September 30, 1988, incorporated herein by reference (21) Filed as Exhibit 10-i to AmSouth's Form 10-K Annual Report for the year ended December 31, 1988, incorporated herein by reference (22) Filed as Exhibit 10 to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1993, incorporated herein by reference (23) Filed as Exhibit 10-a to AmSouth's Form 10-Q Quarterly Report for the quarter ended March 31, 1988, incorporated herein by reference (24) Filed as Exhibit 10-k to AmSouth's Form 10-K Annual Report for the year ended December 31, 1992, incorporated herein by reference (25) Filed as Exhibit 10-a to AmSouth's Form 10-Q Quarterly Report for the quarter ended June 30, 1986, incorporated herein by reference 23 EX-3 2 BILAWS EXHIBIT 3 SECTION 1.1: PRINCIPAL OFFICE AND OTHER OFFICES The principal office of the corporation in the State of Alabama shall be located in the City of Birmingham, County of Jefferson. The corporation may have such other offices, either within or without the State of Alabama, as the Board of Directors may designate or as the business of the corporation may require from time to time. 1 SECTION 2.1: ANNUAL MEETING The annual meeting of the shareholders shall be held on the third Thursday in the month of April in each year, at the hour of 11:00 o'clock, a.m., for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting shall be a legal holiday in the state in which the meeting is to be held, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated herein for any annual meeting of the shareholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the shareholders as soon thereafter as conveniently may be. SECTION 2.2: SPECIAL MEETINGS Special meetings of the shareholders, for any purpose or purposes, may be called only as provided in the Certificate of Incorporation. SECTION 2.3: PLACE OF MEETING The place of meeting shall be the principal office of the corporation in the State of Alabama unless some other place, either within or without the State of Alabama, is designated by the directors at a meeting. SECTION 2.4: NOTICE OF MEETING 2 Written or printed notice stating the place, day, and hour of the meeting and, in the case of a special meeting, or a meeting which is required by statute to be held for any special purpose, or of an annual meeting at which special action is to be taken, the purpose or purposes for which the meeting is called, or the special action which is proposed to be taken, shall be delivered either personally or by mail, by or at the direction of the Board of Directors, the Chief Executive Officer, the Secretary, or the persons calling the meeting, to each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, addressed to the shareholder at his/her address as it appears on the records of the corporation, with postage thereon prepaid. Any such notice shall be delivered: a) with respect to the annual meeting of shareholders, not less than ten (10) nor more than fifty (50) days before the date of the meeting, and b) with respect to any special meeting of shareholders, as provided in the Certificate of Incorporation. SECTION 2.5: CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or shareholders entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors of the corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, fifty (50) days, or in the case of a determination of shareholders eligible to vote at a special meeting of shareholders called by the shareholders, not more than seventy-five (75) days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of 3 shareholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of shareholders, such date in any case to be not more than fifty (50) days and, in the case of a meeting of shareholders, not less than ten (10) days (or, in the case of a determination of shareholders eligible to vote at a special meeting of shareholders called by the shareholders, not more than seventy-five (75) days) prior to the date on which the particular action, requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting of the shareholders, or shareholders entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of shareholders. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired. SECTION 2.6: VOTING LISTS The officer or agent having charge of the stock ledger for shares of the corporation shall make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address and the number of shares held by each, which list, for a period of ten (10) days prior to such meeting, shall be kept on file at the principal office of the corporation 4 in this state and shall be subject to inspection by any shareholder at any time during usual business hours. Such list shall also be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any shareholder during the whole time of the meeting. The original stock ledger shall be the only evidence as to who are the shareholders entitled to examine such list or stock ledger or books of the corporation or to vote in person or by proxy at any meeting of shareholders. SECTION 2.7: QUORUM A majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of shareholders. If less than a majority of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. The shareholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum. SECTION 2.8: PROXIES At all meetings of shareholders, a shareholder may vote by proxy executed in writing by the shareholder or by his/her duly authorized attorney in fact. Such proxy shall be filed with the Secretary of the corporation before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy. SECTION 2.9: VOTING OF SHARES 5 Each outstanding share entitled to vote shall be entitled to one (1) vote upon each matter submitted to a vote at a meeting of the shareholders. SECTION 2.10: VOTING OF SHARES BY CERTAIN HOLDERS Except as provided in this paragraph, shares standing in the name of another corporation may be voted by such officer, agent, or proxy, as the by-laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Shares belonging to another corporation, if a majority of the shares entitled to vote for the election of directors of such other corporation is held by the corporation, shall not be voted at any meeting or counted in determining the total number of outstanding shares at any given time; provided, however, that nothing in this section shall be construed as limiting the right of any such other corporation to vote stock of the corporation held by it in a fiduciary capacity. Shares held by an administrator, executor, guardian, or conservator may be voted by him/her, either in person or by proxy, without a transfer of such shares into his/her name. Shares standing in the name of a trustee may be voted by him/her, either in person or by proxy, but no trustee shall be entitled to vote shares held by him/her without a transfer of such shares into his/her name. Shares standing in the name of a receiver may be voted by such receiver, and shares held or under the control of a receiver may be voted by such receiver without the transfer thereof into his/her name if authority so to do be contained in an appropriate order of the court by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote such shares unless in the transfer by the pledgor on the books of the corporation the pledgor has expressly empowered the pledgee to 6 vote thereon, in which case only the pledgee, or his/her proxy, may represent such shares and vote thereon. Treasury shares shall not be voted, directly or indirectly, at any meeting, and shall not be counted in determining the presence of a quorum. SECTION 2.11: INSPECTORS Prior to any meeting of shareholders, the Board of Directors or the Chief Executive Officer shall appoint one or more inspectors to act at the meeting and make a written report and may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at the meeting of shareholders, the person presiding at the meeting shall appoint one or more inspectors to act at the meeting. Inspectors may, but are not required to be, employees of the corporation or of its subsidiaries. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. The inspectors shall ascertain the number of shares outstanding and the voting power of each, determine the shares represented at the meeting and the validity of proxies and ballots, count all votes and ballots, determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors and certify their determination of the number of shares represented at the meeting and their count of all votes and ballots. The inspectors may appoint or retain other persons or entities to assist them in the performance of their duties. The date and time of the opening and closing of the polls for each matter upon which the shareholders will vote at a meeting shall be announced at the meeting. No ballot, proxy, or vote, nor 7 any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted therewith, any information provided by a shareholder who submits a proxy by telegram, cablegram, or other electronic transmission from which it can be determined that the proxy was authorized by the shareholder, ballots, and the regular books and records of the corporation, and they may also consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the shareholder holds of record. If the inspectors consider other reliable information for such purpose, they shall, at the time they make their certification, specify the precise information considered by them, including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors' belief that such information is accurate and reliable. 8 SECTION 3.1: GENERAL POWERS The business and affairs of the corporation shall be managed under the direction of its Board of Directors. SECTION 3.2: NUMBER, TENURE, AND QUALIFICATIONS (a) Subject to the provisions of Paragraph (5) of Section XI of the Restated Certificate of Incorporation relating to the rights of the holders of any class or series of Preferred Stock, as defined in Section IV of the Restated Certificate of Incorporation, to elect under specified circumstances by separate class vote additional directors, the number of directors of the corporation shall be fixed from time to time by the affirmative vote of two-thirds of the total number of directors then in office who have been elected by the holders of the capital stock of the corporation entitled to vote generally for the election of directors. No decrease in the number of directors shall shorten the term of any incumbent director. (b) Directors need not be residents of the states of Alabama or Delaware or shareholders of the corporation. No person shall be eligible for election or re-election as a director of this corporation (1) who shall have reached the age of sixty-eight, (2) three years after retiring from active business, (3) one year after permanent separation from the business or professional organization with which such person was primarily associated when first elected a director, or (4) one year after moving his/her principal residence outside the state in which such person was a resident when 9 first elected a director, whichever event first occurs. If any of the provisions stated in (1), (2), (3), or (4) above shall become applicable to any director who is a member of a class other than the class whose term of office will expire at the next Annual Meeting of Shareholders, such director shall submit his/her resignation to be effective no later than said next Annual Meeting of Shareholders. Such resignation shall be submitted to the Corporate Secretary in writing by December 31 of the year prior to the year in which the resignation is to become effective under the provisions of the preceding sentence. Any director who is an officer of the corporation, or of any subsidiary thereof, shall resign as a director effective on the date he/she ceases to be an officer. On recommendation of the Nominating Committee, the application to an individual of any provision of this paragraph may be waived by the Board of Directors. Any such waiver shall only be effective on a year-to-year basis. SECTION 3.3: REGULAR MEETINGS A regular meeting of the Board of Directors shall be held without other notice than this by-law on the third Thursday of each month (unless such date shall fall on a holiday observed by AmSouth Bank N.A., in which event the meeting shall be upon the next succeeding business day) at 10:00 a.m., or at such other hour as may be designated by the Board. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Alabama, for the holding of additional or substitute regular meetings without other notice than such resolution. SECTION 3.4: SPECIAL MEETINGS 10 Special meetings of the Board of Directors may be called by or at the request of the Chief Executive Officer or any seven (7) directors. A special meeting of the Board of Directors shall be held at the principal office of the corporation, provided all directors may agree in writing that it be held at any other place, either within or without the State of Alabama. SECTION 3.5: NOTICE At least one (1) day's notice of any special meeting shall be given to all directors unless in the opinion of the officers or directors calling the meeting an emergency exists which requires less than one (1) day's notice, in which event only such notice need be given as such officer or directors shall direct. Any director may waive notice of any meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. SECTION 3.6: FEES By resolution of the Board of Directors, the directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors or any committee thereof, and may be paid a fixed sum for attendance at each such meeting or a stated salary as director, or both. SECTION 3.7: QUORUM Except as otherwise provided in Section XI of the Restated Certificate of Incorporation, a majority of the sum of (i) the number of directors determined pursuant to Paragraph (2) of Section XI of the Restated Certificate of Incorporation and Section 3.2(a) of these by-laws, and (ii) the number of directors, if any, elected under 11 specified circumstances by a separate class vote of the holders of any class or series of Preferred Stock, as defined in Section IV of the Restated Certificate of Incorporation, shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but if less than such quorum is present at a meeting, a majority of the directors present may adjourn the meeting from time to time without further notice. In the case of Committees of the Board of Directors, at the time membership of a Committee is elected the Board may designate one or more directors as alternate members, who may replace any absent or disqualified member at any meeting of that Committee. Further, in the absence or disqualification of a member of a Committee, the member or members present at any meeting and not disqualified from voting, whether or not he/she or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. SECTION 3.8: MANNER OF ACTING Except as provided in Section XI of the Restated Certificate of Incorporation and Section 3.2(a) of these by-laws, the act of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. SECTION 3.9: VACANCIES Any vacancy occurring in the Board of Directors and any directorship to be filled by reason of an increase in the number of directorships or any other reason shall be filled according to the provisions of Section XI of the Restated Certificate of Incorporation. SECTION 3.10: EXECUTIVE COMMITTEE A. POWERS AND DUTIES. There shall be an Executive Committee of the Board of Directors which, in the interim between the meetings of the Board, shall have and may exercise all of the authority and powers of the Board of Directors to the extent permitted by law. In amplification of, but not in limitation of the general empowerment of the Executive Committee, the Executive Committee is specifically charged with responsibility for the Corporation's acquisition program and with the duty to supervise the strategic planning efforts and the control functions and activities of the Corporation and all of its subsidiaries. The Executive Committee shall periodically inform the Board of Directors of the actions taken by the Committee. To exercise its powers and duties the Executive Committee shall meet at such times and on such dates as shall be fixed from time to time by resolution of the Committee or at any time on the call of its Chairman. B. MEMBERSHIP. The Executive Committee shall consist of such number of members drawn from the Board of Directors, not officers of the corporation, as the Board of Directors may determine by resolution from time to time, and the Chairman of the Board and President of the Corporation shall be an ex-officio member and serve as Chairman of the Committee. If the Chairman of the Board is not present at a meeting the Chairman may designate another member of the Committee to preside at that meeting. The members of the Executive Committee who are not officers of the Corporation, shall serve a term of office as shall be specified at the time of their election. Any member shall be eligible to succeed himself/herself and shall serve until a successor is elected. 12 SECTION 3.11: AUDIT COMMITTEE There shall be an Audit Committee of the Board of Directors, to consist of such number of directors who are not officers of the corporation as shall be determined by resolution of the Board of Directors from time to time. Members of the Audit Committee shall serve a term of office as shall be specified at the time of their election which shall be staggered so that a rotation of the membership shall be maintained. Members of this committee shall serve until their successors are elected and shall be eligible for reappointment. The Audit Committee shall meet quarterly; the time and date to be fixed by the committee from time to time. The Audit Committee shall audit and 13 examine the condition of the corporation and its subsidiaries and affiliates, shall review all reports of audits of the corporation and its subsidiaries and affiliates, shall review the asset quality of the corporation and its subsidiaries and affiliates, shall monitor compliance with the various laws and regulations to which the corporation and its subsidiaries and affiliates are subject, and shall report its findings and recommendations to the Board of Directors of the corporation and of the affected subsidiaries and affiliates. SECTION 3.12: COMPENSATION COMMITTEE There shall be a Compensation Committee of the Board of Directors to consist of such number of directors (who are not, at the time of their election for one (1) year prior to their election, officers of the corporation or of any of its subsidiaries or affiliates) as shall be designated from time to time by resolution of the Board of Directors and who shall serve for a term of office as shall be specified at the time of their election which shall be staggered so that a rotation of the membership shall be maintained. Members shall serve until their successors are elected and shall be eligible to succeed themselves. The Compensation Committee shall meet quarterly or more frequently upon the call of its Chairman; the time and date to be fixed by the Committee from time to time. The Compensation Committee shall be responsible for all compensation and staff benefit plans of the corporation and of its subsidiaries and affiliates. The Committee shall evaluate and approve the compensation of all of the Executive Officers as defined in Section 4.1, together with such other officers of the Corporation or any of its subsidiaries or affiliates as it may deem appropriate. It shall review summaries of compensation paid to all officers of the corporation and its subsidiaries and affiliates. It shall be responsible for developing for the corporation and its subsidiaries and 14 affiliates all direct and indirect compensation programs including salary administration, incentive compensation, welfare benefits, perquisites, and deferred compensation programs and shall ensure that periodic reports of changes in such programs are made to the Board of Directors of the Corporation and of the affected subsidiaries and affiliates. It shall receive and review such reports of compensation and benefit plan administration from the corporation's management as it may require. The Compensation Committee shall also review management structure and succession planning, together with any management retirement policy of the corporation and its subsidiaries and affiliates. The Committee shall also review from time to time the supervision and training of the officers of the corporation, its subsidiaries and affiliates to assure the full development of their potential and an orderly succession of management, and shall make recommendations to the Board and the Chief Executive Officer of the corporation with respect thereto. SECTION 3.13: MANAGEMENT SUCCESSION COMMITTEE There shall be a Management Succession Committee, the member- ship of which shall be designated by the Board of Directors from time to time, which shall review management structure and succession planning, together with any management retirement policy of the corporation and its subsidiaries and affiliates. The Committee shall also review from time to time the supervision and training of the officers of the corporation, its subsidiaries and affiliates to assure the full development of their potential and an orderly succession of management, and shall make recommendations to the Board and the Chief Executive Officer of the corporation with respect thereto. In addition, the Management Succession Committee shall be responsible to develop and make recommendations to the Board regarding the selection of senior executive officers of the corporation and its subsidiaries including the selection of a successor to the chief executive officer. The Management Succession Committee shall meet upon the call of its Chairman, and may meet with such members of management and such independent consultants as it may deem advisable. SECTION 3.14: NOMINATING COMMITTEE There shall be a Nominating Committee of the Board of Directors, to consist of such number of directors who are not officers of the corporation as shall be designated from time to time by resolution of the Board of Directors, who shall serve for a term of office as shall be specified at the time of their election which shall be staggered so that a rotation of the membership shall be maintained. Members shall serve until their successors are elected and shall be eligible to succeed themselves. The Committee shall meet twice a year or more frequently upon the call of its Chairman; the time and date to be fixed by the Committee from time to time. All recommendations for potential nominees to the Board of Directors shall be referred to the Nominating Committee which shall review the qualifications of such potential nominees and make 15 recommendations to the Chief Executive Officer and the Board of Directors with respect to such potential nominees. The Nominating Committee will also review the structure of the Board and its operation and recommend changes to the Board of Directors where appropriate. The Committee will also review and recommend appropriate changes in Board compensation and Board retirement policies. SECTION 3.15: MANAGEMENT COMMITTEE There shall be a Management Committee of the corporation to consist of such officers as may be appointed to sit thereon by the Chief Executive Officer. The Committee shall be chaired by the Chairman of the Board and shall meet upon call of the Chairman. The Management Committee shall develop, publish, and implement detailed policies and procedures on behalf of the corporation and its subsidiaries and affiliates under such guidelines as may from time to time be adopted by the Board of Directors. The Management Committee shall also have the duty to amend, make additions to, or deletions from, or revoke such policies and procedures, to the extent the Committee deems such actions to be necessary and desirable. The Committee shall have the duty to publish policies and procedures in the form of a manual or manuals for distribution to appropriate personnel of the corporation and its subsidiaries and affiliates. The Board of Directors shall at all times have the right to amend or revoke actions of the Management Committee adopting, amending, adding to, deleting from, or revoking policies and procedures. In addition to the duties prescribed above, the Management Committee shall have such other and further duties and responsibilities as may from time to time be assigned to it by the Board of Directors or management of the corporation. 16 SECTION 3.16: OTHER COMMITTEES The Board of Directors may, by resolution or resolutions passed by a majority of the whole Board, designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in such resolution or resolutions, shall have and may during intervals between the meetings of the Board exercise the powers of the Board of Directors in the manage- ment of the business and affairs of the corporation and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution or resolutions adopted by the Board of Directors. The designation of any such committee or committees and the delegation thereto of authority shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed upon it or him by law. SECTION 3.17: INFORMAL ACTION Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if prior to such action a written consent thereto is signed by all members of the Board of Directors or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board of Directors or committee. SECTION 3.18: EMERITUS BOARD OF DIRECTORS Each director of the corporation (including officer-directors) retiring at or after the 1988 Annual Meeting of Shareholders shall be eligible to become an Emeritus Director of the corporation for a period of five (5) years. The 17 Emeritus Board of Directors will meet quarterly with senior management or at such other times as may be determined by the Nominating Committee of the Board of Directors. By resolution of the Nominating Committee of the Board of Directors, the Emeritus Directors may be paid their reasonable transportation expenses, if any, of attendance at each meeting of the Emeritus Board, and may be paid a fixed sum for attendance at each such meeting or a stated salary as Emeritus Director, or both. 18 SECTION 4.1: GENERAL (a) NUMBER. The officers of this corporation shall consist of a Chairman of the Board of Directors, President and Chief Executive Officer, one or more Vice Chairmen of the Board of Directors, one or more Vice Presidents (one or more of whom may be designated by the Board of Directors as Executive Vice President, Senior Vice President, or such other title as the Board of Directors may determine), a Corporate Secretary, one or more Assistant Secretaries, and may also include such other officers as the Board of Directors may from time to time determine. (b) EXECUTIVE OFFICERS; ORDER OF AUTHORITY. As used in these By-Laws, the term "Executive Officers" shall include the Chairman of the Board, President and Chief Executive Officer, the Vice Chairmen of the Board, and the Executive Vice Presidents. Their "order of authority" shall be the order in which their titles are listed above; except that, where there are two or more Vice Chairmen of the Board or two or more Executive Vice Presidents, their order of authority shall be any order of authority designated by the Board or Compensation Committee. (c) DUAL OFFICES. Any two or more offices in this corporation may, except where prohibited by law, be held by the same individual. In cases where an individual holds more 19 than one office, that person shall have the authority of all offices so held and shall occupy the "order of authority" provided in these by-laws for the more senior of the offices held. (d) MANNER OF ELECTION; TERM OF OFFICE; REMOVAL. Except as provided below, all officers shall be elected annually by the Board of Directors at the April meeting of the Board, or as soon thereafter as is practicable, and their term of office shall be for one (1) year, commencing upon election, and until their successors are elected and qualified. They shall, however, be subject to removal at any time with or without cause either as specified below or by the Board of Directors. The Board of Directors may, at any time, elect such other officers as it may deem desirable. Notwithstanding anything to the contrary contained in this Section 4.1 or elsewhere in these By-Laws, each of the three (3) Executive Officers having the highest order of authority has the power to elect or appoint all employees and all officers holding a title at or below that of Senior Vice President. Appointment of employees and election of persons to an office at or below the level of Senior Vice President shall be made, unless one of the said three (3) Executive Officers acts in the particular case, as provided in the Personnel Policy of this Corporation. Compensation of all officers and employees shall be fixed as provided in the Personnel Policy of this Corporation. All officers and employees serve at the will of this Corporation and may be removed at any time, with or without cause. Removal from office of the Chairman of the Board and President, and any Vice Chairman of the Board, shall be by the Board of Directors or by its Executive Committee. All other officers and employees may be removed from office by any of the said three (3) Executive Officers or by any person so authorized by the Personnel Policies and Procedures of this Corporation. 20 (e) VACANCIES. Vacancies shall be filled by the Board or Executive Committee as soon as deemed practicable. In the event of a vacancy in any of the offices of the Executive Officers, any of the other Executive Officers remaining active may be elected to fill the vacancy in such office for such period as the Board of Directors may determine or until further action by the Board. SECTION 4.2: CHAIRMAN OF THE BOARD AND PRESIDENT The Chairman of the Board and President shall be the Chief Executive Officer of the corporation and shall preside or designate another Executive Officer to preside at all regular, called, or special meetings of the Board and adjournments thereof. Subject to the control of the Board of Directors, of the Executive Committee and of other Committees of the Board having authority, he shall be vested with authority to act for the corporation in all matters to the extent that such delegation of authority may not be contrary to law, and shall have general charge of the corporation and of its business and affairs, including authority over the detailed operations of the corporation and over its employees, and subject to the limitations stated, with full power and authority to do and perform in the name of the corporation all acts necessary or proper in his opinion to be done and performed and to execute for and in the name of the corporation all instruments, agreements, and deeds which may be 21 authorized to be executed on behalf of the corporation or are required by law. SECTION 4.3: VICE CHAIRMAN OF THE BOARD The Vice Chairmen of the Board shall, subject to the control of the Board of Directors, the Executive Committee, and other committees of the Board having authority and of the Chief Executive Officer, be vested with authority to act for the corporation in all matters to the extent that such delegation of authority may not be contrary to law. They shall have the same power to sign for the corporation as prescribed in these by-laws for the Chairman of the Board. They shall perform all duties incidental to the office and shall perform such other duties as may be assigned from time to time by the Board of Directors or the Chairman of the Board. In the absence of the Chief Executive Officer, one of the Vice Chairmen shall preside at meetings of stockholders, the Board of Directors, and the Executive Committee. SECTION 4.4: OTHER EXECUTIVE OFFICERS Each of the Executive Officers shall (subject to the control of the Board of Directors and of the committees of the Board having authority and to the control of the Chief Executive Officer) have and may exercise authority to act for the corporation in all matters to the extent that such delegation of authority may not be contrary to law and in general to discharge the functions and to exercise the authority vested in the Chief Executive Officer in matters not otherwise acted upon by the Chief Executive Officer or by other Executive Officers prior in their order of authority. Subject to the limitations stated above, such authority of each Executive Officer shall include authority over the operations of the corporation within his assigned areas of responsibility and over assigned employees, and authority to do and perform in the name of the corporation 22 all acts necessary or proper in his opinion to be done and performed and to execute for and in the name of the corporation all instruments, agreements, and deeds which may be authorized to be executed on behalf of the corporation or required by law. SECTION 4.5: VICE PRESIDENTS Any Vice President shall have the authority to execute in the name of the corporation stock certificates of the corporation and transfers, conveyances, certificates, releases, satisfactions, authentications, options, proxies, leases, including oil, gas, and other mineral leases, agreements or other instruments pertaining to investment, assets or operations of the corporation or powers held or controlled by the corporation. The Vice Presidents shall have such other powers as are from time to time conferred upon them by the Board of Directors, committees of the Board, and the Executive Officers. SECTION 4.6: CHIEF ACCOUNTING OFFICER An officer of the corporation shall be appointed Chief Accounting Officer and shall have custody of the corporation's general accounting records, shall prepare financial statements, tax returns, profit plans and reports to regulatory authorities, and shall have such other duties as the Chief Executive Officer or other Executive Officer may assign him from time to time. SECTION 4.7: THE SECRETARY The Secretary shall: (a) keep the minutes of the shareholders' and of the Board of Directors' meetings in one (1) or more books provided for that purpose; (b) see that all notices are duly given in accordance with the provisions of these by-laws or as required by law; (c) be custodian of the corporate records and of the seal of the corporation and see that the seal of the corporation is 23 affixed to all documents the execution of which on behalf of the corporation under its seal is duly authorized; (d) keep a record of the post office address of each shareholder which shall be furnished to the Secretary by such shareholder; (e) have general charge of the stock transfer books of the corporation; and (f) in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by these by-laws, by the Chief Executive Officer or by the Board of Directors. SECTION 4.8: EXERCISE OF AUTHORITY OF CHIEF EXECUTIVE OFFICER BY OTHER EXECUTIVE OFFICERS In case of the disqualification, death, resignation, or removal of the Chief Executive Officer, and until the Board of Directors has filled the vacancy, the executive officers (other than the Executive Vice Presidents) in their order of authority, shall act as such Chief Executive Officer and with his full authority. In case of the absence, disqualification, death, or resignation, or removal of all executive officers prior to the Executive Vice Presidents in order of authority, the ordinary powers of the Chief Executive Officer shall be exercised and his duties discharged by an Executive Vice President or other Vice President designated by the Board or the Executive Committee until the Board has filled the vacancy, but any extraordinary powers of the Chief Executive Officer shall be exercised by such Executive Vice President or other Vice President only when authorized by the Board of Directors or the Executive Committee. 24 SECTION 5.1: CONTRACTS The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. SECTION 5.2: LOANS No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board of Directors. Such authority may be general or confined to specific instances. SECTION 5.3: CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by resolution of the Board of Directors. SECTION 5.4: DEPOSITS All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the Board of Directors may select. 25 SECTION 5.5: PROXIES Unless otherwise provided by resolution of the Board of Directors, the Chief Executive Officer may from time to time appoint an attorney or agent of the corporation, to cast the votes which the corporation may be entitled to cast as the holder of stock or other securities in any other corporation any of whose stock or other securities may be held by the corporation, at meetings of the holders of the stock or other securities of such other corporation, or to consent in writing, in the name and on behalf of the corporation as such holder, to any action by such other corporation, and may instruct the person or persons so appointed as to the manner of casting such votes or giving such consent, and may execute or cause to be executed, in the name and on behalf of the corporation and under its corporate seal or otherwise, all such written proxies or other instruments as he may deem necessary or proper in the premises. 26 SECTION 6.1: CERTIFICATES FOR SHARES Certificates shall be issued only for whole shares and no certificate will be issued for a fractional share. Certificates representing whole shares of the corporation shall be in such form as shall be determined by the Board of Directors, such certificates shall be signed in the manner provided by the General Corporation Law of Delaware by the Chief Executive Officer, and by the Secretary or an Assistant Secretary. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and cancelled, except that in case of a lost, destroyed, or mutilated certificate a new one may be issued therefore upon such terms and indemnity to the corporation as the Board of Directors may prescribe. SECTION 6.2: TRANSFER OF SHARES Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by his/her legal representative, who shall furnish proper evidence of authority to transfer, or by his/her attorney thereunto authorized by power of attorney duly executed and filed 27 with the Secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes. 28 SECTION 7.1: The fiscal year of the corporation shall begin on the first day of January and end on the 31st day of December in each year, unless the Board of Directors shall provide to the contrary by resolution. 29 SECTION 8.1: The Board of Directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares in the manner and upon the terms and conditions provided by law. 30 SECTION 9.1: The Board of Directors shall provide a corporate seal in such form as shall be determined by the Board of Directors. 31 SECTION 10.1: Whenever any notice is required to be given to any shareholder or director of the corporation under the provisions of these by-laws, the certificate of incorporation, or the provisions of law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. 32 SECTION 11.1: POWER OF DIRECTORS TO AMEND The Board of Directors shall have the power to alter, amend, and repeal the by-laws of the corporation or adopt new by-laws for the corporation at any regular or special meeting of the Board. SECTION 11.2: POWER OF SHAREHOLDERS TO AMEND (a) The shareholders may alter, amend, or repeal the by-laws of the corporation or adopt new by-laws for the corporation at any annual meeting or at a special meeting called for the purpose, and all by-laws made by the directors may be altered, amended, or repealed by the shareholders; (1) provided, however, that the affirmative vote of the holders of sixty-seven percent (67%) of the combined voting power of the then outstanding shares of capital stock of this corporation entitled to vote generally for the election of directors, voting together as a single class, shall be required for the shareholders to alter, amend, or repeal Section VII or Section VIII of the Restated Certificate of Incorporation of this corporation, or adopt any provision of these by-laws that would cause these by-laws to be inconsistent with the provisions of Section VII or Section VIII of the Restated Certificate of Incorporation of this corporation; (2) provided further, however, that the affirmative vote of the holders of eighty percent (80%) of the combined voting power of the then outstanding shares of capital stock of this corporation entitled to vote generally for the election of directors, voting together as a single class, shall 33 be required for the shareholders to alter, amend, or repeal Section XI of the Restated Certificate of Incorporation of this corporation or to adopt any provision of these by-laws that would cause these by-laws to be inconsistent with the provisions of Section XI of the Restated Certificate of Incorporation of this corporation; (3) provided further, however, that the affirmative vote of the holders of eighty percent (80%) of the combined voting power of the then outstanding shares of capital stock of this corporation entitled to vote generally for the election of directors, voting together as a single class, shall be required for the shareholders to alter, amend, or repeal any provision of Paragraph (a) of Section 3.2 of these by-laws or to adopt any provision of these by-laws that would cause these by-laws to be inconsistent with the provisions of Paragraph (a) of Section 3.2 of these by-laws. (b) The affirmative vote of the holders of sixty-seven percent (67%) of the combined voting power of the then outstanding shares of capital stock of this corporation entitled to vote generally for the election of directors, voting together as a single class, shall be required for the shareholders to alter, amend, or repeal Paragraph (a) (1) of this Section 11.2 of these by-laws or to adopt any provision of these by-laws that would cause these by-laws to be inconsistent with Paragraph (a) (1) of this Section 11.2 of these by-laws. (c) The affirmative vote of the holders of eighty percent (80%) of the combined voting power of the then outstanding shares of capital stock of this corporation entitled to vote generally for the election of directors, voting together as a single class, shall be required for the shareholders to alter, amend, or repeal Paragraph (a) (2) or (a) (3) of this Section 11.2 of these by-laws or to adopt any provision of these by-laws inconsistent with Paragraph (a) (2) or (a) (3) of this Section 11.2 of these by-laws. 34 EX-10.M 3 OWNER/CONTRACTOR AGR. EXHIBIT 10(m) AIA Document A111 (1987 Edition) Standard Form of Agreement between Owner and Contractor (Infrastructure) THIS AGREEMENT is executed on _________ _____, 1994 but shall be effective for all purposes as of August 2, 1993 by and between AmSouth Bank N.A., a national banking association ("Owner"), P.O. Box 11007, Burmingham, Alabama 35288 and Brasfield & Gorrie, General Contractor, Inc. ("Contractor"), a Delaware Corporation, 729 South 30th Street, Burmingham, Alabama 35233. Background The Owner and Contractor entered into that certain Standard Form of Agreement between Owner and Contractor dated as of August 2, 1993 (the "Original Agreement") which provided for the construction of both the buildings and the infrastructure associated with the buildings in the AmSouth Riverchase Administrative Offices and Training Facility located on approximately ninety-three (93) acres of land in Riverchase in Hoover, Alabama. After some of the construction had been done, AmSouth entered into an agreement to sell the buildings to Sun Riverchase Limited Partnership ("Sun Riverchase"). In connection with that sale, the parties agreed that the Owner would assign the Original Agreement to Sun Riverchase insofar as it governs and provides for the construction of the buildings. The portion of the Original Agreement that governs and provides for the construction of the infrastructure will not be assigned, but will remain in effect between the Owner and the contractor. In order to accomplish this, the Owner and the Contractor have agreed to divide the Original Agreement into two (2) agreements. This Agreement governs and provides for the construction of the infrastructure. Contemporaneously with the execution of this Agreement, the Owner and the Contractor are entering into that certain Standard Form of Agreement Between Owner and Contractor (Buildings) (the "Buildings Agreement") that governs and provides for the construction of the buildings. Also contemporaneously with the execution of this Agreement, Sun Riverchase and the Owner have entered into that certain Construction Agreement (the "Construction Agreement"), which provides for the administration of the Buildings Agreement by the Owner. Agreement NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and adequacy of which is hereby acknowledged, the Owner and the Contractor hereby agree as follows: THE FOLLOWING DOCUMENT IS A REPRODUCTION OF AIA DOCUMENT A111, STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR PRINTED BY THE AMERICAN INSTITUTE OF ARCHITECTS, TENTH EDITION. THE BRACKETED PARAGRAPHS NUMBERED 12.6 THROUGH 12.6.3 AND PART OF 15.1 THROUGH 15.4 ARE MARKED THROUGH ON THE PRINTED ORIGINAL AND THE PARTIES TO THE AGREEMENT HAVE AGREED TO EXCLUDE THOSE PARAGRAPHS FROM THE AGREEMENT. AIA Document A111 Standard Form of Agreement Between Owner and Contractor where the basis of payment is the COST OF THE WORK PLUS A FEE with or without a Guaranteed Maximum Price 1987 EDITION THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. This document has been approved and endorsed by The Associated General Contractors of America. AGREEMENT made as of the 2nd day of August in the year of Nineteen Hundred and Ninety-Three BETWEEN the Owner: AmSouth Bank N.A. (Name and address) Post Office Box 11007 Birmingham, Alabama 35288 and the Contractor: Brasfield & Gorrie General Contractor, Inc. (Name and address) 729 South 30th Street Birmingham, Alabama 35233 the Project is: AmSouth Riverchase Administrative (Name and address) Offices and Training Facility Riverchase Parkway and Parkway Office Circle Hoover, Alabama the Architect: Lohan Associates, Inc. (Name and address) 225 North Michigan Avenue, Suite 800 Chicago, Ill 60601 The Owner and Contractor agree as set forth below. ARTICLE 1 --------- THE CONTRACT DOCUMENTS 1.1 The Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other conditions), Drawings, Specifications, addenda issued prior to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement: these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than Modifications, appears in Article 16. If anything in the other Contract Documents is inconsistent with this Agreement, this Agreement shall govern. ARTICLE 2 --------- THE WORK OF THIS CONTRACT 2.1 The Contractor shall execute the entire Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others, for the following project: All of the infrastructure improvements for the AmSouth Bank Administrative Office and Training Facility, which includes, without limitation, excavation, grading, site preparation, landscaping, on-grade paved parking lots, utilities, and a lake, located on approximately 93 acres of land in Riverchase in Hoover, Alabama. Attached hereto as Exhibit A is a line item budget and schedule of values, both in effect as of the date this Agreement is executed, which set out in more detail the scope of the Project. ARTICLE 3 --------- RELATIONSHIP OF THE PARTIES 3.1 The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with the Owner to cooperate with the Architect and utilize the Contractor's best skill, efforts and judgment in furthering the interests of the Owner; to furnish efficient business administration and supervision; to make best efforts to furnish at all times an adequate supply of workers and materials; and to perform the Work in the best way and most expeditious and economical manner consistent with the interests of the Owner. The Owner agrees to exercise best efforts to enable the Contractor to perform the Work in the best way and most expeditious manner by furnishing and approving in a timely way information required by the Contractor and making payments to the Contractor in accordance with requirements of the Contract Documents. ARTICLE 4 --------- DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION 4.1 The date of commencement is the date from which the Contract Time of Subparagraph 4.2 is measured; it shall be the date of this Agreement, as first written above, unless a different date is stated below or provision is made for the date to be fixed in a notice to proceed issued by the Owner. (Insert the date of commencement, if it differs from the date of this Agreement or, if applicable, state that the date will be fixed in a notice to proceed.) The date of commencement shall be the date so designated in a notice to proceed issued by the Owner, which date must be on or after the date on which a building permit for the Project has been issued by the City of Hoover. Unless the date of commencement is established by a notice to proceed issued by the Owner, the Contractor shall notify the Owner in writing not less than five days before commencing the Work to permit the timely filing of mortgages, mechanic's liens and other security interests. 4.2 The contractor shall achieve Substantial Completion of the entire Work not later than a date to be agreed upon by the Owner and Contractor at a later date, subject to adjustments of this Contract Time as provided in the Contract Documents. The Contractor agrees that the infrastructure work must be sufficiently complete so that at least 105,000 square feet of usable space on three contiguous floors (the "Space") may be substantially complete and in time for the Owner's employees to fully occupy the Space and conduct business therein on June 1, 1995. (Insert the calendar date or number of calendar days after the date of commencement. Also insert any requirements for earlier Substantial Completion of certain portions of the Work, if not stated elsewhere in the Contract Documents.) (Insert provisions, if any, for liquidated damages relating to failure to complete on time.) The Contractor acknowledges that the Owner will need to begin moving into the Space and otherwise preparing the Space for occupancy as administrative offices prior to June 1 so that the Owner can fully conduct its business therein on and after June 1, and the Contractor will cooperate with and assist the Owner in so doing. The Owner agrees that the Space may be located on the top three floors of the North administrative office building. ARTICLE 5 --------- CONTRACT SUM 5.1 The Owner shall pay the Contractor in current funds for the Contractor's performance of the Contract the Contract Sum consisting of the Cost of the Work as defined in Article 7 less the cost of all materials and equipment which are purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent for the Owner, and for which the Owner pays the vendor thereof directly and the Contractor's Fee determined as follows: (State a lump sum, percentage of Cost of the Work or other provision for determining the Contractor's Fee, and explain how the Contractor's Fee is to be adjusted for changes in the Work.) The Contractor's Fee shall be Four Percent (4%) of the Cost of the work. 5.2 GUARANTEED MAXIMUM PRICE (IF APPLICABLE) 5.2.1 The sum of the Cost of the Work and the Contractor's Fee is guaranteed by the Contractor not to exceed an amount to be agreed upon at a later date. Dollars ($ ), subject to additions and deductions by Change Order as provided in the Contract Documents. Such maximum sum is referred to in the Contract Documents as the Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum Price to be exceeded shall be paid by the Contractor without reimbursement by the Owner. (Insert specific provisions if the Contractor is to participate in any savings.) The provisions of Schedule 5.2.1 to this Agreement are incorporated by reference herein as fully as though set forth in this space. 5.2.2 The Guaranteed Maximum Price is based upon the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner: (State the numbers or other identification of accepted alternates, but only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1. If decisions on other alternates are to be made by the Owner subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date until which that amount is valid.) 5.2.3 The amounts agreed to for unit prices, if any, are as follows: (State unit prices only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1.) ARTICLE 6 --------- CHANGES IN THE WORK 6.1 CONTRACTS WITH A GUARANTEED MAXIMUM PRICE 6.1.1 Adjustments to the Guaranteed Maximum Price on account of changes in the Work may be determined by any of the methods listed in Subparagraph 7.3.3 of the General Conditions. 6.1.2 In calculating adjustments to subcontracts (except those awarded with the Owner's prior consent on the basis of cost plus a fee), the terms "cost" and "fee" as used in Clause 7.3.3.3 of the General Conditions and the terms "costs" and "a reasonable allowance for overhead and profit" as used in subparagraph 7.3.6 of the General Conditions shall have the meanings assigned to them in the General Conditions and shall not be modified by Articles 5.7 and 8 of this Agreement. Adjustments to subcontracts awarded with the Owner's prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts. 6.1.3 In calculating adjustments to this Contract, the terms "cost" and "costs" as used in the above-referenced provisions of the General Conditions shall mean the Cost of the Work as defined in Article 7 of this Agreement and the terms "fee" and "a reasonable allowance for overhead and profit" shall mean the Contractor's Fee as defined in Paragraph 5.1 of this Agreement. 6.2 CONTRACTS WITHOUT A GUARANTEED MAXIMUM PRICE 6.2.1 Increased costs for the items set forth in Article 7 which result from changes in the Work shall become part of the cost of the Work, and the Contractor's Fee shall be adjusted as provided in Paragraph 5.1. 6.3 ALL CONTRACTS 6.3.1 If no specific provision is made in Paragraph 5.1 for adjustment of the Contractor's Fee in the case of changes in the Work, or if the extent of such changes is such, in the aggregate, that application of the adjustment provisions of Paragraph 5.1 will cause substantial inequity to the Owner or Contractor, the Contractor's Fee shall be equitably adjusted on the basis of the Fee established for the original Work. ARTICLE 7 --------- COST OF THE WORK 7.1 The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance of the Work plus the cost of all materials and equipment which are purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent for the Owner, and for which the Owner pays the Vendor thereof directly. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Owner. The Cost of the Work shall include only the items set forth in this Article 7. 7.1.1 LABOR COSTS 7.1.1.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at the site or, with the Owner's agreement, at off-site workshops. 7.1.1.2 Wages or salaries of the Contractor's supervisory and administrative personnel when stationed at the site with the Owner's agreement. It is intended that all or part of the wages or salaries of certain personnel stationed at the Contractor's principal or other offices shall be included in the Cost of the Work when and as approved by the Owner. 7.1.1.3 Wages and salaries of the Contractor's supervisory or administrative personnel engaged, at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work. 7.1.1.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages and salaries included in the Cost of the Work under Clauses 7.1.1.1 through 7.1.1.3. 7.1.2 SUBCONTRACT COSTS Payments made by the Contractor to Subcontractors in accordance with the requirements of the subcontracts. 7.1.3 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION 7.1.3.1 Costs (net of discounts), including transportation, of materials and equipment incorporated or to be incorporated in the completed construction. 7.1.3.2 Costs of materials described in the preceding Clause 7.1.3.1 in excess of those actually installed but required to provide reasonable allowance for waste and for spoilage. Unused excess materials, if any, shall be handed over to the Owner at the completion of the Work or, at the Owner's option, shall be sold by the Contractor; amounts realized, if any, from such sales shall be credited to the Owner as a deduction from the Cost of the Work. 7.1.4 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS 7.1.4.1 Costs, including transportation, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site and fully consumed in the performance of the Work; and cost less salvage value on such items if not fully consumed, whether sold to others or retained by the Contractor. Cost for items previously used by the Contractor shall mean fair market value. 7.1.4.2 Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, installation, minor repairs and replacements, dismantling and removal thereof. Rates and quantities of equipment rented shall be subject to the Owner's prior approval. 7.1.4.3 Costs of removal of debris from the site. 7.1.4.4 Costs of telegrams and long-distance telephone calls, postage and parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office. 7.1.4.5 That portion of the reasonable travel and subsistence expenses of the Contractor's personnel incurred while traveling in discharge of duties connected with the Work. 7.1.5 MISCELLANEOUS COSTS 7.1.5.1 That portion directly attributable to this Contract of premiums for insurance and bonds. 7.1.5.2 Sales, use or similar taxes imposed by a governmental authority which are related to the Work and for which the Contractor is liable. 7.1.5.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the Contractor is required by the Contract Documents to pay. 7.1.5.4 Fees of testing laboratories for tests required by the Contract Documents, except those related to defective or nonconforming Work for which reimbursement is excluded by Subparagraph 13.5.3 of the General Conditions or other provisions of the Contract Documents and which do not fall within the scope of Subparagraphs 7.2.2 through 7.2.4 below. 7.1.5.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement by the Contract Documents; payments made in accordance with legal judgments against the Contractor resulting from such suits or claims and payments of settlements made with the Owner's consent; provided, however, that such costs of legal defenses, judgment and settlements shall not be included in the calculation of the Contractor's Fee or of a Guaranteed Maximum Price, if any, and provided that such royalties, fees and costs are not excluded by the last sentence of Subparagraph 3.17.1 of the General Conditions or other provisions of the Contract Documents. 7.1.5.6 Deposits lost for causes other than the Contractor's fault or negligence. 7.1.6 OTHER COSTS 7.1.6.1 Other costs incurred in the performance of the Work if and to the extent approved in advance in writing by the Owner. 7.2 EMERGENCIES: REPAIRS TO DAMAGED, DEFECTIVE OR NONCONFORMING WORK The Cost of the Work shall also include costs described in Paragraph 7.1 which are incurred by the Contractor: 7.2.1 In taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property, as provided in Paragraph 10.3 of the General Conditions. 7.2.2 In repairing or correcting Work damaged or improperly executed by construction workers in the employ of the Contractor, provided such damage or improper execution did not result from the fault or negligence of the Contractor or the Contractor's foremen, engineers or superintendents, or other supervisory, administrative or managerial personnel of the Contractor. 7.2.3 In repairing damaged work other than that described in Subparagraph 7.2.2, provided such damage did not result from the fault or negligence of the Contractor or the Contractor's personnel, and only to the extent that the cost of such repairs is not recoverable by the Contractor from others and the Contractor is not compensated therefor by insurance or otherwise. 7.2.4 In correcting defective or nonconforming Work performed or supplied by a Subcontractor or material supplier and not corrected by them, provided such defective or nonconforming Work did not result from the fault or neglect of the Contractor or the Contractor's personnel adequately to supervise and direct the Work of the Subcontractor or material supplier, and only to the extent that the cost of correcting the defective or nonconforming Work is not recoverable by the Contractor from the Subcontractor or material supplier. ARTICLE 8 --------- COSTS NOT TO BE REIMBURSED 8.1 The cost of the work shall not include: 8.1.1 Salaries and other compensation of the Contractor's personnel stationed at the Contractor's principal office or offices other than the site office, except as specifically provided in Clauses 7.1.1.2 and 7.1.1.3 or as may be provided in Article 14. 8.1.2 Expenses of the Contractor's principal office and offices other than the site office. 8.1.3 Overhead and general expenses, except as may be expressly included in Article 7. 8.1.4 The Contractor's capital expenses, including interest on the Contractor's capital employed for the Work. 8.1.5 Rental costs of machinery and equipment, except as specifically provided in Clause 7.1.4.2. 8.1.6 Except as provided in Subparagraphs 7.2.2 through 7.2.4 and Paragraph 13.5 of this Agreement, costs due to the fault or negligence of the Contractor, Subcontractors, anyone directly or indirectly employed by any of them, or for whose acts any of them may be liable, including but not limited to costs for the correction of damaged, defective or nonconforming Work, disposal and replacement of materials and equipment incorrectly ordered or supplied, and making good damage to property not forming part of the Work. 8.1.7 Any cost not specifically and expressly described in Article 7. 8.1.8 Costs which would cause the Guaranteed Maximum Price, if any, to be exceeded. ARTICLE 9 --------- DISCOUNTS, REBATES AND REFUNDS 9.1 Cash discounts on payments made by the Owner shall accrue to the Owner. Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the payment, the Contractor included them in an Application for Payment and received payment therefor from the Owner, or (2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured. 9.2 Amounts which accrue to the Owner in accordance with the provisions of Paragraph 9.1 shall be credited to the Owner as a deduction from the Cost of the Work. ARTICLE 10 ---------- SUBCONTRACTS AND OTHER AGREEMENTS 10.1 Those portions of the Work that the Contractor does not customarily perform with the Contractor's own personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Contractor shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall deliver such bids to the Architect. The Owner will then determine, with the advice of the Contractor and subject to the reasonable objection of the Architect, which bids will be accepted. The Owner may designate specific persons or entities from whom the Contractor shall obtain bids; however, if a Guaranteed Maximum Price has been established, the Owner may not prohibit the Contractor from obtaining bids from others. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection. 10.2 If a Guaranteed Maximum Price has been established and a specific bidder among those whose bids are delivered by the Contractor to the Architect (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid which conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted; then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually signed with the person or entity designated by the Owner. 10.3 Subcontracts or other agreements shall conform to the payment provisions of Paragraphs 12.7 and 12.8, and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner. ARTICLE 11 ---------- ACCOUNTING RECORDS 11.1 The Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract; the accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner's accountants shall be afforded access to the Contractor's records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three years after final payment, or for such longer period as may be required by law. ARTICLE 12 ---------- PROGRESS PAYMENTS 12.1 Based upon Applications for Payment submitted to the Architect by the Contractor and Statements for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents. 12.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the month, or as follows: 12.3 Provided an Application for Payment is received by the Architect not later than the fifteenth (15th) day of a month, the Owner shall make payment to the Contractor not later than the first (1st) day of the following month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than ten (10) days after the Architect receives the Application for Payment. 12.4 With each Application for Payment the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those payments attributable to the Contractor's Fee; plus (3) payrolls for the period covered by the present Application for Payment; plus (4) retainage provided in Subparagraph 12.5.4, if any, applicable to prior progress payments. 12.5 CONTRACTS WITH A GUARANTEED MAXIMUM PRICE 12.5.1 Each Application for Payment shall be based upon the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Contractor's Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor's Applications for Payment. 12.5.2 Applications for Payment shall show the percentage completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed or (2) the percentage obtained by dividing (a) the expense which has actually been incurred by the Contractor on account of that portion of the Work for which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. 12.5.3 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows: 12.5.3.1 Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the General Conditions, even though the Guaranteed Maximum Price has not yet been adjusted by Change Order. 12.5.3.2 Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing. 12.5.3.3 Add the Contractor's Fee, less retainage of two percent (2%). The Contractor's Fee shall be computed upon the Cost of the Work described in the two preceding Clauses at the rate stated in Paragraph 5.1 or, if the Contractor's Fee is stated as a fixed sum in that Paragraph, shall be an amount which bears the same ratio to that fixed-sum Fee as the Cost of the Work in the two preceding Clauses bears to a reasonable estimate of the probable Cost of the Work upon its completion. 12.5.3.4 Subtract the aggregate of previous payments made by the Owner, and the aggregate cost of all materials and equipment which were purchased on behalf of the Owner by the Contactor or a Subcontractor, as Agent of the Owner, and for which the Owner paid the vendor thereof directly. 12.5.3.5 Subtract the shortfall, if any, indicated by the Contractor in the documentation required by Paragraph 12.4 to substantiate prior Applications for Payment, or resulting from errors subsequently discovered by the Owner's accountants in such documentation. 12.5.3.6 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Paragraph 9.5 of the General Conditions. 12.5.4 Additional retainage, if any, shall be as follows: (If it is intended to retain additional amounts from progress payments to the Contractor beyond (1) the retainage from the Contractor's Fee provided in Clause 12.5.3.3.(2) the retainage from Subcontractors provided in Paragraph 12.7 below, and (3) the retainage, if any, provided by other provisions of the Contract, insert provision for such additional retainage here. Such provision, if made, should also describe any arrangement for limiting or reducing the amount retained after the Work reaches a certain state of completion.) See Subparagrah 9.8.3 of the General Conditions for the amount to be withheld by the Owner from the payment due the Contractor upon Substantial Completion. 12.7 Except with the Owner's prior approval, payments to Subcontractors included in the Contractor's Applications for Payment shall not exceed an amount for each Subcontractor calculated as follows: 12.7.1 Take that portion of the Subcontract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Subcontractor's Work by the share of the total Subcontract Sum allocated to that portion in the Subcontractor's schedule of values, less retainage of ten percent (10%).* Pending final determination of amounts to be paid to the Subcontractor for changes in the Work, amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the General Conditions even though the Subcontract Sum has not yet been adjusted by Change Order. 12.7.2 Add that portion of the Subcontract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing, less retainage of ten percent (10%).* 12.7.3 Subtract the aggregate of previous payments made by the Contractor to the Subcontractor and the aggregate cost of all materials and equipment which were purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent of the Owner, and for which the Owner paid the Vendor thereof directly. 12.7.4 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment by the Owner to the Contractor for reasons which are the fault of the Subcontractor. 12.7.5 Add, upon Substantial Completion of the entire Work of the Contractor, a sum sufficient to increase the total payments to the Subcontractor to one hundred percent (100%) of the Subcontract Sum, less amounts, if any, for incomplete Work and unsettled claims; and, if final completion of the entire Work is thereafter materially delayed through no fault of the Subcontractor, add any additional amounts payable on account of Work of the Subcontractor in accordance with Subparagraph 9.10.3 of the General Conditions. (If it is intended, prior to Substantial Completion of the entire Work of the Contractor, to reduce or limit the retainage from Subcontractors resulting from the percentages inserted in Subparagraphs 12.7.1 and 12.7.2 above, and this is not explained elsewhere in the Contract Documents, insert here provisions for such reduction or limitation.) *The retainage withheld from Subcontractors with subcontracts providing for payment of costs plus a fee, with a guaranteed maximum price shall be Two percent (2%). If recommended by the General Contractor, retainage will not be withheld after Subcontractors' work is fifty percent. (50%) complete. The Subcontract Sum is the total amount stipulated in the subcontract to be paid by the Contractor to the Subcontractor for the Subcontractor's performance of the subcontract. 12.8 Except with the Owner's prior approval, the Contractor shall not make advance payments to suppliers for materials or equipment which have not been delivered and stored at the site. 12.9 In taking action on the Contractor's Applications for Payment, the Architect shall be entitled to rely on the accuracy and completeness of the information furnished by the Contractor and shall not be deemed to represent that the Architect has made a detailed examination, audit or arithmetic verification of the documentation submitted in accordance with Paragraph 12.4 or other supporting data; that the Architect has made exhaustive or continuous on-site inspections or that the Architect has made examinations to ascertain how or for what purposes the Contractor has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if required by the Owner, will be performed by the Owner's accountants acting in the sole interest of the Owner. ARTICLE 13 ---------- FINAL PAYMENT 13.1 Final payment shall be made by the Owner to the Contractor when (1) the Contract has been fully performed by the Contractor except for the Contractor's responsibility to correct defective or nonconforming Work, as provided in Subparagraph 12.2.2 of the General Conditions, and to satisfy other requirements, if any, which necessarily survive final payment; (2) a final Application for Payment and a final accounting for the Cost of the Work have been submitted by the Contractor and reviewed by the Owner's accountants; and (3) a final Statement for Payment has then been issued by the Architect as provided in Subparagraph 9.10.1 of the General Conditions; such final payment shall be made by the Owner not more than 30 days after the issuance of the Architect's final Statement for Payment, or as follows: 13.2 The amount of the final payment shall be calculated as follows: 13.2.1 Take the sum of the Cost of the Work substantiated by the Contractor's final accounting and the Contractor's Fee; but not more than the Guaranteed Maximum Price, if any. 13.2.2 Subtract amounts, if any, for which the Architect withholds, in whole or in part, a final Certificate for Payment as provided in Subparagraph 9.5.1 of the General Conditions or other provisions of the Contract Documents. 13.2.3 Subtract the aggregate of previous payments made by the Owner and the aggregate cost of all materials and equipment which were purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent of the Owner, and for which the Owner paid the Vendor thereof directly. If the aggregate of previous payments made by the Owner exceeds the amount due the Contractor, the Contractor shall reimburse the difference to the Owner. 13.3 The Owner's accountants will review and report in writing on the Contractor's final accounting within 30 days after delivery of the final accounting to the Architect by the Contractor. Based upon such Cost of the Work as the Owner's accountants report to be substantiated by the Contractor's final accounting, and provided the other conditions of Paragraph 13.1 have been met, the Architect will, within seven days after receipt of the written report of the Owner's accountants, either issue to the Owner a final Statement for Payment with a copy to the Contractor, or notify the Contractor and Owner in writing of the Architect's reasons for withholding a Statement as provided in Subparagraph 9.5.1 of the General Conditions. The time periods stated in this Paragraph 13.3 supersede those stated in Subparagraph 9.4.1 of the General Conditions. 13.4 If the Owner's accountants report the Cost of the Work as substantiated by the Contractor's final accounting to be less than claimed by the Contractor, the Contractor shall be entitled to demand arbitration of the disputed amount without a further decision of the Architect. Such demand for arbitration shall be made by the Contractor within 30 days after the Contractor's receipt of a copy of the Architect's final Statement for Payment: failure to demand arbitration within this 30-day period shall result in the substantiated amount reported by the Owner's accountants becoming binding on the Contractor. Pending a final resolution by arbitration, the Owner shall pay the Contractor the amount certified in the Architect's final Statement for Payment. 13.5 If, subsequent to final payment and at the Owner's request, the Contractor incurs costs described in Article 7 and not excluded by Article 8 to correct defective or nonconforming Work, the Owner shall reimburse the Contractor such costs and the Contractor's Fee applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price, if any. If the Contractor has participated in savings as provided in Paragraph 5.2, the amount of such savings shall be recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Contractor. ARTICLE 14 ---------- MISCELLANEOUS PROVISIONS 14.1 Where reference is made in this Agreement to a provision of the General Conditions or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents. 14.2 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located. (Insert rate of interest agreed upon, if any.) Prime rate of AmSouth Bank N.A. in effect from time to time during the applicable period or periods during which payments are past due. (Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner's and Contractor's principal places of business, the location of the Project and elsewhere may affect the validity of this provision. Legal advice should be obtained with respect to deletions or modifications, and also regarding requirements such as written disclosure or waivers.) 14.3 Other provisions: The Cost of the Work includes the cost of materials and equipment which are purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent for the Owner, and for which the Owners pays the vendor thereof directly. To facilitate appropriate accounting for the Project, Applications for Payment will contain the cost of all such materials and equipment and will also contain a credit to the Owner for the cost of such materials and equipment. In no event shall the Contractor or any Subcontractor be entitled to reimbursement or payment for any such materials or equipment. ARTICLE 15 ---------- TERMINATION OR SUSPENSION 15.1 The Contract may be terminated by the Contractor or the Owner as provided in Article 14 of the General Conditions; ARTICLE 16 ---------- ENUMERATION OF CONTRACT DOCUMENTS 16.1 The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated as follows: 16.1.1 The Agreement is this executed Standard Form of Agreement Between Owner and Contractor, Edition. 16.1.2 The General Conditions are the General Conditions of the Contract for Construction, attached hereto. 16.1.3 The Supplementary and other Conditions of the Contract are those contained in the following list of Contract Documents: Document Title Pages Lohan Construction Documents through Addendum No. 13 dated 4/20/94 Lohan Training Center Design/Development Documents dated 12/14/93 L/S/W Design Development Documents dated 2/22/94 (Training Center Interiors Only) Lohan Training Center Design/Development Documents dated 11/17/93. and the Clarifications dated March 2 and 3, 1994 attached hereto as Schedule 16.1.3. 16.1.4 The Specifications are those contained in (Either list the Specifications here or refer to an exhibit attached to this Agreement.) Section Title Pages Clarifications and Contract Documents listed in subparagraph 16.1.3 hereof. 16.1.5 The Drawings are (Either list the Drawings here or refer to an exhibit attached to this Agreement.) Number Title Date Contained in the Clarifications and Contract Documents listed in subparagraph 16.1.3 hereof. 16.1.6 The Addenda, if any, are Contained in the Clarifications and Contract Documents listed in subparagraph 16.1.3 hereof. Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 16. 16.1.7 Other Documents, if any, forming part of the Contract Documents are as follows: (List here any additional documents which are intended to form part of the Contract Documents. The General Conditions provide that bidding requirements such as advertisement or invitation to bid, instructions to Bidders, sample forms and the Contractor's bid are not part of the Contract Documents unless enumerated in this Agreement. They should be listed here only if intended to be part of the Contract Documents.) This Agreement is entered into as of the day and year first written above and is executed in at least three original copies of which one is to be delivered to the Contractor, one to the Architect for use in the administration of the Contract, and the remainder to the Owner. OWNER CONTRACTOR /s/ Henry A. Long, Jr. /s/ M. James Gorrie - ------------------------------- ------------------------------- (Signature) (Signature) Henry A. Long, Senior Vice M. James Gorrie, Executive Vice President President - ------------------------------- ------------------------------- (Printed name and title) (Printed name and title) EX-10.N 4 OWNER/CONTRACTOR AGR. Exhibit 10(n) AIA Document A111 (1987 Edition) Standard Form of Agreement between Owner and Contractor (Buildings) THIS AGREEMENT is executed on _______________ ___, 1994 but shall be effective for all purposes as of August 2, 1993 by and between AmSouth Bank N.A., a national banking association ("Owner"), P. O. Box 11007, Birmingham, Alabama 35288 and Brasfield & Gorrie, General Contractor, Inc. ("Contractor"), a Delaware Corporation, 729 South 30th Street, Birmingham, Alabama 35233. Background The Owner and Contractor entered into that certain Standard Form of Agreement Between Owner and contractor dated as of August 2, 1993 (the "Original Agreement") which provided for the construction of both the buildings and the infrastructure associated with the buildings in the AmSouth Riverchase Administrative Offices and Training Facility located on approximately ninety-three (93) acres of land in Riverchase in Hoover, Alabama. After some of the construction had been done, AmSouth entered into an agreement to sell the buildings to Sun Riverchase Limited Partnership ("Sun Riverchase"). In connection with that sale, the parties agreed that the Owner would assign the Original Agreement to Sun Riverchase insofar as it governs and provides for the construction of the buildings. The portion of the Original Agreement that governs and provides for the construction of the infrastructure will not be assigned, but will remain in effect between the Owner and the Contractor. In order to accomplish this, the Owner and the Contractor have agreed to divide the Original Agreement into two (2) agreements. This Agreement governs and provides for the construction of the buildings. Contemporaneously with the execution of this Agreement, the Owner and the Contractor are entering into that certain Standard Form of Agreement Between Owner and Contractor (Infrastructure) that governs and provides for the construction of the infrastructure. Agreement NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and adequacy of which is hereby acknowledged, the Owner and the Contractor hereby agree as follows: EXHIBIT 10(n) THE FOLLOWING DOCUMENT IS A REPRODUCTION OF AIA DOCUMENT A111, STANDARD FORM OF AGREEMENT BETWEEN OWNER AND CONTRACTOR PRINTED BY THE AMERICAN INSTITUTE OF ARCHITECTS, TENTH EDITION. THE BRACKETED PARAGRAPHS NUMBERED 12.6 THROUGH 12.6.3 AND PART OF 15.1 THROUGH 15.4 ARE MARKED THROUGH ON THE PRINTED ORIGINAL AND THE PARTIES TO THE AGREEMENT HAVE AGREED TO EXCLUDE THOSE PARAGRAPHS FROM THE AGREEMENT. AIA Document A111 Standard Form of Agreement Between Owner and Contractor where the basis of payment is the COST OF THE WORK PLUS A FEE with or without a Guaranteed Maximum Price 1987 EDITION THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION. This document has been approved and endorsed by The Associated General Contractors of America. AGREEMENT made as of the 2nd day of August in the year of Nineteen Hundred and Ninety-Three BETWEEN the Owner: AmSouth Bank N.A. (Name and address) Post Office Box 11007 Birmingham, Alabama 35288 and the Contractor: Brasfield & Gorrie General Contractor, Inc. (Name and address) 729 South 30th Street Birmingham, Alabama 35233 the Project is: AmSouth Riverchase Administrative (Name and address) Offices and Training Facility Riverchase Parkway and Parkway Office Circle Hoover, Alabama the Architect: Lohan Associates, Inc. (Name and address) 225 North Michigan Avenue, Suite 800 Chicago, Ill 60601 The Owner and Contractor agree as set forth below. ARTICLE 1 --------- THE CONTRACT DOCUMENTS 1.1 The Contract Documents consist of this Agreement, General Conditions of the Contract attached hereto, Drawings, Specifications, addenda issued prior and subsequent to execution of this Agreement, other documents listed in this Agreement and Modifications issued after execution of this Agreement: these form the Contract, and are as fully a part of the Contract as if attached to this Agreement or repeated herein. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. An enumeration of the Contract Documents, other than Modifications, appears in Article 16. If anything in the other Contract Documents is inconsistent with this Agreement, this Agreement shall govern. ARTICLE 2 --------- THE WORK OF THIS CONTRACT 2.1 The Contractor shall execute the entire Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others, or as follows: Two administrative office buildings, a pedestrian connector between them, a parking deck and a training facility for the AmSouth Bank Administrative/Training Facility Phase I located on approximately 93 acres of land in Riverchase in Hoover, Alabama. Attached hereto as Exhibit A is a line item budget and schedule of values, both in effect as of the date this Agreement is executed, which set out in more detail the scope of the Project. ARTICLE 3 --------- RELATIONSHIP OF THE PARTIES 3.1 The Contractor accepts the relationship of trust and confidence established by this Agreement and covenants with the Owner to cooperate with the Architect and utilize the Contractor's best skill, efforts and judgment in furthering the interests of the Owner; to furnish efficient business administration and supervision; to make best efforts to furnish at all times an adequate supply of workers and materials; and to perform the Work in the best way and most expeditious and economical manner consistent with the interests of the Owner. The Owner agrees to exercise best efforts to enable the Contractor to perform the Work in the best way and most expeditious manner by furnishing and approving in a timely way information required by the Contractor and making payments to the Contractor in accordance with requirements of the Contract Documents. ARTICLE 4 --------- DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION 4.1 The date of commencement is the date from which the Contract Time of Subparagraph 4.2 is measured; it shall be the date of this Agreement, as first written above, unless a different date is stated below or provision is made for the date to be fixed in a notice to proceed issued by the Owner. (Insert the date of commencement, if it differs from the date of this Agreement or, if applicable, state that the date will be fixed in a notice to proceed.) The date of commencement shall be the date so designated in a notice to proceed issued by the Owner, which date must be on or after the date on which a building permit for the Project has been issued by the City of Hoover. Unless the date of commencement is established by a notice to proceed issued by the Owner, the Contractor shall notify the Owner in writing not less than five days before commencing the Work to permit the timely filing of mortgages, mechanic's liens and other security interests. 4.2 The contractor shall achieve Substantial Completion of the entire Work not later than a date to be agreed upon by the Owner and Contractor at a later date, subject to adjustments of this Contract Time as provided in the Contract Documents. The Contractor agrees that at least 105,000 square feet of usable space on three contiguous floors (the "Space") must be substantially complete in time for the Owner's employees to fully occupy the Space and conduct business therein on June 1, 1995. (Insert the calendar date or number of calendar days after the date of commencement. Also insert any requirements for earlier Substantial Completion of certain portions of the Work, if not stated elsewhere in the Contract Documents.) (Insert provisions, if any, for liquidated damages relating to failure to complete on time.) The Contractor acknowledges that the Owner will need to begin moving into the Space and otherwise preparing the Space for occupancy as administrative offices prior to June 1 so that the Owner can fully conduct its business therein on and after June 1, and the Contractor will cooperate with and assist the Owner in so doing. The Owner agrees that the Space may be located on the top three floors of the North administrative office building. ARTICLE 5 --------- CONTRACT SUM 5.1 The Owner shall pay the Contractor in current funds for the Contractor's performance of the Contract the Contract Sum consisting of the Cost of the Work as defined in Article 7 less the cost of all materials and equipment which are purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent for the Owner, and for which the Owner pays the vendor thereof directly and the Contractor's Fee determined as follows: (State a lump sum, percentage of Cost of the Work or other provision for determining the Contractor's Fee, and explain how the Contractor's Fee is to be adjusted for changes in the Work.) The Contractor's Fee shall be Four Percent. (4%) of the Cost of the work. 5.2 GUARANTEED MAXIMUM PRICE (IF APPLICABLE) 5.2.1 The sum of the Cost of the Work and the Contractor's Fee is guaranteed by the Contractor not to exceed an amount to be determined at a later date; provided however that the cost of the work and the Contractor's Fee shall in no event exceed $62,167,864.00, Dollars ($ ), subject to additions and deductions by Change Order as provided in the Contract Documents. Such maximum sum is referred to in the Contract Documents as the Guaranteed Maximum Price. Costs which would cause the Guaranteed Maximum Price to be exceeded shall be paid by the Contractor without reimbursement by the Owner. (Insert specific provisions if the Contractor is to participate in any savings.) 5.2.2 The Guaranteed Maximum Price is based upon the following alternates, if any, which are described in the Contract Documents and are hereby accepted by the Owner: (State the numbers or other identification of accepted alternates, but only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1. If decisions on other alternates are to be made by the Owner subsequent to the execution of this Agreement, attach a schedule of such other alternates showing the amount for each and the date until which that amount is valid.) 5.2.3 The amounts agreed to for unit prices, if any, are as follows: (State unit prices only if a Guaranteed Maximum Price is inserted in Subparagraph 5.2.1.) ARTICLE 6 --------- CHANGES IN THE WORK 6.1 CONTRACTS WITH A GUARANTEED MAXIMUM PRICE 6.1.1 Adjustments to the Guaranteed Maximum Price on account of changes in the Work may be determined by any of the methods listed in Subparagraph 7.3.3 of the General Conditions. 6.1.2 In calculating adjustments to subcontracts (except those awarded with the Owner's prior consent on the basis of cost plus a fee), the terms "cost" and "fee" as used in Clause 7.3.3.3 of the General Conditions and the terms "costs" and "a reasonable allowance for overhead and profit" as used in subparagraph 7.3.6 of the General Conditions shall have the meanings assigned to them in the General Conditions and shall not be modified by Articles 5, 7 and 8 of this Agreement. Adjustments to subcontracts awarded with the Owner's prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts. 6.1.3 In calculating adjustments to this Contract, the terms "cost" and "costs" as used in the above-referenced provisions of the General Conditions shall mean the Cost of the Work as defined in Article 7 of this Agreement and the terms "fee" and "a reasonable allowance for overhead and profit" shall mean the Contractor's Fee as defined in Paragraph 5.1 of this Agreement. 6.2 CONTRACTS WITHOUT A GUARANTEED MAXIMUM PRICE 6.2.1 Increased costs for the items set forth in Article 7 which result from changes in the Work shall become part of the cost of the Work, and the Contractor's Fee shall be adjusted as provided in Paragraph 5.1. 6.3 ALL CONTRACTS 6.3.1 If no specific provision is made in Paragraph 5.1 for adjustment of the Contractor's Fee in the case of changes in the Work, or if the extent of such changes is such, in the aggregate, that application of the adjustment provisions of Paragraph 5.1 will cause substantial inequity to the Owner or Contractor, the Contractor's Fee shall be equitably adjusted on the basis of the Fee established for the original Work. ARTICLE 7 --------- COST OF THE WORK 7.1 The term Cost of the Work shall mean costs necessarily incurred by the Contractor in the proper performance of the Work plus the cost of all materials and equipment which are purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent for the Owner, and for which the Owner pays the Vendor thereof directly. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Owner. The Cost of the Work shall include only the items set forth in this Article 7. 7.1.1 LABOR COSTS 7.1.1.1 Wages of construction workers directly employed by the Contractor to perform the construction of the Work at the site or, with the Owner's agreement, at off-site workshops. 7.1.1.2 Wages or salaries of the Contractor's supervisory and administrative personnel when stationed at the site with the Owner's agreement. It is intended that all or part of the wages or salaries of certain personnel stationed at the Contractor's principal or other offices shall be included in the Cost of the Work when and as approved by the Owner. 7.1.1.3 Wages and salaries of the Contractor's supervisory or administrative personnel engaged, at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work. 7.1.1.4 Costs paid or incurred by the Contractor for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages and salaries included in the Cost of the Work under Clauses 7.1.1.1 through 7.1.1.3. 7.1.2 SUBCONTRACT COSTS Payments made by the Contractor to Subcontractors in accordance with the requirements of the subcontracts. 7.1.3 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED CONSTRUCTION 7.1.3.1 Costs (net of discounts), including transportation, of materials and equipment incorporated or to be incorporated in the completed construction. 7.1.3.2 Costs of materials described in the preceding Clause 7.1.3.1 in excess of those actually installed but required to provide reasonable allowance for waste and for spoilage. Unused excess materials, if any, shall be handed over to the Owner at the completion of the Work or, at the Owner's option, shall be sold by the Contractor; amounts realized, if any, from such sales shall be credited to the Owner as a deduction from the Cost of the Work. 7.1.4 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES AND RELATED ITEMS 7.1.4.1 Costs, including transportation, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site and fully consumed in the performance of the Work; and cost less salvage value on such items if not fully consumed, whether sold to others or retained by the Contractor. Cost for items previously used by the Contractor shall mean fair market value. 7.1.4.2 Rental charges for temporary facilities, machinery, equipment, and hand tools not customarily owned by the construction workers, which are provided by the Contractor at the site, whether rented from the Contractor or others, and costs of transportation, installation, minor repairs and replacements, dismantling and removal thereof. Rates and quantities of equipment rented shall be subject to the Owner's prior approval. 7.1.4.3 Costs of removal of debris from the site. 7.1.4.4 Costs of telegrams and long-distance telephone calls, postage and parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office. 7.1.4.5 That portion of the reasonable travel and subsistence expenses of the Contractor's personnel incurred while traveling in discharge of duties connected with the Work. 7.1.5 MISCELLANEOUS COSTS 7.1.5.1 That portion directly attributable to this Contract of premiums for insurance and bonds. 7.1.5.2 Sales, use or similar taxes imposed by a governmental authority which are related to the Work and for which the Contractor is liable. 7.1.5.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the Contractor is required by the Contract Documents to pay. 7.1.5.4 Fees of testing laboratories for tests required by the Contract Documents, except those related to defective or nonconforming Work for which reimbursement is excluded by Subparagraph 13.5.3 of the General Conditions or other provisions of the Contract Documents and which do not fall within the scope of Subparagraphs 7.2.2 through 7.2.4 below. 7.1.5.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement by the Contract Documents; payments made in accordance with legal judgments against the Contractor resulting from such suits or claims and payments of settlements made with the Owner's consent; provided, however, that such costs of legal defenses, judgment and settlements shall not be included in the calculation of the Contractor's Fee or of a Guaranteed Maximum Price, if any, and provided that such royalties, fees and costs are not excluded by the last sentence of Subparagraph 3.17.1 of the General Conditions or other provisions of the Contract Documents. 7.1.5.6 Deposits lost for causes other than the Contractor's fault or negligence. 7.1.6 OTHER COSTS 7.1.6.1 Other costs incurred in the performance of the Work if and to the extent approved in advance in writing by the Owner. 7.2 EMERGENCIES: REPAIRS TO DAMAGED, DEFECTIVE OR NONCONFORMING WORK The Cost of the Work shall also include costs described in Paragraph 7.1 which are incurred by the Contractor: 7.2.1 In taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property, as provided in Paragraph 10.3 of the General Conditions. 7.2.2 In repairing or correcting Work damaged or improperly executed by construction workers in the employ of the Contractor, provided such damage or improper execution did not result from the fault or negligence of the Contractor or the Contractor's foremen, engineers or superintendents, or other supervisory, administrative or managerial personnel of the Contractor. 7.2.3 In repairing damaged work other than that described in Subparagraph 7.2.2, provided such damage did not result from the fault or negligence of the Contractor or the Contractor's personnel, and only to the extent that the cost of such repairs is not recoverable by the Contractor from others and the Contractor is not compensated therefor by insurance or otherwise. 7.2.4 In correcting defective or nonconforming Work performed or supplied by a Subcontractor or material supplier and not corrected by them, provided such defective or nonconforming Work did not result from the fault or neglect of the Contractor or the Contractor's personnel adequately to supervise and direct the Work of the Subcontractor or material supplier, and only to the extent that the cost of correcting the defective or nonconforming Work is not recoverable by the Contractor from the Subcontractor or material supplier. ARTICLE 8 --------- COSTS NOT TO BE REIMBURSED 8.1 The cost of the work shall not include: 8.1.1 Salaries and other compensation of the Contractor's personnel stationed at the Contractor's principal office or offices other than the site office, except as specifically provided in Clauses 7.1.1.2 and 7.1.1.3 or as may be provided in Article 14. 8.1.2 Expenses of the Contractor's principal office and offices other than the site office. 8.1.3 Overhead and general expenses, except as may be expressly included in Article 7. 8.1.4 The Contractor's capital expenses, including interest on the Contractor's capital employed for the Work. 8.1.5 Rental costs of machinery and equipment, except as specifically provided in Clause 7.1.4.2. 8.1.6 Except as provided in Subparagraphs 7.2.2 through 7.2.4 and Paragraph 13.5 of this Agreement, costs due to the fault or negligence of the Contractor, Subcontractors, anyone directly or indirectly employed by any of them, or for whose acts any of them may be liable, including but not limited to costs for the correction of damaged, defective or nonconforming Work, disposal and replacement of materials and equipment incorrectly ordered or supplied, and making good damage to property not forming part of the Work. 8.1.7 Any cost not specifically and expressly described in Article 7. 8.1.8 Costs which would cause the Guaranteed Maximum Price, if any, to be exceeded. ARTICLE 9 --------- DISCOUNTS, REBATES AND REFUNDS 9.1 Cash discounts on payments made by the Owner shall accrue to the Owner. Cash discounts obtained on payments made by the Contractor shall accrue to the Owner if (1) before making the payment, the Contractor included them in an Application for Payment and received payment therefor from the Owner, or (2) the Owner has deposited funds with the Contractor with which to make payments; otherwise, cash discounts shall accrue to the Contractor. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Contractor shall make provisions so that they can be secured. 9.2 Amounts which accrue to the Owner in accordance with the provisions of Paragraph 9.1 shall be credited to the Owner as a deduction from the Cost of the Work. ARTICLE 10 ---------- SUBCONTRACTS AND OTHER AGREEMENTS 10.1 Those portions of the Work that the Contractor does not customarily perform with the Contractor's own personnel shall be performed under subcontracts or by other appropriate agreements with the Contractor. The Contractor shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall deliver such bids to the Architect. The Owner will then determine, with the advice of the Contractor and subject to the reasonable objection of the Architect, which bids will be accepted. The Owner may designate specific persons or entities from whom the Contractor shall obtain bids; however, if a Guaranteed Maximum Price has been established, the Owner may not prohibit the Contractor from obtaining bids from others. The Contractor shall not be required to contract with anyone to whom the Contractor has reasonable objection. 10.2 If a Guaranteed Maximum Price has been established and a specific bidder among those whose bids are delivered by the Contractor to the Architect (1) is recommended to the Owner by the Contractor; (2) is qualified to perform that portion of the Work; and (3) has submitted a bid which conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted; then the Contractor may require that a Change Order be issued to adjust the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Contractor and the amount of the subcontract or other agreement actually signed with the person or entity designated by the Owner. 10.3 Subcontracts or other agreements shall conform to the payment provisions of Paragraphs 12.7 and 12.8, and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner. ARTICLE 11 ---------- ACCOUNTING RECORDS 11.1 The Contractor shall keep full and detailed accounts and exercise such controls as may be necessary for proper financial management under this Contract; the accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner's accountants shall be afforded access to the Contractor's records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to this Contract, and the Contractor shall preserve these for a period of three years after final payment, or for such longer period as may be required by law. ARTICLE 12 ---------- PROGRESS PAYMENTS 12.1 Based upon Applications for Payment submitted to the Architect by the Contractor and Statements for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Contractor as provided below and elsewhere in the Contract Documents. 12.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the month, or as follows: 12.3 Provided an Application for Payment is received by the Architect not later than the 13th day of a month, the Owner shall make payment to the Contractor not later than the 2nd day of the following month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than 15 days after the Architect receives the Application for Payment. 12.4 With each Application for Payment the Contractor shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Contractor on account of the Cost of the Work equal or exceed (1) progress payments already received by the Contractor; less (2) that portion of those payments attributable to the Contractor's Fee; plus (3) payrolls for the period covered by the present Application for Payment; plus (4) retainage provided in Subparagraph 12.5.4, if any, applicable to prior progress payments. 12.5 CONTRACTS WITH A GUARANTEED MAXIMUM PRICE 12.5.1 Each Application for Payment shall be based upon the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Contractor's Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Contractor's Applications for Payment. 12.5.2 Applications for Payment shall show the percentage completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed or (2) the percentage obtained by dividing (a) the expense which has actually been incurred by the Contractor on account of that portion of the Work for which the Contractor has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. 12.5.3 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows: 12.5.3.1 Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the General Conditions, even though the Guaranteed Maximum Price has not yet been adjusted by Change Order. 12.5.3.2 Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing. 12.5.3.3 Add the Contractor's Fee, less retainage of two percent (2%). The Contractor's Fee shall be computed upon the Cost of the Work described in the two preceding Clauses at the rate stated in Paragraph 5.1 or, if the Contractor's Fee is stated as a fixed sum in that Paragraph, shall be an amount which bears the same ratio to that fixed-sum Fee as the Cost of the Work in the two preceding Clauses bears to a reasonable estimate of the probable Cost of the Work upon its completion. 12.5.3.4 Subtract the aggregate of previous payments made by the Owner, and the aggregate cost of all materials and equipment which were purchased on behalf of the Owner by the Contactor or a Subcontractor, as Agent of the Owner, and for which the Owner paid the vendor thereof directly. 12.5.3.5 Subtract the shortfall, if any, indicated by the Contractor in the documentation required by Paragraph 12.4 to substantiate prior Applications for Payment, or resulting from errors subsequently discovered by the Owner's accountants in such documentation. 12.5.3.6 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Paragraph 9.5 of the General Conditions. 12.5.4 Additional retainage, if any, shall be as follows: (If it is intended to retain additional amounts from progress payments to the Contractor beyond (1) the retainage from the Contractor's Fee provided in Clause 12.5.3.3.(2) the retainage from Subcontractors provided in Paragraph 12.7 below, and (3) the retainage, if any, provided by other provisions of the Contract, insert provision for such additional retainage here. Such provision, if made, should also describe any arrangement for limiting or reducing the amount retained after the Work reaches a certain state of completion.) See Subparagrah 9.8.3 of the General Conditions for the amount to be withheld by the Owner from the payment due the Contractor upon Substantial Completion. 12.7 Except with the Owner's prior approval, payments to Subcontractors included in the Contractor's Applications for Payment shall not exceed an amount for each Subcontractor calculated as follows: 12.7.1 Take that portion of the Subcontract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Subcontractor's Work by the share of the total Subcontract Sum allocated to that portion in the Subcontractor's schedule of values, less retainage of ten percent (10%).* Pending final determination of amounts to be paid to the Subcontractor for changes in the Work, amounts not in dispute may be included as provided in Subparagraph 7.3.7 of the General Conditions even though the Subcontract Sum has not yet been adjusted by Change Order. 12.7.2 Add that portion of the Subcontract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing, less retainage of ten percent (10%).* 12.7.3 Subtract the aggregate of previous payments made by the Contractor to the Subcontractor and the aggregate cost of all materials and equipment which were purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent of the Owner, and for which the Owner paid the Vendor thereof directly. 12.7.4 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment by the Owner to the Contractor for reasons which are the fault of the Subcontractor. 12.7.5 Add, upon Substantial Completion of the entire Work of the Contractor, a sum sufficient to increase the total payments to the Subcontractor to one hundred percent (100%) of the Subcontract Sum, less amounts, if any, for incomplete Work and unsettled claims; and, if final completion of the entire Work is thereafter materially delayed through no fault of the Subcontractor, add any additional amounts payable on account of Work of the Subcontractor in accordance with Subparagraph 9.10.3 of the General Conditions. (If it is intended, prior to Substantial Completion of the entire Work of the Contractor, to reduce or limit the retainage from Subcontractors resulting from the percentages inserted in Subparagraphs 12.7.1 and 12.7.2 above, and this is not explained elsewhere in the Contract Documents, insert here provisions for such reduction or limitation.) * The retainage withheld from Subcontractors with subcontracts providing for payment of costs plus a fee, with a guaranteed maximum price shall be Two percent (2%). If recommended by the General Contractor, retainage will not be withheld after Subcontractors' work is fifty percent. (50%) complete. The Subcontract Sum is the total amount stipulated in the subcontract to be paid by the Contractor to the Subcontractor for the Subcontractor's performance of the subcontract. 12.8 Except with the Owner's prior approval, the Contractor shall not make advance payments to suppliers for materials or equipment which have not been delivered and stored at the site. 12.9 In taking action on the Contractor's Applications for Payment, the Architect shall be entitled to rely on the accuracy and completeness of the information furnished by the Contractor and shall not be deemed to represent that the Architect has made a detailed examination, audit or arithmetic verification of the documentation submitted in accordance with Paragraph 12.4 or other supporting data; that the Architect has made exhaustive or continuous on-site inspections or that the Architect has made examinations to ascertain how or for what purposes the Contractor has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if required by the Owner, will be performed by the Owner's accountants acting in the sole interest of the Owner. ARTICLE 13 ---------- FINAL PAYMENT 13.1 Final payment shall be made by the Owner to the Contractor when (1) the Contract has been fully performed by the Contractor except for the Contractor's responsibility to correct defective or nonconforming Work, as provided in Subparagraph 12.2.2 of the General Conditions, and to satisfy other requirements, if any, which necessarily survive final payment; (2) a final Application for Payment and a final accounting for the Cost of the Work have been submitted by the Contractor and reviewed by the Owner's accountants; and (3) a final Statement for Payment has then been issued by the Architect as provided in Subparagraph 9.10.1 of the General Conditions; such final payment shall be made by the Owner not more than 30 days after the issuance of the Architect's final Statement for Payment, or as follows: 13.2 The amount of the final payment shall be calculated as follows: 13.2.1 Take the sum of the Cost of the Work substantiated by the Contractor's final accounting and the Contractor's Fee; but not more than the Guaranteed Maximum Price, if any. 13.2.2 Subtract amounts, if any, for which the Architect withholds, in whole or in part, a final Certificate for Payment as provided in Subparagraph 9.5.1 of the General Conditions or other provisions of the Contract Documents. 13.2.3 Subtract the aggregate of previous payments made by the Owner and the aggregate cost of all materials and equipment which were purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent of the Owner, and for which the Owner paid the Vendor thereof directly. If the aggregate of previous payments made by the Owner exceeds the amount due the Contractor, the Contractor shall reimburse the difference to the Owner. 13.3 The Owner's accountants will review and report in writing on the Contractor's final accounting within 30 days after delivery of the final accounting to the Architect by the Contractor. Based upon such Cost of the Work as the Owner's accountants report to be substantiated by the Contractor's final accounting, and provided the other conditions of Paragraph 13.1 have been met, the Architect will, within seven days after receipt of the written report of the Owner's accountants, either issue to the Owner a final Statement for Payment with a copy to the Contractor, or notify the Contractor and Owner in writing of the Architect's reasons for withholding a Statement as provided in Subparagraph 9.5.1 of the General Conditions. The time periods stated in this Paragraph 13.3 supersede those stated in Subparagraph 9.4.1 of the General Conditions. 13.4 If the Owner's accountants report the Cost of the Work as substantiated by the Contractor's final accounting to be less than claimed by the Contractor, the Contractor shall be entitled to demand arbitration of the disputed amount without a further decision of the Architect. Such demand for arbitration shall be made by the Contractor within 30 days after the Contractor's receipt of a copy of the Architect's final Statement for Payment: failure to demand arbitration within this 30-day period shall result in the substantiated amount reported by the Owner's accountants becoming binding on the Contractor. Pending a final resolution by arbitration, the Owner shall pay the Contractor the amount certified in the Architect's final Statement for Payment. 13.5 If, subsequent to final payment and at the Owner's request, the Contractor incurs costs described in Article 7 and not excluded by Article 8 to correct defective or nonconforming Work, the Owner shall reimburse the Contractor such costs and the Contractor's Fee applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price, if any. If the Contractor has participated in savings as provided in Paragraph 5.2, the amount of such savings shall be recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Contractor. ARTICLE 14 ---------- MISCELLANEOUS PROVISIONS 14.1 Where reference is made in this Agreement to a provision of the General Conditions or another Contract Document, the reference refers to that provision as amended or supplemented by other provisions of the Contract Documents. 14.2 Payments due and unpaid under the Contract shall bear interest from the date payment is due at the rate stated below, or in the absence thereof, at the legal rate prevailing from time to time at the place where the Project is located. (Insert rate of interest agreed upon, if any.) Prime rate of AmSouth Bank N.A. in effect from time to time during the applicable period or periods during which payments are past due. (Usury laws and requirements under the Federal Truth in Lending Act, similar state and local consumer credit laws and other regulations at the Owner's and Contractor's principal places of business, the location of the Project and elsewhere may affect the validity of this provision. Legal advice should be obtained with respect to deletions or modifications, and also regarding requirements such as written disclosure or waivers.) 14.3 Other provisions: The Cost of the Work includes the cost of materials and equipment which are purchased on behalf of the Owner by the Contractor or a Subcontractor, as Agent for the Owner, and for which the Owner pays the vendor thereof directly. To facilitate appropriate accounting for the Project, Applications for Payment will contain the cost of all such materials and equipment and will also contain a credit to the Owner for the cost of such materials and equipment. In no event shall the Contractor or any Subcontractor be entitled to reimbursement or payment for any such materials or equipment. ARTICLE 15 ---------- TERMINATION OR SUSPENSION 15.1 The Contract may be terminated by the Contractor or the Owner as provided in Article 14 of the General Conditions; ARTICLE 16 ---------- ENUMERATION OF CONTRACT DOCUMENTS 16.1 The Contract Documents, except for Modifications issued after execution of this Agreement, are enumerated as follows: 16.1.1 The Agreement is this executed Standard Form of Agreement Between Owner and Contractor, AIA Document A111, 1987 Edition. 16.1.2 The General Conditions are the General Conditions of the Contract for Construction, attached hereto. 16.1.3 The Supplementary and other Conditions of the Contract are those contained in the following list of Contract Documents: Document Title Pages Lohan Construction Documents through Addendum No. 13 dated 4/20/94 Lohan Training Center Design/Development Documents dated 12/14/93 L/S/W Design Development Documents dated 2/22/94 (Training Center Interiors Only) Lohan Training Center Design/Development Documents dated 11/17/93. and the Clarifications dated March 2 and 3, 1994 attached hereto as Schedule 16.1.3. 16.1.4 The Specifications are those contained in (Either list the Specifications here or refer to an exhibit attached to this Agreement.) Section Title Pages Clarifications and Contract Documents listed in subparagraph 16.1.3 hereof. 16.1.5 The Drawings are: (Either list the Drawings here or refer to an exhibit attached to this Agreement.) Number Title Date Contained in the Clarifications and Contract Documents listed in Subparagraph 16.1.3 hereof. 16.1.6 The Addenda, if any, are: Contained in the Clarifications and Contract Documents listed in subparagraph 16.1.3 hereof. Portions of Addenda relating to bidding requirements are not part of the Contract Documents unless the bidding requirements are also enumerated in this Article 16. 16.1.7 Other Documents, if any, forming part of the Contract Documents are as follows: (List here any additional documents which are intended to form part of the Contract Documents. The General Conditions provide that bidding requirements such as advertisement or invitation to bid, instructions to Bidders, sample forms and the Contractor's bid are not part of the Contract Documents unless enumerated in this Agreement. They should be listed here only if intended to be part of the Contract Documents.) This Agreement is entered into as of the day and year first written above and is executed in at least three original copies of which one is to be delivered to the Contractor, one to the Architect for use in the administration of the Contract, and the remainder to the Owner. OWNER CONTRACTOR /s/ Henry A. Long, Jr. /s/ M. James Gorrie - ------------------------ ------------------------- (Signature) (Signature) Henry A. Long, Jr. M. James Gorrie Sr. Vice President Executive Vice President - ----------------------------------------- ------------------------- (Printed name and title) (Printed name and title) EX-10.O 5 BRASFIELD & GORRIE LTR. Exhibit 10-0 - ------------------------------------------------------------------------------- [LOGO OF AMSOUTH APPEARS HERE] ____________ ___,1994 Brasfield & Gorrie General Contractor, Inc. P.O. Box 10383 Birmingham, Alabama 35202 Attention: Charles L. Grizzle, Jr., Esquire Dear Chip: AmSouth Bank, N.A. ("AmSouth") is today entering into the Standard Form of Agreement between Owner and Contractor (Buildings) (the "Agreement") with Brasfield & Gorrie General Contractor, Inc. ("Brasfield & Gorrie"). AmSouth desires to assign the Agreement to Sun Riverchase, Limited Partnership ("Sun Riverchase"). In consideration for Brasfield & Gorrie's consent to the assignment of the Agreement and for other good and valuable consideration, receipt of which is hereby acknowledged, so long as Brasfield & Gorrie performs its obligations under the Agreement AmSouth does hereby unconditionally guarantee the full payment of all amounts due to Brasfield & Gorrie under the Agreement as such amounts become due. AmSouth shall pay all collection costs, including reasonable attorney's fees, in the event Brasfield & Gorrie initiates legal action to enforce the guarantee set forth herein. AmSouth also agrees that it will cooperate with Brasfield & Gorrie in the enforcement of Brasfield & Gorrie's rights against Sun Riverchase under the Agreement, including, if and to the extent Charles L. Grizzle, Jr., Esquire ____________ __, 1994 Page 2. necessary, allowing Brasfield & Gorrie to bring lawsuits or actions against Sun Riverchase in the name of AmSouth. If Brasfield & Gorrie desires to bring any such lawsuit or action against Sun Riverchase, it will give AmSouth notice of the same with a full explanation of the factual and legal basis thereof and give AmSouth the opportunity to pursue or participate in, at AmSouth's election, such lawsuit or action. Brasfield & Gorrie shall pay the reasonable costs and expenses of any such lawsuit or action pursued or participated in by AmSouth. AMSOUTH BANK N.A. BY: /s/ Henry A. Long Jr. ---------------------------- TITLE: SR. VICE PRESIDENT ------------------------- Agreed, this __ day of ___________, 1994 Brasfield & Gorrie General Contractor, Inc. By: /s/ M. James Gorrie ------------------------------ Title: Executive Vice President --------------------------- EX-11 6 COMP. OF EARNINGS EXHIBIT 11 AMSOUTH BANCORPORATION COMPUTATION OF EARNINGS PER COMMON SHARE
SIX MONTHS THREE MONTHS ENDED JUNE 30 ENDED JUNE 30 ------------------- ------------------- 1994 1993 1994 1993 --------- --------- --------- --------- (IN THOUSANDS EXCEPT PER SHARE DATA) Net income............................. $81,874 $77,774 $42,900 $39,699 ========= ========= ========= ========= Average shares of common stock out- standing.............................. 54,588 50,345 54,782 50,965 ========= ========= ========= ========= Earnings per common share.............. $ 1.50 $ 1.54 $ 0.78 $ 0.78 ========= ========= ========= =========
24 EX-15 7 LETTER RE: UNAUDIT EXHIBIT 15--LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION Board of Directors AmSouth Bancorporation We are aware of the incorporation by reference in the following Registration Statements and in their related Prospectuses, of our report dated August 10, 1994, relating to the unaudited consolidated interim financial statements of AmSouth Bancorporation and subsidiaries which are included in its Form 10-Q for the quarter ended June 30, 1994: Form S-8 No. 33-52243 pertaining to the assumption by AmSouth Bancorporation of FloridaBank Stock Option Plan and Stock Option Plan-- 1993; Form S-8 No. 33-52113 pertaining to the 1989 Long Term Incentive Compensation Plan; Form S-3 No. 33-50363 pertaining to the Debt Shelf Registration; Form S-8 No. 33-35218 pertaining to the 1989 Long Term Incentive Compensation Plan; Form S-8 No. 33-37905 pertaining to the AmSouth Bancorporation Thrift Plan; Form S-8 No. 33-9368 pertaining to the Long Term Incentive Compensation Plan; Form S-8 No. 33-2927 (as amended) pertaining to the Employee Stock Purchase Plan; Form S-8 No. 2-97464 pertaining to the Long Term Incentive Compensation Plan; Form S-3 No. 33-35280 pertaining to the Dividend Reinvestment and Common Stock Purchase Plan; Form S-8 No. 33-19016 pertaining to the Long Term Incentive Compensation Plan; and Form S-8 No. 33-18653 pertaining to the 1987 Substitute Stock Option Plan. Pursuant to Rule 436(c) of the Securities Act of 1933 our reports are not a part of the registration statements prepared or certified by accountants within the meaning of Sections 7 or 11 of the Securities Act of 1933. /s/ Ernst & Young August 10, 1994 25 -----END PRIVACY-ENHANCED MESSAGE-----