-----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, jEYLbjwy/6iEj9Zwe69gTyC2uxltM2U5jiuxYs1DAzpvmeOIbjnQLRnz5KNXyI6L my6C1SYmFNyBT3q5RiK1SA== 0000037076-94-000087.txt : 19940526 0000037076-94-000087.hdr.sgml : 19940526 ACCESSION NUMBER: 0000037076-94-000087 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19940524 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTAR CORP/WI CENTRAL INDEX KEY: 0000037076 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 390711710 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: 1933 Act SEC FILE NUMBER: 033-53781 FILM NUMBER: 94530172 BUSINESS ADDRESS: STREET 1: 777 E WISCONSIN AVE CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4147654985 MAIL ADDRESS: STREET 1: 777 EAST WISCONSIN AVENUE CITY: MILWAUKEE STATE: WI ZIP: 53202 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WISCONSIN CORP DATE OF NAME CHANGE: 19890124 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WISCONSIN BANKSHARES CORP DATE OF NAME CHANGE: 19750204 S-4 1 FIRSTAR CORPORATION 777 EAST WISCONSIN AVENUE MILWAUKEE, WI U.S.A. 53202 May 23, 1994 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D. C. 20549 Re: Firstar Corporation Registration Statement on Form S-4 Ladies and Gentlemen: On behalf of Firstar Corporation, a Wisconsin corporation ("Firstar"), pursuant to Regulation S-T, we are transmitting herewith for filing Firstar's Registration Statement on Form S-4 ("Registration Statement"), including all exhibits filed as a part thereof. The Registration Statement covers the issuance of up to 1,801,577 shares of Common Stock, $1.25 par value, of Firstar and 900,789 associated Preferred Stock Purchase Rights to be issued in the proposed merger of First Southeast Banking Corp., a non-public company, into Firstar Corporation of Wisconsin, a wholly owned subsidiary of Firstar. Comments and questions regarding the enclosed should be communicated to the undersigned at (414) 765-5479 or to Joan M. Fagan, Assistant General Counsel, at (414) 765-5618. Very truly yours, William J. Schulz First Vice President, Secretary and Deputy General Counsel Registration No. 33-__________________ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-4 REGISTRATION STATEMENT Under the Securities Act of 1933 FIRSTAR CORPORATION (Exact name of Registrant as specified in its charter) Wisconsin (State or other jurisdiction of incorporation or organization) 6022 (Primary Standard Industrial Classification Code No.) 39-0711710 (I.R.S. Employer Identification No.) 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 (414) 765-4321 (Address, including ZIP Code, and telephone number, including area code, of registrant's principal executive officers) Howard H. Hopwood III, Esq. Senior Vice President & General Counsel 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 (414) 765-5977 (Name, address, including ZIP Code, and telephone number, including area code, of agent for service) Copy to: Robert J. Kalupa, Esq. Quarles & Brady 411 East Wisconsin Avenue Milwaukee, Wisconsin 53202 (414) 277-5329 Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / CALCULATION OF REGISTRATION FEE Title of Each Class of Securities to be Registered: Common Stock ($1.25 par value) Preferred Share Purchase Rights Amount to be Registered(1): 1,801,577 shares (Common Stock) 900,789 rights (Rights) Proposed Maximum Offering Price Per Unit: $289.32(2) (Common Stock) (3) (Rights) Proposed Maximum Aggregate Offering Price: $30,809,000(2) (Common Stock) (3) (Rights) Amount of Registration Fee: $10,623.87 (Common Stock) (3) (Rights) (1) The amount being registered represents the number of shares of Firstar Corporation Common Stock and associated Preferred Stock Purchase Rights that will be issued in connection with the conversion and exchange of all outstanding shares of Common Stock of First Southeast Banking Corp. as described herein. (2) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(f)(2) based upon the book value per share of First Southeast Banking Corp. Common Stock on March 31, 1994 ($289.32) and the 106,486 shares of First Southeast Banking Corp. Common Stock that are outstanding and which are to be received by the Registrant or cancelled in the transaction discussed herein. (3) The value attributable to the Preferred Stock Purchase Rights is reflected in the market price of the Firstar Common Stock to which the Rights are attached. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. FIRSTAR CORPORATION Cross-Reference Sheet to Proxy Statement-Prospectus Pursuant to Rule 501(b) of Regulation S-K Location in Proxy Statement- Item of Form S-4 Prospectus A. INFORMATION ABOUT THE TRANSACTION 1. Forepart of Registration Statement Facing Page of and Outside Front Cover Page of Registration Prospectus ....................... Statement; Cross Reference Sheet; Cover Page of Proxy Statement- Prospectus 2. Inside Front Cover and Outside Inside Front Back Cover Pages of Prospectus ... Cover Page of Proxy Statement- Prospectus 3. Risk Factors, Ratio of Earnings to Fixed Charges and Other Information ...................... Summary 4. Terms of the Transaction ......... Summary; Meeting Information; The Proposed Merger 5. Pro Forma Financial Information .. * 6. Material Contacts with the Company Being Acquired ........... The Proposed Merger 7. Additional Information Required for Reoffering by Persons and Parties Deemed to be Underwriters * 8. Interests of Named Experts and Counsel .......................... Experts; Opinions 9. Disclosure of Commission Position on Indemnification for Securities Act Liabilities .................. * ------------------ *Omitted since the answer is negative or Item is not applicable. B. INFORMATION ABOUT THE REGISTRANT 10. Information with Respect to S-3 Registrants ...................... Firstar Corporation 11. Incorporation of Certain Incorporation of Information by Reference ......... Certain Information by Reference 12. Information with Respect to S-2 or S-3 Registrants ............... * 13. Incorporation of Certain Information by Reference ......... * 14. Information with Respect to Registrants other than S-3 or S-2 Registrants .................. * C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED 15. Information with Respect to S-3 Companies ........................ * 16. Information with Respect to S-2 or S-3 Companies ................. * 17. Information with Respect to Companies other than S-3 or First Southeast S-2 Companies .................... Banking Corp. and the Banks D. VOTING AND MANAGEMENT INFORMATION 18. Information if Proxies, Consents Outside Front or Authorizations are to be Cover Page of Solicited ........................ Proxy Statement- Prospectus; Summary; Meeting Information; The Proposed Merger 19. Information if Proxies, Consents or Authorizations are not to be Solicited or in an Exchange Offer ............................ * ------------------ *Omitted since the answer is negative or Item is not applicable. FIRST SOUTHEAST BANKING CORP. 303 Center Street Lake Geneva, Wisconsin 53147 ___________________________ NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD JULY ____, 1994 ___________________________ To the Shareholders of First Southeast Banking Corp.: NOTICE IS HEREBY GIVEN that a special meeting ("Special Meeting") of the shareholders of First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, pursuant to action of the Board of Directors, will be held at the offices of First Southeast, 303 Center Street, Lake Geneva, Wisconsin, on July ____, 1994 at 9:00 a.m. local time, for the purpose of considering and voting upon the following matters: 1. The approval and adoption of an Agreement and Plan of Reorganization and a Plan of Merger, each dated as of February 10, 1994, that provide for, among other things, the merger of First Southeast with and into Firstar Corporation of Wisconsin, a wholly owned subsidiary of Firstar Corporation, and for the conversion of the outstanding shares of First Southeast Common Stock into the right to receive shares of Firstar Corporation Common Stock and associated Preferred Stock Purchase Rights, as described and set forth in the Proxy Statement-Prospectus accompanying this notice (the "Merger"); and 2. Such other matters as may properly be brought before the Special Meeting or any adjournment or adjournments thereof. First Southeast shareholders have the statutory right to assert dissenters' rights under Sections 180.1301 to 180.1331 of the Wisconsin Business Corporation Law. In order to perfect this right, a First Southeast shareholder must not vote in favor of the Merger (this may be done by marking the proxy either to vote against the Merger or to abstain from voting thereon or by not voting at all) and must take such other action as is required by such statute, including delivery of, prior to the vote upon the Merger, written notice of intent to demand the "fair value" of the shareholder's First Southeast Common Stock. A copy of Section 180.1301 et seq. of the Wisconsin Business Corporation Law is attached as Exhibit A to the Proxy Statement-Prospectus. The Special Meeting may be postponed or adjourned from time to time without any notice other than by announcement at the Special Meeting of any postponements or adjournments thereof, and any and all business for which notice is hereby given may be transacted at such postponed or adjourned Special Meeting. THE BOARD OF DIRECTORS OF FIRST SOUTHEAST BELIEVES THE PROPOSED MERGER IS IN THE BEST INTERESTS OF FIRST SOUTHEAST AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF FIRST SOUTHEAST VOTE "FOR" PROPOSAL NUMBER ONE (1) ABOVE. The affirmative vote of the holders of a majority of the shares of common stock of First Southeast outstanding on the record date of May 31, 1994, is required to approve the above proposal. If you are unable to attend the Special Meeting in person, please complete, date and sign the enclosed proxy, which is solicited by First Southeast's Board of Directors, and return it promptly to First Southeast, so that your shares may be voted in accordance with your wishes. The giving of such proxy does not affect your right to vote in person in the event you attend the Special Meeting. You may revoke the proxy at any time prior to its exercise by later proxy received by, or by giving written notice to First Southeast or by attending the Special Meeting and voting in person. By Order of the Board of Directors _________________________________ David A. Straz, Jr., President June ____, 1994 PROSPECTUS OF FIRSTAR CORPORATION ____________________ PROXY STATEMENT OF FIRST SOUTHEAST BANKING CORP. ____________________ This Proxy Statement-Prospectus relates to shares of Common Stock of Firstar Corporation ("Firstar"), a Wisconsin corporation, to be issued pursuant to an Agreement and Plan of Reorganization, dated as of February 10, 1994 (the "Reorganization Agreement"), providing for the merger of First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a wholly owned subsidiary of Firstar. This Proxy Statement-Prospectus also serves as a proxy statement for the special meeting of shareholders of First Southeast to be held on July ____, 1994, and any adjournments or postponements thereof (the "Special Meeting"). A description of the proposed merger is included herein. This Proxy Statement-Prospectus is being furnished to the shareholders of First Southeast in connection with the solicitation of proxies by the Board of Directors of First Southeast for use at the Special Meeting. At the Special Meeting, holders of First Southeast Common Stock will consider and vote upon the approval and adoption of the Reorganization Agreement and a related Plan of Merger dated as of February 10, 1994 by and between First Southeast and FCW and joined in by Firstar for certain limited purposes (the "Plan of Merger" and, together with the Reorganization Agreement, the "Merger Agreements"), which provide for the merger of First Southeast with and into FCW (the "Merger"). Under the Merger Agreements, each outstanding share of common stock of First Southeast, $1.00 par value ("First Southeast Common Stock"), (other than shares held by any shareholder who properly exercises and preserves his statutory dissenter's rights) will be converted into the right to receive 16.91844 shares of common stock of Firstar, $1.25 par value, and associated Preferred Stock Purchase Rights (collectively referred to herein as "Firstar Common Stock"), subject to certain adjustments as provided in the Merger Agreements in connection with changes in Firstar Common Stock. Firstar Common Stock is traded on the New York Stock Exchange and the Chicago Stock Exchange, Incorporated. The composite closing price of Firstar Common Stock on such exchanges on ___, 1994 was $__________. Firstar has filed a Registration Statement on Form S-4 pursuant to the provisions of Rule 145 under the Securities Act of 1933, as amended, covering the shares of Firstar Common Stock to be issued in connection with the Merger. This Proxy Statement-Prospectus also constitutes a prospectus of Firstar filed as part of such Registration Statement. All information herein with respect to Firstar and FCW has been furnished by Firstar and all information with respect to First Southeast and the Banks has been furnished by First Southeast. This Proxy Statement-Prospectus does not cover any resale of the securities to be received by shareholders of First Southeast upon consummation of the Merger and no person is authorized to make any use of this Proxy Statement-Prospectus in connection with any such resale. Copies of this Proxy Statement-Prospectus will be mailed to shareholders on or about June ___, 1994. __________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONER NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Proxy Statement-Prospectus is June ___, 1994. __________________ AVAILABLE INFORMATION Firstar is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the Regional Offices of the Commission at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60621-2511; and 26 Federal Plaza, Room 1228, New York, New York 10007. Copies of such material may also be obtained at prescribed rates by writing to the Public Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, reports, proxy statements and other information filed by Firstar with the New York Stock Exchange and the Chicago Stock Exchange, Incorporated may be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005 and the Chicago Stock Exchange Incorporated, 440 South LaSalle Street, Chicago, Illinois 60605. No person is authorized to give any information or make any representation not contained in this Proxy Statement-Prospectus and, if given or made, the information or representation should not be relied upon as having been authorized by Firstar, FCW or First Southeast. This Proxy Statement-Prospectus does not constitute an offer to sell or a solicitation of an offer to purchase the securities offered hereby, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make such offer or solicitation of an offer or proxy in such jurisdiction. Neither the delivery of this Proxy Statement-Prospectus nor any distribution of the securities to which this Proxy Statement-Prospectus relates shall, under any circumstances, create any implication that there has been no change in the affairs of Firstar, FCW or First Southeast since the date of this Proxy Statement-Prospectus. INCORPORATION OF CERTAIN INFORMATION BY REFERENCE THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE DOCUMENTS (OTHER THAN EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH INCORPORATED DOCUMENTS) ARE AVAILABLE UPON REQUEST WITHOUT CHARGE FROM MR. WILLIAM H. RISCH, SENIOR VICE PRESIDENT-FINANCE AND TREASURER, FIRSTAR CORPORATION, 777 EAST WISCONSIN AVENUE, MILWAUKEE, WISCONSIN 53202 (TELEPHONE 414/765-4985). IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY ____________________________, 1994. [insert date 5 business days before shareholder meeting] The following documents filed by Firstar with the Commission are incorporated herein by reference: (a) Firstar's Annual Report on Form 10-K for the year ended December 31, 1993; (b) Firstar's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994; and (c) the description of Firstar Common Stock (including the Preferred Stock Purchase Rights) contained in Firstar's registration statements filed pursuant to Section 12 of the Exchange Act and any amendment or report filed for the purpose of updating such description. All documents subsequently filed by Firstar pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof and prior to the Closing Date referred to herein will be deemed to be incorporated by reference into this Proxy Statement-Prospectus and to be a part hereof from the date of filing of the documents. Any statement contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof to the extent that a statement contained herein (or in any subsequently filed document which also is incorporated by reference herein) modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed to constitute a part hereof except as so modified or superseded. FIRSTAR CORPORATION AND FIRST SOUTHEAST BANKING CORP. PROXY STATEMENT-PROSPECTUS TABLE OF CONTENTS Page SUMMARY ............................................... Firstar Corporation and Firstar Corporation of Wisconsin ...................................... First Southeast Banking Corp. .................... The Proposed Merger .............................. The Meeting ...................................... Vote Required .................................... Recommendation of the Board of Directors ......... Dissenters' Rights ............................... Certain Federal Income Tax Consequences .......... Accounting Treatment ............................. Date of the Proposed Merger ...................... Terms and Conditions of the Merger; Regulatory Approval ............................ Management and Operations After the Merger ....... Waivers and Amendments to the Merger Agreements .. Termination ...................................... Interests of Certain Persons in the Merger ....... Resales of Firstar Common Stock by Affiliates .... Preferred Stock Purchase Rights .................. Markets and Dividends ............................ Selected Consolidated Financial Data of Firstar Corporation .................................... Selected Consolidated Financial Data of First Southeast Banking Corp. .................. Comparative Per Common Share Data ................ Historical and Pro Forma Selected Financial Contributions .................................. MEETING INFORMATION ................................... General .......................................... Date, Place and Time ............................. Record Date; Vote Required ....................... Voting and Revocation of Proxies ................. Solicitation of Proxies .......................... THE PROPOSED MERGER ................................... Background of and Reasons for the Merger ......... First Southeast Board Recommendation ............. Terms ............................................ Voting and Stock Purchase Agreements of First Southeast's Shareholders ................. Material Contacts Between Firstar and First Southeast ................................ Conduct of Business Until the Merger ............. Date of the Merger ............................... Conditions to the Merger ......................... Regulatory Approval .............................. Termination, Amendment and Waiver of Merger Agreements .............................. Management and Operations of First Southeast After the Merger; Interests of First Southeast Management in the Merger ....................... Certain Federal Income Tax Consequences .......... Certain Differences in Rights of Shareholders .... Accounting Treatment of the Merger ............... Resale of Firstar Common Stock ................... Rights of Dissenting Shareholders ................ FIRSTAR CORPORATION ................................... General .......................................... Competition ...................................... Supervision ...................................... Other Acquisitions and Transactions .............. Incorporation of Certain Information by Reference FIRST SOUTHEAST BANKING CORP. AND THE BANKS ........... General .......................................... Services ......................................... Competition ...................................... Properties ....................................... Regulation ....................................... Management ....................................... Share Ownership .................................. Markets and Dividends ............................ Management's Discussion and Analysis of Operations and Financial Condition - Tables .... Management's Discussion and Analysis of Operations and Financial Condition ............. OPINIONS .............................................. EXPERTS ............................................... SHAREHOLDER PROPOSALS ................................. INDEX TO FIRST SOUTHEAST BANKING CORP. CONSOLIDATED FINANCIAL STATEMENTS ................................ EXHIBIT Exhibit A - Section 180.1301 et seq. of the Wisconsin Business Corporation Law SUMMARY The following is a brief summary of certain information with respect to matters to be considered at the special meeting (the "Special Meeting") of shareholders of First Southeast Banking Corp. ("First Southeast"). This summary includes information presented in connection with the proposed acquisition by Firstar Corporation ("Firstar") of all of the outstanding common stock of First Southeast, $1.00 par value ("First Southeast Common Stock"). This summary is not intended to be complete and is qualified in its entirety by reference to the more detailed information contained elsewhere in this Proxy Statement of First Southeast and Prospectus of Firstar, including the Exhibit hereto (this "Proxy Statement-Prospectus"), and the documents incorporated in this Proxy Statement-Prospectus by reference. Shareholders are urged to review carefully the entire Proxy Statement-Prospectus. Firstar Corporation and Firstar Corporation of Wisconsin: Firstar, a Wisconsin corporation whose common stock, $1.25 par value, and associated Preferred Stock Purchase Rights (collectively referred to herein as "Firstar Common Stock"), are traded on the New York Stock Exchange and the Chicago Stock Exchange, is a multi-bank holding company organized in 1929. The principal assets of Firstar are its investments in Firstar Bank Milwaukee, N.A. and 34 other banks with offices located in the states of Wisconsin, Minnesota, Illinois, Iowa and Arizona. On March 31, 1994, Firstar had consolidated total assets of $13.9 billion and stockholders' equity of $1.2 billion. Firstar's principal executive offices are located at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 (telephone: (414) 765-4321). See "FIRSTAR CORPORATION." Additional information concerning Firstar is included in the Firstar documents incorporated herein by reference. See "FIRSTAR CORPORATION--Incorporation of Certain Information by Reference." Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a wholly owned subsidiary of Firstar, is a multi-bank holding company. The principal assets of FCW are its investments in Firstar's 18 banks with offices located in Wisconsin. FCW's principal executive offices are located at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 (telephone: (414) 765-5848). First Southeast Banking Corp.: First Southeast, a Wisconsin corporation, is a bank holding company. On March 31, 1994, First Southeast had consolidated total assets of $422.3 million and stockholders' equity of $30.8 million. First Southeast's principal executive offices are located at 303 Center Street, Lake Geneva, Wisconsin 53147 (telephone (414) 248-9116). First Southeast, together with bank directors, owns all of the 240,000 issued and outstanding shares of common stock of First Bank Southeast, N.A. ("First Bank Southeast"), a national bank which is headquartered in Milwaukee, Wisconsin, and 81,478 of the 83,000 issued and outstanding shares of common stock of First Bank Southeast of Lake Geneva, N.A. ("First Bank Lake Geneva," and, together with First Bank Southeast, the "Banks"), a national bank which is headquartered in Lake Geneva, Wisconsin. See "FIRST SOUTHEAST BANKING CORP. AND THE BANKS." The Proposed Merger: Firstar, First Southeast and FCW have entered into an Agreement and Plan of Reorganization dated as of February 10, 1994 (the "Reorganization Agreement") and a related Plan of Merger dated as of February 10, 1994 (the "Plan of Merger" and, together with the Reorganization Agreement, the "Merger Agreements"), providing, among other things, for the merger (the "Merger") of First Southeast with and into FCW, as a result of which Firstar will directly own 100% of the stock of the surviving corporation, FCW, and indirectly own all of the issued and outstanding shares of common stock of the Banks. See "THE PROPOSED MERGER." Subject to certain limitations and dissenters' rights provided by law and certain adjustments set forth in the Merger Agreements which relate to changes in Firstar Common Stock, upon consummation of the Merger each outstanding share of First Southeast Common Stock will be converted into the right to receive 16.91844 shares of common stock of Firstar, $1.25 par value, and associated Preferred Stock Purchase Rights (collectively referred to herein as "Firstar Common Stock," unless otherwise required by context). Upon the Merger, the rights of First Southeast shareholders will be governed by Wisconsin law and the Restated Articles of Incorporation and Bylaws of Firstar. See "THE PROPOSED MERGER--Terms." The Meeting: A special meeting of the shareholders of First Southeast (the "Special Meeting") will be held at the offices of First Southeast, 303 Center Street, Lake Geneva, Wisconsin, on July ____, 1994 at 9:00 a.m., local time. The close of business on May 31, 1994 is the record date (the "Record Date") for determining the holders of record of First Southeast Common Stock entitled to notice of and to vote at the Special Meeting and any postponement or adjournments thereof. The purpose of the Special Meeting is to consider and vote upon a proposal to approve the Merger Agreements. For additional information relating to the Special Meeting, see "MEETING INFORMATION." Vote Required: The Wisconsin Business Corporation Law requires that the Merger Agreements be approved by the affirmative vote of a majority of the outstanding shares of common stock of First Southeast. As of the Record Date, there were outstanding and entitled to vote 106,486 shares of First Southeast Common Stock, of which 105,886 were held by directors and executive officers of First Southeast. Neither Firstar nor any of its or FCW's directors or executive officers own any shares of First Southeast Common Stock. In order to induce Firstar to enter into the Merger Agreements, all the shareholders of First Southeast (the "Shareholders") have agreed to vote all of their shares of First Southeast Common Stock in favor of the Merger Agreements, pursuant to the terms of certain Voting and Stock Purchase Agreements with Firstar (the "Voting Agreements"). The Shareholders own 100% of the total outstanding shares of First Southeast Common Stock on the Record Date; thus, First Southeast is assured of approval of the Merger Agreements. The Voting Agreements also grant Firstar an option to purchase the Shareholders' First Southeast Common Stock, subject to certain conditions. See "MEETING INFORMATION--Record Date; Vote Required" and "THE PROPOSED MERGER--Voting and Stock Purchase Agreements of First Southeast's Shareholders." Recommendation of the Board of Directors: The Board of Directors of First Southeast recommends that First Southeast shareholders vote for approval of the Merger Agreements. The Board believes that the terms of the Merger Agreements are fair and that the Merger is in the best interest of First Southeast and its shareholders. In making its recommendation, the Board has not sought the advice of an independent financial advisor. See "THE PROPOSED MERGER--Background of and Reasons for the Merger; First Southeast Board Recommendation." Dissenters' Rights: Under the provisions of Wisconsin law, any shareholders of First Southeast who assert dissenters' rights will have a statutory right to demand payment of the "fair value" of their First Southeast Common Stock in cash. To perfect this right, an First Southeast shareholder must not vote such shares in favor of the Merger Agreements at the Special Meeting (this may be done by marking the proxy either to vote against the Merger Agreements or to abstain from voting thereon or by not voting at all) and must take such other action as is required by the provisions of Sections 180.1301 to 18.1331 of the Wisconsin Business Corporation Law, including delivering written notice of intent to demand the "fair value" of First Southeast Common Stock. See "THE PROPOSED MERGER--Rights of Dissenting Shareholders" and Exhibit A hereto. Certain Federal Income Tax Consequences: It is expected that the Merger will constitute a tax-free reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code (the "Code"), and, therefore, that holders of First Southeast Common Stock who receive Firstar Common Stock in the Merger will not recognize gain or loss for federal income tax purposes as a result of the Merger (except upon the receipt of cash in lieu of fractional shares of Firstar Common Stock or upon the receipt of cash pursuant to dissenting shareholders' right of appraisal). Receipt by First Southeast of an opinion of tax counsel to that effect is a condition to First Southeast's obligations under the Merger Agreements. IT IS RECOMMENDED THAT EACH FIRST SOUTHEAST SHAREHOLDER CONSULT HIS OR HER OWN TAX ADVISER CONCERNING THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER, AS WELL AS ANY APPLICABLE STATE, LOCAL OR FOREIGN TAX CONSEQUENCES, BASED UPON SUCH SHAREHOLDER'S OWN PARTICULAR FACTS AND CIRCUMSTANCES. See "THE PROPOSED MERGER--Certain Federal Income Tax Consequences." Accounting Treatment: Firstar anticipates that the Merger will be accounted for as a pooling of interests. See "THE PROPOSED MERGER--Accounting Treatment of the Merger." Date of the Proposed Merger: The Merger Agreements provide that the Merger will be consummated within five business days of the satisfaction or waiver of the conditions to the Merger Agreements, including the receipt of all necessary approvals of governmental agencies and authorities and expiration of the statutory 30-day waiting period after approval by the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") or on another mutually agreed upon date. It is presently anticipated that the Merger will be consummated in July, 1994. See "THE PROPOSED MERGER--Date of the Merger; Conditions to the Merger." Terms and Conditions of the Merger; Regulatory Approval: The Merger is conditioned upon approval by the shareholders of First Southeast and the Federal Reserve Board and upon the satisfaction of other terms and conditions of the Merger Agreements, including treatment of the Merger as a pooling of interests for accounting purposes. On May ___, 1994, the Federal Reserve Board accepted Firstar's application for approval of the Merger under the Bank Holding Company Act of 1956, as amended (the "BHCA"). Firstar anticipates that the Federal Reserve Board will act on such application in June, 1994. There can be no assurance that the Federal Reserve Board will approve the Merger and, if the Merger is approved, there can be no assurance concerning the date of any such approval. See "THE PROPOSED MERGER--Date of the Merger; Regulatory Approval; Conditions to the Merger." Management and Operations After the Merger: Following the Merger, the successor to First Southeast and FCW will be a wholly owned subsidiary holding company of Firstar, and the Banks will be controlled by Firstar. The officers and directors of FCW prior to the Merger will continue as officers and directors of the surviving corporation. David A. Straz, Jr. ("Mr. Straz"), who is the principal shareholder of First Southeast, one of its directors, and its President, CEO and Treasurer, will be appointed to the Board of Directors of Firstar's lead bank, Firstar Bank Milwaukee, N.A. Following the Merger, Firstar and FCW intend to manage and direct the operations of the Banks as they manage and direct their present bank subsidiaries. Immediately following the date on which the Merger occurs (the "Closing Date"), one or more management representatives of Firstar will be added to the board of each Bank. Within several months of the Closing Date, Firstar and FCW intend to merge First Bank Southeast with Firstar Bank Milwaukee, N.A., merge First Bank Lake Geneva with Firstar's subsidiary, Firstar Bank Lake Geneva, N.A., close certain branches of the Banks and transfer one of First Bank Southeast's branches to Firstar Bank Lake Geneva, N.A. The dates for the bank-level branch closings, mergers and purchase and assumption transactions, which are subject to regulatory approval, have not been determined at this time. At the time of the bank-level mergers, the officers of the Banks will become officers of the surviving banks and certain Lake Geneva bank directors may be invited to join the Board of Directors of the surviving bank. See "THE PROPOSED MERGER-- Management and Operations of First Southeast After the Merger; Interests of First Southeast Management in the Merger." Waivers and Amendments to the Merger Agreements: Firstar and First Southeast may amend, modify or waive certain terms and conditions of the Merger Agreements. Any such action taken by First Southeast following a favorable vote by its shareholders may be taken only if, in the opinion of the Board of Directors of First Southeast, the action will not have a material adverse effect on the benefits intended for its shareholders. See "THE PROPOSED MERGER--Termination, Amendment and Waiver of Merger Agreements." Termination: The Merger Agreements may be terminated and the Merger may be abandoned at any time before the Closing Date (i) by mutual written consent of Firstar and First Southeast at any time before the Merger takes place, (ii) by either Firstar or First Southeast if (a) any condition set forth in Articles VII, VIII or IX of the Reorganization Agreement has not been substantially satisfied or waived in writing by October 31, 1994, (b) any warranty or representation made by the other party in the Merger Agreements is discovered to have become untrue, incomplete or misleading in any material respect, where such change has not been cured within ten business days of notice, or (c) the other party commits one or more material breaches of the Merger Agreements considering all such breaches in the aggregate, where such breach has not been cured within ten business days of notice, or (iii) by First Southeast if the average of the daily closing prices of a share of Firstar Common Stock during a specified ten trading days before the Closing Date is less than $27.00. See "THE PROPOSED MERGER--Termination, Amendment and Waiver of Merger Agreements." Interests of Certain Persons in the Merger: Directors and executive officers of First Southeast and the Bank have an interest in the Merger to the extent that it will affect their stock of First Southeast. Further, Firstar and FCW currently intend to retain the current officers of the Bank after the Merger and have agreed to ask Mr. Straz, a director and executive officer of First Southeast, to join the Board of Firstar's and FCW's subsidiary, Firstar Bank Milwaukee, N.A. See "THE PROPOSED MERGER--Management and Operations of First Southeast after the Merger; Interests of First Southeast Management in the Merger." Resales of Firstar Common Stock by Affiliates: Resales of Firstar Common Stock issued to "affiliates" of First Southeast have not been registered under applicable securities laws in connection with the Merger. Such shares may only be sold (a) under a separate registration for distribution (which Firstar has not agreed to provide), (b) pursuant to Rule 145 under the Securities Act of 1933, as amended, or (c) pursuant to some other exemption from registration. For Firstar to be able to account for the Merger as a pooling of interests, certain additional restrictions will be placed on affiliates of First Southeast and Firstar with respect to dispositions of First Southeast Common Stock and Firstar Common Stock during the period beginning 30 days before the Merger and ending when the results for at least 30 days of post-Merger combined operations have been published. See "THE PROPOSED MERGER--Resale of Firstar Common Stock." Preferred Stock Purchase Rights: Firstar has adopted a Shareholder Rights Plan, pursuant to which each share of Firstar Common Stock, including the Firstar Common Stock to be issued in the Merger, entitles its holder to one-half of a right ("Preferred Stock Purchase Right") to purchase one one-hundredth of a share of Firstar's Series C Preferred Stock under certain limited circumstances. The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire Firstar without conditioning the offer on redemption of the Rights or on a substantial number of Rights being acquired. The Rights should not interfere with any merger or other business combination approved by Firstar's Board of Directors prior to the time that the Rights have become nonredeemable. See "THE PROPOSED MERGER--Certain Differences in Rights of Shareholders." Markets and Dividends: There is no established public trading market for First Southeast stock. The following table sets forth the closing price per share of Firstar Common Stock as reported on the Consolidated Tape System for NYSE stock on the dates set forth, which include February 9, 1994, the last trading day preceding public announcement of the Merger, and June ___, 1994, as well as the equivalent per share prices for First Southeast Common Stock. The equivalent per share price of First Southeast Common Stock at each specified date represents the closing price of a share of Firstar Common Stock on such date multiplied by the unadjusted Merger conversion factor of 16.91844. See "THE PROPOSED MERGER--Terms." Equivalent First Firstar Southeast Common Per Share Stock Price Market Value Per Share at: December 31, 1993 $30.75 $520.24 February 9, 1994 $30.75 $520.24 March 31, 1994 $33.00 $558.31 June ___, 1994 $ $ Because the market price of Firstar Common Stock is subject to fluctuation and the conversion ratio is fixed, the market value of the shares of Firstar Common Stock that holders of First Southeast Common Stock will receive in the Merger may increase or decrease prior to the Merger. First Southeast shareholders are advised to obtain current market quotations for Firstar Common Stock. In 1992, First Southeast paid dividends of $9.35 per share; in 1993 no dividends were paid; in 1994 prior to execution of the Merger Agreements, First Southeast paid dividends of $9.35 per share. Between execution of the Merger Agreements and the Closing Date, First Southeast can pay aggregate cash dividends in amounts not to exceed the cash dividends that shareholders of First Southeast would have received from Firstar had they owned 1,801,577 shares of Firstar Common Stock after February 15, 1994. There can be no assurance as to the amount of future dividends on First Southeast Common Stock, because the dividend policy of First Southeast is subject to the discretion of the Board of Directors of First Southeast, cash needs and general business conditions. SELECTED CONSOLIDATED FINANCIAL DATA OF FIRSTAR - ----------------------------------------------------------------------------- The following table sets forth in summary form certain consolidated financial data of Firstar. This summary should be read in conjunction with the financial review and consolidated financial statements included in the documents incorporated by reference in this Proxy Statement-Prospectus.
Three Months Ended March 31 Years Ended December 31 ------------------ ------------------------------------------------ 1994 1993 1993 1992 1991 1990 1989 -------- -------- -------- -------- -------- -------- -------- Income Summary (Thousands of dollars) Net interest revenue $144,015 $139,752 $568,056 $539,152 $480,596 $429,954 $413,102 Provision for loan losses 2,958 6,334 24,567 44,821 50,276 49,161 52,362 -------- -------- -------- -------- -------- -------- -------- Net interest revenue after loan loss provision 141,057 133,418 543,489 494,331 430,320 380,793 360,740 Other operating revenue 83,113 79,325 342,265 300,767 272,535 248,301 225,521 Other operating expense 144,203 141,739 587,744 557,566 515,536 464,800 429,508 -------- -------- -------- -------- -------- -------- -------- Income before income taxes & extraordinary item 79,967 71,004 298,010 237,532 187,319 164,294 156,753 Provision for income tax 26,745 20,978 93,716 71,547 52,988 46,837 45,618 -------- -------- -------- -------- -------- -------- -------- Net income $ 53,222 $ 50,026 $204,294 $165,985 $134,331 $117,457 $111,135 ======== ======== ======== ======== ======== ======== ======== Per common share: Net income $ 0.83 $ 0.78 $ 3.15 $ 2.62 $ 2.14 $ 1.82 $ 1.72 Dividends 0.26 0.22 1.00 0.80 .705 .635 .545 Selected Period-End Balances (Millions of dollars) Total assets $ 13,908 $ 12,880 $ 13,794 $ 13,169 $ 12,309 $ 12,020 $ 11,163 Loans 9,000 8,107 8,984 8,111 7,545 7,346 6,871 Deposits 10,771 10,518 11,164 10,884 10,063 9,721 8,931 Long-term debt 126 132 126 158 144 185 166 Stockholders' equity 1,190 1,092 1,156 1,048 916 844 790 Selected Financial Ratios Net income as a % of average assets 1.62 % 1.61 % 1.59 % 1.36 % 1.16 % 1.06 % 1.07 % Net income as a % of average common equity 18.37 19.48 18.61 17.43 15.85 14.83 15.65 Net interest margin % 5.11 5.21 5.21 5.27 5.00 4.76 4.88 Total capital to risk-adjusted assets 13.57 13.80 13.18 13.20 11.92 11.94 12.09 Nonperforming assets as a % of period-end loans and other real estate 0.89 1.14 0.72 1.09 1.43 1.87 1.61 Reserve for loan losses as a % of period-end loans 1.95 2.12 1.95 2.08 2.00 1.83 1.69 Net charge-offs as a % of average loans 0.11 0.21 0.25 0.43 0.47 0.48 0.66
SELECTED CONSOLIDATED FINANCIAL DATA OF FIRST SOUTHEAST - ------------------------------------------------------------------------------ The following table sets forth in summary form certain consolidated financial data of First Southeast. This summary should be read in conjunction with Management's Discussion and Analysis and consolidated financial statements included in this Proxy Statement-Prospectus.
Three Months Ended March 31 Years Ended December 31 ------------------ ---------------------------- 1994 1993 1993 1992 1991 -------- -------- -------- -------- -------- Income Summary (Thousands of dollars) Net interest revenue $ 3,876 $ 3,518 $ 15,505 $ 15,361 $ 14,626 Provision for loan losses - 1,137 4,800 600 600 -------- -------- -------- -------- -------- Net interest revenue after loan loss provision 3,876 2,381 10,705 14,761 14,026 Other operating revenue 634 743 2,844 4,774 (472) Other operating expense 3,664 3,316 15,319 14,616 13,722 -------- -------- -------- -------- -------- Income (loss) before income taxes and cumulative effect of change in accounting principle 846 (192) (1,770) 4,919 (168) Income tax expense (benefit) 214 (114) (1,061) 982 (224) -------- -------- -------- -------- -------- Income (loss) before cumulative effect of change in accounting principle 632 (78) (709) 3,937 56 Cumulative effect of change in accounting principle - 325 325 - - -------- -------- -------- -------- -------- Net income (loss) $ 632 $ 247 $ (384) $ 3,937 $ 56 ======== ======== ======== ======== ======== Per common share: Net income (loss) before cumulative effect of change in accounting principle $ 5.93 $ (0.74) $ (6.65) $ 36.97 $ 0.53 Cumulative effect of change in accounting principle - 3.05 3.05 - - Net income (loss) 5.93 2.31 (3.60) 36.97 0.53 Dividends 9.35 - - 9.35 5.53 Selected Period-End Balances (Thousands of dollars) Total assets $422,306 $413,517 $423,882 $426,715 $435,339 Loans, net 237,016 242,476 241,201 249,677 287,726 Deposits 374,285 368,367 381,859 381,696 391,634 Long-term debt 6,000 7,500 6,000 9,100 11,000 Stockholders' equity 30,809 30,781 30,250 30,634 29,692
COMPARATIVE PER COMMON SHARE DATA - --------- The following table presents selected comparative unaudited per share data for Firstar Common Stock and First Southeast Common Stock on a historical and pro forma combined basis and for First Southeast Common Stock on a pro forma equivalent basis giving effect to the Merger on a pooling-of-interests accounting basis. This information is not necessarily indicative of the results of the future operations of the combined entity or the actual results that would have occurred had the Merger been consummated prior to the periods indicated.
Quarter Ended Years Ended December 31 March 31 ------------------------- 1994 1993 1992 1991 -------- ------- ------- ------- Firstar Corporation - Historical: Net income $ 0.83 $ 3.15 $ 2.62 $ 2.14 Cash dividend declared 0.26 1.00 0.80 .705 Book value (at period end) 18.51 17.96 15.94 14.17 First Southeast Banking Corp - Historical Net income $ 5.93 $ (3.60) $ 36.97 $ 0.53 Cash dividend declared 9.35 - 9.35 5.53 Book value (at period end) 289.32 284.08 287.68 260.06 Firstar-First Southeast - Pro Forma Combined: Net income (1) $ 0.81 $ 3.06 $ 2.61 $ 2.08 Cash dividend declared(2) 0.26 1.00 0.80 .705 Book value (at period end)(3) 18.47 17.93 15.97 14.21 First Southeast Banking Corp. Common Stock - Equivalent Pro Forma Combined(4): Net income (1) $ 13.70 $ 51.77 $ 44.16 $ 35.19 Cash dividend declared 4.40 16.92 13.53 11.93 Book value (at period end) 312.48 303.35 270.19 240.41
(1) The pro forma combined net income per share (based on weighted average shares outstanding) is based upon the combined historical net income for Firstar and First Southeast reduced for dividend payments on Firstar's outstanding Series B Preferred Stock divided by the average pro forma common shares of the combined entity. (2) The pro forma combined dividends declared assume no changes in historical dividends declared per share by Firstar. (3) The pro forma combined book values per share of Firstar Common Stock are based upon the historical total common equity for Firstar and First Southeast divided by total pro forma common shares of the combined entity assuming conversion of the First Southeast Common Stock as stated in the Merger Agreements. (4) The equivalent pro forma combined income, dividends and book value per share of Firstr Southeast Common Stock represent the pro forma combined amounts multiplied by the assumed exchange ratio of 16.91844, which is based on the terms of the Merger Agreements. HISTORICAL AND PRO FORMA SELECTED FINANCIAL CONTRIBUTIONS - -- The following table sets forth certain consolidated financial data of Firstar as of and for the quarter ended March 31, 1994 and the data on a pro forma combined basis after giving effect to the acquisition of First Southeast.
First Firstar Southeast Pro Forma Historical Historical Combined ----------- ----------- ----------- For the quarter ended March 31, 1994: (thousands of dollars) Total revenue Amount $ 297,762 $ 7,188 $ 304,950 Percentage of total 97.64% 2.36% Net income Amount $ 53,222 $ 632 $ 53,854 Percentage of total 98.83% 1.17% At March 31, 1994: Total assets Amount $ 13,908,410 $ 422,306 $ 14,330,716 Percentage of total 97.05% 2.95% Stockholders' equity Amount $ 1,190,386 $ 30,809 $ 1,221,195 Percentage of total 97.48% 2.52% Shares of Common Stock Amount 64,318,011 1,801,577 66,119,588 Percentage of total 97.28% 2.72%
MEETING INFORMATION General This Proxy Statement of First Southeast and Prospectus of Firstar is being furnished in connection with the solicitation by the Board of Directors of First Southeast of proxies to be voted at the Special Meeting of shareholders of First Southeast to be held on July ___, 1994, and any adjournment thereof. The purpose of the Special Meeting and of the solicitation is (i) to obtain approval of the holders of First Southeast Common Stock of the Merger of First Southeast with and into FCW pursuant to the Merger Agreements and (ii) the transaction of such other business as may properly come before the meeting or any adjournments thereof. Each copy of this Proxy Statement-Prospectus mailed to holders of First Southeast Common Stock is accompanied by a form of proxy for use at the First Southeast Special Meeting. The Merger Agreements provide for the acquisition of First Southeast by Firstar, to be accomplished through the statutory merger of First Southeast with and into FCW. Each of the outstanding shares of First Southeast Common Stock, except shares with respect to which the holders have exercised and preserved in accordance with law their statutory dissenters' rights, will be converted into the right to receive 16.91844 shares of Firstar Common Stock. See "THE PROPOSED MERGER--Terms." This Proxy Statement-Prospectus is also furnished by Firstar to First Southeast shareholders as a prospectus in connection with the issuance by Firstar of shares of Firstar Common Stock upon consummation of the Merger. This Proxy Statement-Prospectus, the attached Notice, and the form of proxy enclosed herewith are first being mailed to shareholders on or about June ___, 1994. Date, Place and Time The First Southeast Special Meeting will be held at the offices of First Southeast, 303 Center Street, Lake Geneva, Wisconsin, on July ___, 1994, at 9:00 a.m. (local time). Record Date; Vote Required The close of business on May 31, 1994, has been fixed by the Board of Directors of First Southeast as the Record Date for the determination of shareholders entitled to notice of and to vote at the Special Meeting. On that date there were outstanding and entitled to vote 106,486 shares of First Southeast Common Stock, of which 105,886 were held by directors or executive officers of First Southeast. Neither Firstar nor any of its or FCW's directors or executive officers own any shares of First Southeast Common Stock. Each outstanding share of First Southeast stock entitles the record holder thereof to one vote on all matters to be acted upon at the Special Meeting. The affirmative vote of a majority of the issued and outstanding shares of First Southeast Common Stock entitled to vote is required to approve the Merger Agreements. In order to induce Firstar to enter into the Merger Agreements, all the shareholders of First Southeast entered into the Voting Agreements with Firstar and First Southeast. Pursuant to the Voting Agreements, all the outstanding shares of First Southeast Common Stock on the Record Date will be voted in favor of the Merger Agreements, thereby assuring approval of the Merger Agreements at the Special Meeting. The Shareholders have also agreed not to vote their shares in favor of any acquisition of First Southeast by anyone other than Firstar or its affiliates. Voting and Revocation of Proxies For the reasons described in more detail below under "THE PROPOSED MERGER--Background of and Reasons for the Merger," it is the opinion of the Board of Directors of First Southeast that the Merger is in the best interests of the holders of First Southeast Common Stock. ACCORDINGLY, THE BOARD OF DIRECTORS OF FIRST SOUTHEAST UNANIMOUSLY RECOMMENDS THAT HOLDERS OF FIRST SOUTHEAST COMMON STOCK VOTE "FOR" APPROVAL OF THE MERGER AGREEMENTS. Wisconsin law affords dissenters' rights to holders of First Southeast Common Stock who object to the Merger Agreements in accordance with statutory procedures. See "THE PROPOSED MERGER--Rights of Dissenting Shareholders." All properly executed proxies not revoked will be voted at the Special Meeting in accordance with the instructions contained therein. Proxies containing no instructions will be voted "FOR" approval of the Merger Agreements. If any other matters are properly brought before the Special Meeting and submitted to a vote, all proxies will be voted in accordance with the judgment of the persons voting the proxies. Any shareholder executing and returning a proxy may revoke it by later proxy received by, or by giving written notice to, First Southeast or by attending the Special Meeting and voting in person. However, the mere presence of a holder of First Southeast Common Stock at the Special Meeting will not operate to revoke a proxy previously executed and returned. Failure to submit a proxy or to vote at the Special Meeting has the same effect as a negative vote for purposes of approving or disapproving the Merger Agreements. See "THE PROPOSED MERGER-- Rights of Dissenting Shareholders." Solicitation of Proxies The expenses incurred in connection with the solicitation of proxies for the Special Meeting will be borne by First Southeast. However, because this Proxy Statement-Prospectus constitutes part of the Registration Statement filed by Firstar under the Securities Act of 1933, Firstar will bear the expense of preparing, filing and duplicating this Proxy Statement- Prospectus. First Southeast expects to solicit proxies primarily by mail; however, directors of First Southeast who will not be specifically compensated for such services, may also solicit proxies personally or by telephone or other forms of communication. It is not anticipated that anyone will be specifically engaged to solicit proxies. THE PROPOSED MERGER The following description of the Merger is qualified in its entirety by reference to the Merger Agreements, which are incorporated by reference into this Proxy Statement-Prospectus. Background of and Reasons for the Merger For many years, First Southeast has operated as a corporation controlled by David A. Straz, Jr., First Southeast's chief executive officer, who together with two members of his family owns all of First Southeast's common stock. During that period, First Southeast took actions which the Board of Directors believed would be prudent to continue First Southeast as an independent operation, although Mr. Straz and First Southeast periodically received indications of interest from other financial institutions as to their interest in a possible combination transaction with First Southeast. Because of Mr. Straz' substantial experience in the banking field and his majority ownership of First Southeast, Mr. Straz would generally evaluate the offers to determine whether they represented an attractive opportunity. In February 1992, First Southeast entered into a conditional agreement with an unrelated bank holding company for the acquisition of First Southeast. Because certain conditions specified in the agreement were not met, the agreement was terminated in March 1992. After the termination of that agreement, Mr. Straz and First Southeast continued to receive expressions of interest in the acquisition of First Southeast by other financial institutions, including Firstar. Although First Southeast held serious discussions with several of these institutions, only the discussions with Firstar progressed to a point where Mr. Straz believed that a firm offer, acceptable to him, would likely be forthcoming. After the initial discussions with Firstar, Firstar was invited to conduct more intensive due diligence with respect to First Southeast. After that due diligence, officers of Firstar and Mr. Straz, on behalf of First Southeast, engaged in negotiations regarding the terms of a possible acquisition. Those discussions resulted in execution and announcement of the Merger Agreements in February, 1994. First Southeast Board Recommendation The First Southeast Board believes that the Merger represents an opportunity for holders of First Southeast Common Stock to exchange their shares of First Southeast Common stock at an attractive exchange ratio for a security with a greater market liquidity. The Board of Directors also believes that ownership of Firstar Common Stock presents an opportunity for future appreciation, and represents a diminution of risk because of the broader base of Firstar operations. THEREFORE, THE BOARD OF DIRECTORS OF FIRST SOUTHEAST HAS UNANIMOUSLY APPROVED THE MERGER AND RECOMMENDS APPROVAL OF THE MERGER BY SHAREHOLDERS. In making its recommendation, the First Southeast Board has not sought the advice of an independent financial advisor. Because of the controlling interest of Mr. Straz and his family members, Mr. Straz' experience in the banking industry, and his satisfaction with the terms and conditions of the transaction, the Board does not believe that the expense of such an advisor is warranted. Terms The Merger Agreements provide that First Southeast will be merged with and into FCW, which will be the surviving corporation. Upon consummation of the Merger, all the issued and outstanding shares of First Southeast Common Stock, except any Dissenting Shares, will be acquired in exchange for Firstar Common Stock or cash in lieu of any fractional shares of Firstar Common Stock. Each of the shares of First Southeast Common Stock that are to be converted into Firstar Common Stock will be converted into the number of shares of Firstar Common Stock that is equal to the quotient produced by dividing (i) the purchase price per share, $558.31, by (ii) $33.00. Therefore, the Merger exchange ratio will be 16.91844 shares of Firstar Common Stock for each share of First Southeast Common Stock. No fractional shares of Firstar Common Stock will be issued in the Merger. Each holder of First Southeast Common Stock who would otherwise be entitled to receive a fractional share will receive cash in an amount equal to the cash value of the fraction, which cash value will be based upon the market value of Firstar Common Stock as described above. Voting and Stock Purchase Agreements of First Southeast's Shareholders The Shareholders entered into the Voting Agreements, which provide that (a) the Shareholders will vote all their shares of First Southeast Common Stock in favor of the Merger at any shareholder meeting or, if their consent is sought by First Southeast, consent to the Merger; (b) the Shareholders will not vote in favor of or consent to the acquisition of First Southeast by any party other than Firstar or its affiliates prior to the termination of the Voting Agreements; and (c) the subject shares will generally not be transferred. Each Voting Agreement also provides that Firstar has the exclusive right to purchase any or all of the shares of First Southeast Common Stock owned by each Shareholder for $558.31 per share, payable in cash, subject to any necessary regulatory approval, after any events or circumstances that lead Firstar reasonably to believe that First Southeast is likely to materially breach the Merger Agreements. The purchase price per share under the Voting Agreements is equal to the Dollar Purchase Price Per Share specified in the Merger Agreements. The Voting Agreements will terminate if the Merger Agreements terminate. Material Contacts Among Firstar and First Southeast In 1990 and 1991 First Southeast and Firstar had engaged in preliminary merger discussions but had determined not to proceed at that time. First Southeast's conditional merger agreement with an unrelated bank holding company terminated in 1992. In September 1993, Firstar and First Southeast again commenced merger discussions; these ultimately resulted in execution of the Merger Agreement. Since the commencement of these negotiations, except for the Merger Agreements and the related agreements entered into between the parties at the same time, no material contracts or other similar arrangements have been entered into between Firstar or its affiliates and First Southeast or its affiliates. Neither Firstar nor FCW nor any of their respective directors or executive officers holds directly or indirectly any shares of First Southeast Common Stock. Conduct of Business Until the Merger The Merger Agreements provide that First Southeast and Firstar will take or refrain from taking certain actions prior to the Closing Date. After execution of the Merger Agreements, First Southeast cannot pay any dividends or make any distributions on First Southeast Common Stock other than cash dividends in amounts not to exceed in the aggregate an amount equal to the cash dividends that the shareholders of First Southeast would have received from Firstar had they owned, after February 15, 1994, 1,801,577 shares of Firstar Common Stock on the record dates in such quarters for the determination of Firstar shareholders entitled to receive dividends. The Merger Agreements also provide that First Southeast will not permit the Banks to declare or pay any dividends or make any distributions on their capital stock, except cash dividends in an aggregate amount equal to the amount necessary to (i) service existing indebtedness of First Southeast, (ii) fund First Southeast's payment of cash dividends as described above, (iii) pay ordinary and necessary operating expenses of First Southeast on a basis consistent with prior years, and (iv) pay expenses expressly contemplated by the Reorganization Agreement. Under the Merger Agreements, First Southeast cannot effect any change in its capitalization or that of the Banks (except in connection with the Bank-level Merger discussed) or any change in its corporate structure or methods of accounting or tax reporting. First Southeast has also agreed not to initiate, solicit or encourage any transactions competing with the proposed Merger with FCW. The Merger Agreements also provide that First Southeast will, and will cause each of the Banks to, conduct its business in substantially the same manner as conducted prior to the date of the Merger Agreements and use its best efforts to maintain and preserve its business organization intact, retain its present employees and maintain its relationships with customers. First Southeast will not, nor will it permit the Banks to, enter into any transactions or take any other action other than in the ordinary course of business or as contemplated by the Merger Agreements, except with the prior written consent of Firstar. First Southeast and the Banks will cooperate with Firstar and FCW to effect the bank mergers and the branch transfer described in "THE PROPOSED MERGER--Management and Operations of First Southeast after the Merger; Interests of First Southeast Management in the Merger," contingent on the Closing. First Southeast, pursuant to the Merger Agreements, has agreed to withdraw its applications to the Wisconsin Commissioner of Banking for approval of the Banks' charter conversions and merger with each other. First Southeast has agreed to cooperate with Firstar and FCW in effecting the bank-level mergers and the closings of three bank branches specified in the Reorganization Agreement, after the Closing. Prior to the Closing, First Southeast and the Banks must sell their life insurance policies on Mr. Straz, First Southeast's investments in common stock of Southern Exchange Bank and Wisconsin Energy Corp., and the Banks' out-of-state loan participations. Mr. Straz or entities under his control will purchase the life insurance policies and stock of Southern Exchange Bank and may purchase the loan participations; these assets have a value of approximately $5.5 million in the aggregate. The stock of Wisconsin Energy Corp. has been sold. Firstar has agreed to indemnify First Southeast from certain damages it may incur under plant closing laws. Firstar, as the sole shareholder of FCW, has approved the Merger Agreements. Date of the Merger Under the BHCA, the Merger requires the prior approval of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"). It is anticipated that the Federal Reserve Board will act on Firstar's application in June, 1994. The Merger cannot take effect before the 30th calendar day or, absent an extension granted by the Federal Reserve Board, later than three months following the date of approval by the Federal Reserve Board. See "THE PROPOSED MERGER--Conditions to the Merger; Regulatory Approval." Under the Merger Agreements, the Merger will occur within five days of satisfaction of all of the conditions to the Merger, including the expiration of the statutory waiting period after Federal Reserve Board approval, or on such date as Firstar and First Southeast may both agree to, and will take effect upon the date FCW and First Southeast file Articles of Merger with the Wisconsin Secretary of State. It is anticipated that the Closing Date will be July ___, 1994. Conditions to the Merger The Merger Agreements provide that consummation of the Merger is subject to certain conditions unless waived to the extent waiver is permitted by applicable law. Such conditions include the following, which are all the material conditions: a. The Merger Agreements must have been approved by the requisite vote of the holders of a majority of the issued and outstanding shares of First Southeast Common Stock and holders of no more than 5% of the issued and outstanding shares of First Southeast Common Stock shall have asserted Dissenter's Rights. See "MEETING INFORMATION--Record Date; Vote Required" and "THE PROPOSED MERGER--Voting and Stock Purchase Agreements of First Southeast's Shareholders." b. The Firstar Common Stock to be issued in the Merger must have been qualified or exempted under all applicable state securities laws and there must have been no stop order issued that suspends the effectiveness of the Registration Statement of which this Proxy Statement-Prospectus is a part. c. The Merger must have been approved by the Federal Reserve Board. See "THE PROPOSED MERGER--Date of the Merger; Regulatory Approval." d. There must not have been any material adverse change in the financial condition, assets, liabilities, prospects, results of operation or business of First Southeast or either Bank from February 10, 1994, to the Closing Date. e. Continued accuracy of representations and warranties by Firstar and First Southeast regarding, among other things, the organization of the parties, financial statements, capitalization, pending and threatened litigation, enforceability of the Merger Agreements, compliance with law, and tax matters. f. As of the Closing Date, (a) there must not be any litigation that was not disclosed prior to execution of the Merger Agreements, pending or overtly threatened before any court or other governmental agency by the federal or any state government seeking to restrain or prohibit the Merger, and (b) there must not be any litigation that was not disclosed prior to the execution of the Merger Agreements, pending or overtly threatened nor any liability or claim asserted against First Southeast or either Bank that might result in a material adverse change in its financial condition, results of operations or business prospects. g. Any review or examination of the financial condition of First Southeast by Firstar and/or KPMG Peat Marwick must not have disclosed material breaches of the Merger Agreements. h. Firstar must have received confirmation from KPMG Peat Marwick, its certified public accountants, approving the accounting treatment of the Merger as a pooling of interests. See "THE PROPOSED MERGER--Accounting Treatment of the Merger." i. Firstar shall have had the opportunity to conduct an audit of any First Southeast employee benefit plans. j. As of the Closing Date, the allowance for loan losses of each of the Banks must not be less than an amount equal to 2.0% of its gross loans outstanding. k. Firstar and FCW, on the one hand, and First Southeast, on the other hand, shall each have received opinions from Foley & Lardner that the Merger will be treated as a tax-free reorganization under the Code. See "THE PROPOSED MERGER--Certain Federal Income Tax Consequences." l. It is a condition to Firstar's obligation to close that the Federal Reserve Bank of Chicago shall have agreed that a formal agreement and a Memorandum of Understanding regulating First Southeast shall not apply to Firstar or FCW after the Closing. Firstar has requested such an agreement by the Federal Reserve Bank of Chicago. See "THE PROPOSED MERGER--Regulatory Approvals." m. Firstar shall have had an opportunity to conduct environmental audits of the Banks' real property. It is anticipated that all of the foregoing conditions will be met. In addition, unless waived, each party's obligation to effect the Merger is subject to performance by the other party of its obligations under the Merger Agreements and the receipt of certain certificates from the other party and legal opinions. See "THE PROPOSED MERGER--Conduct of Business Until the Merger." Regulatory Approval The Merger is subject to prior approval by the Federal Reserve Board under the BHCA, which requires that the Federal Reserve Board take into consideration the financial and managerial resources and future prospects of the respective institutions and the convenience and needs of the communities to be served. The BHCA prohibits the Federal Reserve Board from approving the Merger if it would result in a monopoly or be in furtherance of any combination or conspiracy to monopolize or to attempt to monopolize the business of banking in any part of the United States, or if its effect in any section of the country may be substantially to lessen competition or to tend to create a monopoly, or if it would in any other manner be a restraint of trade, unless the Federal Reserve Board finds that the anticompetitive effects of the Merger are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the communities to be served. The Federal Reserve Board has the authority to deny an application if it concludes that the combined organization would have an inadequate capital position. Under the BHCA, the Merger may not be consummated until the 30th day following the date of Federal Reserve Board approval, during which time the United States Department of Justice may challenge the Merger on antitrust grounds. The commencement of an antitrust action would stay the effectiveness of the Federal Reserve Board's approval unless a court specifically orders otherwise. The BHCA provides for the publication of notice and public comment on the applications and authorizes the regulatory agency to permit interested parties to intervene in the proceedings. Firstar and FCW submitted an application for filing with the Federal Reserve Bank of Chicago on April 27, 1994. The application was accepted for filing on May ___, 1994. Firstar anticipates that the Federal Reserve Board will act on the application in June, 1994. In conjunction with the application for approval of Merger, Firstar submitted a written request that the Federal Reserve Bank of Chicago agree that the agreement among the Reserve Bank, First Southeast and Mr. Straz dated August 14, 1984 (the "Formal Agreement"), and the Memorandum of Understanding between the Reserve Bank and First Southeast dated November 6, 1991 (the "MOU"), will not apply to Firstar or FCW after the Closing. Firstar has had discussions with a representative of the Reserve Bank who stated that the requested termination of the Formal Agreement and the MOU is likely to be granted. There can be no assurance that the Federal Reserve Board will approve the Merger, and if the Merger is approved, there can be no assurance as to the date of such approval. There can likewise be no assurance that the Department of Justice will not challenge the Merger or, if such a challenge is made, as to the result thereof. Finally, there can be no assurance that the requested formal approval of the Federal Reserve Bank of Chicago of termination of the Formal Agreement and the MOU on the Closing Date will be granted. Termination, Amendment and Waiver of Merger Agreements Firstar and First Southeast may each waive, as to the other, performance of any of the obligations and compliance with any of the covenants or conditions of the Merger Agreements (other than items (a), (b) and (c) in the "Conditions to the Merger" section above) and may amend or modify the Merger Agreements. Any such action by First Southeast taken following a favorable vote on or consent to the Merger by its shareholders may be taken only if, in the opinion of the Board of Directors of First Southeast, the action would not have a material adverse effect on the benefits intended for its shareholders under the Merger Agreements. The Merger Agreements may be terminated and the Merger abandoned by the mutual written consent of the Board of Directors of First Southeast and the Board of Directors or Interstate Banking and Acquisitions Committee of Firstar at any time prior to the Closing Date. In addition, the Merger may be abandoned by (a) either First Southeast or Firstar if (i) any condition set forth in Articles VII, VIII or IX of the Reorganization Agreement has not been substantially satisfied or waived in writing by October 31, 1994, (ii) any warranty or representation made by the other party in the Merger Agreements is discovered to have become untrue, incomplete or misleading, where any such breach is likely to have a material adverse impact on the other party and is not cured within ten business days of notice, (iii) the other party commits one or more material breaches of the Merger Agreements considering all such breaches in the aggregate, where such breach has not been cured within ten business days of notice, or (b) First Southeast if the average composite closing prices per share of Firstar Common Stock on the New York Stock Exchange and the Chicago Stock Exchange on the ten consecutive trading days immediately preceding the Closing Date is less than $27.00. The obligations of each party to keep confidential information received from the other under the Merger Agreements, to coordinate the public release of information about the Merger, and to pay its respective fees and expenses, survive the termination of the Merger Agreements. If the proposed Merger does not take place, other than by reason of a breach by any party to the Merger Agreements, there will be no liability on the part of First Southeast or Firstar except that (a) each party will pay its own fees and expenses incurred in connection with the preparation and performance of the Merger Agreements, (b) in connection with the preparation and filing of the Registration Statement and compliance with state securities laws, Firstar will bear the cost of preparation, filing and duplication of the Registration Statement, (c) Firstar will reimburse First Southeast and the Banks for any out-of-pocket fees and expenses they incurred at the request and direction of Firstar, as specified in the Reorganization Agreement, and (d) First Southeast agrees to reimburse Firstar for the costs of the environmental audits discussed in "THE PROPOSED MERGER--Conditions to the Merger." In the event of termination of the Merger Agreements caused by (a) willful breach of any agreement or covenant contained therein, (b) any material misrepresentation or breach of warranty, which was known to be a misrepresentation or breach of warranty by First Southeast or Firstar on February 10, 1994, or (c) the failure of any condition precedent to the consummation of the Merger which has failed because the non-terminating party did not exercise good faith and best efforts toward the fulfillment of such condition; then the terminating party shall be entitled to all its legal and equitable remedies. Management and Operations of First Southeast after the Merger; Interests of First Southeast Management in the Merger The Merger Agreements provide that, on the Closing Date, First Southeast will be merged with and into FCW. The surviving entity will be FCW and the separate corporate existence of First Southeast will terminate. As a result of the Merger, the surviving corporation will be wholly owned by Firstar, and the Banks, which are now owned by First Southeast, will be controlled by Firstar. The officers and directors of FCW immediately prior to the Merger will continue as the officers and directors of the surviving corporation following the Merger. Following the Merger, Firstar and FCW will manage and direct the operations of the Banks as they manage and direct their present bank subsidiaries. Immediately following the Closing Date, one or more management representatives of Firstar will be added to the Boards of the Banks. Within a few months of the Closing Date, Firstar and FCW intend to a) merge First Bank Southeast with FCW's subsidiary, Firstar Bank Milwaukee, N.A., b) merge First Bank Lake Geneva with FCW's subsidiary, Firstar Bank Lake Geneva, N.A., c) close three Bank branches (transferring the loans and deposits to other Firstar branches), and d) transfer one of First Bank Southeast's former branches to Firstar Bank Lake Geneva, N.A. Pursuant to the proposed Agreement to Merge between First Bank Lake Geneva and Firstar Bank Lake Geneva, N.A., Firstar will offer to purchase all of the outstanding minority shares of First Bank Lake Geneva for at least $287.27 in cash per share. The dates for the bank-level mergers, branch closings and purchase and assumption, which are subject to regulatory approval, have not been determined at this time. At the time of the bank-level mergers and purchase and assumption, the officers of the Banks will become officers of the surviving banks. Firstar and Firstar Bank Milwaukee, N.A. have agreed, in a letter to Mr. Straz dated February 10, 1994, to cause him to be appointed to the Board of Directors of Firstar Bank Milwaukee as soon as reasonably practicable following the Closing Date. It is presently anticipated that there will be no other changes in management or other principal relationships for Firstar, FCW, First Southeast or the Banks that will result from this transaction. Firstar, when reasonably practicable following the Closing Date, intends to cause coverage under the Firstar Corporation Pension Plan and the Firstar Corporation Thrift and Sharing Plan to be extended to eligible employees of the Bank. Certain Federal Income Tax Consequences Firstar and First Southeast expect that the Merger will be treated as a tax-free reorganization and that for federal income tax purposes no gain or loss will be recognized by any First Southeast shareholder upon receipt of Firstar Common Stock pursuant to the Merger (except upon the receipt of cash in lieu of fractional shares of Firstar Common Stock). This discussion of tax consequences of the Merger assumes that none of the Shareholders will exercise dissenters' rights. The Internal Revenue Service has not been asked to rule upon the tax consequences of the Merger and such request will not be made. Instead, Firstar and First Southeast will rely upon the opinion of Foley & Lardner, their joint counsel, as to certain federal income tax consequences of the Merger. The opinion of Foley & Lardner is based entirely upon the Code, regulations now in effect thereunder, current administrative rulings and practice, and judicial authority, all of which are subject to change. Unlike a ruling from the Service, an opinion of counsel is not binding on the Service and there can be no assurance, and none is hereby given, that the Service will not take a position contrary to one or more positions reflected herein or that the opinion will be upheld by the courts if challenged by the Service. EACH HOLDER OF FIRST SOUTHEAST COMMON STOCK IS URGED TO CONSULT HIS OR HER OWN TAX AND FINANCIAL ADVISORS AS TO THE EFFECT OF SUCH FEDERAL INCOME TAX CONSEQUENCES ON HIS OR HER OWN PARTICULAR FACTS AND CIRCUMSTANCES AND ALSO AS TO ANY STATE, LOCAL, FOREIGN OR OTHER TAX CONSEQUENCES ARISING OUT OF THE MERGER. Based upon the opinion of Foley & Lardner, which in turn is based upon various representations and subject to various assumptions and qualifications, the following federal income tax consequences to the First Southeast shareholders will result from the Merger: (i) Provided that the Merger of First Southeast with and into FCW qualifies as a statutory merger under applicable law, the Merger will qualify as a reorganization within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code, and First Southeast, Firstar and FCW will each be a party to the reorganization within the meaning of Section 368(b) of the Code. (ii) No gain or loss will be recognized by the holders of First Southeast Common Stock upon the exchange of First Southeast Common Stock solely for Firstar Common Stock pursuant to the Merger. (iii) The First Southeast shareholder's basis in the Firstar Common Stock received in the exchange (including any fractional share interest to which he or she may be entitled) will be the same as the basis of the First Southeast Common Stock surrendered. (iv) The holding period of the First Southeast Common Stock received by a shareholder of First Southeast pursuant to the Merger will include the period during which the First Southeast Common Stock surrendered was held, provided that the First Southeast Common Stock surrendered was a capital asset on the date of the Merger. (v) A First Southeast shareholder receiving cash in lieu of fractional share interests of First Southeast Common Stock in the Merger will be treated as if he or she actually received such fractional share interests which were subsequently redeemed by Firstar. The cash a First Southeast shareholder receives will be treated as having been received as full payment in exchange for stock redeemed as provided in Section 302(a) of the Code. The foregoing is only a general description of certain anticipated federal income tax consequences of the Merger without regard to the particular facts and circumstances of the tax situation of each shareholder of First Southeast. It does not discuss all of the consequences that may be relevant to First Southeast shareholders entitled to special treatment under the Code (such as insurance companies, dealers in securities, exempt organizations or foreign persons). The summary set forth above does not purport to be a complete analysis of all potential tax effects of the transactions contemplated by the Merger Agreements or the Merger itself. No information is provided herein with respect to the tax consequences, if any, of the Merger under state, local or foreign tax laws. Certain Differences in Rights of Shareholders Firstar and First Southeast are both incorporated under the laws of the State of Wisconsin and, accordingly, the rights of both groups of shareholders are governed by Wisconsin law, as well as such corporations' respective Articles of Incorporation and Bylaws. Upon consummation of the Merger, First Southeast shareholders will become Firstar shareholders and their rights will be governed by Wisconsin law and Firstar's Articles of Incorporation and Bylaws. Although it is impractical to note all of the differences between statutory and other rights of Firstar shareholders and First Southeast shareholders, certain material differences are summarized below. Takeover Statutes. Wisconsin law regulates a broad range of "business combinations" between a Wisconsin corporation with registered stock, such as Firstar, and an "interested stockholder." Wisconsin law defines a "business combination" as including a merger or a share exchange, sale of assets, issuance of stock or rights to purchase stock and certain related party transactions. An "interested stockholder" is defined as a person who beneficially owns, directly or indirectly, 10% of the outstanding voting stock of a corporation or who is an affiliate or associate of the corporation and beneficially owned 10% of the voting stock within the last three years. In certain cases, Wisconsin law prohibits a corporation from engaging in a business combination with an interested stockholder for a period of three years following the date on which the person became an interested stockholder, unless the board of directors approved the business combination or the acquisition of the stock prior to the acquisition date. In such cases, business combinations after the three-year restricted period are permitted only if (i) the business combination is approved by a majority of the outstanding voting stock not owned by the interested stockholder and (ii) the consideration to be received by shareholders meets certain requirements of the statute with respect to form and amount. Under Section 180.1143(1) of the Wisconsin Business Corporation Law, the restrictions on business combinations do not apply to companies like First Southeast which do not have voting stock registered or traded on a national securities exchange or registered under the Exchange Act. Section 180.1150 of the Wisconsin Business Corporation Law provides that in particular circumstances the voting of shares of a Wisconsin "issuing public corporation" (a Wisconsin corporation which has at least 100 Wisconsin resident shareholders, 500 or more shareholders of record and total assets exceeding $1 million) held by any person in excess of 20% of the voting power is limited to 10% of the full voting power of such excess shares. Full voting power may be restored under Section 180.1150 if a majority of the voting power of shares represented at a meeting, including those held by the party seeking restoration, are voted in favor of such restoration. Firstar is, and First Southeast is not, an "issuing public corporation" under Wisconsin law. In addition, Section 180.1132 of the Wisconsin Business Corporation Law sets forth certain fair price provisions which govern mergers and share exchanges with, or sales of substantially all a Wisconsin issuing public corporation's assets to, a 10% shareholder, mandating that any such transaction meet one of two requirements. The first requirement is that the transaction be approved by 80% of all shareholders and two-thirds of "disinterested" shareholders, which generally exclude the 10% shareholder. The second requirement is the payment of a statutory fair price, which is intended to insure that shareholders in the second step merger, share exchange or asset sale receive at least what shareholders received in the first step. Further, Section 180.1134 of the Wisconsin Business Corporation Law requires shareholder approval for certain transactions in the context of a tender offer or similar action for in excess of 50% of a Wisconsin issuing public corporation's stock. Shareholder approval is required for the acquisition of more than 5% of the corporation's stock at a price above market value, unless the corporation makes an equal offer to acquire all shares. Shareholder approval is also required for the sale or option of assets which amount to at least 10% of the market value of the corporation, but this requirement does not apply if the corporation meets certain minimum outside director standards. Preferred Stock. The Restated Articles of Incorporation of Firstar authorize the Board of Directors of Firstar to issue up to 2,500,000 shares of preferred stock, $1.00 par value. The Board of Directors may establish the relative rights and preferences of preferred stock issued in the future without shareholder action and issue such stock in series. As of the date hereof, Firstar has reserved 600,000 shares of Series C Preferred Stock for issuance upon exercise of the Preferred Stock Purchase Rights, as further described below. First Southeast has no authorized shares of Preferred Stock and, accordingly, the rights of holders of First Southeast Common Stock to receive dividends or payment in the event of voluntary or involuntary dissolution, liquidation or winding up of First Southeast are not subject to the prior satisfaction of the rights of any other shareholders. Directors. The Board of Directors of Firstar is divided into three classes as nearly equal in number as possible, with the directors in each class serving for staggered three-year terms. At each annual meeting of Firstar's shareholders, the successors to the class of directors whose term expires at the time of such meeting are elected by a majority of the votes cast, assuming a quorum is present. A director of Firstar may be removed, with or without cause, only by the affirmative vote of not less than 75% of the then issued and outstanding shares taken at a special meeting of shareholders called for that purpose. All the directors of First Southeast are elected at the annual meeting of shareholders by the majority of the votes cast, assuming a quorum is present. A director of First Southeast may be removed, with or without cause, by the affirmative vote of the holders of a majority of the then issued and outstanding stock of First Southeast cast at a special meeting of shareholders called for that purpose. Dissenters' Rights. Under Wisconsin law, dissenting shareholders generally are entitled to receive payment of the fair value of any of their shares in connection with a merger, consolidation or sale of substantially all of the assets of a corporation, other than in the regular course of business. However, no dissenters' rights are available to any class of stock listed on a national securities exchange or quoted on NASDAQ on the applicable record date. Because Firstar Common Stock is listed on the New York Stock Exchange, Firstar's shareholders do not have rights of appraisal. Because First Southeast Common Stock is not listed on a national securities exchange or quoted on NASDAQ, First Southeast's shareholders have the statutory appraisal rights described. See "THE PROPOSED MERGER--Rights of Dissenting Shareholders" and Exhibit A hereto. Preferred Stock Purchase Rights. Firstar has adopted a Shareholder Rights Plan, pursuant to which each share of Firstar Common Stock entitles its holder to one-half of a Preferred Stock Purchase Right. Under certain conditions, each Preferred Stock Purchase Right entitles the holder to purchase one one-hundredth of a share of Firstar's Series C Preferred Stock at a price of $85, subject to adjustment. Recipients of Firstar Common Stock in connection with the Merger will also receive one Preferred Stock Purchase Right per share of Firstar Common Stock. The description of the terms of the Preferred Stock Purchase Rights are set forth in a Rights Agreement dated as of January 19, 1989 (the "Rights Agreement") between Firstar and Firstar Trust Company, as Rights Agent. The description of the Preferred Stock Purchase Rights contained herein is qualified in its entirety by reference to the Rights Agreement. The rights will only be exercisable if a person or group has acquired, or announced an intention to acquire, 20% or more of the outstanding shares of Firstar Common Stock. Under certain circumstances, including the existence of a 20% acquiring party, each holder of a Preferred Stock Purchase Right, other than the acquiring party, will be entitled to purchase at the exercise price Firstar Common Stock having a market value of two times the exercise price. In the event of the acquisition of Firstar by another company subsequent to a party acquiring 20% or more of Firstar Common Stock, each holder of a Preferred Stock Purchase Right is entitled to receive the acquiring company's common shares having a market value of two times the exercise price. The rights may be redeemed at a price of $.01 per right prior to the existence of a 20% acquiring party, and thereafter, may be exchanged for one common share per right prior to the existence of a 50% acquiring party. The Preferred Stock Purchase Rights will expire on January 19, 1999. The rights do not have voting or dividend rights, and until they become exercisable, have no dilutive effect on the earnings of Firstar. Under the rights plan, the Board of Directors of Firstar may reduce the thresholds applicable to the rights from 20% to not less than 10%. First Southeast does not have a shareholder rights plan. Accounting Treatment of the Merger It is anticipated that the acquisition of First Southeast will be treated as a "pooling of interests" for accounting purposes. Accordingly, under generally accepted accounting principles, the assets and liabilities of First Southeast will be recorded in the financial statements of Firstar at their carrying values as of the Closing Date. See "THE PROPOSED MERGER--Conditions to the Merger." Resale of Firstar Common Stock The shares of Firstar Common Stock to be issued in the Merger to holders of First Southeast Common Stock have been registered under the Securities Act of 1933, as amended (the "Securities Act"), and thus could be freely traded if there were any holders of First Southeast Common Stock, who are not "affiliates" of First Southeast (and are not affiliates of Firstar at the time of the proposed resale). All three shareholders of First Southeast are affiliates of First Southeast. Pursuant to the Merger Agreements, Firstar has received a written undertaking from each affiliate of First Southeast to the effect that (a) the affiliate will not sell or dispose of Firstar Common Stock acquired by such affiliate in the Merger, except (i) under a separate registration for distribution (which Firstar has not agreed to provide), or (ii) pursuant to Rule 145 promulgated under the Securities Act, or (iii) pursuant to some other exemption from registration; and (b) the affiliate will not otherwise dispose of the Firstar Common Stock or otherwise reduce his or her risk relative to the Firstar Common Stock prior to the publication by Firstar of an earnings statement covering at least 30 days of combined operations after the Closing Date. Rights of Dissenting Shareholders Under the provisions of Section 180.1301 et seq. of the Wisconsin Business Corporation Law, a copy of which is attached to this Proxy Statement-Prospectus as Exhibit A, any holder of record or beneficial shareholder of First Southeast Common Stock has the statutory right to dissent from the Merger and obtain payment of the fair value of his or her shares in cash. However, each of the shareholders of First Southeast has contractually agreed with Firstar to vote in favor of the Merger. See "THE PROPOSED MERGER--Voting and Stock Purchase Agreements of First Southeast's Shareholders." Any holder electing to exercise his or her statutory dissenters' rights in breach of the Voting Agreements must deliver written notice of his or her intent to demand payment for his or her shares to First Southeast and not vote in favor of the Merger Agreements. Such notice must be delivered to First Southeast before the vote on the Merger Agreements is taken. A shareholder may object as to less than all of the shares registered in his name subject to the provisions of Section 180.1303 of the Wisconsin Business Corporation Law. A PROXY OR VOTE AGAINST THE MERGER AGREEMENTS WILL NOT, OF ITSELF, BE REGARDED AS A WRITTEN NOTICE OF INTENT TO DEMAND PAYMENT FOR PURPOSES OF ASSERTING DISSENTERS' RIGHTS. Within 10 days of the Merger, FCW will give a written dissenters' notice to each dissenting shareholder who has made demand in accordance with Section 180.1321(1), containing a form for demanding payment, a statement indicating where the holder must send the payment demand, an explanation of the extent to which the transfer of shares will be restricted after the payment demand is received and a date by which the payment demand must be received by First Southeast. A holder to whom a dissenters' notice is sent, must demand payment in writing and certify whether he or she acquired beneficial ownership of the shares before the date specified in the dissenters' notice. As soon as the Merger is effected or upon receipt of a demand for payment, whichever is later, FCW will pay each holder who has complied with the provisions of Section 180.1301 et seq. the amount that the corporation estimates to be the fair value of the holder's shares, plus accrued interest. Such payment will be accompanied by a copy of FCW's latest available financial statement, a statement of the corporation's estimate of the fair value of the shares, an explanation of how the interest was calculated, a statement of the dissenter's right to demand payment under Section 180.1328 of the Wisconsin Business Corporation Law if he or she is dissatisfied with the payment and a copy of Sections 180.1301 to 180.1331 of the Wisconsin Business Corporation Law. FCW may elect to withhold the payment required by Section 180.1325 from a dissenter unless the dissenter was the beneficial owner of the shares before the date specified in the dissenter's notice under Section 180.1322(2)(c) as the date of the first announcement to news media or to shareholders of the terms of the Merger. To the extent FCW makes such an election, it must estimate the fair value of the shares, plus accrued interest and pay that amount to each dissenter who agrees to accept it in full satisfaction of his or her demand. FCW will send with its offer a statement of its estimate of the fair value of the shares, an explanation of how the interest was calculated and a statement of the dissenter's right to demand payment under Section 180.1328 if the dissenter is dissatisfied with the offer. Any dissenter may notify the corporation of his or her estimate of the fair value of his or her shares and demand payment of such estimate less any payment received from the corporation or reject the corporation's payment or offer of payment for any one of the following reasons: the dissenter believes that the amount paid or offered by the corporation is less than the fair value of his or her shares or that the accrued interest is incorrectly calculated; the corporation fails to make the payment within 60 days after the date for demanding payment set out in the dissenters' notice; or First Southeast fails to effect the Merger and does not return the deposited shares within 60 days of the date set for demand of payment. In the event any holder of First Southeast Common Stock fails to comply strictly with the applicable statutory requirements, he or she will be bound by the terms of the Merger Agreements and will not be entitled to payment for his or her shares under such statute. If a shareholder complies strictly with the applicable statutory requirements to perfect a dissent, he or she will be entitled to payment under Section 180.1301 et seq. of the Wisconsin Business Corporation Law but will be subject to contractual liability for breach of his or her Voting Agreement with Firstar. Any holder of First Southeast Common Stock who wishes to object to the Merger and demand payment for his or her shares of First Southeast Common Stock should consider consulting his or her own legal advisor. Since an executed proxy relating to First Southeast Common Stock on which no voting direction is made will be voted at the Special Meeting in favor of the Merger Agreements, an objecting shareholder who wishes to have his or her shares of First Southeast Common Stock represented by proxy at the Special Meeting but preserve his or her rights of appraisal must mark his proxy either to vote against the Merger Agreements or to abstain from voting thereon, make the required objection and demand, and make the required submission of stock certificates as described herein. The foregoing, while a summary of all material provisions of Section 180.1301 et seq. of the Wisconsin Business Corporation Law, is qualified in its entirety by reference to the text of such statutory provision, which is set forth in Exhibit A hereto. FIRSTAR CORPORATION General Firstar is a registered bank holding company incorporated in Wisconsin in 1929. Firstar is the largest bank holding company headquartered in Wisconsin. Firstar's 18 bank subsidiaries in Wisconsin had total assets of $9.7 billion at March 31, 1994. Its eleven Iowa banks, four Illinois banks and one Minnesota bank had total assets of approximately $2.5 billion, $949 million and $1.1 billion, respectively, as of March 31, 1994. Firstar has one bank in Phoenix, Arizona, with total assets of $99 million. Firstar's principal subsidiary, Firstar Bank Milwaukee, N.A., had total assets of $5.7 billion, which represented 41 percent of Firstar's consolidated assets at March 31, 1994, and is the largest commercial bank in Wisconsin. Firstar provides banking services throughout Wisconsin and Iowa and in the Chicago, Minneapolis-St. Paul and Phoenix metropolitan areas. Its Wisconsin bank subsidiaries operate in 112 locations, with offices in eight of the ten largest metropolitan population centers of the state, including 45 offices in the Milwaukee metropolitan area. Its Iowa bank subsidiaries operate in 42 locations; its Illinois bank subsidiaries in 15 locations; its Minnesota bank subsidiary in 24 locations; and its Arizona bank in three locations; and a trust subsidiary in Florida in two locations. Firstar's bank subsidiaries provide a broad range of financial services for companies based in Wisconsin, Iowa, Illinois and Minnesota, national business organizations, governmental entities and individuals. These commercial and consumer banking activities include accepting demand, time and savings deposits; making both secured and unsecured business and personal loans; and issuing and servicing credit cards. The bank subsidiaries also engage in correspondent banking and provide trust and investment services to individual and corporate customers. Firstar Bank Milwaukee, N.A., Firstar Bank Cedar Rapids, N.A. and Firstar Bank Madison, N.A. also conduct international banking services consisting of foreign trade financing, issuance and confirmation of letters of credit, funds collection and foreign exchange transactions. Nonbank subsidiaries provide retail brokerage services, trust and investment services, residential mortgage banking activities, title insurance, business insurance, consumer and credit related insurance, and corporate computer and operational services. At March 31, 1994, Firstar and its subsidiaries employed 7,376 full-time and 2,125 part-time employees, of which approximately 943 full-time employees are represented by a union under a collective bargaining agreement that expires on August 31, 1996. Management considers its relations with its employees to be good. Competition Banking and bank-related services is a highly competitive business. Firstar's subsidiaries compete primarily in Wisconsin and the Midwestern United States. Firstar and its subsidiaries have numerous competitors, some of which are larger and have greater financial resources. Firstar competes with other commercial banks and financial intermediaries, such as savings banks, savings and loan associations, credit unions, mortgage companies, leasing companies and a variety of financial services and advisory companies located throughout the country. Supervision Firstar's business activities as a bank holding company are regulated by the Federal Reserve Board under the Bank Holding Company Act of 1956, as amended, which imposes various requirements and restrictions on its operations. The activities of Firstar and those of its banking and nonbanking subsidiaries are limited to the business of banking and activities closely related or incidental to banking. The business of banking is highly regulated, and there are various requirements and restrictions in the laws of the United States and the states in which the subsidiary banks operate, including the requirement to maintain reserves against deposits and adequate capital to support their operations, restrictions on the nature and amount of loans which may be made by the banks, restrictions relating to investment (including loans to and investments in affiliates), branching and other activities of the banks. Firstar's subsidiary banks with a national charter are supervised and examined by the Comptroller of the Currency. The subsidiary banks with a state charter are supervised and examined by their respective state banking agencies and either by the Federal Reserve if a member bank of the Federal Reserve or by the FDIC if a nonmember. All of the Firstar subsidiary banks are also subject to examination by the Federal Deposit Insurance Corporation. In recent years Congress has enacted significant legislation which has substantially changed the federal deposit insurance system and the regulatory environment in which depository institutions and their holding companies operate. The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), the Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer Recovery Act of 1990 and the Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") have significantly increased the enforcement powers of the federal regulatory agencies having supervisory authority over Firstar and its subsidiaries. Certain parts of such legislation, most notably those which increase deposit insurance assessments and authorize further increases to recapitalize the bank deposit insurance fund, increase the cost of doing business for depository institutions and their holding companies. FIRREA also provides that all commonly controlled FDIC insured depository institutions may be held liable for any loss incurred by the FDIC resulting from a failure of, or any assistance given by the FDIC, to any of such commonly controlled institutions. Federal regulatory agencies have implemented provisions of FDICIA with respect to taking prompt corrective action when a depository institution's capital falls to certain levels. Under the new rules, five capital categories have been established which range from "critically undercapitalized" to "well capitalized." Failure of a depository institution to maintain a capital level within the top two categories will result in specific actions from the federal regulatory agencies. These actions could include the inability to pay dividends, restricting new business activity, prohibiting bank acquisitions, asset growth limitations and other restrictions on a case by case basis. In addition to the impact of regulation, commercial banks are affected significantly by the actions of the Federal Reserve Board as it attempts to control the money supply and credit availability in order to influence the economy. Changes to such monetary policies have had a significant effect on operating results of financial institutions in the past and are expected to have such an effect in the future; however, the effect of possible future changes in such policies on the business and operations of Firstar cannot be determined. The following table sets out the risk-based capital position of both Firstar Corporation and each of Firstar's bank subsidiaries as of March 31, 1994. Both Firstar and all of the subsidiaries exceeded the risk-based capital requirements as of such date. Firstar Corporation Bank Subsidiaries Risk-Based Capital Ratios March 31, 1994 Tier 1 Total Capital Capital Minimum Statutory Requirement 4.00% 8.00% Firstar Corporation 11.48% 13.57% Firstar Bank Milwaukee, N.A. 9.96 11.84 Firstar Bank Appleton 9.94 10.99 Firstar Bank Eau Claire, N.A. 10.81 12.07 Firstar Bank Fond du Lac, N.A. 10.68 11.94 Firstar Bank Grantsburg, N.A. 16.15 17.41 Firstar Bank Green Bay 11.34 12.60 Firstar Bank Lake Geneva, N.A. 14.63 15.89 Firstar Bank Madison, N.A. 12.49 13.74 Firstar Bank Manitowoc 12.05 13.31 Firstar Bank Minocqua 16.10 17.37 Firstar Bank Oshkosh, N.A. 9.96 11.21 Firstar Bank Portage 17.55 18.81 Firstar Bank Racine 14.50 15.76 Firstar Bank Rice Lake, N.A. 13.34 14.59 Firstar Bank Sheboygan, N.A. 10.02 11.28 Firstar Bank Wausau, N.A. 15.36 16.64 Firstar Bank Wisconsin Rapids, N.A. 13.69 14.94 Firstar Bank Ames 12.14 13.40 Firstar Bank Burlington, N.A. 12.55 13.81 Firstar Bank Cedar Falls 9.50 10.75 Firstar Bank Cedar Rapids, N.A. 9.93 11.18 Firstar Bank Council Bluffs 10.46 11.71 Firstar Bank Davenport, N.A. 10.67 11.93 Firstar Bank Des Moines, N.A. 11.60 12.85 Firstar Bank Mount Pleasant 11.66 12.91 Firstar Bank Ottumwa 12.78 14.03 Firstar Bank Red Oak, N.A. 12.86 14.05 Firstar Bank Sioux City, N.A. 9.25 10.46 Firstar Bank of Minnesota, N.A. 13.41 14.67 Firstar Bank DuPage 14.94 17.27 Firstar Bank North Shore 14.90 16.20 Firstar Bank Park Forest 12.11 16.15 Firstar Bank West, N.A. 13.41 13.36 Firstar Metropolitan Bank & Trust 17.64 18.87 Other Acquisitions and Transactions Since the enactment of interstate banking statutes in 1986 by Wisconsin, Minnesota and Illinois, Firstar has actively acquired banks within that three-state area. Following the January 1, 1991 effective date of the interstate banking statute in Iowa, Firstar completed the acquisition of eleven banks in that state. Firstar has also acquired one bank in Arizona, primarily to offer trust services to customers in that state. Firstar anticipates that it will acquire additional banks in the Midwest region in the future. Firstar may pay cash or issue common stock, debt securities, preferred stock or combinations of the foregoing in connection with any such acquisitions. Firstar also will continue to monitor external markets and may raise additional capital as needed and when financially attractive by issuing common stock, debt securities, preferred stock or combinations of the foregoing. Incorporation of Certain Information by Reference Additional information concerning Firstar, including certain financial information, information regarding voting securities of Firstar and principal holders thereof, and information concerning directors and executive officers of Firstar, is included in the documents filed by Firstar with the Commission under the Exchange Act. FIRST SOUTHEAST BANKING CORP. AND THE BANKS General First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, is a bank holding company registered under the federal Bank Holding Company Act of 1956, as amended. First Southeast was formed as a Wisconsin corporation in 1974 to acquire and hold shares of a predecessor bank of First Bank Southeast of Lake Geneva, N.A. (f/k/a First National Bank of Lake Geneva) ("First Bank Lake Geneva"). In 1981, First Southeast acquired the first predecessor bank of First Bank Southeast, N.A. ("First Bank Southeast"), which was previously owned by First Southeast's principal shareholder. First Bank Southeast is headquartered in Milwaukee, Wisconsin, and operates 13 full-service offices. Of these offices, five are in Kenosha County, seven in Racine County and one in Milwaukee County, all in southeastern Wisconsin. The market area of First Bank Southeast is generally approximated by counties in which it maintains offices and immediately surrounding areas. First Bank Southeast is the product of the mergers of five predecessor banks, which were acquired by First Bank Southeast or its principal shareholder from 1969 through 1987. First Bank Southeast is wholly-owned by First Southeast, except for First Bank Southeast directors' qualifying shares which First Bank Southeast has the right to acquire. First Bank Lake Geneva is headquartered in Lake Geneva, Wisconsin, and operates ten full-service offices, of which six are in Walworth County and four are in western Kenosha County, all in Wisconsin. The market area for First Bank Lake Geneva is Walworth County and western Kenosha County, Wisconsin, and the immediately surrounding areas. First Bank Lake Geneva is the product of the mergers of four predecessor banks, which were acquired by First Southeast or its principal shareholders from 1970 through 1987. First Bank Lake Geneva is 98.2% owned by First Southeast, including 0.7% owned by First Bank Lake Geneva directors as directors' qualifying shares which First Southeast has the right to acquire. The remaining 1.8% of First Bank Lake Geneva's capital stock is owned by 45 shareholders. Services First Southeast's subsidiary banks provide a wide range of commercial and consumer banking services within their markets. The Banks provide various types of loans, including business loans, long and short term residential and commercial real estate mortgage loans, and consumer lending. Agricultural loans are part of First Bank Southeast's portfolio. The Banks also provide a full range of deposit products, including checking and savings accounts, certificates of deposits and money market accounts and instruments. The Banks also offer other financial-related services, including safe deposit boxes, investment and brokerage services. Competition The subsidiary banks of First Southeast encounter substantial competition from other commercial banks which maintain offices in their market areas. Southeastern Wisconsin markets are highly competitive. Most communities in which the Banks maintain offices have at least one (and, in most cases, many) other commercial banks which maintain full-service offices there. In addition to competition from commercial banks, the banks compete with savings and loan associations, savings banks, credit unions and other providers of financial services which maintain offices in their communities, and many of which offer substantially the same services as the subsidiary banks. In addition, many other providers of financial services, such as insurance companies, securities brokerage firms and investment management firms also offer competition for many of the particular services provided by the banks. Properties First Southeast's offices are located at 303 Center Street, Lake Geneva, Wisconsin 53147, in a facility owned by First Bank Lake Geneva. First Bank Southeast owns ten of its facilities and leases the remaining three facilities. First Bank Lake Geneva owns all ten of its facilities. Regulation First Southeast, as a bank holding company, and First Bank Southeast and First Bank Lake Geneva, as national banks, are subject to substantial regulation under federal law. Such regulation and supervision is substantially similar to that to which Firstar is subject. See "FIRSTAR CORPORATION--Supervision" above. Management Directors The following table sets forth information regarding the directors of First Southeast. The directors are elected annually. Director Name Principal Occupation Since David A. Straz, Jr. Banker; President of First 1977 (1) Southeast; Chairman of First Bank Southeast and First Bank Lake Geneva David A. Straz Vice President of First Southeast 1977 (1) and First Bank Southeast ________________________ (1) David A. Straz, Jr. is the son of David A. Straz Executive Officers The following table set forth information as to the executive officers of First Southeast. The executive officers are elected annually by First Southeast's Board of Directors. The table also sets forth information as to certain key executive officers of First Bank Southeast First Bank Lake Geneva. Officer Name Office(s) Since David A. Straz, Jr. * President (CEO) and Treasurer; 1969** Chairman of First Bank Southeast and First Bank Lake Geneva David A. Straz* Vice President and Secretary 1977 Thomas E. Daniels President (CEO) of First Bank 1992 Southeast Robert Fahey President (CEO) of First Bank 1993 Lake Geneva At December 31, 1993, First Southeast and its subsidiaries had 285 full-time equivalent employees. ________________________ * Designates executive officers of First Southeast ** Includes service as officer of a predecessor of one of the Banks Share Ownership The following table sets forth information as to the shares of First Southeast Common Stock which are owned by the directors of First Southeast and by the directors and executive officers of First Southeast as a group. There are no other persons who own more than 5% of First Southeast's common stock. Name Number of Shares Percent David A. Straz, Jr. (1) 102,807 96.6% David A. Straz (2) 3,079 2.9% Directors and Executive Officers as a Group (2) 105,886 99.5% ________________________ (1) Mr. Straz, Jr.'s address is 540 Gulf Boulevard, Belleair Shore, Florida 34635. (2) Excludes 600 shares beneficially owned by the spouse of Mr. Straz. Markets and Dividends At May 31, 1994, First Southeast had three shareholders of record. Because of the closely-held nature of First Southeast securities, there has not been any market with respect to shares of First Southeast Common Stock. Management of First Southeast is unaware of any transactions in First Southeast Common Stock since 1990. The following table presents the annual dividend payments per share of First Southeast Common Stock: Calendar Year Dividends Paid Per Share 1991 $5.53 1992 $9.35 1993 $0.00 1994 (through May 31) $9.35 First Southeast Banking Corp. Composition of Loans
March 31, December 31, -1994- -1993- -1992- -1991- Amount Percent Amount Percent Amount Percent Amount Percent (dollars in thousands) Commercial 113,222 46.7% 117,879 47.8% 124,926 49.4% 149,246 51.9% Real estate 1-4 family first mortgage 75,561 31.2% 77,027 31.2% 86,540 34.2% 99,345 34.5% Other real estate mortgage 41,183 17.0% 38,310 15.5% 28,713 11.4% 23,198 8.1% Installment and other 12,476 5.1% 13,360 5.4% 12,671 5.0% 15,937 5.5% 242,442 100.0% 246,576 100.0% 252,850 100.0% 287,726 100.0%
First Southeast Banking Corp. Summary of Loan Loss Experience
Three Months Ended March 31, Year Ended December 31, 1994 1993 1992 1991 Balance at beginning of period 5,375 3,173 3,246 3,093 Charge-offs: Commercial 8 1,744 685 394 Real estate 4 813 64 3 Installment 6 53 66 57 Credit card 4 49 40 40 Total charge-offs 22 2,659 855 494 Loan recoveries: Commercial 63 31 154 3 Real estate 0 0 0 0 Installment 8 22 13 37 Credit card 2 8 15 7 Total recoveries 73 61 182 47 Net loan charge-offs -51 2,598 673 447 Provision for loan losses 0 4,800 600 600 Balance at end of year 5,426 5,375 3,173 3,246 Ratio of net charge-offs to average loans outstanding during the period -0.02% 1.04% 0.25% 0.15% Allowance for loan losses to period-end loans 2.24% 2.18% 1.25% 1.13%
FIRST SOUTHEAST BANKING CORP. CONDENSED CONSOLIDATED AVERAGE BALANCE SHEETS NET INTEREST MARGIN AND RATE ANALYSIS
Year ended December 31, 1993 Year Ended December 31, 1992 Avg Balance Income/Expense Yield Avg Balance Income/Expense Yield ----------- -------------- ----- ----------- -------------- ----- Interest Earning Assets: Federal fund sold and other short-term investments 16,313,383 211,121 1.29% 14,706,426 250,158 1.70% Taxable investment securities 73,887,739 4,845,241 6.56% 68,987,596 6,193,365 8.98% Nontaxable investment securities 38,792,061 1,816,230 4.68% 30,131,117 1,130,478 3.75% Loans 249,712,858 20,401,249 8.17% 270,288,024 23,919,650 8.85% ___________ __________ _____ ___________ __________ _____ Average Earning Assets 378,706,040 27,273,841 7.20% 384,113,161 31,493,651 8.20% ___________ __________ _____ ___________ __________ _____ Interest Bearing Liabilities: Time deposits 270,703,355 11,387,557 4.21% 281,683,834 15,336,769 5.44% Securities sold under repurchase agreements 657,500 13,821 2.10% 713,000 35,940 5.04% Long-term debt 7,296,000 367,290 5.03% 10,045,000 759,872 7.56% ___________ __________ _____ ___________ __________ _____ Avg int bearing 278,656,855 11,768,668 4.22% 292,441,834 16,132,581 5.52% ___________ __________ _____ ___________ __________ _____ Net interest/margin 15,505,173 4.09% 15,361,070 4.00% ========== ===== ========== ===== Year ended December 31, 1991 Avg Balance Income/Expense Yield ----------- -------------- ----- Interest Earning Assets: Federal fund sold and other short-term investments 5,975,000 269,130 4.50% Taxable investment securities 69,841,392 6,521,694 9.34% Nontaxable investment securities 23,942,970 1,209,223 5.05% Loans 302,058,726 30,399,223 10.06% ___________ __________ _____ Average Earning Assets 401,818,088 38,399,270 9.56% ___________ __________ _____ Interest Bearing Liabilities: Time deposits 297,679,366 22,041,803 7.40% Securities sold under repurchase agreements 5,487,000 396,982 7.23% Long-term debt 10,000,000 1,334,139 13.34% ___________ __________ _____ Avg int bearing 313,166,366 23,772,924 7.59% ___________ __________ _____ Net interest/margin 14,626,346 3.64% ========== ===== Three Months Three Months Ended March 31, 1994 Ended March 31, 1993 Avg Balance Income/Expense Yield Avg Balance Income/Expense Yield ----------- -------------- ----- ----------- -------------- ----- Interest Earning Assets: Federal fund sold and other short-term investments 12,708,947 74,032 2.36% 10,879,637 69,400 2.59% Taxable investment securities 80,840,253 1,130,291 5.67% 74,014,496 1,280,906 7.02% Nontaxable investment securities 39,099,875 407,947 4.23% 37,797,013 424,428 4.55% Loans 244,508,939 4,942,059 8.20% 249,546,557 4,900,771 7.96% ___________ __________ _____ ___________ __________ _____ Average Earning Assets 377,158,014 6,554,329 7.05% 372,237,702 6,675,505 7.27% ___________ __________ _____ ___________ __________ _____ Interest Bearing Liabilities: Time deposits 267,294,036 2,573,512 3.90% 273,752,339 3,050,919 4.51% Securities sold under repurchase agreements 3,586,500 36,569 4.14% 1,250,000 12,259 3.98% Long-term debt 6,000,000 68,278 4.62% 8,300,000 94,156 4.60% ___________ __________ _____ ___________ __________ _____ Avg int bearing 276,880,536 2,678,359 3.92% 283,302,339 3,157,334 4.52% ___________ __________ _____ ___________ __________ _____ Net interest/margin 3,875,970 4.17% 3,518,171 3.83% ========== ===== ========== =====
First Southeast Banking Corp. Non-performing Assets
March 31 December 31, -------- ----------------------------- 1994 1993 1992 1991 ----- ----- ----- ------ Nonaccrual loans 5,267 4,298 7,682 6,861 Loans past due 90 days or more 41 85 250 2,792 ----- ----- ----- ------ Total non-performing loans 5,308 4,383 7,932 9,653 Other real estate owned 1,078 1,142 1,516 811 ----- ----- ----- ------ Total non-performing assets 6,386 5,525 9,448 10,464 ===== ===== ===== ====== Nonperforming assets as a percentage of: Loans and other real estate 2.62% 2.23% 3.71% 3.63% Total assets 1.52% 1.30% 2.21% 2.40%
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES GENERAL The following discussion and analysis provides information regarding the historical results of operations and financial condition of First Southeast Banking Corp. and subsidiaries (First Southeast) for the three months ended March 31, 1994 and 1993 and for the years ended December 31, 1993, 1992 and 1991. This discussion and analysis should be read in conjunction with the related consolidated financial statements and notes thereto and the other financial information included herein. THREE MONTHS ENDED MARCH 31, 1994 COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 1993 Results of Operations For the three months ended March 31, 1994, net income increased from the same period in 1993 by $385,000 to $632,000. Excluding the impact of adopting Statement of Financial Accounting Standards No. 109 (SFAS 109) in 1993 discussed below, income before the cumulative effect of change in accounting principle increased $710,000. Net Interest Revenue Net interest revenue increased by $358,000 or 10.2% to $3,876,000 principally from a decrease in rates paid on deposits from an average of 4.51% to 3.90% and an increase in net average earning assets of $11,342,000. These changes were partially offset by a decline in rates earned on average interest earning assets from 7.27% to 7.05%. Provision for Loan Losses The amount charged to provision for loan losses is based on management's evaluation of the loan portfolio. Management determines the adequacy of the allowance for loan losses based on past loan loss experience, current economic conditions, composition of the loan portfolio and the potential for future loss. First Southeast provided $1,138,000 in provisions for loan losses in 1993 while no provisions were made in 1994. The decrease in such provisions between 1993 and 1994 reflects, to some extent, a decrease in total nonperforming loans at March 31, 1994 from a year earlier and a decrease in loans outstanding at March 31, 1994 from December 31, 1993. Nonperforming loans totalled $5,308,000 at March 31, 1994 and $9,385,000 at March 31, 1993. The allowance for loan losses stood at 2.24% of loans as of March 31, 1994 as compared with 2.18% at December 31, 1993 and 1.25% at March 31, 1993. The increase in the allowance as a percentage of loans primarily reflects additional provisions made throughout 1993 and net recoveries of $51,000 in the three months ended March 31, 1994 compared with net charge-offs of $543,000 in the same period of 1993. Other Operating Revenue and Expenses Other operating revenue decreased $109,000, or 14.7%, to $634,000 from 1993 to 1994. This decline primarily relates to proceeds of $175,000 from settlement of a lawsuit in 1993, offset by increases in trust and investment management fees as a result of increased trust assets under management from which fees are derived, service charges and higher mortgage banking revenue in 1994 resulting from gains on loans sold to Freddie Mac. Other operating expenses increased $348,000 or 10.5% to $3,664,000. Included in the increase in other operating expenses were increases in supervisory examination expenses by $69,000 resulting from an examination in the current period, $94,000 in processing and other losses, and $58,000 in occupancy and maintenance costs due principally from depreciation on additions and increased expenses of snow removal which occurred in 1994. Income Taxes Income tax expense was $214,000 as compared to a benefit of $114,000 in 1993. The increase is due to the corresponding increase in income before income taxes and the cumulative effect of the adoption of SFAS 109. Financial Condition Total assets of $422,306,000 at March 31, 1994 decreased slightly from $423,882,000 at December 31, 1993. During the same period, total deposits fell $7,574,000, or 2%, to $374,285,000. Most of this decrease occurred primarily within non interest-bearing accounts. Capital Total stockholders' equity decreased from $30,250,000 to $30,809,000 at March 31, 1994 resulting from year to date income and adoption of SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities." The increase was partially offset by the payment of a common stock dividend of $996,000. SFAS 115 revises the accounting for investments in debt and equity securities with readily determinable fair values. SFAS 115 requires that securities available for sale, as defined in the statement, be reported at fair value, with unrealized gains or losses excluded from earnings and reported as a separate component of stockholders' equity. This accounting differs from First Southeast's policy in 1993 under which such securities were accounted for at the lower of amortized cost or market, with unrealized losses, if any, included in earnings. First Southeast adopted SFAS 115 on January 1, 1994. Adoption of SFAS 115 resulted in an increase of stockholders' equity of approximately $1,173,000 after providing for deferred taxes. During the period, an increase in the interest rate environment resulted in a corresponding decrease in the market value of securities available-for-sale. The total amount of net appreciation on securities available-for-sale at March 31, 1994 totalled $922,000, net of deferred taxes. Capital requirements set by federal regulatory agencies establish minimum capital levels for First Bank Southeast N.A. and First Bank Southeast of Lake Geneva, N.A., subsidiaries of First Southeast. These guidelines require minimum Tier I capital of 4%, a Tier I leverage ratio of 3% and total risk-based capital of 8% of risk-weighted assets. The subsidiary banks and First Southeast, on a consolidated basis, are in compliance with all such minimum capital guidelines. Liquidity The management of assets and liabilities provides for the availability of funds to meet loan commitments, deposit withdrawals and other maturing liabilities. Liquidity to service these requirements is generated from maturing short and long term assets, internally generated earnings and from new deposits and borrowings. Management of First Southeast has tended to rely on the maturity structure of loans, investments available for sale, and transactions in federal funds to meet liquidity needs. First Southeast does not rely on brokered deposits as a source of liquidity. First Southeast's liquidity management is not only as of a point in time, but also involves the future estimated needs of the market area served by First Southeast. First Southeast has maintained a high liquidity ratio of rate sensitive assets to rate sensitive liabilities in recent years. Such ratio has ranged between 128% and 136% between 1990 and 1994, and at the same time, the ratio of total loans to total deposits has ranged between 65% and 74%. Recent Accounting Development The Financial Accounting Standards Board (FASB) recently issued SFAS 114, "Accounting by Creditors for Impairment of a Loan." SFAS 114, which for First Southeast is effective for 1995 financial reporting, specifies the methodology to be used by creditors in establishing valuation allowances for impaired loans. The adoption of SFAS 114 is not expected to have a material effect on First Southeast. 1993 COMPARED WITH 1992 AND 1991 Results of Operations For the year ended December 31, 1993, net loss was ($384,000), a decrease of $4,321,000 from 1992. Net income in 1993 included the cumulative effect of change in accounting principle of adopting SFAS 109 amounting to $325,000. Excluding this item, income before cumulative effect of change in accounting principle decreased $4,646,000 to ($709,000) in 1992. For the year ended December 31, 1992, net income was $3,937,000, an increase of $3,881,000 from $56,000 a year earlier. Net Interest Revenue Net interest revenue increased by $144,000 or 0.9% to $15,505,000 in 1993. Although First Southeast experienced decreases in both interest earning assets and interest bearing liabilities, the decline in total interest bearing liabilities was larger between years resulting in reduced interest expense. This was accompanied by an overall decrease in interest rates with a more rapid decrease in interest rates on deposits and borrowed funds than on interest earning assets. Average interest earning assets fell $5,407,000 to $378,706,000. Average rates on interest earning assets declined from 8.20% to 7.20% during the same timeframe. Interest bearing liabilities decreased $13,785,000 to $278,657,000. Average rates paid on such balances fell from 5.52% to 4.22%. Net interest revenue increased by $735,000 or 5% to $15,361,000 in 1992. This increase was attributable to an overall decrease in interest rates paid on deposits and borrowed funds. The average rate paid on such interest bearing liabilities declined from 7.79% to 5.52% between 1991 and 1992; the average rate on interest earning assets decreased from 9.56% to 8.20% during the same period. Provision for Loan Losses The amount charged to provision for loan losses is based on management's evaluation of the loan portfolio. Management determines the adequacy of the allowance for loan losses based on past loan loss experience, current economic conditions, composition of the loan portfolio and the potential for future loss. The provision for loan losses increased from $600,000 in 1992 to $4,800,051 in 1993 in recognition of certain identified credit concerns, increased charge-offs, levels of nonperforming loans above First Southeast's peer group, and management's decision to increase the allowance for loan losses to a level which is believed to be in line with peer group averages. The provision for loan losses was unchanged at $600,000 between 1992 and 1991. Other Operating Revenue And Expenses Other operating revenue decreased by $1,930,000 to $2,844,000 in 1993. Such decrease was primarily due to $2,151,000 in gains recognized on securities in 1992. Securities gains totalled $49,000 in 1993. Management of First Southeast opted to sell securities in 1992 to recognize significant appreciation and utilize certain tax carryforwards from the previous year. Excluding the impact of these security transactions, other operating revenue increased 6.5% or $172,000 to $2,795,000 in 1993. Such increase was attributable to approximately $71,000 in additional trust and investment management fees as a result of increased trust assets under management from which fees are derived, and mortgage banking revenue of $66,000 including mortgage servicing fees, loan origination fees and gains on loan sales which collectively rose due to increased volume in response to low interest rates. Other operating revenue increased by $5,245,000 to $4,774,000 in 1992. Such increase was primarily due securities gains of $2,150,000 recognized in 1992 when losses of $2,930,000 were realized in 1991. Excluding security transactions, other operating revenue increased $164,000 or 6.7% to $2,623,000 in 1992. Such increase in other operating revenue was due to additional mortgage banking revenue resulting from servicing and loan origination fees and increased fee levels assessed to deposit customers. Other operating expenses increased by $703,000 or 4.8% to $15,319,000 in 1993 due to a net increase of $885,000 of expense related to foreclosed properties resulting from additional writedowns and costs incurred to dispose of selected properties, offset by a $205,000 decrease in legal and collection costs consistent with a decrease in nonperforming loans. Other operating expenses increased $843,000 or 6.1% to $14,615,000 in 1992 due to increases in salaries and employee benefits of $315,000 which relates to normal increases in compensation and staffing levels; other real estate expense of $318,000 resulting from increased writedowns and costs to dispose of selected properties compared to the year earlier, $259,000 related to legal and collection expenses associated with the levels of nonperforming loans, and $194,000 attributed to increased occupancy costs due to higher rental expenses, real estate taxes and insurance costs. The increase in other operating expenses was partially offset by a decrease in miscellaneous expense, which included costs related to a claim settlement which occurred in 1991. Income Taxes SFAS 109, "Accounting for Income Taxes," was issued by the FASB in February 1992 and required a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS 109, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS 109, the effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. First Southeast adopted SFAS 109 in 1993 without restating prior years' financial statements. The adoption of SFAS 109 resulted in the recognition of a reduction in 1993 net loss by $325,000, as the cumulative effect of the change in accounting. Financial Condition At December 31, 1993, total assets of $423,882,000 declined slightly from $426,715,000 a year earlier. During 1993, total loans decreased $6,275,000, or 2.5%, which was offset by increases in investment securities. Total deposits remained substantially unchanged from a year earlier. The balance of the long-term debt decreased $3,100,000 between 1992 and 1993 to $6,000,000 as a result of principal paydowns. Capital Total stockholders' equity decreased $384,000 to $30,250,000 from 1992 to 1993 as a result of First Southeast's net loss. Stockholders' equity increased $2,942,000 from 1991 to 1992, primarily to a retention of earnings, after payment of common stock dividends. OPINIONS Certain legal matters in connection with the Merger will be passed upon for First Southeast by Quarles & Brady, 411 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, and for Firstar by Howard H. Hopwood III, Esq., Senior Vice President and General Counsel of Firstar. Mr. Hopwood is a full-time employee of Firstar and at March 31, 1994, directly or beneficially owned approximately 20,049 shares of Firstar Common Stock. He also holds 34,800 options to acquire Firstar Common Stock under Firstar's 1988 Incentive Stock Plan. EXPERTS The consolidated financial statements of Firstar and subsidiaries as of December 31, 1993 and 1992, and for each of the years in the three- year period ended December 31, 1993, incorporated by reference herein and elsewhere in the registration statement have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG Peat Marwick, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. The consolidated financial statements of First Southeast as of and for the year ended December 31, 1993, included herein and elsewhere in the registration statement have been included herein and in the registration statement in reliance upon the report of KPMG Peat Marwick, independent certified public accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. The consolidated financial statements of First Southeast as of December 31, 1992, and for each of the years in the two-year period ended December 31, 1992, included herein and elsewhere in the registration statement have been included herein and in the registration statement in reliance upon the report of James M. Harmon & Co., Ltd., independent certified public accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing. SHAREHOLDER PROPOSALS If the Merger Agreements are approved, shareholders of First Southeast will become shareholders of Firstar on the Closing Date. Firstar welcomes comments or suggestions from its shareholders. Firstar shareholders may submit proposals for formal consideration at the 1995 annual meeting to Firstar at the principal executive offices of Firstar, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, prior to the close of business on November 29, 1994. Firstar's Bylaws establish advance notice procedures as to (1) business to be brought before an annual meeting of shareholders other than by or at the direction of the Board of Directors, (2) the nomination, other than by or at the direction of the Board of Directors, of candidates for election as directors and (3) the request to call a special meeting of the shareholders. Any shareholder who wishes to take such action should obtain a copy of these Bylaws and may do so by written request addressed to the Secretary of Firstar at the principal executive offices of Firstar. INDEX TO FIRST SOUTHEAST BANKING CORP. CONSOLIDATED FINANCIAL STATEMENTS Audited Consolidated Financial Statements: KPMG Peat Marwick Independent Auditor's Report ......... F-1 James M. Harmon & Co., Ltd. Independent Auditor's Report .................................... F-2 Consolidated Balance Sheets as of December 31, 1993 and 1992 ....................................... F-3 Consolidated Statements of Income for Each of the Three Years in the Period Ended December 31, 1993 ... F-4 Consolidated Statements of Changes in Stockholders' Equity for Each of the Three Years in the Period Ended December 31, 1993 ...................... F-5 Consolidated Statements of Cash Flows for Each of the Three Years in the Period Ended December 31, 1993 ... F-7 Notes to Consolidated Financial Statements ............. F-9 Unaudited Interim Financial Statements Condensed Consolidated Balance Sheet ................ F-30 Condensed Consolidated Statements of Operations ..... F-31 Consolidated Statements of Cash Flows ............... F-32 Notes to Condensed Consolidated Financial Statements. F-33 Independent Auditors' Report Board of Directors First Southeast Banking Corp.: We have audited the accompanying consolidated balance sheet of First Southeast Banking Corp. and subsidiaries (Corporation) as of December 31, 1993 and the related consolidated statements of operations, stockholders' equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of First Southeast Banking Corp. and subsidiaries at December 31, 1993 and the results of their operations and their cash flows for the year ended December 31,1993, in conformity with generally accepted accounting principles. As discussed in note 8 to the consolidated financial statements, the Corporation adopted the provisions of Statement of Financial Accounting Standard 109 Accounting for Income Taxes in 1993. February 4, 1994 INDEPENDENT AUDITORS' REPORT March 8, 1993 To the Board of Directors First Southeast Banking Corp. and subsidiaries We have audited the accompanying consolidated balance sheet of First Southeast Banking Corp. and subsidiaries (Corporation) as of December 31, 1992, and the related consolidated statements of operations, stockholder's equity, and cash flows for each of the years in the two-year period ended December 31, 1992. These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of First Southeast Banking Corp. and subsidiaries at December 31, 1992, and the results of their operations and their cash flows for each of the years in the two-year period ended December 31, 1992 in conformity with generally accepted accounting principles. JAMES M. HARMON & CO., LTD. Certified Public Accountants /s/ James M. Harmon, CPA James M. Harmon, CPA FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Consolidated Balance Sheets December 31, 1993 and 1992
Assets 1993 1992 Cash and due from banks $ 27,414,914 29,282,632 Federal funds sold 10,100,000 10,150,000 Other short-term investments 5,063,914 7,312,851 Securities held for sale (market value of $70,719,000 in 1993) (note 2) 68,619,058 - Investment securities (market value of $50,069,850 in 1993 and $109,841,850 in 1992) (note 2) 49,282,903 107,457,637 Loans (note 3) 246,575,508 252,850,208 Allowance for loan losses (note 4) 5,374,578 3,173,125 Loans, net 241,200,930 249,677,083 Bank premises and equipment, net (note 5) 12,148,704 11,027,704 Foreclosed properties 1,142,427 1,516,031 Goodwill, net of amortization of $2,288,542 and $2,007,850 2,083,996 2,364,688 Accrued interest receivable and other assets (note 8) 6,824,836 7,925,947 Total assets $ 423,881,682 426,714,573 Liabilities and Stockholders' Equity Deposits: Demand $ 114,986,821 107,161,280 Time (note 6) 266,872,021 274,534,688 Total deposits 381,858,842 381,695,968 Securities sold under repurchase agreements (note 2) 985,000 330,000 Long-term debt (note 7) 6,000,000 9,100,000 Other liabilities 4,474,602 4,555,536 Total liabilities 393,318,444 395,681,504 Minority interest 312,832 399,126 Stockholders' equity (notes 9 and 11): Common stock, $1 par value; 200,000 shares authorized; 119,633 shares issued 119,633 119,633 Additional paid-in capital 12,613,397 12,613,397 Retained earnings 19,927,652 20,311,189 Treasury stock 13,147 shares at cost (2,410,276) (2,410,276) Total stockholders' equity 30,250,406 30,633,943 Commitments and contingent liabilities (notes 5, 13, 14, 15 and 16) Total liabilities and stockholders' equity $ 423,881,682 426,714,573 See accompanying notes to consolidated financial statements.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Consolidated Statements of Income Years ended December 31, 1993, 1992 and 1991
1993 1992 1991 Interest revenue: Loans $ 20,401,249 23,919,650 30,399,223 Securities: Taxable 4,845,241 6,193,365 6,521,694 Tax-exempt 1,816,230 1,130,478 1,209,223 Federal funds sold and other short-term investments 211,121 250,158 269,130 Total interest revenue 27,273,841 31,493,651 38,399,270 Interest expense: Deposits (note 6) 11,387,557 15,336,769 22,041,803 Securities sold under repurchase agreements 13,821 35,940 396,982 Long-term debt 367,290 759,872 1,334,139 Total interest expense 11,768,668 16,132,581 23,772,924 Net interest revenue 15,505,173 15,361,070 14,626,346 Provision for loan losses (note 4) 4,800,051 600,000 600,000 Net interest revenue after provision for loan losses 10,705,122 14,761,070 14,026,346 Other operating revenue: Service charges on deposit accounts 1,949,507 1,919,771 1,894,502 Securities gains (losses) 49,335 2,150,779 (2,930,256) Trust and investment management fees 249,000 178,000 163,000 Mortgage banking revenue 166,365 100,684 51,812 Other 429,870 424,554 349,253 Total other operating revenue 2,844,077 4,773,788 (471,689) Other operating expenses: Salaries 5,840,042 5,671,046 5,380,721 Foreclosed properties, net 1,589,787 705,085 387,535 Net occupancy expense 1,452,843 1,422,425 1,584,870 Employee benefits 1,112,509 1,254,128 1,229,291 Legal and professional fees 1,070,602 1,042,589 1,028,712 FDIC insurance expense 895,071 865,950 830,915 Equipment expense 503,423 512,092 499,280 Other 2,854,459 3,142,243 2,780,887 Total other operating expense 15,318,736 14,615,558 13,722,211 Income (loss) before income taxes and cumulative effect of change in accounting principle(1,769,537) 4,919,300 (167,554) Income tax expense (benefit) (note 8) (1,061,000) 982,000 (224,000) Income (loss) before cumulative effect of change in accounting principle (708,537) 3,937,300 56,446 Cumulative effect on prior years of adoption of Statement of Financial Accounting Standard No. 109 325,000 - - Net income (loss) $ (383,537) 3,937,300 56,446 Income (loss) per common share: Income (loss) before cumulative effect of change in accounting principle (6.65) 36.97 .53 Cumulative effect on prior years of adoption of Statement of Financial Accounting Standard No. 109 3.05 - - Net income (loss) $ (3.60) 36.97 .53 See accompanying notes to consolidated financial statements.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Consolidated Statements of Stockholders' Equity Year ended December 31, 1993, 1992 and 1991
Allowance for Additional net unrealized Common paid-in Retained Treasury loss on marketable stock capital earnings stock equity securities Total Balance at December 31, 1990 $ 119,633 12,613,397 17,901,955 (2,180,981) (1,384,025) 27,069,979 Net income - - 56,446 - - 56,446 Dividends declared - - (588,868) - - (588,868) Purchase of treasury stock - - - (229,295) - (229,295) Change in net unrealized loss on marketable equity securities - - - - 1,384,025 1,384,025 Balance at December 31, 1991 119,633 12,613,397 17,369,533 (2,410,276) - 27,692,287 Net income - - 3,937,300 - - 3,937,300 Dividends declared - - (995,644) - - (995,644) Balance at December 31, 1992 119,633 12,613,397 20,311,189 (2,410,276) - 30,633,943 Net loss - - (383,537) - - (383,537) Balance at December 31, 1993 $ 119,633 12,613,397 19,927,652 (2,410,276) - 30,250,406 See accompanying notes to consolidated financial statements.
FIRST SOUTHEAST BANKING CORP.AND SUBSIDIARIES Consolidated Statements of Cash Flows Year ended December 31, 1993, 1992 and 1991
1993 1992 1991 Cash flows from operating activities: Net income (loss) $ (383,537) 3,937,300 56,446 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 4,800,051 600,000 600,000 Depreciation, amortization, and accretion, net 1,444,306 686,021 680,000 Amortization of premiums on investment securities, net 370,977 255,560 (32,850) Securities (gains) losses (49,335) (2,150,779) 2,930,256 Deferred income taxes (1,353,000) (106,000) 16,000 Cumulative effect of change in accounting principle (325,000) - - Loss on bank premises and foreclosed properties 1,061,852 220,216 83,207 Net increase in loans held for sale (277,200) (156,600) - Decrease in minority interest 86,294 132,163 6,997 Decrease (increase) in accrued interest receivable and other assets 2,779,109 (3,532,090) (1,236,003) Increase (decrease) in other liabilities (80,934) 638,742 (5,529,031) Net cash provided by (used in) operating activities 8,073,583 524,533 (2,424,978) Cash flows from investing activities: Proceeds from sale of investments 2,713,661 64,215,582 21,479,339 Proceeds from maturity of investments 31,494,396 25,185,294 28,708,484 Purchase of investment securities (45,174,692) (100,227,707) (52,744,249) Decrease in loans 1,702,653 38,386,786 25,943,404 Proceeds from sales of premises and equipment 30,466 367,620 11,266 Purchases of premises and equipment (2,370,352) (1,120,049) (351,726) Proceeds from disposition of foreclosed properties 1,645,756 803,574 3,966,230 Net cash provided by (used in) investing activities (9,958,112) 27,611,100 27,012,748
FIRST SOUTHEAST BANKING CORP.AND SUBSIDIARIES Consolidated Statement of Cash Flows, Continued
1993 1992 1991 Cash flows from financing activities: Net increase (decrease) in deposits $ 162,874 (9,937,766) (11,384,882) Net increase (decrease) in securities sold under repurchase agreements and federal funds purchased 655,000 (766,000) (8,782,000) Increase (decrease) of borrowings (3,100,000) (1,900,000) 2,000,000 Cash dividends paid - (995,644) (588,868) Purchase of treasury stock - - (229,295) Net cash used in financing activities (2,282,126) (13,599,410) (18,985,045) Net increase (decrease) in cash and cash equivalents (4,166,655) 14,536,223 5,602,725 Cash and cash equivalents: Beginning of year 46,745,483 32,209,260 26,606,535 End of year $ 42,578,828 46,745,483 32,209,260 Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 11,932,563 16,132,581 23,772,924 Income taxes 584,256 151,493 488,730 Supplemental schedule of noncash investing and financing activities not described in the notes to the consolidated financial statements: Loans receivable satisfied through foreclosure or acquisition of deeds in lieu of foreclosure $ 2,428,000 1,023,000 6,314,000 Financing of sales of certain foreclosed properties 1,015,000 427,000 2,639,000 See accompanying notes to consolidated financial statements.
FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements December 31, 1993 and 1992 (1) Summary of Significant Accounting Policies First Southeast Banking Corp. (Corporation) provides banking services to individual and corporate customers through its wholly-owned subsidiary, First Bank Southeast, National Association, and its 97% owned subsidiary, First Bank Southeast of Lake Geneva, National Association (collectively "Banks"). Minority interest in income (loss) of subsidiaries is included other operating expense and was not material to any year presented. The Corporation and the Banks are subject to the regulations of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities. The accounting policies and principles followed by the Corporation and the Banks which materially affect the determination of financial position, results of operations and cash flows are summarized below: (a) Principles of Consolidation and Presentation The consolidated financial statements have been prepared in conformity with generally accepted accounting principles, and general practice within the banking industry. All significant intercompany balances and transactions have been eliminated in consolidation. (b) Investment Securities Securities include those held-for-sale and those held for investment. Those classified as securities held-for-sale are carried at the lower of amortized cost or market, determined on an aggregate basis. Investment securities are those which management has the ability and intent to hold to maturity, and are carried at amortized cost. Cost has been adjusted for amortization of premiums and accretion of discounts using the straight-line method. Investment securities would be written-down to market value in the event that an impairment of value that is other than temporary should become evident. Gains and losses on sales of securities are computed on the basis of specific identification of securities sold. (c) Loans Loans are carried at the principal amounts outstanding. Unearned interest on discounted loans is recognized as income using the sum-of-the-months' digits method. Interest income is accrued on all non-discounted loans by applying the contractual interest rate on to the amount outstanding, except where serious doubt exists as to the collectibility of the loan, in which case the accrual of interest ceases. Loans origination and commitment fees and certain direct loan origination costs are deferred and the net amount amortized over the contractual life of the loan as an adjustment of the related loans' yields. Mortgage loans held for sale are valued at the lower of aggregate cost or market. The market value of loans held for sale is determined by the price of actual commitments to sell in the secondary market. (d) Allowance for Loan Losses A material estimate that is particularly susceptible to significant change in the near term relates to the determination of the allowance for loan losses. In connection with the determination of the allowance for loan losses, management obtains independent appraisals for significant properties held as collateral for loans.The allowance of loan losses is established by charges to the provision for loan losses. Loan losses are recognized through charges to the allowance. Subsequent recoveries are added to the reserve. The allowance for loan losses is maintained at a level adequate to provide for potential loan losses through charges to operating expense. The allowance is based upon past loan loss experience and other factors which, in management's judgment, deserve current recognition in estimating loan losses. Such other factors considered by management include growth and composition of the loan portfolio, the relationship of the allowance for loan losses to outstanding loans and economic conditions. Management believes that the allowance for loan losses is adequate. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for losses on loans. Such agencies may require the recognition of additions to the allowance based on their judgments about information available to them at the time of their examination. (e) Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. (f) Foreclosed Properties Foreclosed properties represent property acquired through foreclosure or acquisition of deed in lieu of foreclosure on loans for which the borrowers have defaulted as to the payment of principal and interest. Foreclosed properties are carried at the lower of the carrying value of the related loan or fair value less the estimated costs to sell the property. Initial valuation adjustments, if any, are charged to the allowance for loan losses. Subsequent revaluations of properties which indicate reduced value are charged to expense. Revenues and expenditures related to holding and operating foreclosed properties are included in other operating expenses. (g) Goodwill Goodwill is amortized over fifteen years using the straight-line method. (h) Income Taxes Effective January 1, 1993, the Corporation adopted Statement of Financial Accounting Standards No. 109 (Statement 109), Accounting for Income Taxes. Statement 109 requires a change from the deferred method of accounting for income taxes to the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Corporation has reported the cumulative effect of the change in the method of accounting for income taxes in the 1993 consolidated statement of operations. (i) Earnings Per Share Income (loss) per common share is based on the weighted average number of shares outstanding during each year. (j) Cash and Cash Equivalents For purposes of the consolidated statements of cash flows, cash and cash equivalents include cash, amounts due from banks, federal funds sold and all other highly liquid debt instruments with a maturity at date of acquisition of three months or less. The Corporation's bank subsidiaries are required to maintain noninterest-bearing deposits on hand or with the Federal Reserve Bank. At December 31, 1993 and 1992, those required reserves were satisfied by currency and coin holdings. (k) Other Proposed Accounting Changes In May 1993, the FASB issued Statement 114, Accounting by Creditors for Impairment of a Loan. Statement 114 standardizes how creditors should recognize losses on impaired loans. Statement 114 specifically excludes residential mortgage loans, consumer installment loans, loans measured at fair value or at the lower of cost or fair value and leases from the scope of the statement. Loans covered within the scope of Statement 114 are considered impaired when, based upon current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. The extent to which a loan is impaired will be determined based on the present value of expected future cash flows discounted at the loan's effective rate, except that a creditor may measure impairment based on a loan's observable market price, or the fair value of the collateral if the loan is collateral dependent. Statement 114 is effective for financial statements for fiscal years beginning after December 15, 1994. Statement 114 is expected to be adopted in the first fiscal quarter in the year ending December 31, 1995. The Corporation does not anticipate that adoption will result in any material effect on operating results or financial position. In May 1993, the FASB issued Statement 115, Accounting for Certain Investments in Debt and Equity Securities. Statement 115 requires the classification of debt and equity securities into one of three categories. These categories include securities held-to-maturity and securities available-for-sale. Securities classified as held-to-maturity are measured at amortized cost. Securities classified as available-for-sale are carried at fair value and unrealized holding gains and losses are excluded from earnings and reported as a separate component of equity. Adoption of Statement 115 effective January 1, 1994 resulted in an increase of stockholders' equity of approximately $1,173,000 after consideration of tax effects. (l) Reclassifications Certain amounts for prior years have been reclassified to conform to the 1993 presentation. (2) Securities (a) Securities Held for Sale The amortized cost and estimated market values of securities held for sale at December 31, 1993 are as follows:
Gross Gross Estimated Amortized unrealized unrealized market cost gains losses value U.S. Treasury securities and obli- gations of U.S. Government agencies and corporations $ 15,519,887 183,929 (19,816) 15,684,000 Mortgage-backed securities 32,011,518 366,711 (31,229) 32,347,000 Corporate securities 21,087,653 1,621,040 (20,693) 22,688,000 Totals $ 68,619,058 2,171,680 (71,738) 70,719,000
The amortized cost and estimated market value of securities held for sale at December 31, 1993 by contractual maturity is shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Estimated Amortized market cost value Due in one year or less $ 6,721,161 6,787,000 Due after one year through five years 23,129,333 23,412,000 Due after five years through ten years 5,848,596 6,001,000 35,699,090 36,200,000 Equity securities 908,450 2,172,000 Mortgage-backed securities 32,011,518 32,347,000 $ 68,619,058 70,719,000 (b) Investment Securities The amortized cost and estimated market values of investment securities at December 31, 1993 and 1992 are as follows:
1993 Gross Gross Estimated Amortized unrealized unrealized market cost gains losses value Obligations of states and political subdivisions $ 39,429,846 843,663 (2,509) 40,271,000 Collateralized mortgage obligations 9,242,207 - (54,207) 9,188,000 Other securities 610,850 - - 610,850 Totals $ 49,282,903 843,663 (56,716) 50,069,850
1992 Gross Gross Estimated Amortized unrealized unrealized market cost gains losses value U.S. Treasury securities and obligations of U.S. Government corpora- tions and agencies $ 3,922,049 951 - 3,923,000 Obligations of states and political subdivisions 38,154,275 570,627 (309,902) 38,415,000 Collateralized mortgage obligations 869,934 - (1,934) 868,000 Mortgage-backed securities 39,506,513 625,973 (187,486) 39,945,000 Corporate securities 24,394,016 1,764,588 (78,604) 26,080,000 Other securities 610,850 - - 610,850 Totals $107,457,637 2,962,139 (577,926) 109,841,850
The amortized cost and estimated market value of investment securities at December 31, 1993, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Estimated Amortized market cost value Due in one year or less $ 7,528,351 7,562,000 Due after one year through five years 22,329,035 22,803,000 Due after five years through ten years 9,572,460 9,906,000 Due after ten years 9,242,207 9,188,000 Equity securities 610,850 610,850 $ 49,282,903 50,069,850
Gross gains realized on sales of investment securities totaled $202,335, $2,199,790 and $609,335 during 1993, 1992 and 1991, respectively. Gross losses realized on sales of investment securities totaled $685,732 and $3,702,766 during 1992 and 1991, respectively. Securities with carrying values aggregating approximately $8,580,000 and $9,612,000 at December 31, 1993 and 1992, respectively, are pledged to secure public or trust deposits, securities sold under repurchase agreements and for other purposes as required by law. (3) Loans Loans classified by type at December 31, 1993 and 1992 are as follows: 1993 1992 Commercial and municipal $ 117,879,194 124,925,672 Real estate mortgage 115,336,562 115,252,750 Installment and other 13,359,752 12,671,786 $ 246,575,508 252,850,208 Mortgage loans serviced for other investors approximate $33,280,000, $19,478,000 and $9,800,000, as of December 31, 1993, 1992 and 1991, respectively. Included in loans are mortgage loans held for sale of approximately $433,800, and $156,600, as of December 31, 1993 and 1992, respectively. Nonaccrual and past due loans at December 1993 and 1992 are as follows: 1993 1992 Nonaccrual $ 4,298,000 7,682,000 Past due 90 days or more, still accruing 85,000 250,000 The effect of nonperforming loans on interest revenue is as follows: 1993 Interest at original contract rate $ 540,000 Interest collected 87,000 Net reduction of interest revenue $ 453,000 In the ordinary course of business, the Banks originate loans to related parties, which include directors, executive officers, and associates of such persons. Loans to these individuals are made on substantially the same terms as comparable transactions with other persons and do not involve more than the normal risk of collectibility. Loan activity of related parties for 1993 is summarized as follows: Balance, December 31, 1992 $ 1,566,000 Originations and renewals 729,000 Repayments (767,000) Balance, December 31, 1993 $ 1,528,000 (4) Allowance for Loan Losses An analysis of the allowance for loan losses is as follows: 1993 1992 1991 Balance, beginning of year $ 3,173,125 3,246,468 3,093,005 Provision charged to expense 4,800,051 600,000 600,000 Recoveries of loans previously charged-off 60,321 182,064 47,456 Loans charged-off (2,658,919) (855,407) (493,993) Balance, end of year $ 5,374,578 3,173,125 3,246,468 (5) Premises and Equipment Premises and equipment at December 31, 1993 and 1992 are summarized as follows: 1993 1992 Land and improvements $ 1,983,337 1,983,337 Buildings 10,129,565 9,922,452 Furniture, fixtures and leasehold improvements 6,967,319 5,491,590 19,080,221 17,397,379 Less accumulated depreciation and amortization 6,931,517 6,369,675 $ 12,148,704 11,027,704 The Corporation has agreements for rental of certain premises and equipment. Under the terms of these agreements the Corporation has future non-cancelable minimum lease payments as follows: Year ending December 31, Amount 1994 $ 196,000 1995 196,000 1996 169,000 1997 138,000 1998 and after 670,000 $ 1,369,000 Rent expense under these leases was approximately $207,000, $276,000 and $220,000 in 1993, 1992 and 1991, respectively. (6) Deposits Time deposits include approximately $19,127,000 and $19,756,000 of certificates of deposit of $100,000 or more at December 31, 1993 and 1992. Interest expense on certificates of deposit of $100,000 or more approximated $704,000, $1,386,000 and $1,246,000 in 1993, 1992 and 1991, respectively. (7) Long-term Debt Long-term debt consists of a term note whose outstanding balance is due July 1, 1997, payable to LaSalle National Bank, N.A. (LaSalle), Chicago, Illinois bearing interest at LaSalle's prime rate or London inter bank offered rate (LIBOR) plus 1.2%. The note is collateralized by the stock of First Bank Southeast of Lake Geneva, N.A. and the personal guarantee of a stockholder of the Corporation. The Corporation is restricted from incurring additional indebtedness without the prior approval of the Federal Reserve Board. 1993 1992 Maximum month-end balance $ 9,100,000 10,000,000 Average balance 7,296,000 10,045,000 December 31 balance 6,000,000 9,100,000 Interest rate at December 31 4.45% 5.17% (8) Income Taxes Income tax expense (benefit) in the consolidated statements of operations consists of the following: Federal State Total Year ended December 31, 1993 Current $ 292,000 - 292,000 Deferred (1,353,000) - (1,353,000) (1,061,000) - (1,061,000) Year ended December 31, 1992 Current $ 1,088,000 - 1,088,000 Deferred (106,000) - (106,000) $ 982,000 - 982,000 Year ended December 31, 1991 Current $ (289,000) 49,000 (240,000) Deferred 16,000 - 16,000 $ (273,000) 49,000 (224,000) Income tax expense (benefit) differs from the amounts computed by applying the U.S. federal income tax rate (34%) to income (loss) before income taxes and the cumulative effect of change in accounting principle. A reconciliation to actual tax expense follows: 1993 1992 1991 Tax expense (benefit) at statutory rate $ (602,000) 1,673,000 (57,000) Tax-exempt income, net of disallowance (548,000) (367,000) (471,000) Goodwill amortization 120,000 105,000 105,000 State income taxes - - 32,000 Capital loss carry over - (195,000) 195,000 Other, net (31,000) (234,000) (28,000) Income tax expense (benefit) $(1,061,000) 982,000 (224,000) As discussed in Note 1(h) the Corporation adopted Statement 109 in 1993 without restating prior years' financial statements. The adoption of Statement 109 resulted in the recognition of an increase in 1993 net income of $325,000, as the cumulative effect of the change in accounting. The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at December 31, 1993 are presented below: 1993 Deferred tax assets: Loans, principally due to allowance for losses $ 2,285,000 Foreclosed properties 315,000 State net operating loss carryforwards 1,471,000 Other 571,000 Deferred tax assets 4,642,000 Valuation allowance (1,967,600) 2,674,400 Deferred tax liabilities: Premises and equipment, principally due to differences in depreciation (485,000) Net deferred tax asset $ 2,189,400 At January 1, 1993, the balance of the valuation allowance approximated $1,265,000. Such reserve increased in 1993 primarily due to increases in state net operating loss carry forwards, and the state tax effect of temporary differences.Included in other assets are deferred income tax assets of $2,189,400 at December 31, 1993 and $511,400 at December 31, 1992. At December 31, 1993, the Corporation and its subsidiaries have available alternative minimum tax carryforwards of $255,000 which are carried forward indefinitely and state tax net operating loss carryforwards of approximately $18,615,000, which begin to expire 1996 through 2008. (9) Payment of Dividends The Corporation relies partially on cash dividends received from the subsidiary banks to fund its operating and dividend requirements. The declaration and payment of cash dividends by the subsidiary banks to the Corporation is restricted by certain statutory and regulatory limitations. These restrictions limit cash dividends to current year net profits, as defined, plus retained net profits from the past two years. At December 31, 1993, each of the subsidiary banks is precluded from paying a dividend to the Corporation without prior approval from the office of the Comptroller of the Currency. (10) Employee Benefit Plans The Corporation has a defined contribution plan which covers substantially all employees. Contributions are made to the plan on behalf of each participant in the amount of 5.25% of each participant's compensation plus 4.3% of each participant's excess compensation, as defined for such plan years. Plan expense was approximately $360,000, $346,000 and $330,000 in 1993, 1992 and 1991, respectively. (11) Capital The Corporation and the Banks are subject to regulatory capital guidelines. These guidelines require minimum Tier I capital of 3% of total assets and 4% of risk weighted assets, and total capital equal to 8% of risk-weighted assets. The Corporation and the Banks are in compliance with all minimum capital guidelines. (12) Leases The Corporation leases space in one of its buildings to tenants. Noncancelable operating leases for such office space expire at various dates over the next five years. Future minimum payments receivable under noncancelable operating leases as of December 31, 1993 are: Year 1994 $ 141,000 1995 77,000 1996 42,000 1997 15,000 1998 15,000 $ 290,000 Gross rental income in 1993, 1992 and 1991 was approximately $183,000, $139,000 and 167,000, respectively. (13) Financial Instruments With Off-Balance Sheet Risk The subsidiary banks are party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of customers. These financial instruments include commitments to extend credit and standby letters of credit and involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated financial statements. The contract amounts of those instruments reflect the extent of involvement the banks have in particular classes of financial instruments. The banks' exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual notional amount of those instruments. The banks use the same credit policies in making commitments and conditional obligations as they do for instruments reflected in the consolidated financial statements. A summary of significant off-balance sheet financial commitments at December 31, 1993 and 1992 is as follows: Financial instruments whose contract amounts represent credit risk 1993 1992 Commitments to extend credit $ 24,964,000 21,168,000 Credit card lines 4,079,000 4,172,000 Standby letters of credit 1,476,000 1,291,000 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's credit worthiness is evaluated on a case-by-case basis. The amount of collateral obtained if deemed necessary is based on management's credit evaluation of the counterparty. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, income-producing commercial properties and negotiable securities. Credit card lines are unsecured agreements to extend credit. Such commitments are reviewed periodically, at which time the commitments may be maintained, increased, decreased or canceled, depending upon an evaluation of the customer's creditworthiness and other considerations. Standby letters of credit are conditional commitments issued by the subsidiary banks to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. In some cases marketable securities are pledged as collateral supporting those commitments. (14) Regulatory and Other Commitments The Corporation operates under a Memorandum of Understanding (MOU) with the Federal Reserve Bank of Chicago. Specifically the Corporation and its board of directors agreed to a number of requirements. Under the MOU, the Corporation shall not declare or pay any dividends subsequent to 1992 nor increase its borrowings or incur any debt without the prior written approval of the Federal Reserve Bank. The Corporation is subject to various legal actions and proceedings in the normal course of business, some of which involve substantial claims for compensatory or punitive damages. Although litigation is subject to many uncertainties and the ultimate exposure with respect to these matters cannot be ascertained, management does not believe that the final outcome will have a material adverse effect on the financial condition of the Corporation. (15) Fair Value of Financial Instruments Statement of Financial Accounting Standards 107, Disclosures about Fair Value of Financial Instruments (Statements 107), requires disclosure of fair value information about financial instruments for which it is practicable to estimate that value, whether or not recognized in the consolidated balance sheets. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. Statement 107 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Corporation. The Corporation does not routinely measure the market value of certain of its financial instruments because such measurements represent point-in-time estimates of value. It is not the intent of the Corporation to liquidate and therefore realize the difference between market value and carrying value, and even if it were, there is no assurance that the estimated market values could be realized. Thus the information presented may not be relevant to predicting the Corporation's future earnings or cash flows. The following methods and assumptions were used by the Corporation in estimating its fair value disclosures for financial instruments: Cash and cash equivalents - The carrying amounts of these assets are reported in the consolidated balance sheets at approximately their fair values. Securities available for sale and investment securities - Fair values for these assets are based on quoted market prices, where available. If quoted market prices are not available, fair values are based on quoted market prices of comparable instruments. Loans - For variable-rate mortgage loans that reprice regularly and have not experienced a significant change in credit risk, fair values are based on carrying values. The fair value of fixed-rate residential mortgage loans held for investment, commercial real estate loans, multi-family residential property mortgage loans, consumer loans and commercial loans are estimated using discounted cash flow analyses. The rates utilized for discounting are the interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. For residential construction loans, fair values are based on carrying values due to the short-term nature of the loans. The fair value of mortgage loan servicing rights for loans originated by the banks has not been determined and is not presented below. These rights, which consist of the banks' contractual right to service loans for others, represent a future income producing intangible asset that could be realized immediately be selling the rights to another institution. The value of those rights, except to the extent that purchased mortgage servicing rights exist, is not reflected in the Corporation's consolidated balance sheets. Deposits - The fair values disclosed for demand accounts are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying value amounts). The fair values of fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies current incremental interest rates being offered on certificates of deposit to a schedule of aggregated expected monthly maturities of the outstanding certificates of deposit. Borrowings - The fair value of the Corporation's long-term borrowings approximate the carrying value due to the interest rates floating at market interest rates. Off-Balance Sheet Items - The fair value of unused and open ended consumer lines of credit was estimated using fees currently being charged and does not include the value that relates to estimated cash flows from new loans generated from existing lines of credit. The fair value of commitments to extend credit was estimated using fees currently charged to enter into such agreements. The fair value of commitments to sell loans is based on the current market rates for such loans. The estimated fair values of the Corporation's off-balance sheet items (note 13), are not material and therefore are not included in the following schedule. The carrying amounts and fair values of the Corporation's financial instruments consist of the following at December 31, 1993 and 1992:
1993 1992 Carrying Fair Carrying Fair Amount Value Amount Value Financial assets: Cash and cash equivalents $ 42,578,828 42,578,828 49,745,483 49,745,483 Securities available for sale 68,619,058 70,719,000 - - Investment securities 49,282,903 50,069,850 107,457,637 109,841,513 Loans, net 241,200,930 244,618,959 249,677,083 250,266,663 Financial liabilities: Deposits: Demand accounts 114,986,821 114,986,821 107,161,282 107,161,282 Time accounts 266,872,021 265,431,996 274,534,688 276,446,612 Securities sold under repurchase agreements 985,000 985,000 330,000 330,000 Borrowings 6,000,000 6,000,000 9,100,000 9,100,000
(16) Proposed Acquisition by Firstar Corporation On February 10, 1994, the Corporation entered into a definitive agreement with Firstar Corporation (Firstar) to exchange all outstanding shares of common stock of the Corporation for common stock of Firstar. The definitive agreement is subject to stockholder and regulatory approval. (17) First Southeast Banking Corp. (Parent Company Only) Financial Information Condensed Balance Sheet December 31, 1993 1992 Cash $ 1,803,985 63,463 Due from subsidiaries 326,478 184,725 Investment in subsidiaries 31,596,377 34,099,927 Investment securities (market value of $1,264,000 and $1,548,000) 908,450 1,293,213 Goodwill, net of amortization 1,290,961 1,478,229 Other 1,155,347 2,822,466 $ 37,081,598 39,942,023 Liabilities and Stockholders' Equity Note payable $ 6,000,000 9,100,000 Other 831,192 208,080 Stockholders' equity 30,250,406 30,633,943 $ 37,081,598 39,942,023 Condensed Statements of Operations 1993 1992 1991 Revenue: Dividends received from Banks $ 2,651,870 2,402,436 2,628,220 Other dividend and interest income 82,403 141,291 105,565 Securities gain (losses) 40,391 1,439,728 (3,268,763) Other 65,941 69,335 42,284 Total revenue 2,840,605 4,052,790 (492,694) Expenses: Interest 367,290 759,872 1,334,139 Goodwill amortization 187,267 187,267 187,267 Other 288,189 182,790 215,825 Total expenses 842,746 1,129,929 1,737,231 Income (loss) before income taxes and equity in undistributed net income (loss) of Banks 1,997,859 2,922,861 (2,229,925) Income tax benefit 190,672 3,550 1,326,513 Income (loss) before equity in undistributed net income (loss) of Banks 2,188,531 2,926,411 (903,412) Equity in undistributed net income (loss) of Banks (2,572,068) 1,010,889 959,858 Net income (loss) $ (383,537) 3,937,300 56,446
Condensed Statements of Cash Flows 1993 1992 1991 Cash flows from operating activities: Net income (loss) $ (383,537) 3,937,300 56,446 Adjustments to reconcile net income to net cash provided by operating activities: Securities (gains) losses (40,391) (1,439,728) 1,384,025 Amortization 187,267 187,267 187,267 Decrease (increase) in other assets 1,540,798 (1,565,731) 615,412 Increase (decrease) in other liabilities 623,112 208,080 (4,414,522) Equity in undistributed (net income) loss of Banks 2,572,068 (1,010,889) (959,858) Net cash provided by (used in) operating activities4,499,317 316,299 (3,131,230) Cash flows from investing activities: Proceeds from sales of investments 425,154 2,352,664 2,308,719 Purchase of common stock in Banks (83,949) (150,280) (15,566) Net cash used in investing activities 341,205 2,202,384 2,293,153 Cash flows from financing activities: Net increase (decrease) in borrowed funds (3,100,000) (1,900,000) 2,000,000 Dividends paid - (995,644) (588,868) Purchase of treasury stock - - (229,295) Net cash provided by (used in)financing activities(3,100,000) (2,895,644) 1,181,837 Net increase (decrease)in cashand cash equivalents 1,740,522 (376,961) 343,760 Cash and cash equivalents at beginning of year 63,463 440,424 96,664 Cash and cash equivalents at end of year $ 1,803,985 63,463 440,424 Supplemental disclosures of cash flow information: Cash paid during the year for interest $ 367,290 759,872 1,334,139
The Corporation and the Banks utilize the services of an aviation service of which the owner is a stockholder and director of the Corporation. Fees paid to the aviation service during 1993, 1992 and 1991 totaled approximately $33,000, $46,000 and $142,000, respectively. FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Condensed Consolidated Balance Sheet March 31, 1994 (Unaudited) Assets Cash and due from banks $ 29,312,227 Federal funds sold 9,000,000 Securities available-for-sale 76,177,111 Securities held-to-maturity (market value of $47,059,000) 47,015,768 Loans 242,442,370 Allowance for loan losses (5,426,043) Loans, net 237,016,327 Premises and equipment, net 13,072,070 Foreclosed properties 1,077,976 Goodwill, net of amortization of $2,358,716 2,013,822 Accrued interest receivable and other assets 7,620,591 Total assets $ 422,305,892 Liabilities and Stockholders' Equity Deposits: Demand $ 106,568,807 Time 267,716,051 Total deposits 374,284,858 Securities sold under repurchase agreements (note 3) 6,188,000 Long-term debt 6,000,000 Other liabilities 4,701,434 Total liabilities 391,174,292 Minority interest 322,667 Stockholders' equity: Common stock, $1 par value; 200,000 shares authorized; 119,633 shares iss 119,633 Additional paid-in capital 12,613,397 Retained earnings 19,563,967 Appreciation on securities available-for-sale, net of deferred taxes 922,212 Treasury stock, 13,147 shares at cost (2,410,276) Total stockholders' equity 30,808,933 Total liabilities and stockholders' equity $ 422,305,892 See accompanying notes to unaudited condensed consolidated financial statements. FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Operations Three Months ended March 31, 1994 and 1993 (Unaudited) 1994 1993 Interest revenue: Loans $ 4,942,059 4,900,771 Investment securities: Taxable 1,130,291 1,280,906 Tax-exempt 407,947 424,428 Other 74,032 69,400 Total interest revenue 6,554,329 6,675,505 Interest expense: Deposits 2,573,512 3,050,919 Securities sold under repurchase agreements 36,569 12,259 Long-term debt 68,278 94,156 Total interest expense 2,678,359 3,157,334 Net interest revenue 3,875,970 3,518,171 Provision for loan losses - 1,137,512 Net interest revenue after provision for loan losses 3,875,970 2,380,659 Other revenue: Service charges 470,676 453,234 Trust and investment management fees 62,000 44,000 Mortgage banking revenue 31,725 25,169 Other 69,532 220,775 Total other revenue 633,933 743,178 Other expenses: Salaries and employee benefits 1,788,321 1,741,253 Other 1,875,622 1,574,644 Total other expenses 3,663,943 3,315,897 Income (loss) before income tax expense and cumulative effect of change in accounting principle 845,960 (192,060) Income tax expense (benefit) 214,000 (114,000) Income (loss) before cumulative effect of change in accounting principle 631,960 (78,060) Cumulative effect on prior years of adoption of Statement of Financial Accounting Standards No. 109 - 325,000 Net income $ 631,960 246,940 Income (loss) per common share: Income (loss) before cumulative effect of change in accounting principle $ 5.93 (0.74) Cumulative effect on prior years of adoption of Statement of Financial Accounting Standards No. 109 - 3.05 Net income $ 5.93 2.31 See accompanying notes to unaudited condensed consolidated financial statements. FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows Three Months ended March 31, 1994 and 1993 (Unaudited) 1994 1993 Cash flows from operating activities: Net income $ 631,960 246,940 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization, and accretion, net 229,136 204,074 Provision for loan losses - 1,137,512 Cumulative effect of change in accounting principle - (325,000) Minority interest 9,835 56,332 Decrease (increase) in accrued interest receivable (795,755) 2,510,145 and other assets Decrease in accrued expenses and other liabilities (248,246) (519,088) Net cash provided by operating activities (173,070) 3,310,915 Cash flows from investing activities: Net decrease in loans 4,184,603 6,063,845 Purchases of premises and equipment, net (1,081,983) (1,834,391) Purchase of investment securities, net of maturities (3,893,628) (8,707,743) Net change in foreclosed properties 64,451 (1,150,198) Net cash used in investing activities (726,557 (5,628,487) Cash flows from financing activities: Net decrease in deposits (7,573,984) (13,008,670) Net increase in securities sold under repurchase agreements 5,203,000 1,840,000 Repayment of long-term debt - (1,600,000) Cash dividends paid (995,645) - Net cash provided by (used in) financing activities (3,366,629) (12,768,670) Net decrease in cash and cash equivalents (4,266,256) (15,086,242) Cash and cash equivalents: Beginning of year 42,745,483 46,745,483 End of year $ 38,312,227 31,659,241 See accompanying notes to unaudited condensed consolidated financial statements. FIRST SOUTHEAST BANKING CORP. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements March 31, 1994 and 1993 (Unaudited) (1) General The accounting and reporting policies of First Southeast Banking Corp. and subsidiaries (First Southeast) conform to generally accepted accounting principles and to general practices within the banking industry. Significant accounting principles used by First Southeast are summarized in Note 1 to the 1993 consolidated financial statements. The condensed consolidated financial statements reflect adjustments, all of which are of a normal recurring nature, and, in the opinion of management, necessary for a fair statement of results for the interim periods. The operating results for the three months ended March 31, 1994 are not necessarily indicative of the results which may be expected for the entire year. The accompanying condensed consolidated financial statements should be read in conjunction with First Southeast's 1993 consolidated financial statements and related notes. (2) Allowance for Loan Losses An analysis of the allowance for loan losses for the three months ended March 31, 1994 and 1993 is as follows: 1994 1993 Balance, beginning of period $ 5,374,578 3,173,125 Provision charged to expense - 1,137,512 Recoveries of loans previously charged-off 73,465 15,080 Loans charged-off (22,000) (558,537) Balance, end of period $ 5,426,043 3,767,180 (3) Nonperforming Loans Nonperforming loans as of March 31, 1994 and 1993 are summarized as follows: 1994 1993 Nonperforming loans $ 5,308,000 9,385,000 (4) Long-term Debt Long-term debt consists of a term note payable to LaSalle National Bank, N.A. (LaSalle), Chicago, Illinois. Such note, with interest payable at LaSalle's prime rate or the LIBOR plus 1.2%, is collateralized by the stock of First Bank Southeast of Lake Geneva, N.A. and the personal guarantee of a stockholder of First Southeast and is due July 1, 1997. First Southeast is restricted from incurring additional indebtedness without prior approval of the Federal Reserve Board. PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 20. Indemnification of Directors and Officers. Pursuant to the provisions of Wisconsin Business Corporation Law, Sections 180.0850 through 180.0859, inclusive, directors and officers of Firstar are entitled to mandatory indemnification from Firstar against certain liabilities and expenses (i) to the extent such officers or directors are successful in the defense of a proceeding; and (ii) in proceedings in which the director or officer is not successful in defense thereof, unless it is determined that the director or officer breached or failed to perform his or her duties to Firstar and such breach or failure constituted: (a) a willful failure to deal fairly with Firstar or its shareholders in connection with a matter in which the director or officer had a material conflict of interest; (b) a violation of the criminal law unless the director or officer had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful; (c) a transaction from which the director or officer derived an improper personal profit; or (d) willful misconduct. Additionally, under Section 180.0828 of the Wisconsin Business Corporation Law, directors of Firstar are not subject to personal liability to Firstar, its shareholders or any person asserting rights on behalf thereof for certain breaches or failures to perform any duty resulting solely from their status as directors, except in circumstances paralleling those outlined above. Firstar's Bylaws contain similar indemnification provisions as to directors and officers of Firstar. In addition, Firstar has entered into individual indemnity agreements with all of its current directors. The indemnity agreements are virtually identical in all substantive respects to Firstar's Bylaws. Expenses for the defense of any action for which indemnification may be available may be advanced by Firstar under certain circumstances. Firstar maintains a liability insurance policy for officers and directors which extends to, among other things, liability arising under the Securities Act of 1933, as amended. In addition, Firstar's Pension Plan and Thrift and Sharing Plan provide for indemnification of members of the plan committees and directors of Firstar as follows: The Company shall indemnify each member of the Plan Committee and the Board and hold each of them harmless from the consequences of his acts or conduct in his official capacity, if he acted in good faith and in a manner he reasonably believed to be solely in the best interests of the Participants and their Beneficiaries, and with respect to any criminal action or proceeding had no reasonable cause to believe his conduct was unlawful. Such indemnification shall cover any and all attorneys' fees and expenses, judgments, fines and amounts paid in settlement, but only to the extent such amounts are not paid to such person(s) under the Company's fiduciary insurance policy and to the extent that such amounts are actually and reasonably incurred by such person(s). Item 21. Exhibits. (a) The following exhibits have been filed (except where otherwise indicated) as part of this Registration Statement: Exhibit No. Exhibit 2(a) Agreement and Plan of Reorganization dated as of February 10, 1994, among Firstar Corporation, Firstar Corporation of Wisconsin and First Southeast Banking Corp. 2(b) Plan of Merger dated as of February 10, 1994, between First Southeast Banking Corp. and Firstar Corporation of Wisconsin and joined in by Firstar Corporation for certain limited purposes 2(c) Voting and Stock Purchase Agreement dated as of February 10, 1994, between Firstar Corporation and David A. Straz and joined in by First Southeast Banking Corp. for certain limited purposes 2(d) Voting and Stock Purchase Agreement dated as of February 10, 1994, between Firstar Corporation and David A. Straz, Jr. and joined in by First Southeast Banking Corp. for certain limited purposes 2(e) Voting and Stock Purchase Agreement dated as of February 10, 1994, between Firstar Corporation and Lila G. Straz and joined in by First Southeast Banking Corp. for certain limited purposes 2(f) Indemnity Agreement dated as of February 10, 1994, among First Southeast Banking Corp., David A. Straz, Jr., Firstar Corporation, Firstar Corporation of Wisconsin, First Southeast Bank, N.A. and First Southeast Bank of Lake Geneva, N.A. 4(a) Indenture dated as of June 1, 1986, between Firstar Corporation and Chemical Bank, as Trustee, relating to Firstar Corporation's 10% Notes due 1996 (Exhibit 4(b) to Amendment No. 1 to Registration No. 33-5932; incorporated herein by reference) 4(b) Indenture dated as of May 1, 1988, between Firstar Corporation and Chemical Bank, as Trustee, relating to Firstar Corporation's 10-1/4% Notes due 1998 (Exhibit 4(a) to Amendment No. 1 to Registration No. 33-21527; incorporated herein by reference) 4(c) Shareholder Rights Plan of Firstar Corporation (Exhibit 4 of Form 8-K dated January 19, 1989; incorporated herein by reference) 5 Opinion of Howard H. Hopwood III, Esq. 8 Tax Opinion of Foley & Lardner (to be filed by Amendment) 13(a) Firstar Corporation's Annual Report on Form 10-K for the year ended December 31, 1993 (incorporated herein by reference) 13(b) Firstar Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 1994 (incorporated herein by reference) 15 Letter from KPMG Peat Marwick regarding unaudited interim financial information (included in consent) 21 List of subsidiaries of Firstar Corporation 23(a) Consent of KPMG Peat Marwick addressed to Board of Directors of First Southeast Banking Corp. 23(b) Consent of KPMG Peat Marwick addressed to Board of Directors of Firstar Corporation 23(c) Consent of James M. Harmon & Co., Ltd. 23(d) Consent of Howard H. Hopwood III, Esq. (included in opinion) 23(e) Consent of Foley & Lardner (to be filed by Amendment) 24(a) Powers of Attorney 24(b) Certified resolutions of Firstar Corporation's Board of Directors 99 Form of Proxy (b) No financial statement schedules are required to be filed with regard to Firstar or First Southeast. Item 22. Undertakings. (1) Firstar hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the Registrant's Special report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, that is incorporated by reference in the Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (2) Firstar hereby undertakes that prior to any public reoffering of the securities registered hereunder through use of a Prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering Prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (3) Firstar undertakes that every Prospectus (i) that is filed pursuant to paragraph (2) immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (4) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of Firstar pursuant to the foregoing provisions, or otherwise, Firstar has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Firstar of expenses incurred or paid by a director, officer or controlling person or Firstar in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Firstar will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (5) Firstar hereby undertakes to respond to requests for information that is incorporated by reference into the Prospectus pursuant to Items 4, 10(b), 11 or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. (6) Firstar hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. (7) Firstar hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized in the City of Milwaukee and State of Wisconsin on May 20, 1994. FIRSTAR CORPORATION By: /s/ Roger L. Fitzsimonds Roger L. Fitzsimonds Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons }in the capacities and on the dates indicated. Signature Title Date /s/ Roger L. Fitzsimonds Chairman of the May 20, 1994 Roger L. Fitzsimonds Board, Chief Executive Officer and Director /s/ John A. Becker President, Chief May 20, 1994 John A. Becker Operating Officer and Director /s/ William H. Risch Senior Vice May 20, 1994 William H. Risch President-Finance and Treasurer Michael E. Batten * Director May 20, 1994 Michael E. Batten George M. Chester, Jr. * Director May 20, 1994 George M. Chester, Jr. Roger H. Derusha * Director May 20, 1994 Roger H. Derusha Director May , 1994 James L. Forbes Holmes Foster * Director May 20, 1994 Holmes Foster Joseph F. Heil, Jr. * Director May 20, 1994 Joseph F. Heil, Jr. John H. Hendee, Jr. * Director May 20, 1994 John H. Hendee, Jr. Jerry M. Hiegel * Director May 20, 1994 Jerry M. Hiegel Joseph F. Hladky, III * Director May 20, 1994 Joseph F. Hladky, III Director May , 1994 James H. Keyes Sheldon B. Lubar * Director May 20, 1994 Sheldon B. Lubar Daniel F. McKeithan, Jr.* Director May 20, 1994 Daniel F. McKeithan, Jr. George W. Mead, II * Director May 20, 1994 George W. Mead, II Guy A. Osborn * Director May 20, 1994 Guy A. Osborn Director May , 1994 Judith D. Pyle Clifford V. Smith, Jr. * Director May 20, 1994 Clifford V. Smith, Jr. Director May , 1994 William W. Wirtz By: /s/ Howard H. Hopwood III Howard H. Hopwood III Attorney-in-Fact __________________________ *Pursuant to authority granted by powers of attorney filed with the Registration Statement. EX-2 2 EXHIBIT 2(A) EXHIBIT 2(a) AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG FIRSTAR CORPORATION, FIRSTAR CORPORATION OF WISCONSIN AND FIRST SOUTHEAST BANKING CORP. TABLE OF CONTENTS Page No. ARTICLE I Undertakings of the Parties 1.1 The Merger......................................... 2 1.2 Approval of the Agreements......................... 2 1.3 Preparation of Registration Statement.............. 2 1.4 Preparation of Bank Regulatory Applications........ 3 1.5 Closing............................................ 3 1.6 Confidential Information........................... 3 1.7 No Covenant as to Tax Consequences................. 4 1.8 Release of Information............................. 4 ARTICLE II Representations and Warranties of Firstar 2.1 Corporate Organization............................. 4 2.2 Capitalization..................................... 4 2.3 Authorization...................................... 5 2.4 No Violation....................................... 5 2.5 Financial Statements............................... 5 2.6 Registration Statement............................. 6 2.7 Shares to be Issued................................ 6 2.8 Accuracy of Information............................ 7 2.9 No Material Adverse Change......................... 7 ARTICLE III Representations and Warranties of FCW 3.1 Corporate Organization............................. 7 3.2 Capitalization..................................... 7 3.3 Authorization...................................... 7 3.4 No Violation....................................... 8 3.5 Accuracy of Information............................ 8 ARTICLE IV Representations and Warranties of First Southeast 4.1 Corporate Organization............................. 8 4.2 Capitalization..................................... 9 4.3 Organization of the Subsidiaries................... 9 4.4 Capitalization of the Subsidiaries................. 10 4.5 Authorization...................................... 11 4.6 No Violation....................................... 12 4.7 Financial Statements............................... 12 4.8 Absence of Certain Changes......................... 13 4.9 Employee and Employee Benefit Matters.............. 14 4.10 Litigation......................................... 16 4.11 Tax Matters........................................ 16 4.12 Registration Statement............................. 17 4.13 Title and Condition................................ 18 4.14 Insurance.......................................... 19 4.15 Compliance with Laws and Orders.................... 19 4.16 Governmental Regulation............................ 20 4.17 Contracts and Commitments.......................... 20 4.18 Shareholders and Undertakings from Affiliates...... 21 4.19 Agreements with Directors, Officers & Shareholders. 21 4.20 Absence of Adverse Agreements...................... 21 4.21 Accuracy of Information............................ 22 4.22 Transactions in Capital Stock of First Southeast and the Banks...................... 22 4.23 Allowance for Loan Losses.......................... 22 4.24 No Undisclosed Liabilities......................... 22 4.25 Continuity of Interest............................. 23 4.26 Pooling and Tax-Free Status Matters................ 23 4.27 No Material Adverse Change......................... 23 ARTICLE V Conduct of Business by Firstar 5.1 Approval by Firstar................................ 24 5.2 Subsequent SEC Filings............................. 24 5.3 Conduct of Business; Certain Covenants............. 24 5.4 Plant Closing Laws................................. 24 5.5 Bank Minority Shares............................... 24 ARTICLE VI Conduct of Business by First Southeast Until Merger 6.1 Dividends.......................................... 25 6.2 Capitalization..................................... 25 6.3 Regular Course of Business......................... 25 6.4 Contact with Third Parties; No Board Recommendation 26 6.5 Corporate Structure................................ 27 6.6 Accounting and Tax Reporting....................... 27 6.7 Full Disclosure.................................... 27 6.8 Reports to Firstar................................. 27 6.9 Solicitation of First Southeast Shareholders....... 27 6.10 Supplement to First Southeast Letter............... 28 6.11 Dissent Process.................................... 28 6.12 Employee Benefit Plans............................. 28 6.13 Bank-Level Transactions............................ 28 6.14 Parent Company Debt................................ 29 6.15 Disposition of Assets.............................. 29 6.16 Out-of-State Participations........................ 29 ARTICLE VII Conditions to Obligations of Firstar and FCW 7.1 No Material Adverse Change......................... 29 7.2 Representations and Warranties..................... 30 7.3 Performance and Compliance......................... 30 7.4 No Proceeding or Litigation........................ 30 7.5 Review or Audit by Firstar and Accountants......... 30 7.6 Audit of Plans..................................... 30 7.7 Pooling Letter..................................... 30 7.8 Approval of Shareholders........................... 31 7.9 Opinion of Counsel for First Southeast............. 31 7.10 Allowance for Loan Losses.......................... 31 7.11 Certificate of Chief Executive Officer............. 31 7.12 Good Standing Certificates......................... 31 7.13 Bills for Certain Fees of First Southeast or the Bank............................................... 31 7.14 Tax Opinion........................................ 32 7.15 Regulatory Agreements.............................. 32 7.16 Environmental Audits............................... 32 ARTICLE VIII Conditions to the Obligations of First Southeast 8.1 No Material Adverse Change......................... 32 8.2 Representations and Warranties..................... 32 8.3 Performance and Compliance......................... 33 8.4 No Proceeding or Litigation........................ 33 8.5 Opinion of Counsel for Firstar and FCW ............ 33 8.6 Certificate of Executive Officer................... 33 8.7 Tax Opinion........................................ 33 ARTICLE IX Conditions to the Obligations of all Parties 9.1 Governmental Approvals............................. 33 9.2 Securities Law Compliance.......................... 34 9.3 Shareholder Approval............................... 34 ARTICLE X Termination 10.1 Reasons for Termination............................ 34 10.2 Liability.......................................... 35 ARTICLE XI Miscellaneous 11.1 Brokers........................................... 36 11.2 Expenses.......................................... 36 11.3 Waivers; Amendments............................... 36 11.4 Assignment........................................ 37 11.5 Entire Agreement.................................. 37 11.6 Captions and Counterparts......................... 37 11.7 Governing Law..................................... 37 11.8 Nonsurvival....................................... 37 11.9 Knowledge of the Parties.......................... 37 11.10 Notices........................................... 38 AGREEMENT AND PLAN OF REORGANIZATION This Agreement and Plan of Reorganization dated as of February 10, 1994 (the "Reorganization Agreement"), is entered into by and among Firstar Corporation, a Wisconsin corporation ("Firstar"), First Southeast Banking Corp., a Wisconsin corporation ("First Southeast"), and Firstar Corporation of Wisconsin, a Wisconsin corporation and a wholly-owned subsidiary of Firstar ("FCW"). WHEREAS, this Reorganization Agreement provides for the merger of First Southeast with and into FCW (the "Merger") and for the conversion at the Closing Date, as such term is defined herein, of all the outstanding shares of common stock of First Southeast, $1.00 par value ("First Southeast Common Stock"), into the right to receive shares of common stock of Firstar, $1.25 par value ("Firstar Common Stock"), in accordance with the terms and conditions hereof and of the Plan of Merger executed concurrently herewith between FCW and First Southeast, and joined in by Firstar for certain limited purposes (the "Plan of Merger" and together with this Reorganization Agreement, the "Agreements"); WHEREAS, the respective Boards of Directors of First Southeast, Firstar and FCW deem the Merger desirable and in the best interests of their respective shareholders; WHEREAS, the parties hereto desire and intend that the Merger qualify as a tax-free reorganization under the Internal Revenue Code of 1986, as amended (the "Code"); and WHEREAS, the parties hereto desire and intend that the Merger be accounted for as a "pooling of interests" in accordance with generally accepted accounting principles; NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations, warranties, and agreements herein contained, and in order to set forth the conditions upon which the foregoing reorganization will be carried out, the parties agree as follows: ARTICLE I UNDERTAKINGS OF THE PARTIES 1.1 The Merger. Subject to the terms and conditions of this Reorganization Agreement, on the Closing Date, First Southeast will merge with and into FCW, which will be the surviving corporation. 1.2 Approval of the Agreements. The Agreements will be submitted as soon as reasonably practicable to the shareholders of First Southeast for ratification, confirmation and adoption by consent or at a meeting to be duly called and held in accordance with law and the Articles of Incorporation and Bylaws of First Southeast. 1.3 Preparation of Registration Statement. Firstar will use its reasonable best efforts to file and prosecute the filing of a registration statement (hereinafter the registration statement and amendments thereto are referred to as the "Registration Statement") with the Securities and Exchange Commission (the "SEC") covering the Firstar Common Stock to be issued in the Merger with a view toward permitting the Registration Statement to become effective as soon as reasonably practicable. First Southeast will furnish to Firstar all information concerning First Southeast required to be set forth in the Registration Statement and Firstar will provide First Southeast and its counsel the opportunity to review and approve the Proxy Statement portions of the Registration Statement. Firstar shall promptly advise First Southeast and its counsel, and provide them with copies, of any material communication received by Firstar or its counsel from the SEC with respect to the Registration Statement. Firstar will bear the cost of preparation, filing and duplication of the Registration Statement, including the information or proxy statement and the prospectus included therein (the "Proxy Statement-Prospectus"). The date on which the Registration Statement becomes effective is referred to herein as the "Registration Effective Date". Firstar and First Southeast will each render to the other its full cooperation in preparing, filing, prosecuting the filing of, and amending the Registration Statement such that it comports at all times with the requirements of the Securities Act of 1933, as amended (the "Securities Act"). Specifically, but without limitation, each will promptly advise the other if at any time before the Closing Date any information provided by it for inclusion in the Registration Statement appears to have been, or shall have become, incorrect or incomplete and will furnish the information necessary to correct such misstatements or omissions. As promptly as practicable after the Registration Effective Date, First Southeast will mail or deliver to its shareholders (i) the Proxy Statement-Prospectus and (ii) as promptly as practicable after approval thereof by Firstar, such other supplementary proxy materials as may be necessary to make the Proxy Statement-Prospectus comply with the requirements of the Securities Act. Except as provided above and except with the prior written consent of Firstar, First Southeast will not mail or otherwise furnish or publish to its shareholders any proxy solicitation material or other material relating to the Merger that might constitute a "prospectus" within the meaning of the Securities Act. Firstar shall, as soon as practicable, make all filings required to obtain any Blue Sky permits, authorizations, consents or approvals required for the issuance of the Firstar Common Stock to be issued in the Merger. 1.4 Preparation of Bank Regulatory Applications. Firstar, FCW and First Southeast will cooperate in the preparation by Firstar and FCW of applications to (i) the Board of Governors of the Federal Reserve System (the "Federal Reserve Board") pursuant to the Bank Holding Company Act of 1956, as amended, for approval of Firstar's and FCW's acquisition of control of First Southeast and its subsidiaries, First Bank Southeast, N.A., ("First Bank Southeast") and First Bank Southeast of Lake Geneva, N.A. ("First Bank Lake Geneva" and, together with First Bank Southeast, N.A., the "Banks"), (ii) any other federal or state bank regulatory agency the approval of which may be necessary or appropriate. Firstar will use its best efforts to obtain such regulatory approvals. The obligation to use such best efforts shall not be construed as including an obligation to continue pursuing any approval after it has become apparent that the approval is likely to contain terms or conditions that are not reasonably acceptable to Firstar. First Southeast will furnish such information, appropriate representations and documents as may be necessary in connection therewith and as the parties may mutually agree. 1.5 Closing. Subject to the terms and conditions herein set forth, the closing of the transactions contemplated by this Reorganization Agreement ("Closing") will be effected within five business days of the satisfaction or waiver of the last of the conditions set forth in Articles VII, VIII and IX hereof and the expiration of any waiting periods in connection with necessary regulatory approvals, or on such other date as may be mutually agreed upon by the parties ("Closing Date"). Each of the parties hereto agrees to pursue with reasonable diligence the satisfaction of such conditions. It is anticipated that the Closing will take place on the Closing Date at the offices of Firstar, or at such other place as shall be mutually agreeable to Firstar and First Southeast. 1.6 Confidential Information. All information that has been or will be furnished by any party to another party in connection with the Agreements will be kept confidential by such other party and will be used only in connection with the Agreements and the transactions contemplated thereby, except to the extent that such information is or thereafter becomes lawfully obtainable from other public sources. In the event the Agreements are terminated as provided in Article X hereof, all documents or materials provided by either party shall be returned promptly to the supplying party, the receiving party shall not retain any copies thereof and shall destroy any notes which have been prepared from such documents or materials. 1.7 No Covenant as to Tax Consequences. It is understood and agreed that neither Firstar nor FCW nor any of their respective officers or agents have made any warranty or agreement, expressed or implied, as to the tax consequences of the transactions contemplated by the Agreements or the tax consequences of any action pursuant to or growing out of the Agreements. 1.8 Release of Information. First Southeast and Firstar will each use their best efforts to cooperate in coordinating the public release of information concerning the transactions contemplated by the Agreements. ARTICLE II REPRESENTATIONS AND WARRANTIES OF FIRSTAR Firstar represents and warrants to First Southeast as follows: 2.1 Corporate Organization. Firstar is a corporation duly organized, validly existing and in active status under the laws of the state of Wisconsin and each jurisdiction in which the nature of business conducted or assets owned or leased makes such qualification necessary and where failure to do so would have a material adverse effect on Firstar and its subsidiaries taken as a whole, with full power and authority to own, operate and lease its properties as presently owned, operated and leased and to engage in the activities and business now conducted by it. Firstar is registered with the Federal Reserve Board as a bank holding company under the Bank Holding Company Act of 1956, as amended. Firstar has delivered to First Southeast true, accurate and complete copies of the currently effective Articles of Incorporation and Bylaws of Firstar, including all amendments thereto. 2.2 Capitalization. As of December 31, 1993, the authorized capital stock of Firstar consisted of (i) 120,000,000 shares of Common Stock, $1.25 par value, 64,360,819 shares of which were validly issued and outstanding, and (ii) 2,500,000 shares of Preferred Stock, $1.00 par value, of which 600,000 shares of Series C are reserved for issuance in connection with Firstar's Shareholder Rights Plan approved January 19, 1989 (as used herein, the term "Firstar Common Stock" includes one half of a Preferred Stock Purchase Right issued pursuant to the Rights Agreement dated as of January 29, 1989, between Firstar and Firstar Trust Company, as Rights Agent). All of such issued and outstanding shares of capital stock are fully paid and nonassessable, except as provided in Section 180.0622(2)(b) of the Wisconsin Statutes and judicial interpretations thereof. 2.3 Authorization. The Interstate Banking and Acquisitions Committee of the Board of Directors of Firstar has approved the transactions contemplated by the Agreements and has authorized the execution, delivery and performance by Firstar of the Agreements. Firstar has full corporate power and authority to enter into the Agreements and to consummate the transactions contemplated thereby. The Agreements are valid and binding obligations of Firstar, enforceable in accordance with their terms, subject to (i) all applicable bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and (ii) the application of equitable principles if equitable remedies are sought. Firstar has, as sole shareholder of FCW, approved the Agreements in accordance with law and the Articles of Incorporation and Bylaws of Firstar and FCW, respectively. 2.4 No Violation. Provided that the requisite approvals from the Federal Reserve Board and any other regulatory agencies are obtained and the offering of Firstar Common Stock to be issued hereunder is duly registered pursuant to the Securities Act, and, to the extent applicable, under state securities or blue sky laws, neither the execution and delivery of the Agreements nor the consummation of the transactions contemplated therein will conflict with, result in the breach of, constitute a default under or accelerate the performance provided by the terms of any law, or any rule or regulation of any governmental agency or authority, or any judgment, order or decree of any court or other governmental agency to which Firstar may be subject, or any contract, agreement or instrument to which Firstar is a party or by which Firstar is bound or committed, or the Articles of Incorporation or Bylaws of Firstar, or constitute an event that with the lapse of time or action by a third party, could, to the best of Firstar's knowledge, result in a default under any of the foregoing or result in the creation of any lien, charge or encumbrance upon any of the assets or properties of Firstar or its subsidiaries or the capital stock of Firstar. 2.5 Financial Statements. Firstar has heretofore delivered to First Southeast copies of the following financial statements relating to Firstar and its consolidated subsidiaries: (i) the Consolidated Statements of Condition of Firstar as of December 31, 1991 and 1992, and the Consolidated Statements of Income, Shareholders' Equity and Changes in Financial Position for each of the years in the three-year period ended December 31, 1992, together with the notes thereto, as certified by KPMG Peat Marwick, Firstar's independent auditors, (ii) Firstar's 1992 and 1993 Proxy Statements in connection with its annual shareholders meetings, (iii) Firstar's 1991 and 1992 Form 10-Ks filed with the SEC, and (iv) Firstar's Form 10-Qs for the first three quarters of 1992 and 1993. Each of the aforementioned financial statements has, where necessary, been filed in a timely manner with the SEC and all other federal or state regulatory agencies as necessary, is true and correct in all material respects and together they fairly present, in accordance with applicable laws and regulations, and generally accepted accounting principles (applied on a consistent basis except as disclosed in the footnotes thereto and except that the unaudited statements for 1993 are subject to adjustments which might be required as a result of audit of the independent auditors of Firstar for its fiscal year ending December 31, 1993), the financial position and results of operations of Firstar as of the dates and for the periods therein set forth. Such financial statements do not, as of the date thereof, include any material assets or omit to state any material liability, absolute or contingent, or other facts, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, misleading in any material respect. 2.6 Registration Statement. The Registration Statement and the Proxy Statement-Prospectus included therein (i) will comply in all material respects with the requirements of the Securities Act, and (ii) will not, at the date the Proxy Statement-Prospectus is first mailed or delivered to First Southeast shareholders, or at the date or dates of the meeting or consents of First Southeast's shareholders referred to in Section 6.9 hereof, as then amended or supplemented, contain any statement that is, at the time at which, and in the light of the circumstances under which, it is made, false or misleading with respect to any material facts or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not false or misleading. Notwithstanding the foregoing, Firstar and FCW make no representation or warranty and shall have no responsibility for the truth or accuracy of any information with respect to First Southeast or its affiliates or associates contained in the Registration Statement or the Proxy Statement-Prospectus and which was provided by First Southeast, its affiliates or associates. 2.7 Shares to be Issued. The shares of Firstar Common Stock to be issued pursuant to the Agreements will, upon issuance, be validly issued, fully paid and nonassessable, except insofar as statutory liability may be imposed under Section 180.0622(2)(b) of the Wisconsin Statutes and judicial interpretations thereof, and will have been registered under the Securities Act and listed for trading on the New York Stock Exchange. 2.8 Accuracy of Information. The statements contained in the Agreements and in any other written documents executed and/or delivered by or on behalf of Firstar pursuant to the terms of the Agreements are true and correct in all material respects and do not omit any material fact necessary to make the statements contained herein or therein not materially misleading. 2.9 No Material Adverse Change. Since September 30, 1993 there has been no material adverse change in the financial condition, assets, liabilities, results of operation or business of Firstar. ARTICLE III REPRESENTATIONS AND WARRANTIES OF FCW Firstar and FCW hereby jointly and severally represent and warrant to First Southeast as follows: 3.1 Corporate Organization. FCW is a corporation duly organized, validly existing and in active status under the laws of Wisconsin with full power and authority to engage in the activities and business now conducted by it. FCW is registered with the Federal Reserve Board as a bank holding company under the Bank Holding Company Act of 1956, as amended. FCW has delivered to First Southeast true, accurate and complete copies of the currently effective Articles of Incorporation and Bylaws of FCW, including all amendments thereto. 3.2 Capitalization. The authorized capital stock of FCW consists of 56,000 shares of common stock, $1.00 par value, ten of which are validly issued and outstanding, fully paid and nonassessable, except as provided in Section 180.0622(2)(b) of the Wisconsin Statutes and judicial interpretations thereof. All of such issued shares are owned by Firstar. 3.3 Authorization. The Board of Directors of FCW has approved the transactions contemplated by the Agreements and has authorized the execution, delivery and performance by FCW of the Agreements. FCW has full corporate power and authority to enter into the Agreements, and to consummate the transactions contemplated thereby. The Agreements are valid and binding obligations of FCW, enforceable in accordance with their terms, subject to (i) all applicable bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and (ii) the application of equitable principles if equitable remedies are sought. 3.4 No Violation. Provided that the requisite approvals from the Federal Reserve Board and any other regulatory agencies are obtained and the offering of Firstar Common Stock to be issued hereunder is duly registered pursuant to the Securities Act, and, to the extent applicable, under state securities or blue sky laws, neither the execution and delivery of the Agreements nor the consummation of the transactions contemplated in the Agreements will conflict with, result in the breach of, constitute a default under or accelerate the performance provided by the terms of any law, or any rule or regulation of any governmental agency or authority, or any judgment, order or decree of any court or other governmental agency to which FCW may be subject, or any contract, agreement or instrument to which FCW is a party or by which FCW is bound or committed, or the Articles of Incorporation or Bylaws of FCW, or constitute an event that with the lapse of time or action by a third party, could, to the knowledge of FCW, result in a default under any of the foregoing or result in the creation of any lien, charge or encumbrance upon any of the assets, properties, or capital stock of FCW. 3.5 Accuracy of Information. The statements contained in the Agreements and in any other written documents executed and/or delivered by or on behalf of FCW pursuant to the terms of the Agreements are true and correct in all material respects, and do not omit any material fact necessary to make the statements contained herein or therein not materially misleading. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF FIRST SOUTHEAST Except as disclosed in the First Southeast Letter (as defined below), including its exhibits, First Southeast represents and warrants to Firstar and FCW as follows: 4.1 Corporate Organization. First Southeast is a corporation duly organized, validly existing and in active status under the laws of Wisconsin with full power and authority to engage in the activities and business now conducted by it. First Southeast possesses and is in full compliance with all licenses, franchises, permits and other governmental authorizations that are legally required where the failure to be in full compliance would reasonably be expected to have a material adverse effect on the financial condition, assets or business operations of First Southeast or either Bank. First Southeast is registered with the Federal Reserve Board as a bank holding company under the Bank Holding Company Act of 1956, as amended. First Southeast has delivered to Firstar, as an exhibit to the written statement signed by the Chief Executive Officer of First Southeast and delivered by First Southeast to Firstar at least five days prior to the date hereof (the "First Southeast Letter") true, accurate and complete copies of the currently effective Articles of Incorporation and Bylaws of First Southeast, including all amendments thereto. The minute books of First Southeast and the Banks contain complete and accurate records of all meetings and other corporate actions of their respective shareholders and Boards of Directors (including committees of such Boards of Directors). First Southeast has no subsidiaries, direct or indirect, except the Banks and First Southeast Securities Corp., a Nevada corporation ("FSSC"), and First Southeast Investment Corp., a Nevada corporation ("FSIC" and, together with FSSC, the "Nevada Subsidiaries"). 4.2 Capitalization. The authorized capital stock of First Southeast consists of 200,000 shares of $1.00 par value common stock. There are 106,486 shares of First Southeast Common Stock validly issued and outstanding. All of such issued and outstanding shares of First Southeast capital stock are fully paid and non-assessable, except as provided in Section 180.0622(2)(b) of the Wisconsin Statutes and judicial interpretations thereof and not issued in violation of any preemptive rights of any shareholder. First Southeast does not have any arrangements or commitments obligating First Southeast to issue or sell or otherwise dispose of, or to purchase or redeem shares of its capital stock or any securities convertible into or having the right to purchase shares of its capital stock. 4.3 Organization of the Subsidiaries. (a) First Bank Southeast is a national banking association duly organized, validly existing and in good standing under the laws of the United States. First Southeast has delivered to Firstar, as an exhibit to the First Southeast Letter, true, accurate and complete copies of the currently effective Articles of Association and Bylaws of First Bank Southeast, including all amendments thereto. First Bank Southeast is (i) duly authorized to conduct a general banking business, subject to the supervision of the OCC, at its offices identified in Section 4.3(a) of the First Southeast Letter, (ii) is an insured bank as defined in the Federal Deposit Insurance Act, (iii) has full power and authority to engage in the business and activities now conducted by it, and (iv) possesses and is in full compliance with all licenses, franchises, permits and other governmental authorizations that are legally required. First Bank Southeast has no interest in any subsidiaries, direct or indirect, except FSSC. (b) First Bank Lake Geneva is a national banking association duly organized, validly existing and in good standing under the laws of the United States. First Southeast has delivered to Firstar, as an exhibit to the First Southeast Letter, true, accurate and complete copies of the currently effective Articles of Association and Bylaws of First Bank Lake Geneva, including all amendments thereto. First Bank Lake Geneva is (i) duly authorized to conduct a general banking business, subject to the supervision of the OCC, at its offices identified in Section 4.3(b) of the First Southeast Letter, (ii) is an insured bank as defined in the Federal Deposit Insurance Act, (iii) has full power and authority to engage in the business and activities now conducted by it, and (iv) possesses and is in full compliance with all licenses, franchises, permits and other governmental authorizations that are legally required. First Bank Lake Geneva has no interest in any subsidiaries, direct or indirect, except FSIC. (c) Each of the Nevada Subsidiaries is a corporation duly organized, validly existing and in good standing under the laws of Nevada with full power and authority to engage in the activities and business now conducted by it. First Southeast has delivered to Firstar true, accurate and complete copies of the currently effective Articles of Incorporation and Bylaws of each of the Nevada subsidiaries. Each such corporation possesses and is in full compliance with all licenses, franchises, permits and other governmental authorizations that are legally required, where the failure to be in full compliance would be reasonably expected to have a material adverse effect on its financial condition, assets or business operations. 4.4 Capitalization of the Subsidiaries. (a) The authorized capital stock of First Bank Southeast consists of 240,000 shares of Common Stock, $20.00 par value ("First Bank Southeast Stock"), of which 240,000 are validly issued and outstanding. First Southeast owns 239,700 of such outstanding shares of First Bank Southeast Stock, free and clear of all liens, pledges, assignments and security interests. The remaining 300 of such outstanding shares are owned by directors of First Bank Southeast as directors' qualifying shares subject to Stock Purchase Agreements, true and complete copies of which have been provided to Firstar. All of the shares of the capital stock of First Bank Southeast are fully paid and nonassessable and not issued in violation of the preemptive rights of any shareholder. Except for the Stock Purchase Agreements, neither First Southeast nor First Bank Southeast is a party to or bound by any commitment or obligation to issue or sell or otherwise dispose of, or to purchase or redeem, any capital stock or any other security convertible into or having the right to purchase such shares of the capital stock of the Bank. (b) The authorized capital stock of First Bank Lake Geneva consists of 500,000 shares of Common Stock, $10.00 par value ("First Bank Lake Geneva Stock"), of which 83,000 are validly issued and outstanding. First Southeast owns 80,878 of such outstanding shares of First Bank Lake Geneva Stock, free and clear of all liens, pledges, assignments and security interests except pursuant to the Term Loan Agreement dated June 1, 1992 between First Southeast and LaSalle National Bank, a true and complete copy of which has been provided to Firstar. Of the remaining 2,122 of such outstanding shares, 600 are owned by directors of First Bank Lake Geneva as directors' qualifying shares subject to Stock Purchase Agreements, true and complete copies of which have been provided to Firstar. All of the shares of the capital stock of First Bank Lake Geneva are fully paid and nonassessable and not issued in violation of the preemptive rights of any shareholder. Except for the Stock Purchase Agreements, neither First Southeast nor First Bank Lake Geneva is a party to or bound by any commitment or obligation to issue or sell or otherwise dispose of, or to purchase or redeem, any capital stock or any other security convertible into or having the right to purchase such shares of the capital stock of the Bank. (c) The authorized capital stock of FSSC consists of 2500 shares of Common Stock, no par value, of which 100 are validly issued and outstanding and owned by First Bank Southeast free and clear of all liens, pledges, assignments and security interests. All of such shares of capital stock are fully paid and nonassessable and not issued in violation of the preemptive rights of any shareholder. Neither First Bank Southeast nor FSSC is a party to or bound by any commitment or obligation to issue or sell or otherwise dispose of, or to purchase or redeem, any capital stock or any other security convertible into or having the right to purchase capital stock of the corporation. (d) The authorized capital stock of FSIC consists of 2500 shares of Common Stock, no par value, of which 100 are validly issued and outstanding and owned by First Bank Lake Geneva free and clear of all liens, pledges, assignments and security interests. All of such shares of capital stock are fully paid and nonassessable and not issued in violation of the preemptive rights of any shareholder. Neither First Bank Lake Geneva nor FSIC is a party to or bound by any commitment or obligation to issue or sell or otherwise dispose of, or to purchase or redeem, any capital stock or any other security convertible into or having the right to purchase capital stock of the corporation. 4.5 Authorization. The Board of Directors of First Southeast has approved the Agreements and the transactions contemplated thereby and has authorized the execution, delivery and performance by First Southeast of the Agreements. First Southeast has full corporate power and authority to enter into the Agreements and, upon approval of its shareholders in accordance with law, to consummate the transactions contemplated thereby. The Agreements are valid and binding obligations of First Southeast, enforceable in accordance with their terms, subject to (i) all applicable bankruptcy, insolvency, moratorium, or other similar laws affecting the enforcement of creditors' rights generally, and (ii) the application of equitable principles if equitable remedies are sought. 4.6 No Violation. Provided that the requisite approvals from the Federal Reserve Board and any other regulatory agencies are obtained and the offering of the Firstar Common Stock to be issued hereunder is duly registered under the Securities Act, and, to the extent applicable, under state securities or blue sky laws, neither the execution and delivery of the Agreements nor the consummation of the transactions contemplated therein will conflict with, result in the breach of, constitute a default under or accelerate the performance provided by the terms of any law, or any rule or regulation of any governmental agency or authority, or any judgment, order or decree of any court or other governmental agency to which First Southeast or the Banks may be subject, or any contract, agreement or instrument to which First Southeast or either Bank is a party or by which First Southeast or either Bank is bound or committed, or the Articles of Incorporation or Bylaws of First Southeast, or the Articles of Association of either Bank, or constitute an event that with the lapse of time or action by a third party or both, could, to the best of First Southeast's knowledge, result in a material default under any of the foregoing or result in the creation of any lien, charge or encumbrance upon any of the assets, properties or stock of First Southeast or either Bank. 4.7 Financial Statements. First Southeast has furnished to Firstar copies of the following financial statements: (i) Audited consolidated balance sheets of First Southeast as of December 31, 1992 and 1991, and the related audited statements of income and stockholders' equity for each of the years then ended, accompanied by the audit report thereon of James M. Harmon and Co. Ltd.; (ii) Reports of Condition of each Bank as of September 30, 1993, together with the related Reports of Income for the periods then ended, as included in the call reports of the Bank as of said dates as filed with the OCC. Each of the financial statements referred to in this Section 4.7 hereof is true and correct in all material respects and together they fairly present, the financial position and results of operation of First Southeast and the Banks as of the dates and for the periods therein set forth. Each of the financial statements referred to in clause (i) of this Section 4.7 has been prepared in accordance with generally accepted accounting principles applied on a consistent basis. Each of the financial statements referred to in clause (ii) of this Section 4.7 has been prepared in accordance with the applicable regulations and standards of the OCC. Each of the financial statements referred to in this Section 4.7 do not, as of the date thereof, include any material assets or omit to state any material liability, absolute or contingent, or other facts, the inclusion or omission of which renders such financial statements, in light of the circumstances under which they were made, misleading in any material respect. Since December 31, 1992, there has been no material adverse change in the financial condition, results of operation, business or prospects of First Southeast or the Banks (other than changes in the ordinary course of business, none of which, individually or in the aggregate, has been materially adverse or changes specifically contemplated by this Agreement) nor has there been any other event or condition of any character that has materially and adversely affected the financial condition, results of operations or business of First Southeast or either Bank taken and no fact or condition exists that First Southeast or either Bank believes will cause such a material change in the future. 4.8 Absence of Certain Changes. Since December 31, 1992, neither First Southeast nor either Bank has (i) issued or sold any corporate debt securities (except in the ordinary course of business); (ii) granted any option for the purchase of its capital stock; (iii) declared or set aside or paid any dividend or other distribution in respect of its capital stock, (iv) incurred any material obligation or liability (absolute or contingent) except obligations or liabilities incurred in the ordinary course of business, or mortgaged, pledged or subjected to lien or encumbrance (other than statutory liens for taxes not yet delinquent) any of its assets or properties except pledges to secure government deposits and in connection with repurchase or reverse repurchase agreements; (v) discharged or satisfied any lien or encumbrance or paid any obligation or liability (absolute or contingent), other than current liabilities included in the respective Banks' balance sheets as of September 30, 1993, and current liabilities incurred since the date thereof in the ordinary course of business; (vi) sold, exchanged or otherwise disposed of any of its capital assets other than in the ordinary course of business; (vii) made or modified any general wage or salary increase exceeding five percent annually in the aggregate; (viii) suffered any damage, destruction or loss, whether or not covered by insurance, materially and adversely affecting its business, property or assets or waived any rights of value that are material in the aggregate; (ix) except in the ordinary course of business, entered, or agreed to enter, into any agreement or arrangement granting any preferential right to purchase any of its assets, properties or rights or requiring the consent of any party to the transfer and assignment of any such assets, properties or rights; (x) entered into any transaction outside the ordinary course of its business, except in each case as expressly contemplated by this Reorganization Agreement; or (xi) except in the ordinary course of business or as reflected in the financial statements of First Southeast or the respective Banks, sold or otherwise disposed of any of its investment securities. 4.9 Employee and Employee Benefit Matters. (a) Neither First Southeast nor either Bank is a party to or is bound by any written or oral (i) employment or consulting contract that is not terminable without penalty by First Southeast or the Bank, as the case may be, on notice of 60 days or less, except an employment agreement dated September 7, 1993, between First Bank Lake Geneva and Robert P. Fahey, a true and complete copy of which has been provided by First Southeast to Firstar, or (ii) any collective bargaining agreement covering employees. (b) The First Southeast Letter lists (i) each pension, profit sharing, stock bonus, thrift, savings, employee stock ownership or other plan, program or arrangement, that constitutes an "employee pension benefit plan" within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that is maintained by First Southeast or either Bank or to which First Southeast or either Bank contributes for the benefit of any current or former employee, (ii) each plan, program or arrangement for the provision of medical, surgical, or hospital care or benefits, benefits in the event of sickness, accident, disability, death, unemployment, severance, vacation, apprenticeship, day care, scholarship, prepaid legal services or other benefits which constitute an "employee welfare benefit plan" within the meaning of ERISA, that is maintained by First Southeast or either Bank or to which First Southeast or either Bank contributes for the benefit of any current or former employee, and (iii) every other retirement or deferred compensation plan, bonus or incentive compensation plan or arrangement, stock option plan, stock purchase plan, severance or vacation pay arrangement, or other fringe benefit plan, program or arrangement through which First Southeast or either Bank provides benefits for or on behalf of any current or former employee, officer, director, consultant or agent. (c) All of the plans, programs and arrangements described in this section and listed in the First Southeast Letter (hereinafter referred to as the "Plans") are in compliance with all applicable requirements of ERISA and all other applicable federal and state laws, including the reporting and disclosure requirements of Part 1 of Title I of ERISA, except for instances where non-compliance would not result in material liability to First Southeast, either Bank or the Plans. Each of the Plans that is intended to be a pension, profit sharing, stock bonus, thrift, savings or employee stock ownership plan that is qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service to qualify under Section 401(a) of the Code, and there exist no circumstances that would adversely affect the qualified status of any such Plan under that section for which the remedial amendment period has expired. Each Plan that is a defined benefit pension plan has assets with an aggregate value that exceeds the actuarially determined present value of its liability for accrued benefits as determined on the basis of the actuarial assumptions used for the most recent actuarial valuation of such Plan. There is no pending or, to First Southeast's knowledge, threatened litigation, governmental proceeding or investigation against or relating to any Plan and there is no reasonable basis for any material proceedings, claims, actions or proceedings against any Plan. No "reportable event" (as defined in Section 4043(b) of ERISA) has occurred with respect to any Plan and no Plan has engaged in a "prohibited transaction" (as defined in Section 406 of ERISA and Section 4975(c) of the Code) since the date on which said sections became applicable to such Plan. Neither First Southeast nor either Bank has incurred any "accumulated funding deficiency" (within the meaning of Section 412 of the Code), whether or not waived, with respect to any Plan. There have been no acts or omissions by First Southeast or either Bank which have given rise to or may give rise to any material fines, penalties, taxes or related charges under Section 502(c), 502(i) or 4071 of ERISA or Chapter 43 of the Code, for which First Southeast or either Bank may be liable. None of the payments contemplated by the Plans would, in the aggregate, constitute excess parachute payments as defined in Section 280G of the Code. All group health plans of First Southeast and either Bank, including any plans of current and former affiliates of First Southeast or either Bank which must be taken into account under Section 4980B of the Code or Section 601 of ERISA, have been operated in material compliance with the group health plan continuation coverage requirements of Section 4980B of the Code and Section 601 of ERISA to the extent such requirements are applicable. (d) First Southeast has delivered to Firstar as attachments to the First Southeast Letter (i) a true and complete copy of each Plan (or, in the case of any Plan that is not in written form, a complete and accurate description of the material provisions of the Plan), (ii) complete and current copies of summary plan descriptions of each Plan that is subject to ERISA, (iii) each trust agreement, insurance policy or other instrument relating to the funding of any Plan, (iv) the two most recent Annual Reports (Form 5500 series) and accompanying schedules filed with the Internal Revenue Service or United States Department of Labor with respect to each Plan that is subject to ERISA, (v) the most recent determination letter issued by the Internal Revenue Service with respect to each Plan that is intended to qualify under Section 401 of the Code, (vi) the most recent available financial statements for each Plan that has assets, (vii) the most recent audited financial statements for each Plan for which audited financial statements are required by ERISA, and (viii) the most recent actuarial report for each Plan that is a defined benefit pension plan. (e) With respect to any Plan that is an "eligible individual account plan" within the meaning of Section 407(d)(3) of ERISA (including without limitation any employee stock ownership plan described in Section 4975(e)(7) of the Code), First Southeast has delivered to Firstar as attachments to the First Southeast Letter (i) a description of all transactions involving the purchase or sale by the Plan of employer securities from or to a "disqualified person" (within the meaning of Section 4975 of the Code); (ii) copies of all independent appraisals that have been used to establish the value of employer securities under such Plan from time to time, and, if such appraisals have not been performed on at least an annual basis, a description of the method used to determine the value of such securities in the absence of a current appraisal; and (iii) copies of any notes, loan documents, guarantees, or pledge agreements or other similar documents, governing any loan by any party to such Plan, whether or not any portion of such loan remains unpaid. 4.10 Litigation. No claims have been asserted and no relief has been sought against First Southeast or either Bank in any pending litigation or governmental proceedings or otherwise. There are no circumstances, conditions, events or arrangements, contractual or otherwise, which may hereafter give rise to any proceedings, claims, actions or government investigations involving First Southeast or either Bank, nor are any such proceedings, claims, actions or government investigations, to First Southeast's knowledge, threatened involving First Southeast or either Bank. Neither First Southeast nor either Bank is a party to any order, judgment or decree which would reasonably be expected to have a material adverse effect on the financial condition, assets or business of First Southeast or either Bank, and neither First Southeast nor either Bank (i) is the subject of any cease and desist order, or other formal or informal enforcement action by any regulatory authority or (ii) has made any commitment to or entered into any agreement with any regulatory authority that currently restricts or adversely affects its operations or financial condition. First Southeast has delivered to Firstar copies of all correspondence with or memoranda of other communications with any regulatory authority since January 1, 1991, relating to the operation or condition, financial or otherwise, of First Southeast or the Banks. 4.11 Tax Matters. First Southeast and each Bank have filed with the appropriate governmental agencies all federal, state and local income, franchise, excise, real and personal property and other tax returns and reports that are required to be filed, and neither First Southeast nor either Bank is delinquent in the payment of any taxes shown on such returns or reports or on any assessments for any such taxes received by First Southeast or either Bank. To First Southeast's knowledge, there is no pending Internal Revenue Service or Wisconsin Department of Revenue examination with respect to First Southeast or either Bank. There are included in each Bank's balance sheet as of September 30, 1993 and the First Southeast consolidated balance sheet as of December 31, 1992, adequate reserves for the payment of all accrued but unpaid federal, state and local taxes of First Southeast and the Bank, including interest and penalties, whether or not disputed for such fiscal years and all fiscal years prior thereto. Neither First Southeast nor either Bank has executed or filed with the Internal Revenue Service or the Wisconsin Department of Revenue any agreement extending the period for assessment and collection of any federal or state tax, nor is First Southeast or either Bank a party to any action or proceeding by any governmental authority for assessment or collection of taxes, except tax liens or levies against customers of the Bank. No claim for assessment or collection of taxes has been asserted against First Southeast or either Bank. Neither First Southeast nor either Bank has, during the past ten years, received any notice of deficiency, proposed deficiency or assessment from the Internal Revenue Service or any other governmental agency, with respect to any Federal, state, county or local taxes. To First Southeast's knowledge, no Federal or state income tax return of First Southeast or either Bank is currently the subject of any audit by the Internal Revenue Service or any other governmental agency. No material deficiencies have been asserted in connection with the federal and state income tax returns of each of First Southeast and the Banks for all periods through and including December 31, 1988, and to First Southeast's knowledge, no circumstances exist which reasonably could be expected to result in assessments for subsequent periods. Neither First Southeast nor either Bank is a party to any agreement providing for allocation or sharing of taxes. 4.12 Registration Statement. The parts of the Registration Statement and the Proxy Statement-Prospectus that relate to First Southeast or the Banks and any of their affiliates or associates which were provided by First Southeast will not, at the date the Proxy Statement-Prospectus is first mailed or delivered to shareholders of First Southeast, and will not, at the date or dates of the meeting or consents of First Southeast's shareholders referred to in Section 6.9 hereof, as then amended or supplemented, contain any statement that is, at the time at which, and in light of the circumstances under which, it is made, false or misleading with respect to any material facts or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not false or misleading. Notwithstanding the foregoing, First Southeast makes no representation or warranty regarding and shall have no responsibility for the truth or accuracy of any information with respect to Firstar or FCW or any of their affiliates or associates contained in the Registration Statement or the Proxy Statement-Prospectus. 4.13 Title and Condition. (a) First Southeast or a Bank has good and marketable title to all assets and properties, whether real or personal, tangible or intangible, that it purports to own, including without limitation all assets and properties reflected in the unaudited balance sheet of the Banks as of September 30, 1993 and the audited consolidated balance sheets of First Southeast as of December 31, 1992, or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of for fair value in the ordinary course of business since the dates of such balance sheets) subject to no liens, mortgages, security interests, encumbrances or charges of any kind, except (i) as noted in said balance sheets or the notes thereto; (ii) statutory liens for taxes not yet delinquent; (iii) security interests granted to secure deposits of funds by federal, state or other governmental agencies; and (iv) minor defects and irregularities in title and encumbrances that do not materially impair the use thereof for the purposes for which they are held, and such liens, mortgages, security interests, encumbrances and charges as are not in the aggregate material to the assets and properties of First Southeast or the Bank. First Southeast or a Bank, as lessee, has the right under valid and subsisting leases to occupy, use, possess and control all property leased by First Southeast or the Bank, qualified only by the written terms of such leases, true and complete copies of which have been provided to Firstar as an attachment to the First Southeast Letter. Within ten days of the date of this Reorganization Agreement, a legal description of all real property owned by First Southeast or the Banks, including properties held by the Banks as a result of foreclosure or repossession or carried on the Banks' books as "other real estate owned," or with respect to which, for purposes of any Environmental Law, as hereinafter defined, First Southeast has received notice that such property is deemed to be under the control of First Southeast or a Bank (the "Real Properties"), will be provided to Firstar by First Southeast. With respect to the Real Properties owned by First Southeast or a Bank, First Southeast is not in violation of the Americans with Disabilities Act of 1990 ("ADA") and the regulations promulgated thereunder to the extent such ADA and regulations require compliance for public accommodations by readily achievable barrier removal, or compliance following alterations to existing facilities to the maximum extent feasible, all as such Real Properties exist at closing. Terms used in the preceding sentence are as defined under the ADA and regulations thereunder in effect at closing. (b) The Real Properties are in generally good condition, reasonable wear and tear excepted, and have been well maintained in accordance with reasonable and prudent business practices applicable to like facilities. The Real Properties are in compliance with all Environmental Laws and there are no conditions in connection with the Real Properties, including the presence of lead or asbestos, which would be likely to subject First Southeast or either Bank to damages, penalties, injunctive relief or cleanup costs under any Environmental Laws, or which would, if known, be likely to materially reduce the value of any Real Property or which would require or be likely to require cleanup, removal, remedial action or other response pursuant to Environmental Laws by First Southeast or either Bank. Neither First Southeast nor either Bank is a party to any litigation or administrative proceeding alleging First Southeast's or a Bank's violation of Environmental Laws, nor has First Southeast or the Bank violated Environmental Laws nor is First Southeast or either Bank required by any governmental agency to clean up, remove or take remedial or other responsive action due to the disposal, depositing, discharge, leaking or other release of any hazardous substances or hazardous materials. Neither the Real Properties nor First Southeast nor either Bank are subject to any judgment, decree, order or citation related to or arising out of, or listed as a potentially responsible party by any governmental body or agency in a matter arising under, any Environmental Laws. The term "Environmental Laws" shall mean all federal, state and local laws, including statutes, regulations, ordinances, codes and rules relating to the discharge of air pollutants, water pollutants or process waste water or substances, in effect now or as of the Closing Date, including, but not limited to, the Federal Solid Waste Disposal Act, the Federal Hazardous Materials Transportation Act, the Federal Clean Air Act, the Federal Clean Water Act, the Federal Resource Conservation and Recovery Act of 1976, the Federal Comprehensive Environmental Responsibility Cleanup and Liability Act of 1980, as amended prior to the Closing Date, regulations of the Environmental Protection Agency, regulations of the Nuclear Regulatory Agency, regulations of the Occupational Safety and Health Administration, and any so-called "Superfund" or "Superlien" Laws. 4.14 Insurance. First Southeast has delivered to Firstar as exhibits to the First Southeast Letter, true, accurate and complete copies of all insurance policies of First Southeast and the Banks. Each such policy is in full force and effect, with all premiums due thereon on or prior to the Closing Date having been paid as and when due. First Southeast will use its best efforts to maintain the coverage provided in each of such policies through the Closing Date. 4.15 Compliance with Laws and Orders. First Southeast and each Bank have complied in all material respects with all laws, regulations and orders (including zoning ordinances) applicable to them and to the conduct of their businesses, including without limitation, all statutes, rules and regulations pertaining to the conduct of each Bank's banking activities. Neither First Southeast nor either Bank is in default under, and no event has occurred that, with the lapse of time or action by a third party or both, could result in the default under the terms of any judgment, decree, order, writ, rule or regulation of any governmental authority or court, whether federal, state or local and whether at law or in equity. 4.16 Governmental Regulation. First Southeast and each Bank hold all licenses, certificates, permits, franchises and rights from all appropriate Federal, state and other public authorities necessary for the conduct of their businesses, and, between the date hereof and the Closing Date, First Southeast will, and will cause each Bank to use its best efforts to, maintain all such licenses, certificates, permits, franchises and rights in effect. Each Bank is a member of the Bank Insurance Fund administered by the FDIC; neither Bank has ever been a party to a "conversion transaction" within the meaning of 12 U.S.C. Section 1815(d)(2)(B). Neither First Southeast nor either Bank is a party or subject to any agreement with, or directive or order issued by, the Federal Reserve Board, the OCC or any other bank regulatory authority, which imposes any restrictions or requirements not applicable generally to bank holding companies (in the case of First Southeast), or national banking association (in the case of the Banks), with respect to the conduct of its business. 4.17 Contracts and Commitments. Neither First Southeast nor either Bank is a party to or bound by any written or oral (i) lease or license with respect to any property, real or personal, with a value in excess of $25,000, whether as lessor, lessee, licensor or licensee; (ii) contract or commitment for capital expenditures in excess of $25,000 for any one project or $100,000 in the aggregate; (iii) contract or commitment for total expenses in excess of $25,000 made in the ordinary course of business for the purchase of materials, supplies or for the performance of services for a period of more than 60 days from the date of this Reorganization Agreement; (iv) contract or option for the purchase or sale of any real or personal property other than in the ordinary course of business; (v) contract, commitment or agreement made outside the ordinary course of business; or (vi) union contract or collective bargaining agreement. First Southeast and each Bank have performed in all material respects all obligations required to be performed by them to date, and are not in default under, and no event has occurred which, with the lapse of time or action by a third party or both, could result in a default under any outstanding mortgage, lease, contract, commitment or agreement to which First Southeast or either Bank is a party or by which First Southeast or either Bank is bound or under any provision of their respective charter documents or Bylaws, and each such outstanding mortgage, lease, contract, commitment or agreement is a valid and legally binding obligation of First Southeast or the relevant Bank and, to the knowledge of First Southeast, constitutes a valid and legally binding obligation of the other party or parties thereto, subject to (i) all applicable bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and (ii) the application of equitable principles if equitable remedies are sought. 4.18 Shareholders and Undertakings from Affiliates. First Southeast has furnished to Firstar (i) current shareholder lists of First Southeast and each Bank that set forth the record name and the address and number of shares held by each holder of stock thereof and identify each shareholder who is an officer or director of First Southeast or either Bank or holder of ten percent (10%) or more of the outstanding First Southeast Common Stock, as Exhibit 4.18(i) to the First Southeast Letter; and (ii) written undertakings, in the form attached hereto as Exhibit 4.18(ii) ("Affiliates' Undertakings"), of all of the affiliates of First Southeast, defined as set forth in Exhibit 4.18(ii). 4.19 Agreements with Directors, Officers and Shareholders. No executive officer, or holder of ten percent (10%) or more of the outstanding capital stock of First Southeast nor any executive officer of either Bank nor any "associate" of any such person (as such term is defined in the general rules and regulations under the Securities Act) (a "Company or Bank Principal") (i) is a party (other than as a depositor) to any transaction with First Southeast or the Bank, whether as a borrower or otherwise, which (a) was made other than in the ordinary course of business, (b) was made on other than substantially the same terms, including interest rate and collateral, as those prevailing at the time for comparable transactions for other persons, or (c) involves more than the normal risk of collectibility or presents other unfavorable features, or (ii) is a party to any loan or loan commitment, whether written or oral, from First Southeast or either Bank involving an amount in excess of $10,000. No Company or Bank Principal is an executive officer or director, or, in violation of the Depository Institution Management Interlocks Act, owns any shares of any depository organization other than a Bank. For the purposes of this Section 4.19, the term "depository organization" means a commercial bank (including a private bank), a savings bank, a trust company, a savings and loan association, a homestead association, a cooperative bank, an industrial bank, a credit union, or a depository holding company. 4.20 Absence of Adverse Agreements. Neither First Southeast nor either Bank nor, to the knowledge of First Southeast, any shareholder of First Southeast, is a party to any agreement, option or contract (other than the Agreements, the Indemnity Agreement dated the date hereof among Firstar, FCW, First Southeast, the Banks and the majority shareholder of First Southeast, the Voting and Stock Purchase Agreements dated of the date hereof between Firstar and the shareholders of First Southeast and the Stock Purchase Agreements) the subject of which involves or relates to the merger, consolidation, or sale of assets or stock of First Southeast or either Bank. 4.21 Accuracy of Information. No representation or warranty contained in the Agreements contains any untrue statement of a material fact or omits a material fact necessary to make the statements in the Agreements not misleading. The statements contained in the First Southeast Letter and in any other written documents executed and/or delivered by or on behalf of First Southeast pursuant to the terms of the Agreements are true and correct in all material respects and the First Southeast Letter and such other documents do not omit any material fact necessary to make the statements contained therein not materially misleading. The statements contained in the First Southeast Letter and such other documents will be deemed to constitute representations and warranties of First Southeast under this Reorganization Agreement to the same extent as if set forth herein in full. 4.22 Transactions in Capital Stock of First Southeast and the Banks. Neither First Southeast nor David A. Straz, Jr. has engaged in any transactions involving First Southeast Common Stock in violation of federal or state securities laws. 4.23 Allowance for Loan Losses. (a) The allowance for loan losses of First Bank Southeast after all anticipated loan losses have been charged off, in an amount not less than 2.0% of the Bank's gross loans outstanding, is adequate. Since September 30, 1993 the Bank has taken chargeoffs of $1,456,470 and written down its "other real estate owned" by $267,604. (b) The allowance for loan losses of First Bank Lake Geneva after all anticipated loan losses have been charged off, in an amount not less than 2.0% of the Bank's gross loans outstanding, is adequate. Since September 30, 1993 the Bank has taken chargeoffs of $333,497 and written down its "other real estate owned" by $344,348. 4.24 No Undisclosed Liabilities. Neither First Southeast nor either Bank nor any of their respective properties is subject to any liability or obligation (absolute, accrued, contingent or otherwise) known to First Southeast, including without limitation, any lease, contract, commitment or purchase or sale agreement, except: (a) as specifically disclosed in this Agreement or the financial statements of First Southeast delivered pursuant to Section 4.7 hereof; (b) as disclosed in the First Southeast Letter; or (c) liabilities or obligations arising or incurred in the ordinary course of business of First Southeast or either Bank since September 30, 1993 and consistent with past practices. 4.25 Continuity of Interest. There is no plan or intention by the shareholders of First Southeast who own one percent (1%) or more of the First Southeast Common Stock, and to the best of the knowledge of the management of First Southeast, there is no plan or intention on the part of the remaining shareholders of First Southeast to sell, exchange or otherwise dispose of a number of shares of Firstar Common Stock received in the Merger that would reduce the First Southeast shareholders' ownership of Firstar Common Stock to a number of shares having a value, as of the Closing Date, of less than fifty percent (50%) of the value of all of the formerly outstanding First Southeast Common Stock as of the same date. For purposes of this representation, shares of First Southeast Common Stock exchanged for cash or shares of Firstar Common Stock, by dissenting shareholders or exchanged for cash in lieu of fractional shares of Firstar Common Stock will be treated as outstanding Firstar Common Stock on the Closing Date. In addition, shares of First Southeast Common Stock and shares of Firstar Common Stock held by First Southeast shareholders and otherwise sold, redeemed, or disposed of prior or subsequent to the Merger shall be considered in making the foregoing representation. 4.26 Pooling and Tax-Free Status Matters. To the knowledge of First Southeast, neither First Southeast nor any of its affiliates has through the date hereof taken or agreed to take any action that would prevent Firstar from accounting for the business combination to be effected by the Merger as a pooling of interests or would prevent the Merger from qualifying as a tax-free reorganization under Section 368 of the Code. 4.27 No Material Adverse Change. Since December 31, 1992, there has been no material adverse change in the financial condition, assets, liabilities, results of operation or business of First Southeast or either Bank. ARTICLE V CONDUCT OF BUSINESS BY FIRSTAR Firstar agrees that: 5.1 Approval by Firstar. Firstar will give its consent or approval on such matters as may be appropriate or required in connection with the transactions contemplated by the Agreements, subject, however, to Sections 1.4 and 9.1 of this Reorganization Agreement. 5.2 Subsequent SEC Filings. As soon as reasonably practicable, Firstar will furnish First Southeast copies of all Firstar's periodic reports on Forms 10-K, 10-Q and 8-K filed with the SEC subsequent to the date hereof. Such reports shall be prepared in compliance with laws applicable to Firstar. 5.3 Conduct of Business; Certain Covenants. From and after the execution and delivery of this Agreement and until the Closing Date, Firstar will, except insofar as deviations from the following covenants would not reasonably be expected to have a material adverse impact on Firstar and its subsidiaries, taken as a whole: (a) conduct its business and operate only in accordance with sound banking and business practices; and (b) maintain its corporate existence in good standing and file all material required reports with all applicable regulatory authorities. 5.4 Plant Closing Laws. Firstar shall indemnify the shareholders of First Southeast from any damages they may incur if Firstar takes any action that subjects the shareholders to damages under the federal Worker Adjustment and Retraining Notification Act or Section 109.07 of the Wisconsin Statutes. 5.5 Bank Minority Shares. As soon as reasonably practicable after the Closing Date, Firstar or FCW will offer to purchase directly or pursuant to a Plan of Merger, all of the outstanding shares of First Bank Lake Geneva other than shares owned by First Bank Southeast or directors' qualifying shares, at a price per share of $287.27. ARTICLE VI CONDUCT OF BUSINESS BY FIRST SOUTHEAST UNTIL MERGER First Southeast agrees that from the date of this Reorganization Agreement until the Closing Date: 6.1 Dividends. First Southeast will not declare or pay any dividends or make any distributions on First Southeast Common Stock other than cash dividends in an amount or amounts not to exceed in the aggregate the cash dividends that the shareholders of First Southeast would have received from Firstar had they owned, after February 15, 1994, 1,801,577 shares of Firstar Common Stock on the record dates in such quarters for the determination of Firstar shareholders entitled to receive dividends. First Southeast will not permit either Bank to declare or pay any dividends or make any distributions on its common stock other than cash dividends necessary to fund such dividends of First Southeast, pay expenses expressly contemplated by this Reorganization Agreement, service First Southeast's debt and pay ordinary and necessary operating expenses of First Southeast on a basis consistent with prior years. 6.2 Capitalization. First Southeast will not, nor will it permit either Bank to, issue, sell or otherwise dispose of, grant an option for, or acquire for value any shares of capital stock of First Southeast or the Banks or otherwise effect any change in connection with its capitalization or that of the Banks, except in connection with the bank-level mergers with Firstar affiliates referred to in Section 6.13 hereof. 6.3 Regular Course of Business. First Southeast will, and will cause each Bank to, carry on its business in substantially the same manner as heretofore and use its best efforts to maintain and preserve its business organization intact, retain its present employees and maintain its relationships with customers. Except with the prior written consent of Firstar, First Southeast will not, and will not permit either Bank to (i) enter into any transaction other than in the ordinary course of business or incur or agree to incur any obligation or liability, except (a) liabilities incurred and obligations entered into in the ordinary course of business, (b) with respect to an agreement with Quarles & Brady for fair and reasonable legal services in connection with the Agreements and the transactions contemplated thereby, providing for payment on an hourly basis only, at a rate per hour not to exceed the amount disclosed in Section 6.3 of the First Southeast Letter, and for an aggregate amount estimated not to exceed $100,000; (c) with respect to any agreements for fees with KPMG Peat Marwick and James M. Harmon & Co., Ltd. for fair and reasonable services in connection with preparation of the Registration Statement and proxy solicitation materials and other activities contemplated by the Agreements and for an aggregate amount estimated not to exceed the amount disclosed in Section 6.3 of the First Southeast Letter; and (d) consulting fees to David A. Straz, Jr. for consulting services to First Southeast in the ordinary course of its business and exclusive of matters concerning the sale of First Southeast in amounts not to exceed $195 per hour; (ii) change its lending, investment, liability management and other material policies concerning its or either Bank's banking business, unless required by statute, regulation or order; (iii) grant any bonus or increase in the rates of pay of employees or directors except normal salary and bonus increases to employees, based on past practice, not to exceed five percent (5%) in the aggregate; (iv) except pursuant to the contracts or commitments disclosed in the First Southeast Letter or in the ordinary course of business, incur or commit to any capital expenditure which exceeds $25,000; (v) except in the ordinary course of business or as expressly contemplated by this Reorganization Agreement, and, in the case of sales for more than $50,000, after prior notice to Firstar, sell any loans made prior to the date hereof, or sell any investment securities from their respective investment portfolios, or sell or otherwise dispose of any assets; or (vi) agree to any of the foregoing actions. 6.4 Contact with Third Parties; No Board Recommendation. First Southeast will not initiate, solicit or encourage and will not permit either Bank to initiate, solicit or encourage (including by way of furnishing information or assistance), or take any other action to facilitate, any inquiries or the making of any proposal which constitutes, or may reasonably be expected to lead to, any Competing Transaction (as such term is defined below), or negotiate with any person in furtherance of such inquiries or to obtain a Competing Transaction, or agree to or endorse any Competing Transaction, or authorize or permit any of its officers, directors or employees or any financial advisor, attorney, accountant or other representative retained by First Southeast or either Bank to take any such action. For purposes of this Agreement, "Competing Transaction" shall mean any of the following: (i) the merger or consolidation of First Southeast or either Bank with any person or entity other than Firstar or its subsidiaries, (ii) the acquisition of more than three percent (3%) of the consolidated gross assets of First Southeast by any person or entity other than Firstar or its subsidiaries, (iii) the acquisition of any of the capital stock of First Southeast or either Bank by any person or entity other than Firstar or its subsidiaries, or (iv) the acquisition by First Southeast or either Bank of the stock or, except in the ordinary course of business, the assets of any other person or entity. Promptly upon receiving any oral or written offer relating to any such event or proposed event, First Southeast shall notify Jon H. Stowe, Executive Vice President of Firstar, or, in his absence, any other member of Firstar's Acquisition Team, by telephone, confirmed by letter, giving all relevant details of such oral or written offer. The Board of Directors of First Southeast will not recommend that it or its shareholders vote in favor of any Competing Transaction. 6.5 Corporate Structure. First Southeast will not, nor will it permit either Bank to, without the prior written consent of Firstar, create or acquire any subsidiary. There will be no change in the Articles of Incorporation or Bylaws of First Southeast or the Articles of Association or Bylaws of either Bank, without the prior written consent of Firstar. 6.6 Accounting and Tax Reporting. First Southeast will not, nor will it permit either Bank to, change any of its methods of accounting in effect at the end of its last fiscal year, or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns of First Southeast or the Bank for its last taxable year, except as may be required by law or generally accepted accounting principles. 6.7 Full Disclosure. First Southeast will afford Firstar, its officers, accountants, counsel and other authorized representatives, such access to all books, records, tax returns, leases, contracts and documents of First Southeast and the Banks and to the buildings, structures, fixtures and appurtenances of First Southeast and the Banks for purposes of inspecting their condition, and will furnish to Firstar such information with respect to the assets and business of First Southeast and the Banks as Firstar may from time to time reasonably request in connection with the Agreements and the transactions contemplated hereby and as permitted by law, provided that such access or investigation shall not interfere unnecessarily with the normal operations of First Southeast and the Banks. 6.8 Reports to Firstar. First Southeast will promptly advise Firstar in writing of all actions taken by the directors and shareholders of First Southeast at meetings or in connection with written consents filed with First Southeast and furnish Firstar with copies of all monthly and other interim financial statements of First Southeast and the Bank as they become available. First Southeast will use its best efforts to keep Firstar fully informed concerning all trends and developments of which it becomes aware that may have a material effect upon the business, properties or condition (either financial or otherwise) of First Southeast and the Banks. 6.9 Solicitation of First Southeast Shareholders. First Southeast will take such action as may be necessary in accordance with applicable law, including soliciting consents or causing a special meeting of its shareholders to be held as soon as practicable after the effective date of the Registration Statement, to solicit, and will use its best efforts to obtain, the requisite ratification, confirmation and adoption of the Agreements and approval of the Merger by its shareholders and the consent or approval of its shareholders on such other matters as may be appropriate or required in connection with the transactions contemplated by the Agreements. The Board of Directors of First Southeast shall (i) recommend to its shareholders approval of the Merger; (ii) not withdraw, modify or amend such recommendation; and (iii) use its best efforts to obtain such shareholder approval. First Southeast and Firstar shall coordinate and cooperate with respect to the timing of such meeting and shall use their best efforts to hold such meeting as soon as practicable after the date hereof. 6.10 Supplement to First Southeast Letter. First Southeast will promptly supplement or amend the First Southeast Letter with respect to any matter hereafter arising that, if existing or occurring at the date of this Reorganization Agreement, would have been required to be set forth or described in the First Southeast Letter. No supplement or amendment to the First Southeast Letter will have any effect for the purpose of determining satisfaction of the condition set forth in Section 7.2 hereof. 6.11 Dissent Process. First Southeast will give to Firstar prompt notice of any written notice relating to the exercise of dissenters' rights granted under the Wisconsin Statutes, including the name of the dissenting shareholder and the number of shares of First Southeast Common Stock to which the dissent relates. Firstar will have the right to participate in all negotiations and proceedings relating thereto, and, exceptions required by law. First Southeast will not make any payment with respect to, or settle or offer to settle, any appraisal demands without Firstar's prior written consent. 6.12 Employee Benefit Plans. Except as required by law or provided by this Agreement, First Southeast will not make any material change in any Plan. First Southeast will cooperate fully with Firstar and FCW and will take all steps necessary in the judgment of Firstar and its counsel to cause the termination of any Plan or the merger thereof, effective on or after closing into one or more employee benefit plans maintained by Firstar or FCW. Without limitation of the foregoing, if requested by Firstar or FCW, First Southeast will cause the trustee of any Plan to value the assets of such Plan and, effective on or after closing, transfer all Plan assets and liabilities to a successor trustee designated by Firstar or FCW, all in the manner specified by Firstar or FCW. 6.13 Bank-Level Transactions. (a) First Southeast and the Banks will cooperate with Firstar and FCW in the preparation by Firstar or FCW of applications to the OCC and any other appropriate regulatory authority to effect, contingent on consummation of the Merger, the transfer of certain Bank assets and liabilities to and/or a merger of the Banks with one or more bank subsidiaries of Firstar. (b) As soon as reasonably practicable, First Southeast and the Banks will withdraw their pending applications to the Wisconsin Commissioner of Banking for approval of the Banks' previously-proposed charter conversions and merger with each other. (c) First Southeast and the Banks will cooperate with Firstar and FCW in effecting, including through publication of branch closing notices, the closing, on or as soon as practicable after the Closing Date, of First Bank Southeast's Milwaukee and North Cape offices, First Bank Lake Geneva's New Muenster office, and such other offices as the parties may mutually agree. 6.14 Parent Company Debt. At closing, debt at the parent company level will not exceed $2.7 million. 6.15 Disposition of Assets. All the life insurance policies carried on David A. Straz, Jr. by First Southeast or either Bank will be sold by such entity to Mr. Straz prior to the Closing Date for their respective cash surrender values. All the shares First Southeast owns of Southern Exchange Bank will be sold by First Southeast to Mr. Straz at least five trading days prior to the Closing Date at their fair market value. The shares First Southeast owns of Wisconsin Energy Corp. will be sold prior to the Closing Date at their fair market value. 6.16 Out-of-State Participations. Prior to the Closing Date, all out-of-state participations at either Bank shall be sold for their book value as of December 31, 1993, reduced by normal loan principal payments to the date of sale. ARTICLE VII CONDITIONS TO OBLIGATIONS OF FIRSTAR AND FCW The obligations of Firstar and FCW under the Agreements to cause the transactions contemplated therein to be consummated shall be subject to the satisfaction of the following conditions: 7.1 No Material Adverse Change. There shall not have been any material adverse change, or discovery of a condition or the occurrence of any event that has or is likely to result in such a change, in the financial condition, assets, liabilities, results of operation or business of First Southeast or either Bank from the date hereof to the Closing Date. 7.2 Representations and Warranties. All representations and warranties by First Southeast contained in this Reorganization Agreement shall be true and correct in all material respects at, or as of, the Closing Date as though such representations and warranties were made on and as of said date, except with respect to (y) changes expressly contemplated in this Reorganization Agreement, or (z) breaches that are not reasonably likely to have a material adverse impact on First Southeast or either Bank or on the benefits to have been received by Firstar or FCW from consummation of the transactions contemplated by the Agreements. 7.3 Performance and Compliance. First Southeast shall have performed or complied with all covenants, agreements and conditions required by the Agreements to be performed and satisfied by it on or prior to the Closing Date. 7.4 No Proceeding or Litigation. At the Closing Date, no suit, action or proceeding shall be pending or overtly threatened and no liability or claim shall have been asserted against First Southeast or either Bank which has not been disclosed in the First Southeast Letter (i) involving any of the assets, properties, business or operations of First Southeast or either Bank that might result in any material adverse change in the financial condition or results of operations of First Southeast or the Bank, or (ii) before any court or other governmental agency by the federal or any state government in which it is or will be sought to restrain or prohibit the consummation of the Merger. 7.5 Review or Audit by Firstar and Accountants. Prior to the Closing Date, Firstar and KPMG Peat Marwick shall have had an adequate opportunity to conduct such a complete review, in accordance with standards established by the American Institute of Certified Public Accountants, or audit, in accordance with generally accepted auditing standards, of the financial condition, assets, liabilities, results of operation, and business of First Southeast and the Banks as Firstar shall deem prudent and such review or audit shall not have disclosed matters that are inconsistent in any material respect with any of the representations and warranties of First Southeast contained in this Reorganization Agreement. 7.6 Audit of Plans. Firstar shall have had the opportunity to conduct, or to have conducted by an entity of its choosing, at its expense, an audit of any Plans. 7.7 Pooling Letter. Firstar shall have received confirmation from KPMG Peat Marwick that the Merger will be accounted for as a "pooling of interests" in accordance with generally accepted accounting principles, as of a date no more than five business days prior to the Closing Date. Failure to obtain the confirmation contemplated in this Section 7.7 due to an affirmative act of Firstar alone shall constitute a waiver of this condition. 7.8 Approval of Shareholders. This Reorganization Agreement and all actions contemplated thereby and hereby, including the Merger, that require the approval of First Southeast's shareholders shall have received the required shareholder approval by consent or at a meeting duly called and held for such purpose, and holders of not more than five percent (5%) of the First Southeast Common Stock outstanding as of the date of such consent action or record date for such meeting shall have undertaken steps to perfect their right to dissent in accordance with the Wisconsin Statutes and not lost or abandoned such right. 7.9 Opinion of Counsel for First Southeast. Firstar and FCW shall have received an opinion from Quarles & Brady, counsel for First Southeast, dated the Closing Date, substantially to the effect set forth in Exhibit 7.9 hereto. 7.10 Allowance for Loan Losses. (a) As of the Closing Date, the allowance for loan losses of First Bank Southeast after all anticipated loan losses shall have been charged off shall not be less than an amount equal to 2.0% of its gross loans outstanding. (b) As of the Closing Date, the allowance for loan losses of First Bank Lake Geneva after all anticipated loan losses shall have been charged off shall not be less than an amount equal to 2.0% of its gross loans outstanding. 7.11 Certificate of Chief Executive Officer. First Southeast shall have furnished Firstar a certificate, signed by its Chief Executive Officer, dated the Closing Date, to the effect that the conditions described in Sections 7.1, 7.2, 7.3, 7.4, 7.8, and 7.10 of this Reorganization Agreement have been fully satisfied, to the best of the knowledge of such Chief Executive Officer. 7.12 Active Status Certificates. Firstar and FCW shall have received (i) a statement of the State of Wisconsin, certifying that First Southeast is a corporation in active status in Wisconsin, and (ii) statements from the OCC stating that the Banks are in good standing as national banking associations, each dated within five business days prior to the Closing Date. 7.13 Bills for Certain Fees of First Southeast or the Bank. Firstar shall have received a copy of an itemized bill from Quarles & Brady to First Southeast for services performed in connection with the transactions contemplated in the Agreements, through two business days prior to the Closing Date, which details the fees charged to that date and estimated to be charged through the Closing Date for such services. 7.14 Tax Opinion. Firstar and FCW shall have received an opinion from Foley & Lardner, dated the Closing Date, opining that the Merger will be treated as a tax-free reorganization under the Code. Firstar and FCW have requested such an opinion. The failure to obtain such opinion due to an act or omission of Firstar or FCW shall constitute a waiver of such condition. 7.15 Regulatory Agreements. The Federal Reserve Bank of Chicago (the "Reserve Bank") shall have agreed that (a) the agreement by and between First Southeast and David A. Straz, Jr. and the Reserve Bank dated August 14, 1984, and (b) the Memorandum of Understanding executed between First Southeast and the Reserve Bank dated November 6, 1991, from and after the Closing will not apply to Firstar or FCW. 7.16 Environmental Audits. Firstar shall have had an opportunity to have conducted by an entity of its choosing, environmental site assessments of the Real Properties carried on the Banks' books as "other real estate owned" to determine if such properties have indications of or give evidence that any violations of Environmental Laws have occurred on any such properties. If the Agreements are terminated and the Merger abandoned for any reason, First Southeast will reimburse Firstar for the cost of such environmental site assessments. ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF FIRST SOUTHEAST The obligations of First Southeast under the Agreements to cause the transactions contemplated herein to be consummated shall be subject to the satisfaction of the following conditions: 8.1 No Material Adverse Change. There shall not have been any material adverse change, or discovery of a condition or the occurrence of any event that has or is likely to result in such a change, in the consolidated financial condition, assets, liabilities, results of operation or business of Firstar from the date hereof to the Closing Date. 8.2 Representations and Warranties. All representations and warranties of Firstar and FCW contained in this Reorganization Agreement shall be true and correct in all material respects at, or as of, the Closing Date as though such representations were made at and as of said date, except with respect to (y) changes expressly contemplated in this Reorganization Agreement, or (z) breaches that are not reasonably likely to have a material adverse impact on Firstar or FCW or on the benefits to have been received by First Southeast or its shareholders from consummation of the transactions contemplated by the Agreements. 8.3 Performance and Compliance. Firstar shall have performed or complied with all covenants, agreements and conditions required by the Agreements to be performed and satisfied by it at or prior to the Closing Date. 8.4 No Proceeding or Litigation. At the Closing Date, no suit, action or proceeding shall be pending or overtly threatened before any court or other governmental agency by the federal or any state government in which it is sought to restrain or prohibit the consummation of the Merger. 8.5 Opinion of Counsel for Firstar and FCW. Firstar and FCW shall have delivered to First Southeast an opinion of Firstar's General Counsel, dated the Closing Date, substantially to the effect set forth in Exhibit 8.5 hereto. 8.6 Certificate of Executive Officer. Firstar shall have furnished to First Southeast a certificate, signed by any one of its executive officers and dated the Closing Date, to the effect that the conditions described in Sections 8.1, 8.2 and 8.3 of this Reorganization Agreement have been fully satisfied. 8.7 Tax Opinion. First Southeast shall have received an opinion from Foley & Lardner dated the Closing Date, opining that the Merger will be treated as a tax-free reorganization under the Code. First Southeast has requested such an opinion. The failure to obtain such opinion due to an act or omission of First Southeast shall constitute a waiver of such condition. ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES In addition to the provisions of Articles VII and VIII hereof, the obligations of First Southeast, Firstar and FCW to cause the transactions contemplated herein to be consummated, shall be subject to the satisfaction of the following conditions. 9.1 Governmental Approvals. The parties hereto shall have received all necessary approvals of governmental agencies and authorities, on conditions satisfactory to Firstar, of the transactions contemplated by the Agreements and each of such approvals shall remain in full force and effect at the Closing Date and such approvals and the transactions contemplated thereby shall not have been contested by any federal or state governmental authority nor by any other third party by formal proceeding. If any contest as aforesaid is brought by formal proceedings, any party may, but shall not be obligated to, answer and defend such contest. 9.2 Securities Law Compliance. The Registration Statement shall have become effective by an order of the SEC, the Firstar Common Stock to be issued in the Merger shall have been qualified or exempted under all applicable state securities or blue sky laws, and there shall have been no stop order issued or threatened by the SEC that suspends the effectiveness of the Registration Statement, and no proceeding shall have been commenced, pending or overtly threatened for such purpose. 9.3 Shareholder Approval. The Agreements and the Merger shall have been duly approved by the requisite affirmative votes of the shareholders of First Southeast. ARTICLE X TERMINATION 10.1 Reasons for Termination. The Agreements may be terminated and the Merger abandoned at any time before the Closing Date, notwithstanding the approval or adoption of the Agreements by the shareholders of First Southeast and/or FCW: (a) By mutual written consent of the Board of Directors of First Southeast and the Board of Directors or the Interstate Banking and Acquisitions Committee of Firstar; (b) By written notice from Firstar to First Southeast if: (i) any condition set forth in Articles VII or IX of this Reorganization Agreement has not been substantially satisfied or waived in writing by October 31, 1994, unless the failure to satisfy such condition is due to a breach of the Agreements by Firstar; (ii) any warranty or representation made by First Southeast shall be discovered to be or to have become untrue, incomplete or misleading where any such breach, individually or in the aggregate, (y) is reasonably likely to have a material adverse impact on First Southeast or either Bank or on the benefits to have been received by Firstar or FCW from consummation of the transactions contemplated by the Agreements, and (z) has not been cured within ten business days following receipt by First Southeast of notice of such discovery; or (iii) First Southeast shall have breached one or more covenants of this Reorganization Agreement in any material respect considering all such breaches in the aggregate, where such breach has not been cured within ten business days following receipt by First Southeast of notice of such breach; or (c) By written notice from First Southeast to Firstar, authorized by the Board of Directors of First Southeast, if: (i) any condition set forth in Articles VIII or IX of this Reorganization Agreement has not been substantially satisfied or waived in writing by October 31, 1994, unless the failure to satisfy such condition is due to a breach of the Agreements by First Southeast; (ii) any warranty or representation made by Firstar shall be discovered to be or to have become untrue, incomplete or misleading where any such breach, individually or in the aggregate, (y) is reasonably likely to have a material adverse impact on Firstar or on the benefits to have been received by First Southeast or its shareholders from consummation of the transactions contemplated by the Agreements, and (z) has not been cured within ten business days following receipt by Firstar of notice of such discovery; (iii) Firstar shall have breached one or more covenants of this Reorganization Agreement in any material respect considering all such breaches in the aggregate, where such breach has not been cured within ten business days following receipt by Firstar of notice of such breach; or (iv) the average composite closing price of Firstar Common Stock on the New York Stock Exchange and the Midwest Stock Exchange, on the ten consecutive trading days immediately preceding the date on which the parties could otherwise have closed the transactions contemplated by the Agreements, is less than $27.00. 10.2 Liability. In the event of termination of this Reorganization Agreement caused (a) otherwise than by breach of a party hereto or (b) by any breach or misrepresentation by a party hereto not covered by the next sentence, there shall be no liability on the part of First Southeast, Firstar or FCW of any nature whatsoever, except that the parties shall pay fees and expenses pursuant to Section 11.2 of this Reorganization Agreement and continue to comply with the obligations set forth in Section 1.6 of this Reorganization Agreement. In the event of termination of this Reorganization Agreement caused by (i) willful breach by a party of any agreement, covenant, or undertaking of such party contained herein or in any exhibit hereto; (ii) any material misrepresentations or breach of warranty in any material respect by a party herein, which at the date hereof was known to be a misrepresentation or breach of warranty by such party; or (iii) the failure of any condition set forth in Articles VII, VIII or IX hereof which has failed because a party did not exercise good faith and best efforts towards the fulfillment of such condition; then the other party shall be entitled to all its legal and equitable remedies. ARTICLE XI MISCELLANEOUS 11.1 Brokers. Firstar and First Southeast agree that no third person or entity has in any way brought the parties together or been instrumental in the making of the Agreements. Each such party agrees to indemnify the other against any claim by any third person or entity for any commission, brokerage or finder's fee, or other payment with respect to the Agreements or the transactions contemplated thereby based on any alleged agreement or misunderstanding between such party and such third person or entity, whether express or implied from the actions of such party. 11.2 Expenses. Each party to the Agreements will pay its respective fees and expenses incurred in connection with the preparation and performance of the Agreements, including fees and expenses of its counsel, accountants, and other experts and advisors, except that (a) Firstar agrees to reimburse First Southeast and the Banks for any out-of-pocket fees and expenses they incur at the request and direction of Firstar (to include fees paid or payable by First Southeast to KPMG Peat Marwick pursuant to Firstar's letter dated January 13, 1994 (the "Peat Marwick Letter") but not to include fees paid or payable to James M. Harmon & Co., Ltd. or fees paid or payable for the environmental audits referred to in Section 6.16 hereof), and (b) First Southeast agrees to reimburse Firstar for the costs of the environmental site assessments referred to in Section 7.16 hereof. 11.3 Waivers; Amendments. At any time prior to the Closing Date, either Firstar, by action taken by its Board of Directors or Interstate Banking and Acquisitions Committee or officers thereunto authorized, or First Southeast, by action taken by its Board of Directors or officers thereunto authorized, may waive the performance of any of the obligations of the other or waive compliance by the other with any of the covenants or conditions contained in the Agreements or agree to the amendment or modification of the Agreements by an agreement in writing executed in the same manner as the Agreements; provided, however, that after consent of or a favorable vote by the shareholders of First Southeast pursuant to Section 6.9 of this Reorganization Agreement any such action shall be taken by First Southeast only if, in the opinion of its Board of Directors, such waiver, amendment or modification will not have any material adverse effect on the benefits intended under the Agreements for the shareholders of First Southeast and will not require resolicitation of any proxies from such shareholders. 11.4 Assignment. This Reorganization Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but shall not be assigned by the parties hereto without the prior written consent of the other parties. 11.5 Entire Agreement. This Reorganization Agreement, the Plan of Merger, the Indemnity Agreement, the Voting and Stock Purchase Agreements, the Affiliates' Undertakings and the Peat Marwick Letter supersede any other agreement, whether written or oral, that may have been made or entered into by First Southeast or Firstar or FCW or by any officer or officers of such parties relating to the acquisition of the business or the capital stock of First Southeast by Firstar or FCW. The aforementioned agreements constitute the entire agreement by the respective parties, and there are no agreements or commitments except as set forth herein and therein. 11.6 Captions and Counterparts. The captions in this Reorganization Agreement are for convenience only and shall not be considered a part of or affect the construction or interpretation of any provision of this Reorganization Agreement. This Reorganization Agreement may be executed in several counterparts, each of which shall constitute one and the same instrument. 11.7 Governing Law. The Reorganization Agreement shall be construed and interpreted in accordance with the laws of the State of Wisconsin. 11.8 Nonsurvival. No representations, warranties or covenants in this Reorganization Agreement shall survive the Merger or termination under Article X hereof, other than the obligations set forth in Sections 1.6, 1.8, 5.5, 7.16 and 11.2, and the representations set forth in Section 4.25, of this Reorganization Agreement. 11.9 Knowledge of the Parties. Wherever in this Agreement any representation or warranty is made upon the knowledge of a party hereto, such knowledge shall include the actual knowledge of any executive officer of such party or any facts that upon due inquiry, would have been known to such person. 11.10 Notices. All notices given hereunder shall be in writing (including a telecopy) and shall be mailed by first class mail, postage prepaid, or sent by facsimile transmission or by nationally recognized overnight delivery service, addressed as follows: (a) If to Firstar or FCW, to: Firstar Corporation [or Firstar Corporation of Wisconsin] Attn: Jon H. Stowe Executive Vice President 777 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 765-4349 with a copy to: Firstar Corporation Law Department Attn: Howard H. Hopwood, III Senior Vice President and General Counsel 777 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 765-6111 (b) If to First Southeast, to: First Southeast Banking Corp. Attn: David A. Straz, Jr., President P.O. Box 490 Lake Geneva, WI 53147 Telecopy No. (414) 248-7024 with a copy to: Quarles & Brady Attn: Robert J. Kalupa, Esq. 411 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 271-3552 IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Reorganization to be duly executed as of the date first above written. FIRSTAR CORPORATION [SEAL] By: Jon H. Stowe Its:Executive Vice President Attest: John A. Kielich Its:First Vice President [SEAL] FIRST SOUTHEAST BANKING CORP. By: David A. Straz, Jr. Its:President Attest: _______________________ Its:___________________ [NO SEAL] FIRSTAR CORPORATION OF WISCONSIN By: John A. Kielich Its:Vice President Attest: Joan M. Fagan Its:Assistant Secretary EXHIBIT 4.18(ii) [Form of First Southeast Affiliate's Undertaking] February 10, 1994 Firstar Corporation 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Gentlemen: I have been advised that as of the date hereof I may be deemed an "affiliate" of First Southeast Banking Corp., a Wisconsin corporation ("First Southeast"), as that term is defined for purposes of paragraphs (c) and (d) of Rule 145 of the rules and regulations (the "Rules and Regulations") under the Securities Act of 1933, as amended (the "Act") ("Affiliate"). Pursuant to the terms of the Agreement and Plan of Reorganization among Firstar Corporation, a Wisconsin corporation ("Firstar"), Firstar Corporation of Wisconsin, a Wisconsin corporation ("FCW"), and First Southeast (the "Reorganization Agreement"), and the related Plan of Merger by and between First Southeast and FCW joined in by Firstar for certain limited purposes, both dated as of February 9, 1994 (together with the Reorganization Agreement, the "Agreements"), First Southeast will be merged with and into FCW (the "Merger"), and as a result of the Merger, I may receive shares of common stock of Firstar, $1.25 par value ("Firstar Common Stock"). In connection with the above transactions, I represent and warrant to Firstar and agree that: A. I will not make any sale, transfer or other disposition of the shares of Firstar Common Stock in violation of the Act or the Rules and Regulations. B. I have no present plan or intent to dispose of the Firstar Common Stock acquired by me pursuant to the Merger. C. I have been advised that the offering, sale and delivery of the shares of Firstar Common Stock to me pursuant to the Merger will be registered under the Act on a Registration Statement on Form S-4. I have also been advised, however, that, since I may be deemed to be an Affiliate of First Southeast at the time the Agreements are submitted for a vote of the shareholders of First Southeast, the shares of Firstar Common Stock must be held by me indefinitely unless (i) such shares of Firstar Common Stock have been registered for distribution under the Act, (ii) a sale of the shares of Firstar Common Stock is made in conformity with the volume and other limitations of Rule 145, or (iii) in the opinion of counsel acceptable to Firstar, some other exemption from registration under the Act is available with respect to any such proposed sale, transfer or other disposition of the shares of Firstar Common Stock. D. I have carefully read this Agreement and the Agreements and have discussed their requirements and other applicable limitations upon my ability to sell, transfer or otherwise dispose of the shares of Firstar Common Stock, to the extent I felt necessary, with my counsel or counsel for First Southeast. E. I understand that Firstar is under no obligation to register the sale, transfer or other disposition of the shares of Firstar Common Stock for sale, transfer or other disposition by me to make compliance with an exemption from registration available. F. I understand that stop transfer instructions will be given to the registrar of the certificates for the shares of Firstar Common Stock and that there will be placed on the certificates for the shares of Firstar Common Stock, or any substitutions therefore, a legend stating in substance: "The shares represented by this certificate were issued in a transaction (the acquisition of First Southeast Banking Corp.) to which Rule 145 promulgated under the Securities Act of 1933, as amended (the "Act"), applies and may be sold or otherwise transferred only in compliance with the limitations of such Rule 145, or upon receipt by Firstar Corporation of an opinion of counsel acceptable to it that some other exemption from registration under the Act is available, or pursuant to a registration statement under the Act. The shares represented by this certificate may not be sold or otherwise transferred prior to the publication by Firstar Corporation of an earnings statement covering at least 30 days of operations subsequent to [the effective date of the Merger]." G. I hereby agree that, for a period of two (2) years following the effective date of the Merger, I will obtain an agreement similar to this agreement from each transferee of the shares of Firstar Common Stock sold or otherwise transferred by me, but only if such transfer is effected other than in a transaction involving a registered public offering or as a sale pursuant to Rule 145. H. Notwithstanding the other provisions hereof, I agree not to sell, pledge, transfer, or otherwise dispose of the shares of Firstar Common Stock, or reduce my risk relative to the Firstar Common Stock in any other way, from the date hereof until such time as financial results covering at least 30 days of combined operations of the parties to the Merger have been published within the meaning of Section 201.01 of the Securities and Exchange Commission's Codification of Financial Reporting Policies. It is understood and agreed that any transfer of my shares of First Southeast to a Nevada partnership pursuant to documents substantially to the effect of the partnership agreement reviewed by KPMG Peat Marwick prior to the date hereof will not be a breach of this Agreement. I have not reduced my risk relative to the Firstar Common Stock to date. It is understood and agreed that this Agreement will terminate and be of no further force and effect and the legend set forth in Paragraph F above will be removed by delivery of substitute certificates without such legend, and the related transfer restrictions shall be lifted forthwith, if the period of time specified in Paragraph H of this Agreement has passed and (i) my shares of Firstar Common Stock shall have been registered under the Act for sale, transfer or other disposition by me or on my behalf, (ii) I am not at the time an Affiliate of Firstar and have held the shares of Firstar Common Stock for at least two (2) years (or such other period as may be prescribed by the Act and the Rules and Regulations) and Firstar has filed with the Securities and Exchange Commission ("SEC") all of the reports it is required to file under the Securities Exchange Act of 1934, as amended, during the preceding twelve (12) months, (iii) I am not and have not been for at least three (3) months an Affiliate of Firstar and I have held the shares of Firstar Common Stock for at least three (3) years, or (iv) Firstar shall have received a letter from the staff of the SEC, or an opinion of Firstar's General Counsel or other counsel acceptable to Firstar, to the effect that the stock transfer restrictions and the legend are not required. This Agreement shall be binding on my heirs, legal representatives and successors. Very truly yours, _______________________________ Accepted as of the 10th day of February, 1994. FIRSTAR CORPORATION By: _____________________ EXHIBIT 7.9 [Closing Date] Firstar Corporation 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Gentlemen: We have acted as special counsel to First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation and a bank holding company registered under the Bank Holding Company Act of 1956, as amended, in connection with the merger of First Southeast with and into Firstar Corporation of Wisconsin, a Wisconsin corporation ("FCW"), pursuant to an Agreement and Plan of Reorganization dated as of February ____, 1994 (the "Reorganization Agreement"), by and among First Southeast, FCW, and Firstar Corporation, a Wisconsin corporation ("Firstar") the parent of FCW. This letter is furnished to you pursuant to Section 7.9 of the Reorganization Agreement. We have represented David A. Straz, Jr., to the extent of his being party to the Indemnity Agreement. Unless the context clearly requires otherwise, capitalized terms used herein shall have the meanings ascribed thereto in the Reorganization Agreement. As special counsel for First Southeast, we have examined and relied upon corporate records of First Southeast and the Banks and such other documents, and certificates provided by their officers, including certificates supplied to Firstar in connection with this transaction, and certificates of public officials. Furthermore, in regard to the matters stated in numbered paragraphs 6, 7 and 8, we wish to advise you that we have not been engaged to give substantive attention to any legal or governmental proceedings, orders or third party agreements (other than the Agreements) to which First Southeast or either Bank may be a party. We have not searched the dockets of any court or any governmental agency to determine if any such proceedings are pending or orders entered involving First Southeast or either Bank or the Merger. Based upon and subject to the foregoing and the qualifications set forth in subsequent portions of this letter, it is our opinion that: 1. First Southeast is a corporation validly existing and in active status under the laws of the State of Wisconsin, with full power and authority, corporate or otherwise, except as may be limited by the terms of formal agreements between First Southeast and the Federal Reserve Bank ("FRB") dated August 14, 1984, and November 6, 1991, copies of which have been previously delivered to you, to own the stock of the Banks that it currently holds and to engage in the activities of a bank holding company. First Southeast is registered with the FRB as a bank holding company under the Bank Holding Company Act of 1956, as amended. First Southeast has no direct or indirect subsidiaries except the Banks, and First Southeast Securities Corp. (FSC) ("FSC") and First Southeast Investment Corp. (FIC) ("FIC"), both Nevada corporations. 2. First Bank Southeast, N.A. and First Bank Southeast of Lake Geneva, N.A. are each a national banking association validly existing under the laws of the United States. Each Bank (i) is duly authorized to conduct a commercial banking business in its offices subject to the supervision of the United States Comptroller of the Currency; (ii) is an "insured depository institution" as defined in Section 3(c)(2) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1813(c)(2); and (iii) to our knowledge has full power and authority, corporate or otherwise (including all necessary licenses, franchises, permits and other governmental authorizations) to engage in the banking business. 3. The authorized capital stock of First Southeast consists of 200,000 shares of common stock, $1.00 par value, of which 106,486 shares of First Southeast Common Stock are validly issued and outstanding. All of such shares are fully paid and nonassessable, except as provided at Sec. 180.0622(2)(b) of the Wisconsin Statutes as interpreted by Wisconsin Courts. To our knowledge, First Southeast does not have any arrangements or commitments obligating it to issue or sell or otherwise dispose of, or to purchase or redeem shares of its capital stock or any securities convertible into or having the right to purchase shares of its capital stock. 102,807 of such shares are pledged to Bank One Wisconsin securing debt of David A. Straz, Jr. 4. (a) The authorized capital stock of First Bank Southeast, N.A. consists of 240,000 shares of common stock, $20.00 par value, all of which are validly issued and outstanding, fully paid and nonassessable. First Southeast is the registered holder of 239,700 of such shares of the outstanding capital stock of such Bank. To our knowledge, neither First Southeast nor the Bank has any arrangements or commitments other than the Stock Purchase Agreements relating to directors' qualifying shares obligating it to issue or sell or otherwise dispose of, or to purchase or redeem shares of the Bank's capital stock or any securities convertible into or having the right to purchase shares of the Bank's capital stock. First Bank Southeast, N.A. has no subsidiaries, except FSC. (b) The authorized capital stock of First Bank Southeast of Lake Geneva, N.A. consists of 500,000 shares of common stock, $10.00 par value, of which 83,000 are validly issued and outstanding, fully paid and nonassessable. First Southeast is the registered holder of 80,878 shares of the outstanding capital stock of such Bank. To our knowledge, neither First Southeast nor the Bank has any arrangements or commitments other than the (i) Stock Purchase Agreements relating to directors' qualifying shares and (ii) the pledge pursuant to the Term Loan Agreement dated June 1, 1992, between First Southeast and LaSalle National Bank obligating it to issue or sell or otherwise dispose of, or to purchase or redeem shares of the Bank's capital stock or any securities convertible into or having the right to purchase shares of the Bank's capital stock. First Bank Southeast of Lake Geneva, N.A. has no subsidiaries, except FIC. 5. The execution, delivery and performance of the Reorganization Agreement, the Plan of Merger by First Southeast have been duly authorized and approved by all requisite action of the Board of Directors and shareholders of First Southeast and each has been duly executed and delivered by First Southeast and in the case of the Indemnity Agreement, by David A. Straz, Jr., and constitutes a valid and binding obligation of First Southeast and in the case of the Indemnity Agreement, by David A. Straz, Jr., enforceable in accordance with their terms. 6. Except as disclosed in the First Southeast Letter, as updated through the date hereof, neither the execution and delivery of the Reorganization Agreement, the Plan of Merger, and the Indemnity Agreement, nor the consummation of the Merger, to our knowledge, will conflict with, result in the breach of, constitute a default under, or accelerate the performance provided by the terms of any mortgage, lease, contract, commitment or agreement to which First Southeast or either Bank is a party and of which we are aware, or any law, rule or regulation of any governmental agency or authority or the Articles of Incorporation or Association or Bylaws of First Southeast or either Bank, or, to our knowledge, any judgment, order or decree of any court or other governmental agency to which First Southeast or either Bank may be subject and of which we are aware, or constitute an event that, with the lapse of time or action by a third party, could result in a default under any of the foregoing or result in the creation of any lien, charge or encumbrance upon any of the assets, properties or stock of First Southeast or either Bank. 7. Except as set forth in the First Southeast Letter, as updated through the date hereof, we have not been made aware of (i) any claims having been asserted or relief having been sought against or affecting First Southeast or either Bank in any pending litigation or governmental proceedings; (ii) there being any proceedings, claims, actions or governmental investigations threatened against First Southeast or either Bank; (iii) First Southeast or either Bank being a party to any order, judgment or decree, other than any order, judgment or decree to which either Bank may be subject or a party in the ordinary course of its business; (iv) First Southeast or either Bank being the subject of any cease and desist order, or other formal enforcement action, or any memorandum of understanding with any bank regulatory authority; and (v) First Southeast or either Bank making any commitment to or entering into any agreement with any bank regulatory authority that restricts or adversely affects its or their operations or financial condition. 8. Without having conducted any investigation, we have not been made aware that (i) First Southeast or either Bank is not in compliance in all material respects with all laws, regulations and orders (including zoning ordinances) applicable to it and to the conduct of its banking activities; and (ii) First Southeast or either Bank is in default under, or an event has occurred that with the lapse of time or action by a third party could result in the default under the terms of any judgment, decree, order, writ or rule or regulation of any governmental authority or court, whether federal, state or local and whether at law or in equity. 9. To our knowledge and except as disclosed in the First Southeast Letter, there is no suit, action or proceeding pending or overtly threatened before any court or other governmental agency by the federal or state government in which it is or will be sought to restrain or prohibit the consummation of the Merger. On the basis of information developed and made available to us by First Southeast in the course of the preparation of the portions of the Proxy Statement-Prospectus and the Registration Statement that relate to First Southeast or the Banks and without having conducted any investigation, nothing has come to our attention to lead us to believe that (i) the portions of the Proxy Statement-Prospectus and Registration Statement relating to First Southeast or the Banks (other than financial statements and other financial data included therein, which we did not participate in the preparation of and therefore express no view concerning) contained, on the effective date of the Registration Statement (the "Registration Effective Date") and at this date, any untrue statement of a material fact or omitted any material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, and (ii) any event has occurred as a result of which the Proxy Statement-Prospectus and Registration Statement should be supplemented or amended at any time subsequent to the Registration Effective Date in order to correct any statement regarding First Southeast or the Banks made therein or to make any additional statements regarding First Southeast or the Banks. We express no view concerning the manner in which such information given to you and your counsel by First Southeast, the Banks, and us was presented or described in the Proxy Statement-Prospectus and Registration Statement. Moreover, the limitations inherent in the process of independently verifying factual matters are such that we assume no responsibility for the accuracy, completeness or fairness of the factual statements contained in the Registration Statement or the Proxy Statement-Prospectus. The opinions expressed in this letter are also subject to the following additional qualifications: (a) We have assumed without independent investigation (i) the authenticity of all documents submitted to us as originals, (ii) the genuineness of all signatures and proper delivery of all documents, and (iii) the conformity to the originals of all documents submitted to us as copies. (b) Our opinions expressed herein that the Reorganization Agreement, the Plan of Merger and the Indemnity Agreement constitute the valid and binding obligations of First Southeast and, in the case of the Indemnity Agreement, David A. Straz, Jr., are legally enforceable against them in accordance with their terms, are expressly subject to: i) limitations on the availability of specific enforcement and other equitable remedies based upon the application of equitable principles; and ii) bankruptcy, involvency, reorganization, arrangement, moratorium, fraudulent conveyance and other similar state and federal laws affecting the enforcement of creditors' rights generally. (c) We have assumed that you have obtained any and all required federal and state banking approvals for the transactions described herein and that any necessary waiting periods have elapsed. (d) Our review of the corporate records of First Southeast and the Banks has been limited to the Articles of Incorporation in the case of First Southeast, the Articles of Association, in the case of the Banks, the Bylaws, stock register books, and minutes of the Boards of Directors and shareholders of such organizations for the last ten years. (e) We have assumed that you have performed (and will perform) all of your obligations under, and are in full compliance with, the Reorganization Agreement, the Plan of Merger, and the Indemnity Agreement. The opinions contained in this letter are limited to the laws of the United States and of the State of Wisconsin. We express no opinion as to the applicability or effect of the laws of any other state or country. This letter is being delivered to you solely for your benefit pursuant to Section 7.9 of the Reorganization Agreement and may not be relied upon by any other person or for any other purpose. This letter is not to be used, circulated, quoted or otherwise referred to any any other person or for any other purpose without our prior express written permission. Very truly yours, QUARLES & BRADY [HHH Letterhead] EXHIBIT 8.5 [Closing Date] First Southeast Banking Corp. Attn: David A. Straz, Jr., President P.O. Box 490 Lake Geneva, WI 53147 Gentlemen: As Senior Vice President and General Counsel of Firstar Corporation ("Firstar"), I am familiar with the Agreement and Plan of Reorganization (the "Reorganization Agreement") dated as of February 10, 1994, by and among Firstar, First Southeast Banking Corp., a Wisconsin corporation ("First Southeast"), and Firstar Corporation of Wisconsin, a Wisconsin corporation ("FCW"), and the Plan of Merger dated of even date therewith by and between First Southeast and FCW and joined in by Firstar for certain limited purposes (the "Plan of Merger"). Section 8.5 of the Reorganization Agreement requires as a condition to your obligation to consummate the transactions contemplated by the Reorganization Agreement and the Plan of Merger that you receive an opinion as of this date as to certain matters. Any capitalized term used, but not defined herein, shall have the meaning ascribed to it in the Reorganization Agreement or the Plan of Merger. As counsel for Firstar, I have examined or caused to be examined such corporate records, certificates and other documents and have examined such matters of law as I considered necessary or appropriate for purposes of this opinion. Based upon the foregoing, it is my opinion that: 1. Firstar and FCW are corporations duly organized, validly existing and in active status under the laws of Wisconsin with full power and authority to engage in the activities and business now conducted by them. Firstar and FCW are registered with the Federal Reserve Board as bank holding companies under the Bank Holding Company Act of 1956, as amended. 2. The authorized capital stock of Firstar consists of (i) 120,000,000 shares of Common Stock, $1.25 par value, _______ shares of which were validly issued and outstanding as of _______________, 1994, and (ii) 2,500,000 shares of Preferred Stock, $1.00 par value, of which 600,000 shares of Series C were reserved for issuance in connection with Firstar's Shareholder Rights Plan approved January 19, 1989, as of __________, 1994. All of the issued and outstanding shares of capital stock of both Firstar and FCW are fully paid and non-assessable, except as provided in 180.0622(2)(b) of the Wisconsin Business Corporation Law and judicial interpretations thereof, and not issued in violation of the preemptive rights of any shareholder. 3. The execution, delivery and performance of the Reorganization Agreement, the Plan of Merger, and the Indemnity Agreement have been duly authorized and approved by all requisite action of the boards of directors and shareholders of Firstar and FCW, and the Reorganization Agreement, the Plan of Merger, and the Indemnity Agreement have been duly executed and delivered by Firstar and FCW and each constitutes a valid and binding obligation of Firstar and FCW, enforceable in accordance with their terms, subject to (a) all applicable bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) the application of equitable principles if equitable remedies are sought. 4. The Registration Statement referred to in Section 1.3 of the Reorganization Agreement is effective under the Securities Act of 1933, as amended, and no stop order suspending the effectiveness of the Registration Statement has been instituted. 5. The Proxy Statement/Prospectus referred to in Section 1.3 of the Reorganization Agreement, as of the date it was disseminated to holders of common stock of First Southeast, and the Registration Statement, as of the date on which the Registration Statement became effective (the Registration Effective Date"), and any amendment thereto that subsequently become effective, complied in all material respects with the requirements of the Securities Act of 1933, as amended; provided, however, that in this connection (a) I have relied upon First Southeast and the Bank and their counsel as to the accuracy of the descriptions included in the Proxy Statement/Prospectus and the Registration Statement relating to First Southeast and the Bank and their business operations; and (b) I did not participate in the preparation of financial statements and financial data for First Southeast and the Bank included in the Proxy Statement/Prospectus and the Registration Statement, and I therefore express no opinion as to such matters. 6. On the basis of information developed and made available to me in the course of the preparation of the Proxy Statement/Prospectus and the Registration Statement, but without independently verifying the accuracy, completeness or fairness of the statements contained therein, nothing has come to my attention that leads me to believe that (a) the portions of the Proxy Statement/Prospectus and Registration Statement relating to Firstar and FCW and their affiliates (other than financial statements and other financial data included therein as to which I express no opinion) contained, on the Registration Effective Date and at this date, any untrue statement of a material fact or omitted any material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading, and (b) any event has occurred as a result of which the Proxy Statement/Prospectus and Registration Statement should be supplemented or amended to correct any statement regarding Firstar and FCW or their affiliates made therein or to supplement or amend the statements to include additional statements. 7. Neither the execution and delivery of the Reorganization Agreement and the Plan of Merger nor the consummation of the Merger will conflict with, result in the breach of, constitute a default under or accelerate the performance provided by the terms of any law, or any rule or regulation of any governmental agency or authority, or any judgment, order or decree of any court or other governmental agency to which Firstar may be subject, or any contract, agreement or instrument to which Firstar is a party or by which Firstar is bound or committed, or the Articles of Incorporation or Bylaws of Firstar, or constitute an event that, with the lapse of time or action by a third party, could result in a default under any of the foregoing or result in the creation of any lien, charge or encumbrance upon any of the assets, properties or stock of Firstar. 8. The shares of common stock of Firstar to be issued pursuant to the Reorganization Agreement and the Plan of Merger will be validly issued, fully paid and non-assessable, except insofar as liability may be imposed under 180.0622(2)(b) of the Wisconsin Business Corporation Law and judicial interpretations thereof, and listed on the New York Stock Exchange. 9. The Merger, when consummated in accordance with the Reorganization Agreement and the Plan of Merger, will be valid and effective in accordance with law. 10. To my knowledge after due investigation, there is no suit, action or proceeding pending or overtly threatened before any court or other governmental agency by the federal or state government in which it is or will be sought to restrain or prohibit the consummation of the Merger. Very truly yours, Howard H. Hopwood III Senior Vice President and General Counsel EX-2 3 EXHIBIT 2(B) EXHIBIT 2(b) PLAN OF MERGER This Plan of Merger dated as of February 10, 1994, is entered into by and between Firstar Corporation of Wisconsin, a Wisconsin corporation ("FCW"), and First Southeast Banking Corp., a Wisconsin corporation ("First Southeast"), and joined in by Firstar Corporation, a Wisconsin corporation ("Firstar"), for certain limited purposes. First Southeast is a corporation duly organized and existing under the laws of Wisconsin with authorized common stock of 200,000 shares, $1.00 par value, of which 106,486 shares are validly issued and outstanding. FCW is a corporation duly organized and existing under the laws of Wisconsin with authorized capital stock of 56,000 shares of Common Stock, $1.00 par value ("FCW Common Stock"), of which 10 shares are validly issued and outstanding, and are owned by Firstar. Firstar is a corporation duly organized and existing under the laws of Wisconsin with 120,000,000 shares of authorized Common Stock, $1.25 par value ("Firstar Common Stock"), of which 64,381,919 shares were validly issued and outstanding as of January 31, 1994. Contemporaneous with the execution and delivery of this Plan of Merger, Firstar, FCW and First Southeast, have entered into an Agreement and Plan of Reorganization (the "Reorganization Agreement" and, together with this Plan of Merger, the "Agreements") that contemplates the merger of First Southeast with and into FCW (the "Merger"), on the "Closing Date", as hereinafter defined, upon the terms and conditions provided in this Plan of Merger. The Boards of Directors of First Southeast and FCW deem it fair and equitable to, and in the best interests of, their respective shareholders, that First Southeast be merged with and into FCW with FCW being the Surviving Corporation (as hereinafter defined), on the terms and conditions herein set forth and pursuant to the Wisconsin Business Corporation Law. Each such Board of Directors has approved this Plan of Merger, has authorized its execution and delivery and has directed that this Plan of Merger and the Merger be submitted to its respective shareholders for approval. The Board of Directors of Firstar has authorized the execution and delivery of this Plan of Merger and the issuance of the Firstar Common Stock and payment of the cash provided herein. NOW, THEREFORE, in consideration of the premises and the mutual agreements, provisions and covenants herein contained, the parties hereto adopt and agree to the following agreements, terms and conditions relating to the Merger and the mode of carrying the same into effect. 1. Merger. First Southeast will be merged with and into FCW, which will be the surviving corporation (hereinafter called the "Surviving Corporation" whenever reference is made to it as of the Closing Date or thereafter). Such Merger will be pursuant to the provisions of and with the effect provided in the Wisconsin Business Corporation Law. The date when the Merger will be consummated is hereinafter referred to as the "Closing Date" as defined in Section 15 below. 2. Name. The name of the Surviving Corporation will be the name of FCW in effect at the Closing Date. 3. Board of Directors; Officers. The Board of Directors of the Surviving Corporation at the Closing Date will consist of all the persons who are directors of FCW immediately prior to the Closing Date. Such directors will serve as directors of the Surviving Corporation until the next annual meeting of the Surviving Corporation or until such time as their successors have been elected and have qualified. The officers of FCW immediately prior to the Closing Date will be the officers of the Surviving Corporation until their successors are elected or appointed in accordance with the Bylaws of the Surviving Corporation. 4. Articles of Incorporation. The Articles of Incorporation of FCW as in effect immediately prior to the Closing Date will, from and after the Closing Date, be and continue to be the Articles of Incorporation of the Surviving Corporation until further amended as provided by law. 5. Bylaws. The Bylaws of FCW as in effect immediately prior to the Closing Date will, from and after the Closing Date, be and continue to be the Bylaws of the Surviving Corporation until the same are altered, amended or rescinded as therein provided or as provided in the Articles of Incorporation of the Surviving Corporation. 6. Effect of the Merger. At the Closing Date, First Southeast will merge into FCW which will be the Surviving Corporation, and the separate existence of First Southeast shall cease as provided in 180.1106 of the Wisconsin Business Corporation Law. The title to all property owned by each corporation shall be vested in the Surviving Corporation without reversion or impairment and all liabilities of each corporation shall become those of the Surviving Corporation. Any civil, criminal, administrative or investigatory proceeding pending against either corporation may be continued as if the merger did not occur or the Surviving Corporation may be substituted in the proceeding. 7. Conversion of Common Stock of FCW. At the Closing Date, the shares of FCW Common Stock validly issued and outstanding immediately prior to the Closing Date will, by virtue of the Merger and without any action by the holder thereof, be converted into 10 shares of Common Stock, $1.00 par value, of the Surviving Corporation so that all shares of Common Stock of the Surviving Corporation will be owned by Firstar. The outstanding certificates representing shares of Common Stock of FCW will, after the Closing Date, be deemed to represent the number of shares of the Surviving Corporation into which they have been converted and may be exchanged for new certificates of the Surviving Corporation upon the request of the holder thereof. 8. Conversion of Common Stock of First Southeast. On the Closing Date, each share of First Southeast Common Stock validly issued and outstanding immediately prior to the Closing Date (and not held by a shareholder who objected under 180.1301 et seq. of the Wisconsin Business Corporation Law with respect to such share) will, by virtue of the Merger and without any action by the holder thereof, be converted into the right to receive at the times described below, the number of shares of Firstar Common Stock that is equal to the quotient produced by dividing the Dollar Purchase Price Per Share (as hereinafter defined) by $33.00. For the purposes of this Section 8, the "Dollar Purchase Price Per Share" means (a) $59,452,055, divided by (b) 106,486. On and after the Closing Date, the holder of each such share of First Southeast Common Stock will be treated as the record holder of such number of shares of Firstar Common Stock, subject, however, to the provisions of this Section 8 as to fractional interests in one share of Firstar Common Stock and to the provisions of Section 9 as to delivery of certificates for, and dividends payable upon, such shares of Firstar Common Stock. Notwithstanding the foregoing, no stockholder of First Southeast will become the holder of any fractional share of Firstar Common Stock, and neither certificates nor scrip for fractional shares of Firstar Common Stock will be issued for any fractional interests otherwise payable upon the Merger. In lieu thereof, each holder of shares of First Southeast Common Stock who otherwise would have been entitled to a fractional share of Firstar Common Stock will be paid the value of such fraction in cash. In the case of any holder of First Southeast Common Stock who did not vote for the Merger and who gives notice of objection with respect to any or all of his shares of First Southeast Common Stock as provided in 180.1301 et seq. of the Wisconsin Business Corporation Law, each such share of First Southeast Common Stock will be converted into the right to receive the fair value of the share as provided in such statute. At the Closing Date, the holders of First Southeast Common Stock will cease to have any rights with respect to such stock other than the rights to receive Firstar Common Stock as provided herein, cash in lieu of fractional shares or the fair value of the stock as provided herein or as provided by law. 9. Surrender of First Southeast Common Stock Certificates Upon Merger. As soon as reasonably practicable after satisfaction of the conditions in Article IX of the Reorganization Agreement, Firstar or its exchange agent will mail or deliver to each First Southeast shareholder a letter of transmittal with instructions for effecting the surrender of his or her shares of First Southeast Common Stock in exchange for shares of Firstar Common Stock. Upon receipt of letters of transmittal from Firstar or its exchange agent, each holder of a certificate or certificates that represents shares of First Southeast Common Stock (other than holders exercising their rights to dissent in accordance with 180.1301 et seq. of the Wisconsin Business Corporation Law) will surrender the same to Firstar conditional upon the Closing together with instructions for the issuance of shares of Firstar Common Stock and any payment by Firstar, in lieu of a fractional interest, to which the holder will be entitled at Closing pursuant to this Plan of Merger. At the Closing, provided that Firstar has previously received such certificates and such instructions in form satisfactory to Firstar, Firstar will deliver, in accordance with such instructions and this Plan of Merger, a check for any cash payment in lieu of fractional shares to which the holder is entitled and a certificate or certificates for any shares of Firstar Common Stock to which the holder is entitled. Until receipt of such certificates and instructions from a holder of First Southeast Common Stock, Firstar will withhold (i) delivery of any such cash payment and (ii) delivery of any cash dividends distributed upon shares of Firstar Common Stock into which such holder's shares were converted. No interest will be paid or accrued on any cash payable upon the surrender of such certificates and Firstar will assume no responsibility for any delay not within Firstar's control in connection with the payment of any part of such funds. After the Closing Date and until surrendered for exchange, each outstanding certificate which, prior to the Closing Date represented shares of First Southeast Common Stock, shall be deemed for all purposes to evidence ownership of and to represent the number of whole shares of Firstar Common Stock into which such shares of First Southeast Common Stock shall have been converted, and the record holder of such shares shall, after the Closing Date, be entitled to vote the shares of Firstar Common Stock in to which such shares of First Southeast Common Stock shall have been converted on any matters in which the holders of record of Firstar Common Stock, as of any date subsequent to the Closing Date, shall be entitled to vote. 10. Shareholder Approval. This Plan of Merger will be submitted to the respective shareholders of First Southeast and FCW for ratification and confirmation by consent or at meetings to be called and held in accordance with the applicable provisions of law and the respective Articles of Incorporation and Bylaws of First Southeast and FCW. First Southeast and FCW will proceed expeditiously and cooperate fully in the procurement of any other consents and approvals and in the taking of any other action, and the satisfaction of all other requirements prescribed by law or otherwise, necessary for consummation of the Merger, and the other transactions contemplated hereby and by the Reorganization Agreement on the terms herein and therein provided. 11. Consummation of the Merger. Consummation of the Merger is conditional upon the fulfillment or waiver of the conditions precedent set forth in Articles VI, VII and VIII of the Reorganization Agreement. 12. Termination. This Plan of Merger may be terminated and the Merger abandoned by mutual consent of the respective Boards of Directors of First Southeast and FCW at any time prior to the Closing Date. If the Reorganization Agreement is terminated in accordance with Article IX thereof, then this Plan of Merger will terminate simultaneously and the Merger will be abandoned without further action by First Southeast or FCW. 13. Waivers; Amendments. Either First Southeast or FCW may, at any time prior to the Closing Date, by action taken by its Board of Directors or officers thereunto authorized, waive the performance of any of the obligations of the other or waive compliance by the other with any of the covenants or conditions contained in this Plan of Merger or agree to the amendment or modification of this Plan of Merger by an agreement in writing executed in the same manner as this Plan of Merger; provided, however, that after a favorable vote by or consent of the shareholders of First Southeast any such action will be taken by First Southeast only if, in the opinion of its Board of Directors, such waiver, amendment or modification will not have any material adverse effect on the benefits intended under this Plan of Merger for the shareholders of First Southeast. 14. Closing Date. The Merger will become effective on the day (the "Closing Date") on which and at the time at which the Articles of Merger are filed by First Southeast and FCW with the Wisconsin Secretary of State, as provided in 180.1105 of the Wisconsin Business Corporation Law. 15. Captions; Counterparts. The captions in this Plan of Merger are for convenience only and will not be considered a part of or affect the construction or interpretation of any provision of this Plan of Merger. This Plan of Merger may be executed in several counterparts, each of which will constitute one and the same instrument. 16. Governing Law. This Plan of Merger is to be construed and interpreted in accordance with the laws of the State of Wisconsin. 17. Notices. All notices given hereunder shall be in writing (including a telecopy) and shall be mailed by first-class mail, postage prepaid, or sent by facsimile transmission or by nationally recognized overnight delivery service, addressed as follows: (a) If to Firstar or FCW, to: Firstar Corporation Attention: Jon H. Stowe, Executive Vice President 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Telecopy No. (414) 765-4349 with a copy to: Firstar Corporation Law Department Attn: Howard H. Hopwood, III Senior Vice President and General Counsel 777 East Wisconsin Avenue Milwaukee, Wisconsin 53202 Telecopy No. (414) 765-6111 (b) If to First Southeast, to: First Southeast Banking Corp. Attn: David A. Straz, Jr., President P.O. Box 490 Lake Geneva, WI 53147 Telecopy No. (414) 248-7024 with a copy to: Quarles & Brady Attn: Robert J. Kalupa, Esq. 411 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 271-3552 IN WITNESS WHEREOF, the parties hereto have caused this Plan of Merger to be duly executed as of the date first above written. FIRSTAR CORPORATION [SEAL] By: Jon H. Stowe Title:Executive Vice President Attest: John A. Kielich Title: First Vice President FIRSTAR CORPORATION OF WISCONSIN [NO SEAL] By: John A. Kielich Title: Vice President Attest: Joan M. Fagan Title: Assistant Secretary FIRST SOUTHEAST BANKING CORP. [SEAL] By: David A. Straz, Jr. Title: President Attest: David A. Straz Title: Secretary EX-2 4 EXHIBIT 2(C) VOTING AND STOCK PURCHASE AGREEMENT EXHIBIT 2(c) VOTING AND STOCK PURCHASE AGREEMENT THIS VOTING AND STOCK PURCHASE AGREEMENT dated as of February 10, 1994 (this "Agreement"), is entered into by and between Firstar Corporation ("Firstar"), a Wisconsin corporation, and David A. Straz, Jr. ("Shareholder"), and joined in by First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, for certain limited purposes. W I T N E S S E T H : WHEREAS, as of the date hereof, Shareholder is the owner of 102,807 shares of the common stock of First Southeast, $1.00 par value ("First Southeast Common Stock"), which represents approximately 96.55% of the issued and outstanding shares of the capital stock of First Southeast; WHEREAS, Firstar is contemplating the acquisition of First Southeast by means of a merger (the "Merger") of First Southeast with and into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a wholly-owned subsidiary of Firstar, pursuant to an Agreement and Plan of Reorganization and Plan of Merger, each dated of even date herewith (the "Merger Agreements"); WHEREAS, Firstar is unwilling to expend the substantial time, effort and expense necessary to implement the proposed acquisition of First Southeast, including applying for and obtaining necessary approvals of federal banking authorities, unless Shareholder enters into this Agreement with Firstar; and WHEREAS, Shareholder believes it is in his best interest as well as the best interest of First Southeast for Firstar to consummate the Merger; NOW, THEREFORE, in consideration of the covenants and agreements of the parties herein contained and as an inducement to Firstar to incur the expenses associated with the Merger, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Representations and Warranties. Shareholder represents and warrants that as of the date hereof Shareholder owns beneficially and of record 102,807 shares of First Southeast Common Stock (the "Subject Shares"), all of which shares are free and clear of all liens, pledges, security interests, claims, encumbrances, options and agreements to sell, except as disclosed in the First Southeast Letter, as defined in the Merger Agreements. Shareholder represents and warrants that Shareholder has the sole voting power with respect to the Subject Shares. 2. Voting Agreement. Shareholder shall vote all the Subject Shares in favor of the Merger at any meeting of shareholders of First Southeast called for the purpose of approving the Merger and shall, if his consent is solicited by First Southeast, consent to the Merger. Shareholder shall not vote in favor of or consent to any acquisition of stock or all or substantially all of the assets of First Southeast by any party other than Firstar or its affiliates prior to the termination of this Agreement. None of the Subject Shares shall be transferred while this Agreement is in effect, except to a Nevada partnership organized pursuant to documents substantially to the effect of the partnership agreement previously reviewed by KPMG Peat Marwick (the "Nevada Partnership") and provided that the Nevada Partnership has, prior to such transfer, executed a Voting and Stock Purchase Agreement satisfactory in form and content to Firstar. At Firstar's request and provided that Firstar is then in compliance with the Merger Agreements, Shareholder shall use his best efforts to cause any necessary meeting of shareholders of First Southeast to be duly called and held or any necessary consents of shareholders to be obtained for the purpose of approving the Merger. 3. Purchase Right. Shareholder hereby grants to Firstar the exclusive right (the "Purchase Right") to purchase any or all of the Subject Shares for a price of $558.31 per share, payable in cash. The exercise of the Purchase Right by Firstar with respect to any amount of shares that exceeds five percent (5%) of the outstanding voting stock of First Southeast is subject to the approval of the Board of Governors of the Federal Reserve System and any other necessary regulatory approvals. The Purchase Right is exercisable at any time prior to the earlier of the Closing, as defined in the Merger Agreements, or the termination of the Merger Agreements, and after (a) a material breach by First Southeast of the Merger Agreements, (b) a breach by the Shareholder of this Agreement; (c) the acquisition or overtly threatened acquisition by any person not related to the current shareholders of First Southeast of more than five percent (5%) of the stock of First Southeast or its subsidiaries, First Bank Southeast, N.A. and First Bank Southeast of Lake Geneva, N.A. (the "Banks"), or of a material portion of the assets of First Southeast or the Banks; or (d) any similar events or circumstances that lead Firstar reasonably to believe that First Southeast is likely to materially breach the Merger Agreements. 4. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Firstar any direct or indirect ownership or incidence of ownership of or with respect to any shares of First Southeast Common Stock. All rights, ownership and economic benefits of and relating to the shares of First Southeast Common Stock shall remain and belong to Shareholder and Firstar shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of First Southeast or exercise any power or authority to direct Shareholder in the voting of any of the shares of First Southeast Common Stock, or the performance of his duties or responsibilities as a shareholder of First Southeast, except as otherwise expressly provided herein. 5. Evaluation of Investment. Shareholder, by reason of his knowledge and experience in financial and business matters [and through serving as an officer of a financial institution], believes himself capable of evaluating the merits and risks of the investment in common stock of Firstar, $1.25 par value ("Firstar Common Stock"), contemplated by the Merger Agreements. 6. Documents Delivered. Shareholder acknowledges receipt of copies of the following documents: a. Merger Agreements and all exhibits thereto; b. Firstar's 1992 Annual Report (including Annual Report on Form 10-K for the year ended December 31, 1992); c. Notice of 1993 Annual Meeting of Shareholders and Proxy Statement dated April 22, 1993 of Firstar; d. Firstar's Reports on Form 10-Q for the periods ended March 31, June 30, and September 30, 1993. 7. Investment Purpose. Shareholder hereby represents, warrants and agrees that he is acquiring the shares of Firstar Common Stock pursuant to the Reorganization Agreement solely for his own account, for investment, and not with a view to the distribution or resale thereof. 8. Amendment and Modification. This Agreement may be amended, modified or supplemented at any time by the written approval of such amendment, modification or supplement by First Southeast, Shareholder and Firstar. 9. Entire Agreement. This Agreement evidences the entire agreement among the parties hereto with respect to the matters provided for herein and there are no agreements, representations or warranties with respect to the matters provided for herein other than those set forth herein and in the Merger Agreements and their related written agreements. This Agreement supersedes any agreements among First Southeast and its shareholders, concerning the acquisition, disposition or control of the stock of First Southeast. 10. Severability. The parties agree that if any provision of this Agreement shall under any circumstances be deemed invalid or inoperative, this Agreement shall be construed with the invalid or inoperative provisions deleted and the rights and obligations of the parties shall be construed and enforced accordingly. 11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 12. Governing Law. The validity, construction, enforcement and effect of this Agreement shall be governed by the internal laws of the State of Wisconsin. 13. Headings. The headings for the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect the meaning or interpretation of this Agreement. 14. Successors. This Agreement shall be binding upon and inure to the benefit of First Southeast and Firstar, and their successors, and Shareholder and Shareholder's spouse and their respective executors, personal representatives, administrators, heirs, legatees, guardians and other legal representatives. This Agreement shall survive the death or incapacity of Shareholder. This Agreement may be assigned by Firstar only to an affiliate of Firstar. 15. Termination. This Agreement shall terminate at the earlier of: (i) October 31, 1994; (ii) the termination of the Merger Agreements; or (iii) consummation of the transactions contemplated by the Merger Agreements. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. FIRST SOUTHEAST BANKING CORP. [SEAL] By: David A. Straz, Jr. Title: President FIRSTAR CORPORATION [SEAL] By: Jon H. Stowe Title: Executive Vice President SHAREHOLDER David A. Straz, Jr. [Name] EX-2 5 EXHIBIT 2(D) EXHIBIT 2(d) VOTING AND STOCK PURCHASE AGREEMENT THIS VOTING AND STOCK PURCHASE AGREEMENT dated as of February 10, 1994 (this "Agreement"), is entered into by and between Firstar Corporation ("Firstar"), a Wisconsin corporation, and David A. Straz ("Shareholder"), and joined in by First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, for certain limited purposes. W I T N E S S E T H : WHEREAS, as of the date hereof, Shareholder is the owner of 3079 shares of the common stock of First Southeast, $1.00 par value ("First Southeast Common Stock"), which represents approximately 2.89% of the issued and outstanding shares of the capital stock of First Southeast; WHEREAS, Firstar is contemplating the acquisition of First Southeast by means of a merger (the "Merger") of First Southeast with and into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a wholly-owned subsidiary of Firstar, pursuant to an Agreement and Plan of Reorganization and Plan of Merger, each dated of even date herewith (the "Merger Agreements"); WHEREAS, Firstar is unwilling to expend the substantial time, effort and expense necessary to implement the proposed acquisition of First Southeast, including applying for and obtaining necessary approvals of federal banking authorities, unless Shareholder enters into this Agreement with Firstar; and WHEREAS, Shareholder believes it is in his best interest as well as the best interest of First Southeast for Firstar to consummate the Merger; NOW, THEREFORE, in consideration of the covenants and agreements of the parties herein contained and as an inducement to Firstar to incur the expenses associated with the Merger, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Representations and Warranties. Shareholder represents and warrants that as of the date hereof Shareholder owns beneficially and of record 3079 shares of First Southeast Common Stock (the "Subject Shares"), all of which shares are free and clear of all liens, pledges, security interests, claims, encumbrances, options and agreements to sell, except as disclosed in the First Southeast Letter, as defined in the Merger Agreements. Shareholder represents and warrants that Shareholder has the sole voting power with respect to the Subject Shares. 2. Voting Agreement. Shareholder shall vote all the Subject Shares in favor of the Merger at any meeting of shareholders of First Southeast called for the purpose of approving the Merger and shall, if his consent is solicited by First Southeast, consent to the Merger. Shareholder shall not vote in favor of or consent to any acquisition of stock or all or substantially all of the assets of First Southeast by any party other than Firstar or its affiliates prior to the termination of this Agreement. None of the Subject Shares shall be transferred while this Agreement is in effect, except to a Nevada partnership organized pursuant to documents substantially to the effect of the partnership agreement previously reviewed by KPMG Peat Marwick (the "Nevada Partnership") and provided that the Nevada Partnership has, prior to such transfer, executed a Voting and Stock Purchase Agreement satisfactory in form and content to Firstar. At Firstar's request and provided that Firstar is then in compliance with the Merger Agreements, Shareholder shall use his best efforts to cause any necessary meeting of shareholders of First Southeast to be duly called and held or any necessary consents of shareholders to be obtained for the purpose of approving the Merger. 3. Purchase Right. Shareholder hereby grants to Firstar the exclusive right (the "Purchase Right") to purchase any or all of the Subject Shares for a price of $558.31 per share, payable in cash. The exercise of the Purchase Right by Firstar with respect to any amount of shares that exceeds five percent (5%) of the outstanding voting stock of First Southeast is subject to the approval of the Board of Governors of the Federal Reserve System and any other necessary regulatory approvals. The Purchase Right is exercisable at any time prior to the earlier of the Closing, as defined in the Merger Agreements, or the termination of the Merger Agreements, and after (a) a material breach by First Southeast of the Merger Agreements, (b) a breach by the Shareholder of this Agreement; (c) the acquisition or overtly threatened acquisition by any person not related to the current shareholders of First Southeast of more than five percent (5%) of the stock of First Southeast or its subsidiaries, First Bank Southeast, N.A. and First Bank Southeast of Lake Geneva, N.A. (the "Banks"), or of a material portion of the assets of First Southeast or the Banks; or (d) any similar events or circumstances that lead Firstar reasonably to believe that First Southeast is likely to materially breach the Merger Agreements. 4. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Firstar any direct or indirect ownership or incidence of ownership of or with respect to any shares of First Southeast Common Stock. All rights, ownership and economic benefits of and relating to the shares of First Southeast Common Stock shall remain and belong to Shareholder and Firstar shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of First Southeast or exercise any power or authority to direct Shareholder in the voting of any of the shares of First Southeast Common Stock, or the performance of his duties or responsibilities as a shareholder of First Southeast, except as otherwise expressly provided herein. 5. Evaluation of Investment. Shareholder, by reason of his knowledge and experience in financial and business matters [and through serving as an officer of a financial institution], believes himself capable of evaluating the merits and risks of the investment in common stock of Firstar, $1.25 par value ("Firstar Common Stock"), contemplated by the Merger Agreements. 6. Documents Delivered. Shareholder acknowledges receipt of copies of the following documents: a. Merger Agreements and all exhibits thereto; b. Firstar's 1992 Annual Report (including Annual Report on Form 10-K for the year ended December 31, 1992); c. Notice of 1993 Annual Meeting of Shareholders and Proxy Statement dated April 22, 1993 of Firstar; d. Firstar's Reports on Form 10-Q for the periods ended March 31, June 30, and September 30, 1993. 7. Investment Purpose. Shareholder hereby represents, warrants and agrees that he is acquiring the shares of Firstar Common Stock pursuant to the Reorganization Agreement solely for his own account, for investment, and not with a view to the distribution or resale thereof. 8. Amendment and Modification. This Agreement may be amended, modified or supplemented at any time by the written approval of such amendment, modification or supplement by First Southeast, Shareholder and Firstar. 9. Entire Agreement. This Agreement evidences the entire agreement among the parties hereto with respect to the matters provided for herein and there are no agreements, representations or warranties with respect to the matters provided for herein other than those set forth herein and in the Merger Agreements and their related written agreements. This Agreement supersedes any agreements among First Southeast and its shareholders, concerning the acquisition, disposition or control of the stock of First Southeast. 10. Severability. The parties agree that if any provision of this Agreement shall under any circumstances be deemed invalid or inoperative, this Agreement shall be construed with the invalid or inoperative provisions deleted and the rights and obligations of the parties shall be construed and enforced accordingly. 11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 12. Governing Law. The validity, construction, enforcement and effect of this Agreement shall be governed by the internal laws of the State of Wisconsin. 13. Headings. The headings for the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect the meaning or interpretation of this Agreement. 14. Successors. This Agreement shall be binding upon and inure to the benefit of First Southeast and Firstar, and their successors, and Shareholder and Shareholder's spouse and their respective executors, personal representatives, administrators, heirs, legatees, guardians and other legal representatives. This Agreement shall survive the death or incapacity of Shareholder. This Agreement may be assigned by Firstar only to an affiliate of Firstar. 15. Termination. This Agreement shall terminate at the earlier of: (i) October 31, 1994; (ii) the termination of the Merger Agreements; or (iii) consummation of the transactions contemplated by the Merger Agreements. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. FIRST SOUTHEAST BANKING CORP. [SEAL] By: David A. Straz, Jr. Title: President FIRSTAR CORPORATION [SEAL] By: Jon H. Stowe Title: Executive Vice President SHAREHOLDER David A. Straz [Name] David A. Straz EX-2 6 EXHIBIT 2(E) EXHIBIT 2(e) VOTING AND STOCK PURCHASE AGREEMENT THIS VOTING AND STOCK PURCHASE AGREEMENT dated as of February 10, 1994 (this "Agreement"), is entered into by and between Firstar Corporation ("Firstar"), a Wisconsin corporation, and Lila G. Straz ("Shareholder"), and joined in by First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, for certain limited purposes. W I T N E S S E T H : WHEREAS, as of the date hereof, Shareholder is the owner of 600 shares of the common stock of First Southeast, $1.00 par value ("First Southeast Common Stock"), which represents approximately .56% of the issued and outstanding shares of the capital stock of First Southeast; WHEREAS, Firstar is contemplating the acquisition of First Southeast by means of a merger (the "Merger") of First Southeast with and into Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a wholly-owned subsidiary of Firstar, pursuant to an Agreement and Plan of Reorganization and Plan of Merger, each dated of even date herewith (the "Merger Agreements"); WHEREAS, Firstar is unwilling to expend the substantial time, effort and expense necessary to implement the proposed acquisition of First Southeast, including applying for and obtaining necessary approvals of federal banking authorities, unless Shareholder enters into this Agreement with Firstar; and WHEREAS, Shareholder believes it is in his best interest as well as the best interest of First Southeast for Firstar to consummate the Merger; NOW, THEREFORE, in consideration of the covenants and agreements of the parties herein contained and as an inducement to Firstar to incur the expenses associated with the Merger, the parties hereto, intending to be legally bound, hereby agree as follows: 1. Representations and Warranties. Shareholder represents and warrants that as of the date hereof Shareholder owns beneficially and of record 600 shares of First Southeast Common Stock (the "Subject Shares"), all of which shares are free and clear of all liens, pledges, security interests, claims, encumbrances, options and agreements to sell, except as disclosed in the First Southeast Letter, as defined in the Merger Agreements. Shareholder represents and warrants that Shareholder has the sole voting power with respect to the Subject Shares. 2. Voting Agreement. Shareholder shall vote all the Subject Shares in favor of the Merger at any meeting of shareholders of First Southeast called for the purpose of approving the Merger and shall, if his consent is solicited by First Southeast, consent to the Merger. Shareholder shall not vote in favor of or consent to any acquisition of stock or all or substantially all of the assets of First Southeast by any party other than Firstar or its affiliates prior to the termination of this Agreement. None of the Subject Shares shall be transferred while this Agreement is in effect, except to a Nevada partnership organized pursuant to documents substantially to the effect of the partnership agreement previously reviewed by KPMG Peat Marwick (the "Nevada Partnership") and provided that the Nevada Partnership has, prior to such transfer, executed a Voting and Stock Purchase Agreement satisfactory in form and content to Firstar. At Firstar's request and provided that Firstar is then in compliance with the Merger Agreements, Shareholder shall use his best efforts to cause any necessary meeting of shareholders of First Southeast to be duly called and held or any necessary consents of shareholders to be obtained for the purpose of approving the Merger. 3. Purchase Right. Shareholder hereby grants to Firstar the exclusive right (the "Purchase Right") to purchase any or all of the Subject Shares for a price of $558.31 per share, payable in cash. The exercise of the Purchase Right by Firstar with respect to any amount of shares that exceeds five percent (5%) of the outstanding voting stock of First Southeast is subject to the approval of the Board of Governors of the Federal Reserve System and any other necessary regulatory approvals. The Purchase Right is exercisable at any time prior to the earlier of the Closing, as defined in the Merger Agreements, or the termination of the Merger Agreements, and after (a) a material breach by First Southeast of the Merger Agreements, (b) a breach by the Shareholder of this Agreement; (c) the acquisition or overtly threatened acquisition by any person not related to the current shareholders of First Southeast of more than five percent (5%) of the stock of First Southeast or its subsidiaries, First Bank Southeast, N.A. and First Bank Southeast of Lake Geneva, N.A. (the "Banks"), or of a material portion of the assets of First Southeast or the Banks; or (d) any similar events or circumstances that lead Firstar reasonably to believe that First Southeast is likely to materially breach the Merger Agreements. 4. No Ownership Interest. Nothing contained in this Agreement shall be deemed to vest in Firstar any direct or indirect ownership or incidence of ownership of or with respect to any shares of First Southeast Common Stock. All rights, ownership and economic benefits of and relating to the shares of First Southeast Common Stock shall remain and belong to Shareholder and Firstar shall have no authority to manage, direct, superintend, restrict, regulate, govern or administer any of the policies or operations of First Southeast or exercise any power or authority to direct Shareholder in the voting of any of the shares of First Southeast Common Stock, or the performance of his duties or responsibilities as a shareholder of First Southeast, except as otherwise expressly provided herein. 5. Evaluation of Investment. Shareholder, by reason of his knowledge and experience in financial and business matters [and through serving as an officer of a financial institution], believes himself capable of evaluating the merits and risks of the investment in common stock of Firstar, $1.25 par value ("Firstar Common Stock"), contemplated by the Merger Agreements. 6. Documents Delivered. Shareholder acknowledges receipt of copies of the following documents: a. Merger Agreements and all exhibits thereto; b. Firstar's 1992 Annual Report (including Annual Report on Form 10-K for the year ended December 31, 1992); c. Notice of 1993 Annual Meeting of Shareholders and Proxy Statement dated April 22, 1993 of Firstar; d. Firstar's Reports on Form 10-Q for the periods ended March 31, June 30, and September 30, 1993. 7. Investment Purpose. Shareholder hereby represents, warrants and agrees that he is acquiring the shares of Firstar Common Stock pursuant to the Reorganization Agreement solely for his own account, for investment, and not with a view to the distribution or resale thereof. 8. Amendment and Modification. This Agreement may be amended, modified or supplemented at any time by the written approval of such amendment, modification or supplement by First Southeast, Shareholder and Firstar. 9. Entire Agreement. This Agreement evidences the entire agreement among the parties hereto with respect to the matters provided for herein and there are no agreements, representations or warranties with respect to the matters provided for herein other than those set forth herein and in the Merger Agreements and their related written agreements. This Agreement supersedes any agreements among First Southeast and its shareholders, concerning the acquisition, disposition or control of the stock of First Southeast. 10. Severability. The parties agree that if any provision of this Agreement shall under any circumstances be deemed invalid or inoperative, this Agreement shall be construed with the invalid or inoperative provisions deleted and the rights and obligations of the parties shall be construed and enforced accordingly. 11. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 12. Governing Law. The validity, construction, enforcement and effect of this Agreement shall be governed by the internal laws of the State of Wisconsin. 13. Headings. The headings for the paragraphs of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect the meaning or interpretation of this Agreement. 14. Successors. This Agreement shall be binding upon and inure to the benefit of First Southeast and Firstar, and their successors, and Shareholder and Shareholder's spouse and their respective executors, personal representatives, administrators, heirs, legatees, guardians and other legal representatives. This Agreement shall survive the death or incapacity of Shareholder. This Agreement may be assigned by Firstar only to an affiliate of Firstar. 15. Termination. This Agreement shall terminate at the earlier of: (i) October 31, 1994; (ii) the termination of the Merger Agreements; or (iii) consummation of the transactions contemplated by the Merger Agreements. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. FIRST SOUTHEAST BANKING CORP. [SEAL] By: David A. Straz, Jr. Title: President FIRSTAR CORPORATION [SEAL] By: Jon H. Stowe Title: Executive Vice President SHAREHOLDER Lila G. Straz [Name] Lila G. Straz EX-2 7 EXHIBIT 2(F) EXHIBIT 2(f) INDEMNITY AGREEMENT THIS INDEMNITY AGREEMENT dated as of February 10, 1994 (the "Agreement"), is entered into by and among First Southeast Banking Corp. ("First Southeast"), a Wisconsin corporation, the undersigned shareholder of First Southeast, David A. Straz, Jr. (the "Shareholder"), Firstar Corporation ("Firstar"), a Wisconsin corporation, Firstar Corporation of Wisconsin ("FCW"), a Wisconsin corporation and a wholly-owned subsidiary of Firstar, and First Southeast Bank, N.A. and First Southeast Bank of Lake Geneva, N.A. (the "Banks"). W I T N E S S E T H: WHEREAS, Firstar, FCW and First Southeast are parties to that certain Agreement and Plan of Reorganization of even date herewith (the "Reorganization Agreement") providing for the merger (the "Merger") of First Southeast with and into FCW and the conversion of all of the outstanding shares of common stock of First Southeast into the right to receive shares of Firstar common stock $1.25 par value ("Firstar Common Stock") from Firstar, (the "Merger"); and WHEREAS, the obligation of Firstar and FCW under the Reorganization Agreement to consummate the transactions contemplated therein are subject to the receipt by Firstar of an indemnity from the Shareholder; and WHEREAS, the Shareholder is executing this Agreement for the purpose of inducing Firstar to consummate the transactions contemplated by the Reorganization Agreement; NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, the parties hereby agree as follows: 1. Grant of Indemnity. The Shareholder hereby indemnifies (subject to the limitations set forth in Sections 4(A) and 4(C) of this Agreement) and holds Firstar, FCW, First Southeast, and the Banks harmless from and against any and all losses, costs, damages, expenses, liabilities, taxes, interest, penalties, judgments, amounts paid in settlement, claims, demands, deficiencies, causes of action, suits or other damage, including, without limitation, reasonable attorneys' fees and expenses, but reduced by any applicable insurance recovery or other offsetting asset (all the foregoing items being hereinafter referred to as the "Claims"), resulting from, arising out of or incurred with respect to (or alleged to result from, arise out of or to have been incurred with respect to): (i) the falsity, inaccuracy, or breach of any representation, warranty, covenant or agreement made by First Southeast contained in the Reorganization Agreement, whether intentional, negligent or innocent; (ii) the falsity, inaccuracy or breach of any representation, warranty, covenant or agreement contained in the First Southeast Letter, as such term is defined in the Reorganization Agreement, or in any documents, certificates, schedules or exhibits delivered to Firstar or FCW pursuant to the Reorganization Agreement or the First Southeast Letter, whether intentional, negligent or innocent; (iii) any of the matters referred to in the letter dated of even date herewith from Firstar Corporation to the Shareholder (the "Side Letter Issues"); and (iv) the expenses or costs incurred by Firstar, FCW, First Southeast, or the Banks, including reasonable attorneys fees (including fees generated by Firstar personnel at the hourly rate for internal services normally charged by them for the purpose of intercompany cost allocation), in connection with investigating, attempting to correct, defending against, or participating in the defense against any of the Claims for which Firstar, FCW, First Southeast or the Banks are entitled to indemnification pursuant to the foregoing provisions. 2. Survival; Effect of Investigation, Representations and Warranties. The indemnity granted herein shall survive any investigations by an indemnified party prior to Closing, any investigations by an indemnified party after Closing of any potential Claims, and the Closing of the transactions contemplated by the Reorganization Agreement. Notwithstanding any expiration of the representations, warranties, covenants and agreements in the Reorganization Agreement, the foregoing indemnity shall nonetheless survive any such expiration, as well as the execution of this Agreement, the execution of the Reorganization Agreement and the Closing, with the same effect as though such representations, warranties, covenants and agreements remained in effect. Notwithstanding anything contained in this Agreement, the Shareholder shall be released from the agreement of indemnification contained in this Agreement in respect of any Claims for which Firstar has not given written notice to the Shareholder by the earlier of (a) the expiration of one (1) year of the Closing or (b) the date on which the first audited results of the combined company is mailed to Firstar's shareholders; provided, however, the foregoing limitation shall not apply to (i) any liability for income, franchise, excise or real or personal property taxes with the respect to periods prior to the Closing, not fully accrued for in the consolidated financial statements of First Southeast ("Tax Claims"); (ii) Claims resulting from, arising out of or incurred with respect to (or alleged to result from, arise out of or to have been incurred with respect to) litigation pending at the Closing or overtly threatened against First Southeast or the Banks at or prior to the Closing ("Litigation Claims"); (iii) Claims resulting from, arising out of or incurred with respect to (or alleged to result from, arise out of or to have been incurred with respect to) the Side Letter Issues (the "Side Letter Claims") and (iv) such other contingencies pending against First Southeast or the Banks at the Closing, the outcome of which cannot reasonably be determined by Firstar as of such date, including breaches of Section 4.13(b) of the Reorganization Agreement ("Additional Claims" and, together with Tax Claims, Litigation Claims, and Side Letter Claims, "Specific Claims"), of which (i), (ii) or (iv) shall be identified through a recitation of the specific facts available prior to Closing, by Firstar in writing to the Shareholder on or before the Closing. Specific Claims may be asserted by the indemnified parties against the Shareholder until barred by the applicable statute of limitations. The agreement to indemnify shall remain effective in respect of all Claims made by the indemnified parties in writing on or prior to such date until the same are finally determined and satisfied in full. 3. Procedure for Indemnification. (A) An indemnified party shall promptly give notice to the Shareholder after obtaining knowledge of any Claim other than the Side Letter Claims and, if such indemnity shall arise from the claim of a third party, shall permit the Shareholder to assume the defense, at his sole expense, of any such Claim or any litigation resulting from such Claim, provided that the indemnified party shall not be required to permit the Shareholder to assume the defense of any third party claim which if not first paid, discharged or otherwise complied with would result in an interruption or cessation of the conduct of the business of First Southeast or the Banks or any material part thereof or, in the reasonable sole opinion of Firstar, might materially adversely affect First Southeast or the Banks. Except as set forth in Section 2 of this Agreement, notwithstanding the foregoing notice requirement, the right to indemnification hereunder shall not be affected by any failure of the indemnified party to give such notice or any delay by the indemnified party in giving such notice unless, and then only to the extent that, the rights and remedies of the Shareholder shall have been prejudiced as a result of the failure to give, or delay in giving, such notice. Failure by the Shareholder to notify the indemnified party of his election to defend any such claim or action by a third party within fourteen (14) days after notice thereof shall have been given to the Shareholder shall be deemed a waiver by him of his right to defend such claim or action. (B) If the Shareholder assumes the defense of such claim by a third party or litigation resulting therefrom, as set forth above, his obligation hereunder as to such claim shall include taking all steps necessary in the defense or settlement of such claim or litigation resulting therefrom, including the retention of counsel satisfactory to the indemnified party, and holding the indemnified party harmless from and against any and all Claims caused by or arising out of any settlement approved by the Shareholder, or any judgment in connection with such claim or litigation resulting therefrom. Without the prior written consent of the indemnified party, the Shareholder shall not, in the defense of such claim or any litigation, consent to the entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to the indemnified party of a release, in form satisfactory to the indemnified party, from all liability in respect of such claim or litigation. Notwithstanding the foregoing, the indemnified party will be entitled (i) to participate in the defense of such claim or litigation and, (ii) subject to the limitations of any contract of insurance, upon fourteen (14) days prior written notice to the Shareholder, to control and manage any defense. If the defendants in any such action include both an indemnified party and the Shareholder and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. (C) If the Shareholder does not elect to assume the defense of any such claim by a third party or litigation resulting therefrom or if the indemnified party does not allow the Shareholder to assume the defense of any such claim by a third party or litigation resulting therefrom, as set forth in Section 3(A) of this Agreement, the indemnified party may defend against such claim or litigation in such manner as it deems appropriate, and, unless the Shareholder shall deposit with the indemnified party a sum equivalent to the total amount demanded in such claim or litigation plus the indemnified party's estimate of the cost of defending the same, the indemnified party may settle such claim or litigation on such terms as it deems appropriate and the Shareholder shall, in accordance with the provisions hereof, promptly reimburse the indemnified party for the amount of such settlement and for all losses and expenses incurred by the indemnified party in connection with the defense against or settlement of such claim or litigation. The Shareholder agrees to cooperate fully with the indemnified party in the conduct of any defense against any claim. 4. Limitations on Indemnification. (A) Notwithstanding the foregoing, the aggregate liability of the Shareholder under this Agreement in respect of any Claim or combination of Claims other than Specific Claims shall be $1 million. The liability of the Shareholder in respect of the aggregate of all Specific Claims shall be limited to $5 million; provided, however, that prior to Closing, Firstar shall specifically allocate a portion of such $5 million limitation to each individual Specific Claim. The liability of the Shareholder under this Agreement must be paid in shares of Firstar Common Stock, with the value of each such share of stock deemed for this purpose to equal the Market Value of Firstar Common Stock on the Closing Date. For purposes of this Indemnity Agreement, the "Market Value of Firstar Common Stock on the Closing Date" means the average composite closing prices of Firstar Common Stock on the New York Stock Exchange and the Midwest Stock Exchange on the ten consecutive trading days immediately preceding the Closing under the Reorganization Agreement. Except as otherwise provided herein, the amount of indemnity due an indemnified party hereunder shall be satisfied by delivery of Firstar Common Stock equal in value (as determined in accordance with this Agreement) to the amount of the indemnity to be so satisfied and the indemnity shall be deemed paid and satisfied upon receipt by the indemnified party of certificate(s) representing Firstar Common Stock appropriately endorsed to the indemnified party. (B) In the event the number of shares of outstanding Firstar Common Stock is changed, between the Closing Date and the date of payment by the Shareholder under this Agreement, by means of a stock split or stock dividend, then the Market Value of Firstar Common Stock on the Closing Date shall be deemed modified accordingly. In the event, between the Closing Date and the date of payment by the Shareholder under this Agreement, Firstar Common Stock is converted into or exchanged for another class, series or type of stock in a recapitalization, merger, consolidation, combination or any similar corporate change, then payment hereunder shall be made in the number of shares of such new class, series or type of stock into or for which each share of Firstar Common Stock has been converted or exchanged, multiplied by the number of shares of Firstar Common Stock otherwise payable hereunder. In the event the Shareholder shall have sold all or part of his shares of Firstar Common Stock issued in connection with the Reorganization Agreement prior to the date of payment under this Agreement, then he shall repurchase shares of Firstar Common Stock in an amount sufficient to pay the indemnified parties under this Agreement. (C) Notwithstanding anything to the contrary in other sections of this Agreement, the Shareholder shall not be liable for the first $250,000 of the aggregate amount of all Claims hereunder provided, however, that if the aggregate amount of all Claims hereunder exceeds $250,000, the Shareholder shall be liable for the amount of all Claims hereunder in excess of $100,000. 5. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, superseding all prior oral or written agreements or understandings. There have been and are no promises, restrictions, agreements or understandings between the parties with respect to the subject matter hereof except as set forth herein. 6. Headings; Counterparts. The headings in this Agreement are for convenience only and shall not be considered a part of or affect the meaning, construction or interpretation of any provision of this Agreement. This Agreement may be executed in several counterparts each of which shall be deemed an original and shall bind the signatory, but all of which together shall constitute but one and the same instrument. 7. Governing Law; Consent to Jurisdiction. This Agreement shall be governed, construed and interpreted exclusively in accordance with the laws of the State of Wisconsin. 8. Notices. All notices given hereunder shall be in writing (including a telecopy and shall be mailed by first class mail, postage prepaid, or sent by facsimile transmission or by nationally recognized overnight delivery service, addressed as follows: (a) If to Firstar, to: Firstar Corporation Attn: Jon H. Stowe Executive Vice President 777 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 765-4349 with a copy to: Firstar Corporation Law Department Attn: Howard H. Hopwood, III Senior Vice President and General Counsel 777 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 765-6111 (b) If to First Southeast, FCW or the Banks, after the Closing, to such entities: c/o Firstar Corporation Attn: Jon H. Stowe Executive Vice President 777 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 765-4349 With a copy to: Firstar Corporation Law Department Attn: Howard H. Hopwood Senior Vice President and General Counsel 777 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 765-6111 (c) If to the Shareholder, to: David A. Straz, Jr. 540 Gulf Boulevard Belleair Shore, FL 34635 Telecopy No. (813) 595-7644 with a copy to: Quarles & Brady Attn: Robert J. Kalupa, Esq. 411 East Wisconsin Avenue Milwaukee, WI 53202 Telecopy No. (414) 271-3552 or to such other address as a party may have furnished to the others in writing in accordance herewith except that notices of a change of address shall be effective only upon receipt. 9. Severability. If any provision of this Agreement shall be deemed invalid or inoperative, or in the event a court of competent jurisdiction determines that any of the provisions of this Agreement contravene public policy in any way, this Agreement shall be construed so that the remaining provisions shall not be affected, but shall remain in full force and effect, and any such provisions which are invalid or inoperative or which contravene public policy shall be deemed, without further action or deed on the part of any person, to be modified, amended and/or limited, but only to the limited extent necessary to render the same valid and enforceable. 10. Amendment and Modification. This Agreement may only be amended, modified or supplemented by a written agreement executed by each of the parties hereto. 11. Assignment. Except for assignments by Firstar, First Southeast, FCW, or the Banks to an entity controlled by, controlling or under common control with Firstar, this Agreement shall not be assigned by any party without the prior written consent of the other parties hereto. Subject to the foregoing, this Agreement and all of the provisions hereof shall inure to the benefit of Firstar, FCW, and the Banks and their respective successors and assigns, and shall be binding upon the shareholders and their heirs, personal representatives, successors and assigns. This Agreement shall not be revoked by death or incapacity. 12. Waiver of Defenses and Notice. (A) The Shareholder's liability for performance of this Agreement shall be absolute and unconditional, except for conditions expressly set forth in this Agreement; and the Shareholder unconditionally and irrevocably waives each and every defense which would otherwise operate to impair or diminish such liability. (B) The Shareholder hereby unconditionally waives (a) all notices of any kind whatsoever except as otherwise provided in this Agreement; and (b) any subrogation to the rights of an indemnified party against a third party until the indemnified party has been paid in full and such payments are not subject to any right of recovery. 13. Waiver of Compliance; Consents. Any failure of an indemnified party, on the one hand, or the Shareholder, on the other hand, to comply with any obligation, covenant, agreement or condition herein may be waived in writing by the party entitled to the performance of such obligation; however, such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth above. 14. Affiliated Parties. Any notice to or by any indemnified party which is an affiliate of one or more other indemnified parties, or any action by any such indemnified party, shall be deemed given to or received or taken by all affiliated indemnified parties. 15. Transactions in First Southeast Common Stock. The Shareholder shall not, prior to the Closing, sell, transfer or otherwise dispose of any shares of common stock of First Southeast that he owns on the date of this Agreement except to a Nevada partnership of which the Shareholder is the general partner. 16. Effective Date. This Agreement shall be effective upon the Closing of the Reorganization Agreement and shall be void if the Reorganization Agreement is terminated. 17. Costs and Expenses. In the event of any dispute hereunder between the Shareholder and an indemnified party, the prevailing party in such dispute shall be entitled to recover from the other party its reasonable costs and expenses incurred in connection with such dispute, including, without limitation, reasonable attorneys' fees. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. FIRSTAR CORPORATION [SEAL] By: Jon H. Stowe Attest: John A. Kielich FIRSTAR CORPORATION OF WISCONSIN [NO SEAL] By: John A. Kielich Attest: Joan M. Fagan FIRST SOUTHEAST BANKING CORP. [SEAL] By: David A. Straz, Jr., Pres. Attest: FIRST SOUTHEAST BANK, N.A. [SEAL] By: David A. Straz, Jr., Chmn. Attest: ______________________ FIRST SOUTHEAST BANK OF [SEAL] LAKE GENEVA, N.A. By: David A. Straz, Jr., Chmn. Attest: ______________________ SHAREHOLDER David A. Straz, Jr. David A. Straz, Jr. EX-5 8 EXHIBIT 5 May 20, 1994 Firstar Corporation 777 East Wisconsin Avenue Milwaukee, WI 53202 Ladies and Gentlemen: Reference is made to the Registration Statement on Form S-4 (the "Registration Statement") to be filed by Firstar Corporation (the "Corporation") with the Securities and Exchange Commission (the "Commission") pursuant to the Securities Act of 1933, as amended (the "Securities Act"), with respect to shares of Common Stock of the Corporation, $1.25 par value, and the rights to purchase Series C Preferred Stock associated with each share of Common Stock (the "Preferred Stock Purchase Rights"), issuable in connection with the merger (the "Merger") of Firstar Corporation of Wisconsin ("FCW"), and First Southeast Banking Corp. ("FSBC"), as described in the Proxy Statement-Prospectus included in the Registration Statement. As Senior Vice President and General Counsel of the Corporation, I am familiar with the restated Articles of Incorporation and the Bylaws of the Corporation and with its affairs. I also have examined, or caused to be examined, such other documents and instruments and have made, or caused to be made, such further investigation as I have deemed necessary or appropriate to enable me to render this opinion. Based upon the foregoing, it is my opinion that: (1) The Corporation is duly incorporated and validly existing as a corporation under the laws of the State of Wisconsin. (2) The shares of Common Stock of the Corporation when issued upon the effectiveness of the Merger and delivered to the shareholders of FSBC will be legally issued, fully-paid and non-assessable, except that Section 180.0622 of the Wisconsin Business Corporation Law, and judicial interpretations thereof, impose liability upon shareholders for unpaid wage claims of the Corporation's employees, not exceeding six months' service in any one case. (3) The issuance of the Preferred Stock Purchase Rights with the Common Stock as set forth above has been duly and validly authorized by all necessary corporate action. I hereby consent to the use of this opinion as Exhibit 5 to the Registration Statement, and I further consent to the use of my name in the Registration Statement under the caption "OPINIONS." In giving this consent, I do not admit that I am in the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission issued thereunder. Very truly yours, /s/ Howard H. Hopwood III Howard H. Hopwood III Senior Vice President and General Counsel EX-21 9 EXHIBIT 21 Subsidiaries of the Registrant Exhibit 21 Firstar Corporation has no parents. The following list shows the name of each subsidiary of Firstar and the state or juristiction of the incorporation. State or Other Jurisdiction in which Incorporated Name of Subsidiary or Organized 1 Firstar Bank Milwaukee, N.A. United States 1 Firstar Bank Appleton Wisconsin 1 Firstar Bank Eau Claire, N.A. United States 1 Firstar Bank Fond du Lac, N.A. United States 1 Firstar Bank Grantsburg, N.A. United States 1 Firstar Bank Green Bay Wisconsin 1 Firstar Bank Lake Geneva, N.A. United States 1 Firstar Bank Madison, N.A. United States 1 Firstar Bank Manitowoc Wisconsin 1 Firstar Bank Minocqua Wisconsin 1 Firstar Bank Oshkosh, N.A. United States 1 Firstar Bank Portage Wisconsin 1 Firstar Bank Racine Wisconsin 1 Firstar Bank Rice Lake, N.A. United States 1 Firstar Bank Sheboygan, N.A. United States 1 Firstar Bank Wausau, N.A. United States 1 Firstar Bank Wisconsin Rapids, N.A. United States 5 Firstar Bank Ames Iowa 5 Firstar Bank Burlington, N.A. United States 5 Firstar Bank Cedar Falls Iowa 5 Firstar Bank Cedar Rapids, N.A. United States 5 Firstar Bank Council Bluffs Iowa 5 Firstar Bank Davenport, N.A. United States 5 Firstar Bank Des Moines, N.A. United States 5 Firstar Bank Mount Pleasant Iowa 5 Firstar Bank Ottumwa Iowa 5 Firstar Bank Red Oak, N.A. United States 5 Firstar Bank Sioux City, N.A. United States 3 Firstar Bank of Minnesota, N.A. United States 2 Firstar Bank DuPage Illinois 2 Firstar Bank West, N.A. United States 2 Firstar Bank North Shore Illinois 2 Firstar Bank Park Forest Illinois 4 Firstar Metropolitan Bank & Trust Arizona State or Other Jurisdiction in which Incorporated Name of Subsidiary or Organized Firstar Corporation of Wisconsin Wisconsin Firstar Corporation of Illinois Illinois Firstar Corporation of Minnesota Minnesota Firstar Corporation of Arizona Arizona Firstar Corporation of Iowa Iowa 1 Firstar Trust Company Wisconsin 1 Firstar Trust Company of Florida, N.A. United States 2 Firstar Trust Company of Illinois Illinois 3 Firstar Trust Company of Minnesota Minnesota Firstar Investment Research & Management Company Wisconsin Firstar Insurance Services, Inc. Wisconsin 6 Elan Investment Services, Inc. Wisconsin Elan Life Insurance Company, Inc. Arizona Elan Title Services, Inc. Wisconsin 6 Firstar Community Investment Corporation Wisconsin Firstar Development Corporation Delaware 6 Firstar Leasing Services Corporation Wisconsin 6 Firstar Mortgage Corporation Wisconsin 6 FM Properties of Wisconsin, Inc. Wisconsin 6 CSFM Corporation Wisconsin Firstar Home Mortgage Corporation Wisconsin 6 Firstar Information Services Corporation Wisconsin 5 Banks of Iowa Capital Corporation Iowa 5 Banks of Iowa Credit Corporation Iowa 7 CRC Corporation Wisconsin 5 Firstar CSC Corporation Iowa 6 DPC of Milwaukee, Inc. Wisconsin State or Other Jurisdiction in which Incorporated Name of Subsidiary or Organized Appleton Capital Corporation Nevada Eau Claire Capital Corporation Nevada Fond du Lac Capital Corporation Nevada Grantsburg Capital Corporation Nevada Green Bay Capital Corporation Nevada Lake Geneva Capital Corporation Nevada Madison Capital Corporation Nevada Manitowoc Capital Corporation Nevada Milwaukee Capital Corporation Nevada Minocqua Capital Corporation Nevada Oshkosh Capital Corporation Nevada Portage Capital Corporation Nevada Racine Capital Corporation Nevada Rice Lake Capital Corporation Nevada Sheboygan Capital Corporation Nevada Wausau Capital Corporation Nevada Wisconsin Rapids Capital Corporation Nevada Burlington Capital Corporation Nevada Cedar Rapids Capital Corporation Nevada Davenport Capital Corporation Nevada Des Moines Capital Corporation Nevada Red Oak Capital Corporation Nevada Sioux City Capital Corporation Nevada Notes 1 Subsidiary of Firstar Corporation of Wisconsin 2 Subsidiary of Firstar Corporation of Illinois 3 Subsidiary of Firstar Corporation of Minnesota 4 Subsidiary of Firstar Corporation of Arizona 5 Subsidiary of Firstar Corporation of Iowa 6 Subsidiary of Firstar Bank Milwaukee, N.A. 7 Subsidiary of Firstar Bank Madison, N.A. All Capital Corporations are subsidiaries of their respective banks EX-23 10 EXHIBIT 23(C) EXHIBIT 23(c) CONSENT OF JAMES M. HARMON & CO., LTD. The Board of Directors First Southeast Banking Corp.: We consent to use of our report included herein and to the reference to our firm under the heading "Experts" in the Proxy Statement-Prospectus. /s/ James M. Harmon James M. Harmon & Co., Ltd. Kenosha, Wisconsin May 18, 1994 EX-24 11 EXHIBIT 24(A) EXHIBIT 24(a) FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 12 day of May, 1994. Michael E. Batten FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 11 day of May, 1994. George M. Chester, Jr. FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 6 day of May, 1994. Roger H. Derusha FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 5 day of May, 1994. James L. Forbes FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 6 day of May, 1994. Holmes Foster FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 8 day of May, 1994. Joseph F. Heil, Jr. FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 16 day of May, 1994. John H. Hendee, Jr. FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 9 day of May, 1994. Jerry M. Hiegel FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 6 day of May, 1994. Joseph F. Hladky, III FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 8 day of May, 1994. Sheldon B. Lubar FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 5 day of May, 1994. Daniel F. McKeithan, Jr. FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 6 day of May, 1994. George W. Mead, II FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 6 day of May, 1994. Guy A. Osborn FIRST SOUTHEAST BANKING CORP. POWER OF ATTORNEY WITH RESPECT TO REGISTRATION STATEMENT COVERING COMMON STOCK OF FIRSTAR CORPORATION KNOW ALL MEN BY THESE PRESENTS that the undersigned, an officer and/or director of FIRSTAR CORPORATION, does hereby constitute and appoint Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch and William J. Schulz, and each of them, severally, his or her true and lawful attorney and agent at any time and from time to time to do any and all acts and things and execute, in his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation, or otherwise) any and all instruments which said attorney and agent may deem necessary, appropriate or desirable to enable Firstar Corporation to comply with the Securities Act of 1933, as amended, and any requirements of the Securities and Exchange Commission in respect thereof, in connection with a Registration Statement and any and all amendments (including post-effective amendments) to the Registration Statement relating to the issuance of Common Stock, $1.25 par value, of Firstar Corporation and associated preferred stock purchase rights in connection with the acquisition by Firstar Corporation (or a subsidiary thereof) of First Southeast Banking Corp. pursuant to and in accordance with an Agreement and Plan of Reorganization and related Plan of Merger entered into by Firstar Corporation, including specifically but without limitation thereto, power and authority to sign his or her name (whether on behalf of Firstar Corporation, or as an officer or director of Firstar Corporation or by attesting the seal of Firstar Corporation, or otherwise) to such Registration Statement and to such amendments (including post-effective amendments) to the Registration Statement to be filed with the Securities and Exchange Commission, or any of the exhibits, financial statements and schedules, or the Proxy Statements-Prospectuses, filed therewith, and to file the same with the Securities and Exchange Commission; and the undersigned does hereby ratify and confirm all that said attorneys and agents, and each of them, shall do or cause to be done by virtue hereof. Any one of said attorneys and agents shall have, and may exercise, all the powers hereby conferred. IN WITNESS WHEREOF, the undersigned has signed his or her name hereto on the 11 day of May, 1994. Clifford V. Smith, Jr. EX-24 12 EXHIBIT 24(B) EXHIBIT 24(b) FIRSTAR CORPORATION CERTIFICATE I, William J. Schulz, First Vice President and Secretary of Firstar Corporation, a Wisconsin corporation (the "Corporation"), DO HEREBY CERTIFY that the resolutions attached hereto as Exhibit A are a true and correct copy of the resolutions adopted by the Interstate Banking and Acquisitions Committee of the Board of Directors of the Corporation on November 3, 1993, at a meeting duly called and held at which a quorum was present and acted throughout; that such actions of the Committee were ratified and approved by the Board of Directors of the Corporation on January 20, 1994, at a meeting duly called and held at which a quorum was present and acted throughout; and such resolutions have not been amended or modified, rescinded or revoked and are in full force and effect on the date hereof. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate seal of the Corporation this 18 day of May, 1994. /s/ William J. Schulz [SEAL] William J. Schulz First Vice President and Secretary Exhibit A First Southeast Banking Corp. FIRSTAR CORPORATION RESOLUTIONS OF THE INTERSTATE BANKING AND ACQUISITIONS COMMITTEE Acquisition RESOLVED, that the Chairman of the Board, President, Senior Executive Vice President, Executive Vice President, any Senior Vice President, and any First Vice President of the Corporation, and each of them, be and they hereby are authorized and empowered for and in the name and on behalf of the Corporation to execute and deliver acquisition, purchase, reorganization, merger, consolidation, voting, indemnity and related agreements (the "Merger Agreements") with respect to the acquisition by the Corporation of First Southeast Banking Corp., Lake Geneva, Wisconsin ("First Southeast"), a bank holding company, and its subsidiary banks, First Bank Southeast, N.A., headquartered in Milwaukee, Wisconsin, and First Bank Southeast of Lake Geneva, N.A., headquartered in Lake Geneva, Wisconsin (together, the "Banks"), upon the terms and conditions presented at this meeting, including the assumption of such liabilities as First Southeast may have, or upon such other, additional or modified terms and conditions, including an increase in the price or the number of shares of common stock of the Corporation, $1.25 par value, with associated Preferred Stock Purchase Rights (together, the "Common Stock"), of up to ten percent (10%), that in the judgment of such officers do not substantially depart from the terms and conditions hereby specifically approved, consideration to be payable in Common Stock, whereby First Southeast will be merged with or into a corporate subsidiary of the Corporation ("Acquisition Corporation") and the Corporation will become or remain the owner of 100% of the stock of the surviving entity, and Acquisition Corporation will acquire the outstanding minority shares of First Bank Southeast of Lake Geneva, N.A. for $700,000 in cash. Banking Application RESOLVED, that the Chairman of the Board, President, Senior Executive Vice President, Executive Vice President, any Senior Vice President, and any First Vice President of the Corporation, and each of them, be and they hereby are authorized and empowered for and in the name and on behalf of the Corporation to execute and deliver to the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), pursuant to the Bank Holding Company Act of 1956, as amended, an application for prior approval by the Federal Reserve Board of the acquisition by the Corporation of direct or indirect ownership, control or power to vote, of 100% of the voting shares of First Southeast and of the Banks. RESOLVED, that any and all resolutions which may be required by any federal or state banking laws in connection with or relating to the application referred to in the immediately preceding resolution be and they hereby are approved and adopted; that the appropriate officers of the Corporation, and each of them, be and they hereby are authorized to certify that such resolutions were duly adopted at this meeting; and that the First Vice President and Secretary shall cause a copy of each resolution so certified to be attached to the minutes of this meeting. Issuance of Common Stock RESOLVED, that the appropriate officers of the Corporation be and they hereby are authorized, in connection with the acquisition of First Southeast and the Banks to issue no more than 1,818,182 shares of Common Stock, subject to the increases contemplated in the foregoing resolutions. Exchange Agent RESOLVED, that the appropriate officers of the Corporation, and each of them, be and they hereby are authorized to appoint Firstar Trust Company, or such other company or person as any such officer deems appropriate, to act as Exchange Agent pursuant to and in accordance with the Merger Agreements. Further, Firstar Trust Company, the Transfer Agent and Registrar for the Corporation's Common Stock, is hereby authorized to record and countersign new certificates evidencing such number of shares of Common Stock as are issued by the Corporation under and pursuant to the Merger Agreements and to deliver such new certificates after they have been countersigned, all in accordance with instructions from officers of the Corporation and in compliance with the requirements and regulations of the New York Stock Exchange or other applicable stock exchange as they may now or hereafter exist. Further, any resolutions as may be required by the Exchange Agent and Transfer Agent and Registrar to effectuate this resolution are adopted hereby and shall be attached to the minutes of this meeting and the First Vice President and Secretary may so certify. Authorization of Registration Statement and Amendments RESOLVED, that preparation of the Registration Statement on Form S-4 or such other form as may be appropriate covering the Common Stock of the Corporation, including prospectuses, exhibits and other documents to be filed with the Securities and Exchange Commission (the "Commission") for the purpose of registering the offer and sale of the Common Stock, under the Securities Act of 1933, as amended, be and it hereby is in all respects approved; that the directors and appropriate officers of the Corporation, and each of them, be and they hereby are authorized to execute (whether for and on behalf of the Corporation, or as an officer or director of the Corporation, or otherwise), such Registration Statement (including amendments to the prospectus and the addition or amendment of exhibits and other documents relating thereto or required by law or regulation in connection therewith), any and all amendments (including post-effective amendments) to the Registration Statement or a new Registration Statement in such form as such directors and officers may deem necessary, appropriate or desirable, as conclusively evidenced by their execution thereof; that the appropriate officers of the Corporation, and each of them, be and they hereby are authorized to cause such Registration Statement, amendments to the Registration Statement or new Registration Statement, so executed, to be filed with the Commission; and that the appropriate officers of the Corporation, and each of them, be and they hereby are authorized to make such payments, and do such other acts or things as in their opinion, may be necessary or desirable in order to effect any such filing, to cause the Registration Statement to become effective, and to maintain the Registration Statement in effect so long as they deem it to be in the best interest of the Corporation. RESOLVED, that Howard H. Hopwood, III, Senior Vice President and General Counsel of the Corporation, is hereby designated as the person duly authorized to receive communications and notices from the Commission with respect to the Registration Statement and with the powers conferred upon him as such person by the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder. Authorization of Power of Attorney RESOLVED, that each officer and director who may be required to sign and execute any such Registration Statement or any amendment thereto or document in connection therewith (whether for and on behalf of the Corporation, or as an officer or director of the Corporation, or otherwise), be and hereby is authorized to execute a power of attorney appointing Roger L. Fitzsimonds, John A. Becker, Howard H. Hopwood, William H. Risch, and William J. Schulz, and each of them, severally, his or her true and lawful attorney or attorneys to sign in his or her name, place and stead in any such capacity any such Registration Statement and any and all amendments (including post-effective amendments) thereto and documents in connection therewith, and to file the same with the Commission, each of said attorneys to have power to act with or without the other, and to have full power and authority to do and perform, in the name and on behalf of each of said officers and directors who shall have executed such power of attorney, every act whatsoever which such attorneys, or any of them, may deem necessary, appropriate or desirable to be done in connection therewith as fully and to all intents and purposes as such officers or directors might or could do in person. Authorization of Blue Sky Applications RESOLVED, that it is desirable and in the best interest of the Corporation that its securities be qualified or registered for sale in various states; that the Chairman of the Board, President, Senior Vice President-Finance and Treasurer, Senior Vice President and General Counsel, and First Vice President and Secretary, and each of them, be and they hereby are authorized to determine the states in which appropriate action shall be taken to qualify or register for sale all or such part of the securities of the Corporation as said officers may deem advisable; that said officers are hereby authorized to perform on behalf of the Corporation any such acts as they may deem necessary or advisable in order to comply with the applicable laws of any such states, and in connection therewith to execute and file all requisite papers and documents, including but not limited to, applications, reports, surety bonds, irrevocable consents and appointments of attorneys for service of process; and the execution by such officers of any such paper or document or the doing by them of any act in connection with the foregoing matters shall conclusively establish their authority therefor from the Corporation and the approval and ratification by the Corporation of the papers and documents so executed and the action so taken. Listing Applications RESOLVED, that the Chairman of the Board, President, Senior Vice President-Finance and Treasurer, Senior Vice President and General Counsel, and First Vice President and Secretary, and each of them, be and they hereby are authorized for and on behalf of the Corporation to take such action as such officers, or any of them, may deem necessary, appropriate or desirable to make application for the listing on the New York Stock Exchange, Midwest Stock Exchange or other exchange of the Common Stock to be issued in connection with the acquisition pursuant to and in accordance with the Merger Agreements, and such officers, and each of them, be and they hereby are designated as representatives of the Corporation to appear before the appropriate department of any such exchange and to take all such other steps as such officers, or any of them, may deem necessary, appropriate or desirable to effect such listing. Other Action RESOLVED, that the appropriate officers of the Corporation, and each of them, be and they hereby are authorized and empowered, in the name and for and on behalf of the Corporation, to take any action, including paying expenses, and to execute and deliver any and all letters, documents, amendments, certificates, agreements or other writings, that such officer or officers may deem necessary, appropriate or desirable in order to enable the Corporation fully to exercise its rights and to perform its obligations or otherwise to carry out the purposes and intents of the Merger Agreements, and each and all of the foregoing resolutions. EX-99 13 EXHIBIT 99 PROXY FOR SPECIAL MEETING OF THE SHAREHOLDERS TO BE HELD JULY ___, 1994 FIRST SOUTHEAST BANKING CORP. 303 Center Street Lake Geneva, WI 53147 The undersigned hereby appoints David A. Straz, Jr. and David A. Straz, or either of them, proxies with power of substitution to vote all the shares of Common Stock that the undersigned would be entitled to vote if then personally present at the Special Meeting of Shareholders of First Southeast Banking Corp. to be held July ___, 1994, at 9:00 a.m., local time, and at any adjournments thereof, upon the matters as set forth in the Proxy Statement-Prospectus dated June ___, 1994, receipt of which is hereby acknowledged, as follows: The Board of Directors recommends a vote "FOR" the following: 1. to consider and vote upon the approval and adoption of an Agreement and Plan of Reorganization dated as of February 10, 1994 by and among First Southeast Banking Corp., Firstar Corporation and Firstar Corporation of Wisconsin (a subsidiary of Firstar Corporation), and a Plan of Merger dated as of February 10, 1994 by and between First Southeast Banking Corp. and Firstar Corporation of Wisconsin, joined in by Firstar Corporation for certain limited purposes, providing for the merger of First Southeast Banking Corp. with and into Firstar Corporation of Wisconsin, in which the outstanding shares of First Southeast Banking Corp. Common Stock will be converted into the right to receive shares of Firstar Corporation Common Stock and associated Preferred Stock Purchase Rights, all as more fully described in the Proxy Statement-Prospectus. _______ _______ _______ _______ _______ _______ FOR AGAINST ABSTAIN 2. in their discretion, on such other business as may properly be brought before the Special Meeting or any adjournment or adjournments thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" THE PROPOSAL. Please Sign Here ________________________________ Dated: _____________________________, 1994 Note: Please date proxy and sign it exactly as name or names appear above. All joint owners of shares should sign. State full title when signing as executor, administrator, trustee, guardian, etc. -----END PRIVACY-ENHANCED MESSAGE-----