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EXHIBIT 2.1
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AGREEMENT AND PLAN OF MERGER
BETWEEN
BANCORPSOUTH, INC.
AND
PREMIER BANCORP, INC.
DATED AS OF SEPTEMBER 17, 2004
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of September 17,
2004
("Agreement"), between BANCORPSOUTH, INC.,
a Mississippi corporation
("BancorpSouth"), and PREMIER BANCORP,
INC., a Tennessee corporation ("PBC," and
collectively with BancorpSouth, the
"Holding Companies").
RECITALS:
WHEREAS, BancorpSouth is the parent corporation of BancorpSouth
Bank,
a Mississippi banking corporation
("BancorpSouth Bank");
WHEREAS, PBC is the sole shareholder of Premier Bank of
Brentwood,
a Tennessee banking corporation
("PBB");
WHEREAS, BancorpSouth and PBC have determined that it is in the
best
interests of their respective companies and
their shareholders to consummate the
business combination transactions provided
for herein in which (i) PBC will
merge with and into BancorpSouth (the
"Holding Company Merger") and (ii) PBB
will merge with and into BancorpSouth Bank
(the "Bank Merger"), each subject to
the terms and conditions set forth herein
(the Holding Company Merger and the
Bank Merger, collectively, the
"Merger");
WHEREAS, the parties intend that the Merger shall qualify as a
reorganization under the provisions of
Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and
the rules and regulations promulgated
thereunder; and
WHEREAS, the parties desire to make certain representations,
warranties
and agreements in connection with the
Merger and also to prescribe certain
conditions to the Merger.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements
contained herein, the receipt and
sufficiency of which is hereby
acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I. THE MERGER
1.1 The Merger.
(a) Subject to the terms and conditions of this Agreement, in
accordance with the Mississippi Business
Corporation Act (the "MBCA") and the
Tennessee Business Corporation Act (the
"TBCA"), at the Effective Time (as
defined in Section 1.2), PBC shall merge
with and into BancorpSouth.
BancorpSouth shall be the surviving
corporation (hereinafter sometimes called
the "Surviving Corporation") in the Holding
Company Merger, and shall continue
its corporate existence under the laws of
the State of Mississippi. The name of
the Surviving Corporation shall continue to
be "BancorpSouth, Inc." Upon
consummation of the Holding Company Merger,
the separate corporate existence of
PBC shall terminate.
(b) Subject to the terms and conditions of this Agreement, in
accordance with the Mississippi Banking Act
(the "MBA") and the Tennessee
Banking Act (the "TBA"), as applicable, at
the Effective Time, PBB shall merge
with and into BancorpSouth Bank.
BancorpSouth Bank shall be the surviving
banking corporation (hereinafter sometimes
called the "Surviving Bank") in the
Bank Merger, and shall
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continue its corporate existence under the
laws of the State of Mississippi. The
name of the Surviving Bank shall continue
to be "BancorpSouth Bank." Upon
consummation of the Bank Merger, the
separate corporate existence of PBB shall
terminate.
1.2 Effective Time.
(a) The Holding Company Merger shall become effective as set forth
in
the articles of merger (the "Holding
Company Articles of Merger") which shall be
filed on the Closing Date (as defined in
Section 10.1) with the Secretary of
State of the State of Mississippi (the
"Mississippi Secretary") and the
Secretary of State of the State of
Tennessee (the "Tennessee Secretary") with
respect to the Holding Company Merger.
(b) The Bank Merger shall become effective as set forth in the
articles
of merger (the "Bank Articles of Merger,"
and together with the Holding Company
Articles of Merger, the "Articles of
Merger") which shall be filed on the
Closing Date (as defined in Section 10.1)
with the Mississippi Department of
Banking and Consumer Finance (the
"Mississippi Department"), the Tennessee
Department of Financial Institutions (the
"Tennessee Department") and the
Tennessee Secretary with respect to the
Bank Merger, but shall occur immediately
after the Holding Company Merger.
(c) The term "Effective Time" shall be the date and time when
the
Merger becomes effective, as set forth in
the Articles of Merger.
1.3 Effects of the Merger.
(a) At and after the Effective Time, the Holding Company Merger
shall
have the effects set forth in Section
79-4-11.06 of the MBCA and Section
48-21-108 of the TBCA.
(b) At and after the Effective Time, the Bank Merger shall have
the
effects set forth in, as applicable,
Section 81-5-85 of the MBA and Section
45-2-1308 of the TBA.
1.4 Conversion of PBC Common Stock.
(a) At the Effective Time, each share of the common stock, par
value
of $1.00 per share, of PBC (the "PBC Common
Stock") issued and outstanding
immediately prior to the Effective Time
(other than PBC Dissenting Shares (as
defined below) and shares of PBC Common
Stock held directly or indirectly by
BancorpSouth or PBC or any of their
respective Subsidiaries as defined in
Section 3.2(d) hereof (as adjusted below),
other than Trust Account Shares and
DPC shares as such terms are defined in
this Section below) shall be converted,
at the election of the holder thereof, into
the right to receive the following,
without interest:
(i) for each share of PBC Common Stock with respect to which an
election to receive cash has been made (a
"Cash Election"), the right to receive
in cash an amount equal to $50.07 (the
"Cash Consideration", and collectively,
the "Cash Election Shares");
(ii) for each share of PBC Common Stock with respect to which
an
election to receive common stock, par value
$2.50 per share, of BancorpSouth
(the "BancorpSouth Common Stock") together
with the number of BancorpSouth
Rights (as defined in Section 5.2 hereof)
associated therewith, has been made (a
"Stock Election"), the right to receive
from BancorpSouth the number of shares
of BancorpSouth Common Stock as is equal to
the Exchange Ratio (as defined in
Section 1.4(b)) (the "Stock
Consideration"), and (collectively, the "Stock
Election Shares");
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(iii) Holders of more than one share of PBC Common Stock may elect
a
combination of both cash and shares of
BancorpSouth Common Stock (with such
election referred to as a "Mixed
Election"). For purposes of this Agreement,
Cash Consideration, Stock Consideration and
any combination thereof shall be
collectively referred to herein as "Merger
Consideration."; and
(iv) for each share of PBC Common Stock other than PBC
Dissenters'
Shares and shares as to which a Cash
Election or a Stock Election has been
effectively made (collectively,
"Non-Election Shares"), the right to receive
from BancorpSouth such Stock Consideration
and/or Cash Consideration as is
determined in accordance with Section
1.4(d).
(b) Certain Definitions. For purposes of this Agreement, the
following
terms shall have the following
meanings:
(i) "Aggregate BancorpSouth Share Amount" shall be a number of
shares
of BancorpSouth Common Stock equal to the
number of shares of PBC Common Stock
outstanding at the time of determination
multiplied by 1.1111.
(ii) "Aggregate Cash Election Amount" means the amount calculated
by
multiplying the Cash Consideration by the
sum of (x) the aggregate number of
Cash Election Shares and (y) the aggregate
number of Non-Election Shares being
converted into the right to receive the
Cash Consideration.
(iii) "Exchange Ratio" means 2.1785.
(c) Subject to Section 1.6, the total number of shares of PBC
Common
Stock to be converted into Stock
Consideration (the "Stock Conversion Number")
shall be equal to the quotient obtained by
dividing (x) the Aggregate
BancorpSouth Share Amount by (y) the
Exchange Ratio. All of the other shares of
PBC Common Stock shall be converted into
Cash Consideration (in each case,
excluding shares of PBC Common Stock to be
cancelled pursuant to Subsection (e)
below).
(d) As promptly as possible after the Election Deadline (as
defined
below), BancorpSouth shall cause the
Exchange Agent (as defined in Section 2.1)
to effect the allocation among holders of
PBC Common Stock of rights to receive
the Cash Consideration and the Stock
Consideration as follows:
(i) If the aggregate number of shares of PBC Common Stock with
respect
to which Stock Elections shall have been
made (the "Stock Election Number")
exceeds the Stock Conversion Number, then
all Cash Election Shares and all
Non-Election Shares of each holder thereof
shall be converted into the right to
receive the Cash Consideration, and Stock
Election Shares of each holder thereof
will be converted into the right to receive
the Stock Consideration in respect
of that number of Stock Election Shares
equal to the product obtained by
multiplying (x) the number of Stock
Election Shares held by such holder by (y) a
fraction, the numerator of which is the
Stock Conversion Number and the
denominator of which is the Stock Election
Number, with the remaining number of
such holder's Stock Election Shares being
converted into the right to receive
the Cash Consideration; and
(ii) If the Stock Election Number is less than the Stock
Conversion
Number (the amount by which the Stock
Conversion Number exceeds the Stock
Election Number being referred to herein as
the "Shortfall Number"), then all
Stock Election Shares shall be converted
into the right to receive the Stock
Consideration and the Non-Election Shares
and Cash Election Shares shall be
treated in the following manner:
(A) If the Shortfall Number is less than or equal to the number
of
Non-Election Shares, then all Cash Election Shares shall be
converted
into the right to receive the Cash Consideration and the
Non-Election
Shares of each holder thereof shall convert into the right to
receive
the Stock
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Consideration in respect of that number of Non-Election Shares
equal to
the product obtained by multiplying (x) the number of
Non-Election
Shares held by such holder by (y) a fraction, the numerator of
which is
the Shortfall Number and the denominator of which is the total
number
of Non-Election Shares, with the remaining number of such
holder's
Non-Election Shares being converted into the right to receive the
Cash
Consideration; or
(B) If the Shortfall Number exceeds the number of Non-Election
Shares,
then all Non-Election Shares shall be converted into the right
to
receive the
Stock Consideration and Cash Election Shares of each holder
thereof shall convert into the right to receive the Stock
Consideration
in respect of that number of Cash Election Shares equal to the
product
obtained by multiplying (x) the number of Cash Election Shares held
by
such holder by (y) a fraction, the numerator of which is the amount
by
which (1) the Shortfall Number exceeds (2) the total number of
Non-Election Shares and the denominator of which is the total
number of
Cash Election Shares, with the remaining number of such holder's
Cash
Election Shares being converted into the right to receive the
Cash
Consideration.
(e) At the Effective Time, all shares of PBC Common Stock that
are
owned directly or indirectly by
BancorpSouth or PBC or any of their respective
Subsidiaries, other than shares of PBC
Common Stock (i) held directly or
indirectly in trust accounts, managed
accounts and the like or otherwise held in
a fiduciary capacity for the benefit of
third parties (any such shares, and
shares of BancorpSouth Common Stock which
are similarly held, whether held
directly or indirectly by BancorpSouth or
PBC, as the case may be, being
referred to herein as "Trust Account
Shares") and (ii) held by BancorpSouth or
PBC or any of their respective Subsidiaries
in respect of a debt previously
contracted (any such shares of PBC Common
Stock, and shares of BancorpSouth
Common Stock which are similarly held,
whether held directly or indirectly by
BancorpSouth or PBC, being referred to
herein as "DPC Shares"), shall be
canceled and shall cease to exist, and no
stock of BancorpSouth or other
consideration shall be delivered in
exchange therefor. All shares of
BancorpSouth Common Stock that are owned by
PBC or any of its Subsidiaries
(other than Trust Account Shares and DPC
Shares) shall become treasury stock of
BancorpSouth.
(f) Each share of PBC Common Stock converted into BancorpSouth
Common
Stock pursuant to this Article I shall no
longer be outstanding and shall
automatically be canceled and shall cease
to exist, and each certificate (each a
"Certificate") previously representing any
such shares of PBC Common Stock shall
thereafter only represent the right to
receive (i) the number of whole shares of
BancorpSouth Common Stock into which such
share is convertible pursuant to
Section 1.4(a) and (ii) the cash in lieu of
fractional shares into which the
shares of PBC Common Stock represented by
such Certificate have been converted
pursuant to Section 1.4(a) and Section
2.2(e) hereof, and (iii) Cash
Consideration pursuant to Section 1.4(a)
hereof. Certificates previously
representing shares of PBC Common Stock
shall be exchanged for certificates
representing whole shares of BancorpSouth
Common Stock and cash in lieu of
fractional shares issued in consideration
therefor and Cash Consideration upon
the surrender of such Certificates in
accordance with Section 2.2 hereof,
without any interest thereon. If, between
the date of this Agreement and the
Effective Time, the shares of BancorpSouth
Common Stock shall be changed into a
different number or class of shares by
reason of any reclassification,
recapitalization, split-up, combination,
exchange of shares or readjustment, or
a stock dividend thereon shall be declared
with a record date within said period
(any such event, an "Anti-Dilution Event"),
the Exchange Ratio and the Merger
Consideration shall be adjusted to result
in the same aggregate consideration
being delivered to PBC's shareholders as
would have been received had such
Anti-Dilution Event not occurred.
(g) Notwithstanding anything in this Agreement to the contrary,
shares
of PBC Common Stock which are outstanding
immediately prior to the Effective
Time and with respect to which dissenters'
rights shall have been properly
demanded in accordance with Sections
48-23-201, et. seq. of
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the TBCA ("PBC Dissenting Shares") shall
not be converted into the right to
receive, or be exchangeable for, Merger
Consideration or cash in lieu of
fractional shares but, instead, the holders
thereof shall be entitled to payment
of the appraised value of such PBC
Dissenting Shares in accordance with the
provisions of Sections of the TBCA;
provided, however, that (i) if any holder of
PBC Dissenting Shares shall subsequently
deliver a written withdrawal of his
demand for appraisal of such shares, or
(ii) if any holder fails to establish
his entitlement to dissenters' rights as
provided in Sections 48-23-202, et.
sec. of the TBCA, such holder or holders
(as the case may be) shall forfeit the
right to appraisal of such shares of PBC
Common Stock and each of such shares
shall thereupon be deemed to have been
converted into the right to receive, and
to have become exchangeable for, as of the
Effective Time, Stock Consideration
and/or cash in lieu of fractional shares
and/or Cash Consideration, without any
interest thereon, as provided in Sections
1.4(a) and 1.4(c) and Article II
hereof.
(h) At the Effective Time, all shares of PBB common stock shall
be
canceled and shall cease to exist and no
stock of BancorpSouth or BancorpSouth
Bank or other consideration shall be
delivered in exchange therefor.
1.5 Stock Options. At the Effective Time,
each option granted by PBC to purchase
shares of PBC Common Stock which is
outstanding and unexercised immediately
prior thereto (each, a "PBC Option") shall,
by virtue of the Merger and without
any further action by the holder thereof,
cease to represent a right to acquire
shares of PBC Common Stock and shall be
considered an option (the "New Option")
issued under and subject to the appropriate
stock option plan of BancorpSouth to
purchase shares of BancorpSouth Common
Stock to be issued in an amount and at an
exercise price determined as provided
below:
(a) The number of shares of BancorpSouth Common Stock to be subject
to
the New Option shall be equal to the number
of shares of BancorpSouth Common
Stock to which the holder of the PBC Option
would have been entitled under
Section 1.4(a) of this Agreement had the
PBC Option been exercised in full
immediately prior to the Effective Time and
had such holder received only Stock
Consideration in the Merger, provided that
any fractional shares of BancorpSouth
Common Stock resulting from such
multiplication shall be rounded to the nearest
whole share; and
(b) The exercise price per share of BancorpSouth Common Stock under
the
New Option shall be equal to the aggregate
exercise price for the shares of PBC
Common Stock otherwise purchasable under
the PBC Option divided by the number of
shares of BancorpSouth Common Stock
issuable under the New Option pursuant to
Section 1.5(a); provided that any such
exercise price which would otherwise
include a fraction of a cent shall be
rounded to the nearest whole cent. The
adjustment provided herein with respect to
any PBC Options which are "incentive
stock options" (as defined in Section 422
of the Code) shall be and is intended
to be effected in a manner which is
consistent with Section 424(a) of the Code
and, to the extent it is not so consistent,
such Section 424(a) of the Code
shall override anything to the contrary
contained herein. The duration of the
New Option shall be the same as the
original PBC Option. All New Options shall
be exercisable by the holder thereof in
accordance with the terms of the
agreements for the PBC Options.
(c) At the Effective Time, BancorpSouth shall either adopt the
PBC
Option plans for the purpose of issuing New
Options or, in BancorpSouth's sole
discretion, issue New Options under and
subject to an appropriate stock option
plan of BancorpSouth. At or prior to the
Effective Time, BancorpSouth shall take
all corporate action necessary to reserve
for issuance a sufficient number of
shares of BancorpSouth Common Stock for
delivery upon exercise of the New
Options. At or prior to the Effective Time,
BancorpSouth shall take such action
as is necessary to ensure that a
registration statement on Form S-8, S-4 or
other applicable form is effective to cover
the shares of BancorpSouth Common
Stock subject to the New Options.
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1.6 Tax Matters. Notwithstanding any other provision contained in
this
Agreement, it is intended that the Holding
Company Merger shall qualify as a
reorganization within the meaning of
Section 368(a) of the Code and that this
Agreement shall constitute a "plan of
reorganization" for purposes of Sections
354 and 361 of the Code.
(a)
In order that the Holding Company Merger will not fail to
satisfy
the continuity of interest requirements
under applicable federal income tax
principles relating to reorganizations
under Section 368(a) of the Code, if the
aggregate value of the shares of
BancorpSouth Common Stock to be issued in
connection with the Holding Company Merger,
based upon the closing price of
BancorpSouth Common Stock as reported on
the NYSE at the end of the regular
session on the business day immediately
preceding the Effective Time (the
"Aggregate BancorpSouth Share Value
Consideration"), would be less than 45% of
the sum of (i) the Aggregate BancorpSouth
Share Value Consideration and (ii) the
Aggregate Cash Value Consideration (as
defined below), then BancorpSouth may, in
its sole discretion, increase the Stock
Consideration and decrease the Cash
Consideration so that the aggregate value
of the shares of BancorpSouth Common
Stock to be issued to the holders of PBC
Common Stock in connection with the
Holding Company Merger, as determined based
upon the closing price of
BancorpSouth Common Stock as reported on
the NYSE at the end of the regular
session on the business day immediately
preceding the Effective Time, is equal
to 45% of the sum of (i) the aggregate
value of the shares of BancorpSouth
Common Stock to be issued to the holders of
PBC Common Stock in connection with
the Holding Company Merger, as determined
based upon the closing price of
BancorpSouth Common Stock as reported on
the NYSE at the end of the regular
session on the business day immediately
preceding the Effective Time, and (ii)
the Aggregate Cash Value Consideration. In
the event that the Stock
Consideration and Cash Consideration are
adjusted as provided for in this
Section 1.6(a), all references in this
Agreement to the "Stock Consideration"
and the "Cash Consideration" shall refer to
the Stock Consideration and Cash
Consideration as adjusted in this Section
1.6(a). For purposes of this
Agreement, the "Aggregate Cash Value
Consideration" shall be an amount equal to
the sum of (x) Aggregate Cash Election
Amount, (y) the product of the number of
PBC Dissenting Shares (except to the extent
that the holder of such PBC
Dissenting Shares, as of the Closing Date,
has effectively withdrawn or lost his
right to dissent from the Merger under the
TBCA) and the Cash Consideration and
(z) any other amounts received by a holder
of PBC Common Stock prior to the
Merger, either in a redemption of PBC stock
or in a distribution with respect to
PBC stock (but only to the extent such
amount is treated as other property or
money received in the exchange for purposes
of Section 356 of the Code, or would
be so treated if the PBC shareholder also
had received stock of BancorpSouth in
exchange for stock owned by the shareholder
in PBC).
(b) The parties agree that BancorpSouth may at any time change
the
method of effecting the combination of
BancorpSouth and PBC or the Bank Merger,
including, without limitation, by merging
PBC with a direct wholly-owned
subsidiary of BancorpSouth, and PBC shall
cooperate in such efforts, including
by entering into an appropriate amendment
to this Agreement (to the extent such
amendment only changes the method of
effecting the business combination and does
not substantively affect this Agreement or
the rights and obligations of the
parties or their respective shareholders
hereunder); provided, however, that any
such subsidiary shall become a party to,
and shall agree to be bound by, the
terms of this Agreement, and that any such
change shall not (i) alter or change
the kind or amount of Merger Consideration
to be provided to holders of PBC
Common Stock as provided for in this
Agreement, (ii) adversely affect the rights
of holders of PBC Options (hereinafter
defined) or (iii) materially impede or
delay consummation of the transactions
contemplated by this Agreement.
1.7 BancorpSouth Common Stock. Except for
shares of BancorpSouth Common Stock
owned by PBC or any of its Subsidiaries
(other than Trust Account Shares and DPC
Shares), which shall be converted into
authorized but unissued stock of
BancorpSouth as contemplated by Section 1.4
hereof, the shares of BancorpSouth
Common Stock issued and outstanding
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immediately prior to the Effective Time
shall be unaffected by the Merger and
such shares shall remain issued and
outstanding.
1.8 Articles of Incorporation. At the
Effective Time, the Amended and Restated
Articles of Incorporation of BancorpSouth,
as in effect at the Effective Time,
shall be the articles of incorporation of
the Surviving Corporation. At the
Effective Time, the Amended and Restated
Articles of Association of BancorpSouth
Bank, as in effect at the Effective Time,
shall be the articles of association
of the Surviving Bank.
1.9 Bylaws. At the Effective Time, the
Bylaws of BancorpSouth, as in effect
immediately prior to the Effective Time,
shall be the bylaws of the Surviving
Corporation until thereafter amended in
accordance with applicable law and the
articles of incorporation of the Surviving
Corporation. At the Effective Time,
the Bylaws of BancorpSouth Bank, as in
effect immediately prior to the Effective
Time, shall be the bylaws of the Surviving
Bank until thereafter amended in
accordance with applicable law and the
articles of association of the Surviving
Bank.
1.10 Directors and Officers. The directors
and officers of BancorpSouth
immediately prior to the Effective Time
shall be the directors and officers of
the Surviving Corporation, each to hold
office in accordance with the articles
of incorporation and bylaws of the
Surviving Corporation until their respective
successors are duly elected or appointed
and qualified. The directors and
officers of BancorpSouth Bank immediately
prior to the Effective Time shall be
the directors and officers of the Surviving
Bank, each to hold office in
accordance with the articles of association
and bylaws of the Surviving Bank
until their respective successors are duly
elected or appointed and qualified.
ARTICLE II. EXCHANGE OF SHARES
2.1 BancorpSouth to Make Shares and Cash
Available. At or prior to the Effective
Time, BancorpSouth shall deposit, or shall
cause to be deposited, with SunTrust
Bank, Atlanta, N.A. or another bank or
trust company (the "Exchange Agent")
selected by BancorpSouth and reasonably
satisfactory to PBC, for the benefit of
the holders of Certificates, for exchange
in accordance with this Article II,
the Cash Consideration, certificates
representing the shares of BancorpSouth
Common Stock constituting the Stock
Consideration and the cash in lieu of
fractional shares (such cash and
certificates for shares of BancorpSouth Common
Stock, together with any dividends or
distributions with respect thereto, being
hereinafter referred to as the "Exchange
Fund") to be issued pursuant to Section
1.4 and paid pursuant to Section 2.2(a) in
exchange for outstanding shares of
PBC Common Stock.
2.2 Exchange of Shares; Payment of Cash
Consideration.
(a) At the time of the mailing of the Proxy Statement and
Prospectus
described in Section 7.1 hereof,
BancorpSouth will cause the Exchange Agent to
send to each holder of record of shares of
PBC Common Stock on the record date
for the meeting of the shareholders of PBC
a letter of transmittal and cash
election form (collectively, the "Election
Form") and other appropriate
materials providing for such holder,
subject to the provisions of Section 1.4
hereof, to make a Stock Election, Cash
Election, Mixed Election, or No Election.
As of the Election Deadline (as defined
below), any shares of PBC Common Stock
with respect to which there shall not have
been such election by submission to
the Exchange Agent of an effective,
properly completed Election Form shall be
deemed to be No Election Shares.
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(i) Any Cash Election, Stock Election or Mixed Election shall
have been validly made only if the Exchange
Agent shall have received an
Election Form properly completed by 5:00
p.m., Central Time, on the second
business day immediately preceding the
meeting of shareholders of PBC described
in Section 7.1 hereof (the "Election
Deadline"). An election by a holder of
shares of PBC Common Stock shall be validly
made only if the Exchange Agent
shall have received an Election Form
properly completed and executed (with the
signature or signatures thereon guaranteed
if required by the Election Form) by
such holder of shares of PBC Common Stock.
An Election Form shall be deemed
properly completed only if accompanied by
one or more Certificates (or customary
affidavits and, if required by
BancorpSouth, indemnification regarding the loss
or destruction of such Certificates or the
guaranteed delivery of such
Certificates) representing all shares of
PBC Common Stock covered by such
Election Form, together with duly executed
transmittal materials included with
the Election Form. BancorpSouth shall have
the right to make reasonable
determinations and to establish reasonable
procedures (not inconsistent with the
terms of this Agreement) in guiding the
Exchange Agent in its determination as
to the validity of Election Forms and of
any revision, revocation or withdrawal
thereof.
(ii) Two or more holders of shares of PBC Common Stock who are
determined to constructively own shares
owned by each other by virtue of Section
318(a) of the Code and who so certify to
BancorpSouth's satisfaction, and any
single holder of shares of PBC Common Stock
who holds such shares in two or more
different names and who so certifies to
BancorpSouth's satisfaction, may submit
a joint Election Form covering the
aggregate shares of PBC Common Stock owned by
all such holders or by such single holder,
as the case may be. For all purposes
of this Agreement, each such group of
holders which, and each such single holder
who, submits a joint Election Form shall be
treated as a single holder of shares
of PBC Common Stock.
(iii) Each holder of record of shares of PBC Common Stock who
holds such shares as nominee, trustee or in
other representative capacities
(each, a "Representative") may submit
multiple Election Forms, provided that
such Representative certifies that each
such Election Form covers all shares of
PBC Common Stock held by that
Representative for a particular beneficial owner.
(iv) Any holder of shares of PBC Common Stock who has made an
election by submitting an Election Form to
the Exchange Agent may at any time
prior to the Election Deadline change such
holder's election by submitting a
revised Election Form, properly completed
and signed, that is received by the
Exchange Agent prior to the Election
Deadline. Any holder of shares of PBC
Common Stock may at any time prior to the
Election Deadline revoke such holder's
election by written notice to the Exchange
Agent received at any time prior to
the Election Deadline.
(b) As soon as practicable after the Election Deadline (the
"Allocation
Date"), the Exchange Agent shall effectuate
the allocation among the holders of
shares of PBC Common Stock of rights to
receive the Stock Consideration, the
Cash Consideration or a combination of both
the Stock Consideration and the Cash
Consideration in the Merger in accordance
with the terms of this Section. As
more fully set forth in Section 1.4 above,
the aggregate number of shares of PBC
Common Stock to be converted in the Merger
into the right to receive Cash
Consideration may not exceed 49.0% of the
outstanding shares of PBC Common
Stock, and the aggregate number of shares
of PBC Common Stock to be converted in
the Merger into the right to receive Stock
Consideration may not exceed 51.0% of
the total number of outstanding shares of
PBC Common Stock.
(c) No dividends or other distributions declared after the
Effective
Time with respect to BancorpSouth Common
Stock and payable to the holders of
record thereof shall be paid to the holder
of any unsurrendered Certificate
until the holder thereof shall surrender
such Certificate in accordance with
this Article II. After the surrender of a
Certificate in accordance with this
Article II, the record holder thereof shall
be entitled to receive any such
dividends or other distributions, without
any interest thereon,
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<PAGE>
which theretofore had become payable with
respect to shares of BancorpSouth
Common Stock represented by such
Certificate.
(d) If any certificate representing shares of BancorpSouth Common
Stock
is to be issued in a name other than that
in which the Certificate surrendered
in exchange therefor is registered, it
shall be a condition of the issuance
thereof that the Certificate so surrendered
shall be properly endorsed (or
accompanied by an appropriate instrument of
transfer) and otherwise in proper
form for transfer, and that the person
requesting such exchange shall pay to the
Exchange Agent in advance any transfer or
other taxes required by reason of the
issuance of a certificate representing
shares of BancorpSouth Common Stock in
any name other than that of the registered
holder of the Certificate
surrendered, or required for any other
reason, or shall establish to the
satisfaction of the Exchange Agent that
such tax has been paid or is not
payable.
(e) After the Effective Time, there shall be no transfers on the
stock
transfer books of PBC of the shares of PBC
Common Stock which were issued and
outstanding immediately prior to the
Effective Time. If, after the Effective
Time, Certificates representing such shares
are presented for transfer to the
Exchange Agent, they shall be canceled and
exchanged for certificates
representing shares of BancorpSouth Common
Stock as provided in this Article II.
(f) Notwithstanding anything to the contrary contained herein,
no
certificates or scrip representing
fractional shares of BancorpSouth Common
Stock shall be issued upon the surrender
for exchange of Certificates, no
dividend or distribution with respect to
BancorpSouth Common Stock shall be
payable on or with respect to any
fractional share, and such fractional share
interests shall not entitle the owner
thereof to vote or to any other rights of
a shareholder of BancorpSouth. In lieu of
the issuance of any such fractional
share, BancorpSouth shall pay to each
former shareholder of PBC who otherwise
would be entitled to receive a fractional
share of BancorpSouth Common Stock an
amount in cash equal to the product of (x)
$22.984 and (y) the fraction of a
share of BancorpSouth Common Stock which
such holder would otherwise be entitled
to receive pursuant to Article I
hereof.
(g) Any portion of the Exchange Fund that remains unclaimed by
the
shareholders of PBC for 12 months after the
Effective Time shall be paid to
BancorpSouth. Any shareholders of PBC who
have not theretofore complied with
this Article II shall thereafter look only
to BancorpSouth for payment of their
portion of the Cash Consideration and their
shares of BancorpSouth Common Stock,
cash in lieu of fractional shares and
unpaid dividends and distributions on
BancorpSouth Common Stock deliverable in
respect of each share of PBC Common
Stock such shareholder holds as determined
pursuant to this Agreement, in each
case, without any interest thereon.
Notwithstanding the foregoing, none of
BancorpSouth, PBC, the Exchange Agent or
any other person shall be liable to any
former holder of shares of PBC Common Stock
for any amount properly delivered to
a public official pursuant to applicable
abandoned property, escheat or similar
laws.
(h) In the event any Certificate shall have been lost, stolen
or
destroyed, upon the making of an affidavit
of that fact by the person claiming
such Certificate to be lost, stolen or
destroyed and, if required by
BancorpSouth, the posting by such person of
a bond in such amount as is
customarily required by BancorpSouth and
Exchange Agent for other shareholders
of BancorpSouth as indemnity against any
claim that may be made against it with
respect to such Certificate, the Exchange
Agent will issue in exchange for such
lost, stolen or destroyed Certificate the
shares of BancorpSouth Common Stock
and cash in lieu of fractional shares
deliverable in respect thereof pursuant to
this Agreement.
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ARTICLE III. DISCLOSURE SCHEDULES; STANDARDS FOR
REPRESENTATIONS AND WARRANTIES
3.1 Disclosure Schedules. On or prior to
the date hereof, each of BancorpSouth
and PBC has delivered to the other party a
schedule (in the case of PBC, the
"PBC Disclosure Schedule," and in the case
of BancorpSouth, the "BancorpSouth
Disclosure Schedule," and, generally, a
"Disclosure Schedule") setting forth,
among other things, items the disclosure of
which is necessary or appropriate
either in response to an express disclosure
requirement contained in a provision
hereof or as an exception to one or more of
such party's representations or
warranties contained in Article IV, in the
case of PBC, or Article V, in the
case of BancorpSouth, or to one or more of
such party's covenants contained in
Article VI; provided, however, that the
mere inclusion of an item in a
Disclosure Schedule as an exception to a
representation or warranty shall not be
deemed an admission by a party that such
item represents a material exception or
material fact, event or circumstance or
that such item has had or could be
reasonably expected to have a Material
Adverse Effect (as defined in Section 3.2
below) with respect to either PBC or
BancorpSouth, respectively.
3.2 Standards.
(a) As used in this Agreement, the term "Material Adverse
Effect"
means, with respect to PBC, (i) a change in
the business or properties of PBC or
its Subsidiaries which, individually or in
the aggregate has resulted or is
reasonably expected by BancorpSouth, to
result in losses, damages, liabilities,
costs, expenses, judgments or fines in an
amount of $750,000 or greater; or (ii)
is materially adverse to (A) the business,
condition, assets, properties,
rights, prospects or results of operations
of PBC and its Subsidiaries taken as
a whole or (B) the ability of PBC and its
Subsidiaries to consummate the
transactions contemplated hereby; provided
that, for purposes of clauses (i) and
(ii), Material Adverse Effect shall
specifically exclude any adverse effect
attributable to or resulting from (1) any
change in banking laws, rules or
regulations of general applicability or
interpretations thereof by courts or
governmental authorities, (2) any change in
generally accepted accounting
principles ("GAAP") or regulatory
accounting principles applicable to banks or
their holding companies generally, (3) any
action or omission of PBC or any
Subsidiary of PBC taken with the express
prior written consent of BancorpSouth,
(4) any expenses incurred by PBC where such
expenses are contemplated by or
reasonably incurred in connection with this
Agreement or the transactions
contemplated hereby, (5) the fact that PBC
does not meet the revenue, profit or
balance sheet predictions set forth in
PBC's internal projections separately
delivered to BancorpSouth (provided that
this exception shall not excuse any
breach of a representation, warranty or
covenant that results in such failure to
meet projections), (6) any termination or
resignation of employment by any
employee of PBC or PBB as a result of the
pendency of the Merger, including any
termination arising as a result of the
employment package (including title,
level of responsibility, location of
employment or compensation) offered to such
employees by BancorpSouth or BancorpSouth
Bank, or (7) any changes in general
economic conditions or changes affecting
the banking industry generally,
including adverse changes in the banking or
financial markets (provided such
changes do not affect PBC in a
disproportionate manner).
(b) As used in this Agreement, the term "Material Adverse
Effect"
means, with respect to BancorpSouth, a
material adverse effect on (i) the
business, condition, assets, properties,
rights, prospects or results of
operations of BancorpSouth and its
Subsidiaries taken as a whole or (ii) the
ability of BancorpSouth and its
Subsidiaries to consummate the transactions
contemplated hereby; provided that Material
Adverse Effect shall specifically
exclude any adverse effect attributable to
or resulting from (A) any change in
banking laws, rules or regulations of
general applicability, (B) any change in
GAAP or regulatory accounting principles
applicable to banks or their holding
companies generally or interpretations
thereof by courts or governmental
authorities, (C) any action or omission of
BancorpSouth or any Subsidiary of
BancorpSouth taken with the express prior
written consent of PBC, (D) any
expenses
10
<PAGE>
incurred by BancorpSouth where such
expenses are contemplated by or reasonably
incurred in connection with this Agreement
or the transactions contemplated
hereby, or (E) any changes in general
economic conditions or changes affecting
the banking industry generally, including
adverse changes in the banking or
financial markets (provided such changes do
not affect BancorpSouth in a
disproportionate manner). Changes in the
market price of BancorpSouth Common
Stock shall not be considered Material
Adverse Effects or otherwise considered a
material change or circumstance for any
purpose.
(c) As used in this Agreement, the word "Subsidiary" when used
with
respect to any party means any corporation,
partnership, limited liability
company or other person, entity or
organization, whether incorporated or
unincorporated, with respect to which such
party owns, directly or indirectly,
50% or more of the equity or ownership
interests, or an amount of voting
securities or ownership interests
sufficient to elect at least a majority of its
board of directors or other governing
body.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF PBC
PBC hereby represents and warrants to BancorpSouth as follows:
4.1 Corporate Organization.
(a) PBC is a corporation duly organized, validly existing and in
good
standing under the laws of the State of
Tennessee. PBC has the corporate power
and authority to own or lease all of its
properties and assets and to carry on
its business as it is now being conducted.
PBC is duly licensed or qualified to
do business in each jurisdiction in which
the nature of the business conducted
by it or the character or location of the
properties and assets owned or leased
by it makes such licensing or qualification
necessary, except where failure to
obtain such license or qualification would
not have a Material Adverse Effect on
PBC. PBC is duly registered as a bank
holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC
Act"). The Charter and Bylaws of PBC,
copies of which have previously been
provided to BancorpSouth, are true and
correct copies of such documents as
currently in effect. PBC has no Subsidiaries
other than PBB and Premier Bancorp Capital
Trust I, which is used as a vehicle
to issue trust preferred securities. PBC
does not own (other than in a bona fide
fiduciary capacity or in satisfaction of a
debt previously contracted)
beneficially, directly or indirectly (other
than as set forth in Section 4.1(a)
of the PBC Disclosure Schedule), any shares
of capital stock or any equity
securities or similar interests of any
person, or any interest in a partnership
or joint venture of any kind.
(b) PBB is a Tennessee state bank duly organized, validly existing
and
in good standing under the laws of the
State of Tennessee. The deposit accounts
of PBB are insured by the Federal Deposit
Insurance Corporation (the "FDIC")
through the Bank Insurance Fund (the "BIF")
to the fullest extent permitted by
law, and all premiums and assessments
required to be paid in connection
therewith have been paid when due. PBB has
the corporate power and authority to
own or lease all of its properties and
assets and to carry on its business as it
is now being conducted. PBB is duly
licensed or qualified to do business in each
jurisdiction in which the nature of the
business conducted by it or the
character or the location of the properties
and assets owned or leased by it
makes such licensing or qualification
necessary, except where failure to obtain
such license or qualification would not
have a Material Adverse Effect on PBB.
The Charter and Bylaws of PBB, copies of
which have previously been provided to
BancorpSouth, are true and correct copies
of such documents as currently in
effect. PBB has no Subsidiaries and does
not own beneficially, directly or
indirectly, any shares of any equity
securities or similar interests of any
person, or any interest in a partnership or
joint venture of any kind.
(c) The minute books of PBC and each of its direct and indirect
Subsidiaries contain true and correct
records of all meetings and other
corporate actions held or taken since
December 31, 1998 of their respective
shareholders and Boards of Directors
(including committees of their respective
Boards of
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<PAGE>
Directors). Certain minutes have been taken
of meetings, the contents of which
relate exclusively to this transaction.
Such minutes are not included in the
regular minute books and have not been made
available to BancorpSouth.
4.2 Capitalization.
(a) The authorized capital stock of PBC consists of 1,000 shares
of
organizational common stock, $1.00 par
value, callable by PBC at any time,
3,000,000 shares of PBC Common Stock, $1.00
par value and 1,000,000 shares of
PBC Preferred Stock, no par value. There
are 603,000 shares of PBC Common Stock
issued and outstanding and no shares of PBC
Common Stock held by PBC as treasury
stock. Other than shares reserved for
issuance in respect of 174,600 options,
there are no shares of PBC Common Stock
reserved for issuance upon exercise of
outstanding stock options or otherwise.
There are no shares of PBC Preferred
Stock issued or outstanding, held in PBC's
treasury or reserved for issuance
upon exercise of outstanding stock options
or otherwise. All of the issued and
outstanding shares of PBC Common Stock have
been duly authorized and validly
issued and are fully paid, nonassessable,
and were issued in compliance with and
are currently free of all preemptive
rights, with no personal liability
attaching to the ownership thereof. Except
for options outstanding to purchase a
total of 174,600 shares of PBC Common Stock
(the "Options"), PBC does not have
and is not bound by any outstanding
subscriptions, options, warrants, calls,
commitments or agreements of any character
calling for the purchase or issuance
of any shares of PBC Common Stock or PBC
Preferred Stock or any other equity
security or capital stock of PBC or any
securities representing the right to
purchase or otherwise receive any shares of
PBC Common Stock or any other equity
security or capital stock of PBC. Set forth
in Section 4.2(a) of the PBC
Disclosure Schedule is a complete and
correct list, for each of the Options, of
the names of the optionees, the date of
grant, the number of shares subject to
each such option, the expiration date of
each such option, and the price at
which each such option may be
exercised.
(b) The authorized capital stock of PBB consists of 3,000,000
shares of
Bank Common Stock, par value $1.00 and
1,000,000 shares of PBB Preferred Stock,
no par value. Except as set forth in
Section 4.2(b) of the PBC Disclosure
Schedule, PBC owns, directly or indirectly,
all of the issued and outstanding
shares of the capital stock, membership
interests or other equity securities of
each of PBC's Subsidiaries, free and clear
of all liens, charges, encumbrances
and security interests whatsoever, and all
of such shares, membership interests
or other equity interests are duly
authorized and validly issued and are fully
paid, nonassessable (except as otherwise
provided by applicable federal law) and
free of preemptive rights, with no personal
liability attaching to the ownership
thereof. PBC's Subsidiaries are not bound
by any outstanding subscriptions,
options, warrants, calls, commitments or
agreements of any character calling for
the purchase or issuance of any shares of
capital stock or any other equity
security of any of PBC's Subsidiaries or
any securities representing the right
to purchase or otherwise receive any shares
of capital stock or any other equity
security of any of PBC's Subsidiaries.
There are no outstanding subscriptions,
options, warrants, calls, commitments or
agreements of any character by which
PBC or any of its Subsidiaries will be
bound calling for the purchase or
issuance of any shares of the capital
stock, membership interests or other
equity securities of any of PBC's
Subsidiaries.
4.3 Authority; No Violation.
(a) PBC has full corporate power and authority to execute and
deliver
this Agreement and, upon the receipt of
requisite approval by the shareholders
of PBC of this Agreement, to consummate the
transactions contemplated hereby.
The execution and delivery of this
Agreement and the consummation of the
transactions contemplated hereby have been
duly and validly approved by the
Board of Directors of PBC and the Board of
Directors of PBB. The Board of
Directors of PBC has directed that this
Agreement and the transactions
contemplated hereby be submitted to PBC's
shareholders for approval at a meeting
of such shareholders. PBC has approved this
Agreement and the transactions
contemplated hereby, and the Board of
Directors of PBC has directed officers of
PBC to so approve this Agreement and the
transactions
12
<PAGE>
contemplated herein in its capacity as the
sole shareholder of PBB. Except for
the adoption of this Agreement by the
requisite vote of PBC's shareholders, no
other proceedings on the part of PBC or its
Subsidiaries are necessary to
approve this Agreement and to consummate
the transactions contemplated hereby.
This Agreement has been duly and validly
executed and delivered by PBC, and this
Agreement constitutes a valid and binding
obligation of PBC, enforceable against
PBC in accordance with its terms, except as
enforcement may be limited by
general principles of equity whether
applied in a court of law or a court of
equity and by bankruptcy, insolvency and
similar laws affecting creditors'
rights and remedies generally.
(b) Neither the execution and delivery of this Agreement, nor
the
consummation by PBC of the transactions
contemplated hereby, nor compliance by
PBC with any of the terms or provisions
hereof or thereof, will (i) violate any
provision of the Articles of Incorporation
or Bylaws of PBC or the articles of
incorporation, bylaws or similar governing
documents of any of PBC's
Subsidiaries, or (ii) assuming that the
consents and approvals referred to in
Section 4.4 hereof are duly obtained, (A)
violate any statute, code, ordinance,
rule, regulation, judgment, order, writ,
decree or injunction applicable to PBC
or any of its Subsidiaries, or any of their
respective properties or assets, or
(B) violate, conflict with, result in a
breach of any provision of or the loss
of any benefit under, constitute a default
(or an event which, with notice or
lapse of time, or both, would constitute a
default) under, result in the
termination of or a right of termination or
cancellation under, accelerate the
performance required by, or result in the
creation of any lien, pledge, security
interest, charge or other encumbrance upon
any of the respective properties or
assets of PBC or any of its Subsidiaries
under, any of the terms, conditions or
provisions of any note, bond, mortgage,
indenture, deed of trust, license,
lease, agreement or other instrument or
obligation to which PBC or any of its
Subsidiaries is a party, or by which they
or any of their respective properties
or assets may be bound or affected unless,
with respect to (ii) above, such
violation, conflict, or breach would not
have a Material Adverse Effect on PBC.
4.4 Consents and Approvals. Except for (a)
the filing of applications and
notices, as applicable, with the Board of
Governors of the Federal Reserve
System (the "Federal Reserve Board"), the
FDIC, the Federal Trade Commission
(the "FTC") and the Department of Justice
("DoJ"), and approval of such
applications and notices, (b) the filing of
such applications, filings,
authorizations, orders and approvals as may
be required under applicable state
law, (c) the filing with, and declaration
of effectiveness by, the United States
Securities and Exchange Commission ("SEC")
of a registration statement on Form
S-4 (such registration statement and any
post-effective amendment thereto
relating to this transaction, or any other
registration statement on Form S-4
used in connection with the Merger, the
"S-4") in which will be included as a
prospectus a definitive proxy statement
relating to the meeting of shareholders
of PBC to be held in connection with this
Agreement and the transactions
contemplated herein (the "Proxy
Statement"), (d) the approval of this Agreement
by the requisite vote of the shareholders
of PBC, (e) the filing of the Articles
of Merger with, as applicable, the
Mississippi Secretary, the Tennessee
Secretary, the Mississippi Department and
the Tennessee Department and (f)
approval for listing of BancorpSouth Common
Stock to be issued in the Merger on
the NYSE, no consents or approvals of or
filings or registrations with any
court, administrative agency or commission
or other governmental authority or
instrumentality (each a "Governmental
Entity") or with any third party are
necessary in connection with (i) the
execution and delivery by PBC of this
Agreement and (ii) the consummation by PBC
and its Subsidiaries of the Merger
and the other transactions contemplated
hereby.
4.5 Reports. PBC and each of its
Subsidiaries have timely filed all reports,
registrations and statements, together with
any amendments required to be made
with respect thereto, that they were
required to file since December 31, 1998
with (i) the Federal Reserve Board, (ii)
the FDIC, (iii) any Federal Reserve
Bank, (iv) any state banking commissions,
including without limitation the
Tennessee Department or any other state
regulatory authority (each a "State
Regulator") and (v) any self-regulatory
organization (collectively, the
"Regulatory Agencies"), and have paid all
fees and assessments due and payable
in connection therewith. Except for normal
examinations conducted by
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<PAGE>
a Regulatory Agency in the regular course
of the business of PBC and its
Subsidiaries, no Regulatory Agency has
initiated any proceeding or, to the
knowledge of PBC, investigation into the
business or operations of PBC or any of
its Subsidiaries since December 31, 1998.
There is no unresolved outstanding
violation, criticism, or exception by any
Regulatory Agency with respect to any
report or statement relating to any
examinations of PBC or any of its
Subsidiaries.
4.6 Financial Statements.
(a) Except as set forth in Section 4.6(a) of the PBC Disclosure
Schedule, the audited consolidated
financial statements of PBC and its
Subsidiaries for the fiscal years ended
December 31, 2003, 2002 and 2001, and
the unaudited financial statements of PBC
for the six-month period ended June
30, 2004 (collectively, the "PBC Financial
Statements"), including consolidated
statements of condition and statements of
earnings, copies of which have been
previously provided to BancorpSouth, fairly
present in all material respects the
consolidated financial position of PBC and
its Subsidiaries as of the respective
dates thereof, and fairly present (subject,
in the case of the unaudited
statements, to recurring audit adjustments
normal in nature and amount) the
results of the consolidated operations and
consolidated financial position of
PBC and its Subsidiaries for the respective
fiscal periods or as of the
respective dates therein set forth; each of
such PBC Financial Statements
(including the related notes, where
applicable) complies with applicable
accounting requirements with respect
thereto; and each of such PBC Financial
Statements (including the related notes,
where applicable) has been prepared in
accordance with GAAP consistently applied
during the periods involved, except as
indicated in the notes thereto. The books
and records of PBC and its
Subsidiaries have been, and are being,
maintained in accordance with GAAP and
any other applicable legal and accounting
requirements.
(b) To the knowledge of PBC, neither PBC nor any of its
Subsidiaries
(or any of its or their assets) are subject
to any liability or obligation
whatsoever, whether absolute, accrued,
contingent, matured or unmatured, that is
not reflected and adequately reserved
against in the most recent balance sheet
included in the PBC Financial Statements,
other than liabilities which have not
had and would not reasonably be expected to
have, individually or in the
aggregate, a Material Adverse Effect with
respect to PBC and which were incurred
the ordinary course of business consistent
with past practices.
4.7 Broker's Fees. Other than Hovde
Financial LLC, neither PBC nor any of its
Subsidiaries, nor any of their respective
officers or directors, has employed
any broker or finder or incurred any
liability for any broker's fees,
commissions or finder's fees in connection
with any of the transactions
contemplated by this Agreement.
4.8 Absence of Certain Changes or
Events.
(a) Except as set forth in Section 4.8(a) of the PBC Disclosure
Schedule, since December 31, 2003, there
has been no change or development or
combination of changes or developments
which, individually or in the aggregate,
has had or is reasonably likely to have a
Material Adverse Effect with respect
to PBC.
(b) Except as set forth in Section 4.8(b) of the PBC Disclosure
Schedule, since December 31, 2003, PBC and
its Subsidiaries have carried on
their respective businesses in the ordinary
course consistent with their past
practices.
(c) Section 4.8(c) of the PBC Disclosure Schedule sets forth a true
and
correct list of all stock options granted
since December 31, 2003. Since June
30, 2004, except as set forth in Section
4.8(c) of the PBC Disclosure Schedule,
neither PBC nor any of its Subsidiaries has
increased the wages, salaries,
compensation, pension, or other fringe
benefits or perquisites payable to any
executive officer, employee, or director
from the amount thereof in effect as of
June 30, 2004, granted any severance or
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<PAGE>
termination pay, entered into any contract
to make or grant any severance or
termination pay, or paid any bonus (except
for salary increases and bonus
payments made in cash and in the ordinary
course of business consistent with
past practices) or granted any stock
option.
4.9 Legal Proceedings. Section 4.9 of the
PBC Disclosure Schedule lists all
pending or, to PBC's knowledge, threatened,
legal, administrative, arbitral or
other proceedings, claims, actions or
governmental or regulatory investigations
of any nature against PBC or any of its
Subsidiaries or challenging the validity
or propriety of the transactions
contemplated by this Agreement, other than
regularly scheduled examinations and
similar routine investigations made by bank
regulatory officials in the course of their
supervision of PBC or any of its
Subsidiaries. Neither PBC nor any of its
Subsidiaries is a party to any, and
there are no pending or, to PBC's
knowledge, threatened, legal, administrative,
arbitral or other proceedings, claims,
actions or governmental or regulatory
investigations of any nature against PBC or
any of its Subsidiaries or
challenging the validity or propriety of
the transactions contemplated by this
Agreement, other than regularly scheduled
examinations and similar routine
investigations made by bank regulatory
officials in the course of their
supervision of PBC or any of its
Subsidiaries, which has had, or could
reasonably be expected to have, a Material
Adverse Effect with respect to PBC.
There is no injunction, order, judgment,
decree or unique regulatory restriction
imposed upon PBC, any of its Subsidiaries
or the assets of PBC or any of its
Subsidiaries.
4.10 Taxes.
(a) (i) Each of PBC
and its Subsidiaries has duly and timely filed
(including applicable extensions granted)
all Tax Returns (as defined in this
Section below) that it was required to
file, and all such Tax Returns are true,
complete and accurate in all material
respects; (ii) except as disclosed in
Section 4.10(a) of the PBC Disclosure
Schedule, PBC and its Subsidiaries have
timely paid all Taxes (as defined in this
Section below) due and owing (whether
or not shown on any Tax Return) and have
adequately reserved in the financial
statements of PBC in accordance with GAAP
for all Taxes (whether or not shown on
any Tax Return) that have accrued but are
not yet due or owing as of the dates
thereof; (iii) there are no pending or, to
the knowledge of PBC, threatened
audits, examinations, investigations,
deficiencies, claims or other proceedings
in respect of Taxes relating to PBC or any
Subsidiary of PBC; (iv) there are no
liens for Taxes upon the assets of PBC or
any Subsidiary of PBC, other than
liens for current Taxes not yet due; (v)
neither PBC nor any of its Subsidiaries
has requested any extension of time within
which to file any Tax Returns in
respect of any taxable year which have not
subsequently been filed when due
(pursuant to such extension), nor provided
or been requested to provide any
waivers of the time to assess any Taxes
that are pending or outstanding; (vi)
with respect to each taxable period of PBC
and its Subsidiaries, the federal and
state income Tax Returns of PBC and its
Subsidiaries have either been audited by
the Internal Revenue Service (the "IRS") or
appropriate state tax authorities or
the time for assessing and collecting
income Tax with respect to such taxable
period has closed and such taxable period
is not subject to review, except as
disclosed in Section 4.10(a) of the PBC
Disclosure Schedule; (vii) neither PBC
nor any of its Subsidiaries (a) has ever
been a member of an affiliated group
(within the meaning of Section 1504(a) of
the Code) filing a consolidated
federal income Tax Return (other than with
a group the common parent of which
was PBC), (b) has ever been a party to any
Tax sharing, indemnification or
allocation agreement (other than with a
group the common parent of which was
PBC), (c) has any liability for the Taxes
of any person (other than PBC or any
of its Subsidiaries) under Treasury
Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law),
as a transferee or successor, by
contract or agreement, or otherwise and (d)
is a party to any joint venture,
partnership or other arrangement that is
being treated as a partnership for
federal income Tax purposes; (viii) neither
PBC nor any of its Subsidiaries has
been, at any time, a "United States Real
Property Holding Corporation" within
the meaning of Section 897(c)(2) of the
Code; (ix) neither PBC nor any of its
Subsidiaries has constituted either a
"distributing corporation" or a
"controlled corporation" in a distribution
of stock intended to qualify for
tax-free treatment under Section 355 of the
Code (A) in the two (2) years prior
to the date of this Agreement or (B) in a
distribution which could otherwise
constitute
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part of a "plan" or "series of related
transactions" (within the meaning of
Section 355(e) of the Code) in conjunction
with the Merger; (x) PBC and each of
its Subsidiaries have withheld with respect
to its Employees all federal, state
and foreign income taxes and social
security charges and similar fees, Federal
Insurance Contribution Act, Federal
Unemployment Tax Act and other Taxes
required to be withheld, and have timely
paid such taxes withheld over to the
appropriate authorities; (xi) neither PBC
nor any of its Subsidiaries has been a
party to any "reportable transaction" as
defined in Treasury Regulation Section
1.6011-4(b) and (xii) no Tax is required to
be withheld pursuant to Section 1445
of the Code as a result of the transfer
contemplated by this Agreement.
(b) For the purposes of this Agreement, "Taxes" shall mean (i)
all
taxes, charges, fees, levies, penalties or
other assessments imposed by any
federal, state, local or foreign taxing
authority, including, but not limited to
income, excise, property, sales, transfer,
franchise, payroll, withholding,
social security or other taxes, including
any interest, penalties or additions
attributable thereto and (ii) any liability
for Taxes described in clause (i)
under Treasury Regulation Section 1.1502-6
(or any similar provision of state,
local or foreign law). For purposes of this
Agreement, "Tax Return" shall mean
any return, report or similar statement
(including any related or supporting
information) required to be filed with
respect to any Taxes, including any
information return, claim for refund,
amended return or declaration of estimated
Taxes.
4.11 Employees.
(a) Section 4.11(a) of the PBC Disclosure Schedule sets forth a
true,
complete and correct list (all of which are
collectively referred to as the
"Employee Plans") of all "employee benefit
plans" as defined by section 3(3) of
the Employee Retirement Income Security Act
of 1974, as amended, and the rules
and regulations promulgated thereunder
(collectively, "ERISA"), all specified
fringe benefit plans as defined in section
6039D of the Code, and all other
bonus, incentive compensation, deferred
compensation, profit sharing, stock
option, stock appreciation right, stock
bonus, stock purchase, employee stock
ownership, savings, severance, supplemental
unemployment, layoff, salary
continuation, retirement, pension, health,
life insurance, disability, group
insurance, vacation, holiday, sick leave,
fringe benefit, or welfare plan, or
employment, consulting, change in control,
independent contractor, professional
services, confidentiality, or
non-competition agreement or any other similar
plan, agreement, policy or understanding
(whether written or oral, qualified or
nonqualified), and any trust, escrow or
other agreement related thereto, which
(i) is now or was for the last five (5)
years maintained or contributed to by
PBC or an ERISA Affiliate (as hereinafter
defined), or (ii) with respect to
which PBC or any ERISA Affiliate has any
obligations to any current or former
officer, Employee, service provider, or the
dependents of any thereof,
regardless of whether funded, or (iii)
which could result in the imposition of
any liability or obligation of any kind or
nature, whether accrued, absolute,
contingent, direct, indirect, known or
unknown, perfected or inchoate or
otherwise, and whether or not now due or to
become due to PBC or any ERISA
Affiliate.
(b) PBC has heretofore provided to BancorpSouth, to the extent
requested by BancorpSouth, and with respect
to each of the Employee Plans, true
and correct copies of each of the following
documents, as applicable: (i) the
Employee Plan document, (ii) the actuarial
report, if any, for such Employee
Plan for each of the last three (3) years,
(iii) the most recent determination
letter from the IRS for such Employee Plan,
(iv) the IRS Form 5500 annual
reports for such Employee Plan for each of
the last three (3) years, and (v) the
most recent summary plan description and
related summaries of material
modifications.
(c) Neither PBC nor any ERISA Affiliate has been liable at any time
for
contributions to a Plan that is subject to
section 412 of the Code, section 302
of ERISA and/or Title IV of ERISA.
(d) The form and
operation of all Employee Plans is in compliance with
the applicable terms of ERISA, the Code,
and any other applicable laws,
including the Americans with Disabilities
Act of
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1990, the Family Medical Leave Act of 1993
and the Health Insurance Portability
and Accountability Act of 1996, and such
Employee Plans have been operated in
compliance with such laws and the written
Employee Plan documents. Neither PBC
nor any fiduciary of an Employee Plan has
violated the requirements of section
404 of ERISA. All required reports and
descriptions of the Employee Plans
(including Internal Revenue Service Form
5500 Annual Reports, Summary Annual
Reports and Summary Plan Descriptions and
Summaries of Material Modifications)
have been (when
