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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 27, 2000 (April 16, 2000)
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BANCORPSOUTH, INC.
(Exact Name of Registrant as Specified in Its Charter)
MISSISSIPPI 0-10826 64-0659571
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(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation)
ONE MISSISSIPPI PLAZA
TUPELO, MISSISSIPPI 38804
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(Address of Principal (Zip Code)
Executive Offices)
(662) 680-2000
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, if Changed from Last Report)
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ITEM 5. OTHER EVENTS
BancorpSouth, Inc. and First United Bancshares, Inc. have entered into
an Agreement and Plan of Merger, dated as of April 16, 2000 (the "Merger
Agreement"), pursuant to which First United Bancshares, Inc. is to merge with
and into BancorpSouth, Inc. upon the terms and subject to the conditions set
forth in the Merger Agreement. A copy of the Merger Agreement is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits are filed herewith:
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<CAPTION>
Exhibit Number Description
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<S> <C>
99.1 Agreement and Plan of Merger, dated as of April 16, 2000,
between BancorpSouth, Inc. and First United Bancshares, Inc.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BANCORPSOUTH, INC.
By: /s/ L. NASH ALLEN, JR.
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L. Nash Allen, Jr.
Treasurer and Chief Financial Officer
Date: April 27, 2000
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EXHIBIT INDEX
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<CAPTION>
Exhibit Number Description
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<S> <C>
99.1 Agreement and Plan of Merger, dated as of April 16, 2000,
between BancorpSouth, Inc. and First United Bancshares, Inc.
</TABLE>
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EXHIBIT 99.1
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AGREEMENT AND PLAN OF MERGER
BETWEEN
BANCORPSOUTH, INC.
AND
FIRST UNITED BANCSHARES, INC.
DATED AS OF APRIL 16, 2000
================================================================================
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TABLE OF CONTENTS
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PAGE
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ARTICLE I THE MERGER.........................................................2
1.1. The Merger.........................................................2
1.2. Effective Time.....................................................2
1.3. Effects of the Merger..............................................2
1.4. Conversion of First United Common Stock............................3
1.5. Stock Options......................................................4
1.6. BancorpSouth Common Stock..........................................4
1.7. Articles of Incorporation..........................................5
1.8. Bylaws.............................................................5
1.9. Directors and Officers.............................................5
1.10. Tax Consequences; Accounting Treatment.............................5
ARTICLE II EXCHANGE OF SHARES.................................................5
2.1. BancorpSouth to Make Shares Available..............................5
2.2. Exchange of Shares.................................................5
ARTICLE III DISCLOSURE SCHEDULES; STANDARDS FOR REPRESENTATIONS
AND WARRANTIES............................................................7
3.1 Disclosure Schedules...............................................7
3.2. Standards..........................................................7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF FIRST............................8
4.1. Corporate Organization.............................................8
4.2. Capitalization....................................................12
4.3. Authority; No Violation...........................................13
4.4. Consents and Approvals............................................14
4.5. Reports...........................................................14
4.6. Financial Statements..............................................14
4.7. Broker's Fees.....................................................15
4.8. Absence of Certain Changes or Events..............................15
4.9. Legal Proceedings.................................................15
4.10. Taxes.............................................................16
4.11. Employees.........................................................16
4.12. First United Information..........................................18
4.13. Compliance with Applicable Law....................................18
4.14. Certain Contracts.................................................18
4.15. Agreements with Regulatory Agencies...............................18
4.16. Business Combination Provision; Takeover Laws.....................19
4.17. Environmental Matters.............................................19
4.18. Approvals.........................................................19
4.19. Insurance.........................................................19
4.20. Year 2000.........................................................20
4.21. Accounting for the Merger; Reorganization.........................20
ARTICLE V REPRESENTATIONS AND WARRANTIES OF BANCORPSOUTH....................20
5.1. Corporate Organization............................................20
</TABLE>
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<TABLE>
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5.2. Capitalization...................................................20
5.3. Authority; No Violation..........................................21
5.4. Consents and Approvals...........................................22
5.5. Reports..........................................................22
5.6. Financial Statements.............................................22
5.7. Broker's Fees....................................................23
5.8. Absence of Certain Changes or Events.............................23
5.9. Legal Proceedings................................................23
5.10. Taxes............................................................23
5.11. Employees........................................................24
5.12. BancorpSouth Information.........................................24
5.13. Compliance with Applicable Law...................................24
5.14. Ownership of First United Common Stock; Affiliates
and Associates...................................................24
5.15. Agreements with Regulatory Agencies..............................25
5.16. Approvals........................................................25
5.17. Environmental Matters............................................31
5.18. Insurance........................................................26
5.19. Accounting for the Merger; Reorganization........................26
ARTICLE VI COVENANTS RELATING TO CONDUCT OF BUSINESS........................26
6.1. Covenants of First United........................................26
6.2. Covenants of BancorpSouth........................................28
ARTICLE VII ADDITIONAL AGREEMENTS............................................29
7.1. Regulatory Matters...............................................29
7.2. Access to Information............................................30
7.3. Shareholder Meetings.............................................31
7.4. Legal Conditions to Merger.......................................31
7.5. Affiliates.......................................................31
7.6. NYSE Listing.....................................................31
7.7. Employee Benefit Plans; Existing Agreements......................31
7.8. Indemnification of First United Directors and Officers...........32
7.9. Additional Agreements............................................33
7.10. Coordination of Dividends........................................33
7.11. Stock Option Agreements..........................................33
7.12. Publication of Combined Results..................................34
7.13. Reasonable Best Efforts..........................................34
7.14. BancorpSouth Board of Directors..................................34
7.15. First United-Texas Subsidiary Merger.............................34
ARTICLE VIII CONDITIONS PRECEDENT.............................................34
8.1. Conditions to Each Party's Obligation To Effect the Merger.......34
8.2. Conditions to Obligations of BancorpSouth........................35
8.3. Conditions to Obligations of First United........................36
ARTICLE IX TERMINATION AND AMENDMENT........................................36
9.1. Termination......................................................36
9.2. Effect of Termination............................................39
</TABLE>
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<TABLE>
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9.3. Amendment.........................................................39
9.4. Extension; Waiver.................................................39
ARTICLE X GENERAL PROVISIONS................................................40
10.1. Closing...........................................................40
10.2. Nonsurvival of Representations, Warranties and Agreements.........40
10.3. Expenses..........................................................40
10.4. Notices...........................................................40
10.5. Interpretation....................................................41
10.6. Defined Terms.....................................................42
10.7. Counterparts......................................................42
10.8. Entire Agreement..................................................42
10.9. Governing Law.....................................................42
10.10. Enforcement of Agreement..........................................42
10.11. Severability......................................................42
10.12. Publicity.........................................................42
10.13. Assignment; Third Party Beneficiaries.............................42
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of April 16, 2000
("Agreement"), between BANCORPSOUTH, INC., a Mississippi corporation
("BancorpSouth"), and FIRST UNITED BANCSHARES, INC., an Arkansas corporation
("First United," and collectively with BancorpSouth, the "Holding Companies").
RECITALS:
WHEREAS, BancorpSouth is the parent corporation of BancorpSouth Bank,
a Mississippi banking corporation ("BancorpSouth Bank");
WHEREAS, First United is the sole shareholder of the following
entities: (i) The First National Bank of El Dorado, a national banking
association organized under the laws of the United States ("El Dorado"), (ii)
First National Bank of Magnolia, a national banking association organized under
the laws of the United States ("Magnolia"), (iii) Merchants and Planters Bank,
N.A. of Camden, a national banking association organized under the laws of the
United States ("Merchants"), (iv) The City National Bank of Fort Smith, a
national banking association organized under the laws of the United States
("Fort Smith"), (v) The Bank of North Arkansas, an Arkansas banking corporation
("North Arkansas"), (vi) FirstBank, a Texas banking corporation ("FirstBank"),
(vii) First United Bank, an Arkansas banking corporation ("FU Bank"), (viii)
Fredonia State Bank, a Texas banking corporation ("Fredonia"), (ix) City Bank &
Trust of Shreveport, a Louisiana banking corporation ("City Bank"), (x) Citizens
National Bank of Hope, a national banking association organized under the laws
of the United States ("Citizens"), (xi) First Republic Bank, a Louisiana banking
corporation ("Republic"), and (xii) First United Trust Company, N.A., a national
association organized under the laws of the United States ("First United Trust")
(El Dorado, Magnolia, Merchants, Fort Smith, North Arkansas, FirstBank, FU Bank,
Fredonia, City Bank, Citizens, Republic and First United Trust shall
collectively be referred to for purposes of this Agreement as the "First United
Banks");
WHEREAS, First United is the sole shareholder of First United of Texas,
Inc., an Arkansas corporation ("First United-Texas"), which is the sole
shareholder of Fredonia and First Bank;
WHEREAS, BancorpSouth and First United 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) First United will merge with and into BancorpSouth (the "Holding Company
Merger") and (ii) each of the First United Banks will merge with and into
BancorpSouth Bank (collectively, the "Bank Mergers"), each subject to the terms
and conditions set forth herein (the Holding Company Merger and the Bank
Mergers, collectively, the "Merger");
WHEREAS, concurrently with the execution and delivery of this
Agreement, the parties are entering into Stock Option Agreements (the "Stock
Option Agreements") pursuant to which each of the parties shall grant to the
other an option to acquire, under certain circumstances, up to 19.9% of the
party's outstanding shares of common stock;
WHEREAS, the parties intend that the Merger be treated as a
reorganization under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended, and the rules and regulations promulgated thereunder
(the "Code");
WHEREAS, the parties intend that the Merger be accounted for under the
pooling of interests method of accounting; 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 Mergers.
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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:
AGREEMENT:
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
Arkansas Business Corporation Act of 1987 (the "ABCA"), at the Effective Time
(as defined in Section 1.2), First United 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 First United shall terminate.
(b) Subject to the terms and conditions of this Agreement, in
accordance with the Mississippi Banking Act (the "MBA"), the National Bank Act
(the "NBA"), the Arkansas Banking Code of 1997 (the "ABA"), the Louisiana
Banking Law (the "LBL") and the Texas Finance Code (the "TBA"), as applicable,
at the Effective Time, each of the First United Banks shall merge with and into
BancorpSouth Bank. BancorpSouth Bank shall be the surviving banking corporation
(hereinafter sometimes called the "Surviving Bank") in each of the Bank Mergers,
and shall 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 Mergers, the separate corporate existence
of each of the First United Banks 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 Arkansas (the "Arkansas Secretary") with
respect to the Holding Company Merger.
(b) The Bank Mergers shall become effective as set forth in the
respective 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
Arkansas State Bank Department (the "Arkansas Department"), the Texas Department
of Banking (the "Texas Department"), the Louisiana Office of Financial
Institutions (the "Louisiana Department"), the Office of the Comptroller of the
Currency of the United States Department of Treasury (the "OCC") and the
Arkansas Secretary with respect to the Bank Mergers, 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
4-27-1106 of the ABCA.
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(b) At and after the Effective Time, the Bank Mergers shall have the
effects set forth in, as applicable, Section 81-5-85 of the MBA, Section
23-48-604 of the ABA, Section 6:355 of the LBL, Section 32.301 of the TBA and
Section 3(e) of the NBA (12 U.S.C. ss. 215a(e)).
1.4. Conversion of First United Common Stock.
(a) At the Effective Time, subject to Section 2.2(e) hereof, each share
of the common stock, par value $1.00 per share, of First United (the "First
United Common Stock") issued and outstanding immediately prior to the Effective
Time (other than First United Dissenting Shares (as defined in this Section
below) and other than shares of First United Common Stock held directly or
indirectly by BancorpSouth or First United or any of their respective
Subsidiaries (as defined in Section 3.2 hereof), except for Trust Account Shares
and DPC shares (as such terms are defined in this Section below), shall, by
virtue of this Agreement and without any action on the part of the holder
thereof, be converted into and exchangeable for 1.125 shares (the "Exchange
Ratio"), based upon the representations contained in Section 4.2, of the common
stock, par value $2.50 per share, of BancorpSouth ("BancorpSouth Common Stock"),
together with the number of BancorpSouth Rights (as defined in Section 5.2)
associated therewith. There shall be no adjustment in the Exchange Ratio in the
event of any change in the price of BancorpSouth Common Stock, First United
Common Stock or any other matter, other than for Anti-Dilution Events (as
defined in this Section below).
(b) All of the shares of First United 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 First United Common Stock shall thereafter only represent the right to
receive (i) the number of whole shares of BancorpSouth Common Stock and (ii) the
cash in lieu of fractional shares into which the shares of First United Common
Stock represented by such Certificate have been converted pursuant to this
Section 1.4(a) and Section 2.2(e) hereof. Certificates previously representing
shares of First United 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 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 shall be adjusted to result in the
same aggregate consideration being delivered to First United's shareholders as
would have been received had such Anti-Dilution Event not occurred.
(c) At the Effective Time, all shares of First United Common Stock that
are owned directly or indirectly by BancorpSouth or First United or any of their
respective Subsidiaries, other than shares of First United 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 First United, as the case
may be, being referred to herein as "Trust Account Shares") and (ii) held by
BancorpSouth or First United or any of their respective Subsidiaries in respect
of a debt previously contracted (any such shares of First United Common Stock,
and shares of BancorpSouth Common Stock which are similarly held, whether held
directly or indirectly by BancorpSouth or First United, 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 First United or any of its
Subsidiaries (other than Trust Account Shares and DPC Shares) shall become
treasury stock of BancorpSouth.
(d) Notwithstanding anything in this Agreement to the contrary, shares
of First United 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 4-27-1301 et
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seq. of the ABCA ("First United Dissenting Shares") shall not be converted into
the right to receive, or be exchangeable for, BancorpSouth Common Stock or cash
in lieu of fractional shares but, instead, the holders thereof shall be entitled
to payment of the appraised value of such First United Dissenting Shares in
accordance with the provisions of Sections 4-27-1301 et seq. of the ABCA;
provided, however, that (i) if any holder of First United 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 4-27-1301 et seq. of the ABCA, such
holder or holders (as the case may be) shall forfeit the right to appraisal of
such shares of First United 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, BancorpSouth Common Stock and/or
cash in lieu of fractional shares, without any interest thereon, as provided in
Sections 1.4(a) and 1.4(b) and Article II hereof.
(e) BancorpSouth may terminate this Agreement if cash payments in
respect of fractional shares or dissenter's rights exceed the amount permissible
for the utilization of pooling of interests method of accounting with respect to
the Merger.
(f) At the Effective Time, all shares of El Dorado common stock ("El
Dorado Common Stock"), Magnolia common stock ("Magnolia Common Stock"),
Merchants common stock ("Merchants Common Stock"), Fort Smith common stock
("Fort Smith Common Stock"), North Arkansas common stock ("North Arkansas Common
Stock"), FirstBank common stock ("FirstBank Common Stock"), FU Bank common stock
("FU Bank Common Stock"), Fredonia common stock ("Fredonia Common Stock"), City
Bank common stock ("City Bank Common Stock"), Citizens common stock ("Citizens
Common Stock"), Republic common stock ("Republic Common Stock"), and First
United Trust common stock ("First United Trust 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 First
United to purchase shares of First United Common Stock (each a "First United
Option") which is outstanding and unexercised immediately prior thereto shall
cease to represent a right to acquire shares of First United Common Stock and
shall be promptly replaced by an option issued under and subject to the
appropriate stock option plan of BancorpSouth to purchase shares of BancorpSouth
Common Stock in an amount and at an exercise price determined as provided below:
(i) The number of shares of BancorpSouth Common Stock to be
subject to the new option shall be equal to the product of the number
of shares of First United Common Stock subject to the original option
and the Exchange Ratio, provided that any fractional shares of
BancorpSouth Common Stock resulting from such multiplication shall be
rounded down to the nearest whole share; and
(ii) The exercise price per share of BancorpSouth Common Stock
under the new option shall be equal to the exercise price per share of
First United Common Stock under the original option divided by the
Exchange Ratio, provided that such exercise price shall be rounded up
to the nearest cent. The adjustment provided herein with respect to any
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) and pooling of interests method
of accounting rules shall override anything to the contrary contained
herein. The duration of the new option shall be the same as the
original option.
1.6. BancorpSouth Common Stock. Except for shares of BancorpSouth Common
Stock owned by First United or any of its Subsidiaries (other than Trust Account
Shares and DPC Shares), which shall be converted into treasury stock of
BancorpSouth as contemplated by Section 1.4 hereof, the shares of BancorpSouth
Common Stock issued and outstanding immediately prior to the Effective Time
shall be unaffected by the Merger and such shares shall remain issued and
outstanding.
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1.7. 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.
1.8. 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.
1.9. Directors and Officers. Except as provided in Section 7.14, 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.
1.10. Tax Consequences; Accounting Treatment. It is intended that the Merger
shall (i) constitute a reorganization within the meaning of Section 368(a) of
the Code and that this Agreement shall constitute a "plan of reorganization" for
the purposes of Section 368 of the Code, and (ii) be accounted for as a "pooling
of interests" under GAAP (as defined in Section 4.6).
ARTICLE II. EXCHANGE OF SHARES
2.1. BancorpSouth to Make Shares Available. At or prior to the Effective
Time, BancorpSouth shall deposit, or shall cause to be deposited, with SunTrust
Bank, Atlanta, N.A. or other bank or trust company (the "Exchange Agent")
selected by BancorpSouth and reasonably satisfactory to First United, for the
benefit of the holders of Certificates, for exchange in accordance with this
Article II, certificates representing the shares of BancorpSouth Common Stock
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 First United Common Stock.
2.2. Exchange of Shares.
(a) As soon as practicable after the Effective Time, and in no event
more than three business days thereafter, the Exchange Agent shall mail to each
holder of record of a Certificate or Certificates a form letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Exchange Agent) and instructions for use in effecting the surrender of the
Certificates in exchange for certificates representing the shares of
BancorpSouth Common Stock and the cash in lieu of fractional shares into which
the shares of First United Common Stock represented by such Certificate or
Certificates shall have been converted pursuant to this Agreement. Upon
surrender of a Certificate for exchange and cancellation to the Exchange Agent,
together with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor and the Exchange
Agent shall mail to such holder within three business days of such surrender (i)
a certificate representing that number of whole shares of BancorpSouth Common
Stock to which such holder of First United Common Stock shall have become
entitled pursuant to the provisions of Article I hereof and (ii) a check
representing the amount of cash in lieu of fractional shares, if any,
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which such holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Article II, and the Certificate
so surrendered shall forthwith be cancelled. No interest will be paid or accrued
on the cash in lieu of fractional shares and unpaid dividends and distributions,
if any, payable to holders of Certificates.
(b) 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, which
theretofore had become payable with respect to shares of BancorpSouth Common
Stock represented by such Certificate.
(c) 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.
(d) After the Effective Time, there shall be no transfers on the stock
transfer books of First United of the shares of First United 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.
(e) 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 stockholder of First United who
otherwise would be entitled to receive a fractional share of BancorpSouth Common
Stock an amount in cash equal to the product of (x) the Closing Price (as
defined below), times (y) the fraction of a share of BancorpSouth Common Stock
which such holder would otherwise be entitled to receive pursuant to Article I
hereof. The "Closing Price" means the average of the last reported sale prices
of BancorpSouth Common Stock, as reported by the New York Stock Exchange
("NYSE") Composite Transactions Reporting System (as reported in The Wall Street
Journal or, if not reported therein, in another authoritative source mutually
agreeable to the parties), for the three NYSE trading days immediately preceding
the Closing Date.
(f) Any portion of the Exchange Fund that remains unclaimed by the
shareholders of First United for 12 months after the Effective Time shall be
paid to BancorpSouth. Any shareholders of First United who have not theretofore
complied with this Article II shall thereafter look only to BancorpSouth for
payment of 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 First United Common Stock such
stockholder holds as determined pursuant to this Agreement, in each case,
without any interest thereon. Notwithstanding the foregoing, none of
BancorpSouth, First United, the Exchange Agent or any other person shall be
liable to any former holder of shares of First United Common Stock for any
amount properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
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(g) 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
BancorpSouth may direct 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.
ARTICLE III. DISCLOSURE SCHEDULES; STANDARDS FOR
REPRESENTATIONS AND WARRANTIES
3.1. Disclosure Schedules. On or prior to the date hereof, each of
BancorpSouth and First United has delivered to the other party a schedule (in
the case of First United, the "First United 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 First United, 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 First
United or BancorpSouth, respectively.
3.2. Standards.
(a) No representation or warranty of First United contained in
Article IV, or of BancorpSouth contained in Article V, shall be deemed untrue or
incorrect for any purpose under this Agreement as a consequence of the existence
or absence of any fact, circumstance or event, unless such fact, circumstance or
event, individually or when taken together with all other facts, circumstances
or events inconsistent with any representation or warranty contained in Article
IV, in the case of First United, or Article V, in the case of BancorpSouth, has
had or could be reasonably expected to have a Material Adverse Effect with
respect to (i) First United or (ii) BancorpSouth, respectively.
(b) As used in this Agreement, the term "Material Adverse Effect"
means, with respect to BancorpSouth or First United, as the case may be, a
material adverse effect on (i) the business, results of operations or financial
condition of such party and its Subsidiaries taken as a whole, other than any
such effect attributable to or resulting from (A) any change in banking or
similar laws, rules or regulations of general applicability or interpretations
thereof by courts or governmental authorities, (B) any change in GAAP or
regulatory accounting principles applicable to banks or their holding companies
generally, (C) any action or omission of First United or BancorpSouth or any
Subsidiary of either of them taken with the express prior written consent of the
other party hereto, or (D) any expenses incurred by such party where such
expenses are contemplated by or reasonably incurred in connection with this
Agreement or the transactions contemplated hereby; or (ii) the ability of such
party and its Subsidiaries to consummate the transactions contemplated hereby.
Changes in the market price of First United Common Stock or 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
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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 FIRST UNITED
Subject to Article III, First United hereby represents and warrants to
BancorpSouth as follows:
4.1. Corporate Organization.
(a) First United is a corporation duly organized, validly existing and
in good standing under the laws of the State of Arkansas. First United 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, and 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.
First United is duly registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). The Articles of Incorporation
and Bylaws of First United, copies of which have previously been provided or
will be provided to BancorpSouth within seven days following the date hereof,
are true and correct copies of such documents as currently in effect. First
United has no Subsidiaries other than the First United Banks, First United-Texas
and First Bankers Insurance Services, LLC, an Arkansas limited liability company
("First United Insurance"), and except for the First United Banks, First
United-Texas and First United Insurance, First United 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 First United 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) El Dorado is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. The deposit
accounts of El Dorado are insured by the Federal Deposit Insurance Corporation
(the "FDIC") through the Bank Insurance Fund ("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. El Dorado 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 and 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. The Articles of
Association and Bylaws of El Dorado, copies of which have previously or will be
provided to BancorpSouth within seven days following the date hereof, are true
and correct copies of such documents as currently in effect. El Dorado has no
Subsidiaries and does not own (other than in a bona fide fiduciary capacity or
in satisfaction of a debt previously contracted) 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) Magnolia is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. The deposit
accounts of Magnolia are insured by the FDIC through 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. Magnolia 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 and 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. The Articles of
Association and Bylaws of Magnolia, copies of which have previously been
provided or will be provided to BancorpSouth within seven days following the
date hereof, are true and correct copies of such documents as currently in
effect. Magnolia has no Subsidiaries and does not own (other than in
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a bona fide fiduciary capacity or in satisfaction of a debt previously
contracted) 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.
(d) Merchants is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. The deposit
accounts of Merchants are insured by the FDIC through 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. Merchants 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 and 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. The Articles of
Association and Bylaws of Merchants, copies of which have previously been
provided or will be provided to BancorpSouth within seven days following the
date hereof, are true and correct copies of such documents as currently in
effect. Merchants has no Subsidiaries and does not own (other than in a bona
fide fiduciary capacity or in satisfaction of a debt previously contracted)
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.
(e) Fort Smith is a national banking association duly organized,
validly existing and in good standing under the laws of the United States. The
deposit accounts of Fort Smith are insured by the FDIC through 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. Fort Smith 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 and 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.
The Articles of Association and Bylaws of Fort Smith, copies of which have
previously been provided or will be provided to BancorpSouth within seven days
following the date hereof, are true and correct copies of such documents as
currently in effect. Fort Smith has no Subsidiaries and does not own (other than
in a bona fide fiduciary capacity or in satisfaction of a debt previously
contracted) 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.
(f) North Arkansas is an Arkansas state bank duly organized, validly
existing and in good standing under the laws of the State of Arkansas. The
deposit accounts of North Arkansas are insured by the FDIC through 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. North Arkansas 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 and 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. The Articles of Association and Bylaws of North Arkansas, copies of
which have previously been provided or will be provided to BancorpSouth within
seven days following the date hereof, are true and correct copies of such
documents as currently in effect. North Arkansas has no Subsidiaries and does
not own (other than in a bona fide fiduciary capacity or in satisfaction of a
debt previously contracted) 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.
(g) FirstBank is a Texas state bank duly organized, validly existing
and in good standing under the laws of the State of Texas. The deposit accounts
of FirstBank are insured by the FDIC through 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. FirstBank 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 and 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
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owned or leased by it makes such licensing or qualification necessary. The
Articles of Association and Bylaws of FirstBank, copies of which have previously
been provided or will be provided to BancorpSouth within seven days following
the date hereof, are true and correct copies of such documents as currently in
effect. FirstBank has no Subsidiaries and does not own (other than in a bona
fide fiduciary capacity or in satisfaction of a debt previously contracted)
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.
(h) FU Bank is an Arkansas state bank duly organized, validly existing
and in good standing under the laws of the State of Arkansas. The deposit
accounts of FU Bank are insured by the FDIC through 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. FU Bank 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 and 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. The Articles of
Association and Bylaws of FU Bank, copies of which have previously been provided
or will be provided to BancorpSouth within seven days following the date hereof,
are true and correct copies of such documents as currently in effect. FU Bank
has no Subsidiaries and does not own (other than in a bona fide fiduciary
capacity or in satisfaction of a debt previously contracted) 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.
(i) Fredonia is a Texas state bank duly organized, validly existing and
in good standing under the laws of the State of Texas. The deposit accounts of
Fredonia are insured by the FDIC through 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. Fredonia 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 and 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. The Articles of
Association and Bylaws of Fredonia, copies of which have previously been
provided or will be provided to BancorpSouth within seven days following the
date hereof, are true and correct copies of such documents as currently in
effect. Fredonia has no Subsidiaries and does not own (other than in a bona fide
fiduciary capacity or in satisfaction of a debt previously contracted)
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.
(j) City Bank is a Louisiana state bank duly organized, validly
existing and in good standing under the laws of the State of Louisiana. The
deposit accounts of City Bank are insured by the FDIC through 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. City Bank 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 and 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.
The Articles of Association and Bylaws of City Bank, copies of which have
previously been provided or will be provided to BancorpSouth within seven days
following the date hereof, are true and correct copies of such documents as
currently in effect. City Bank has no Subsidiaries and does not own (other than
in a bona fide fiduciary capacity or in satisfaction of a debt previously
contracted) 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.
(k) Citizens is a national banking association duly organized, validly
existing and in good standing under the laws of the United States. The deposit
accounts of Citizens are insured by the FDIC through the BIF to the fullest
extent permitted by law, and all premiums and assessments
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required to be paid in connection therewith have been paid when due. Citizens
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 and 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. The Articles of Association and Bylaws of Citizens, copies of which
have previously been provided or will be provided to BancorpSouth within seven
days following the date hereof, are true and correct copies of such documents as
currently in effect. Citizens has no Subsidiaries and does not own (other than
in a bona fide fiduciary capacity or in satisfaction of a debt previously
contracted) 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, except First United Insurance and Citizen's
Investment Services, Inc., an Arkansas corporation.
(l) Republic is a Louisiana state bank duly organized, validly existing
and in good standing under the laws of the State of Louisiana. The deposit
accounts of Republic are insured by the FDIC through 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. Republic 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 and 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. The Articles of
Association and Bylaws of Republic, copies of which have previously been
provided or will be provided to BancorpSouth within seven days following the
date hereof, are true and correct copies of such documents as currently in
effect. Republic has no Subsidiaries and does not own (other than in a bona fide
fiduciary capacity or in satisfaction of a debt previously contracted)
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, except Eagle Premium Assistance Corporation, a Louisiana
corporation, and First Republic Agricultural Credit Corporation, a Louisiana
corporation.
(m) First United Trust is a national association duly organized,
validly existing and in good standing under the laws of the United States. The
trust accounts of First United Trust are insured by the FDIC through 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. First United Trust
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 and 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. The Articles of Incorporation and Bylaws of First United Trust,
copies of which have previously been provided or will be provided to
BancorpSouth within seven days following the date hereof, are true and correct
copies of such documents as currently in effect. First United Trust has no
Subsidiaries and does not own (other than in a bona fide fiduciary capacity or
in satisfaction of a debt previously contracted) 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.
(n) First United Insurance is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Arkansas. First United Insurance has the 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 and 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. The Articles of Organization and Operating Agreement
of First United Insurance, copies of which have previously been provided or will
be provided to BancorpSouth within seven days following the date hereof, are
true and correct copies of such documents as currently in effect. First United
Insurance 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.
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(o) First United-Texas is a corporation duly organized, validly
existing and in good standing under the laws of the State of Arkansas. First
United-Texas 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,
and 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. First United-Texas is duly registered as a bank holding
company under the BHC Act. The Articles of Incorporation and Bylaws of First
United-Texas, copies of which have previously been provided or will be provided
to BancorpSouth within seven days following the date hereof, are true and
correct copies of such documents as currently in effect. First United-Texas has
no Subsidiaries and does not own (other than in a bona fide fiduciary capacity
or in satisfaction of a debt previously contracted) beneficially, directly or
indirectly, 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, except for Fredonia and FirstBank.
(p) The minute books of First United and each of its Subsidiaries
contain true and correct records of all meetings and other corporate actions
held or taken since December 31, 1994 of their respective shareholders and
Boards of Directors (including committees of their respective Boards of
Directors).
4.2. Capitalization.
(a) The authorized capital stock of First United consists of 50,000,000
shares of First United Common Stock and 500,000 shares of preferred stock, $1.00
par value (the "First United Preferred Stock"). There are 25,297,444 shares of
First United Common Stock issued and outstanding and no shares of First United
Common Stock held by First United as treasury stock. There are no shares of
First United Common Stock reserved for issuance upon exercise of outstanding
stock options or otherwise except for (i)(A) 4% of the outstanding shares of
First United Common Stock reserved for issuance pursuant to First United's 1999
Employee's Long-Term Incentive Plan (the "1999 Plan") and (B) 300,000 shares of
First United Common Stock reserved for issuance under First United's 1994 Equity
Participation Plan (together with the 1999 Plan, the "First United Option
Plans"), and (ii) 5,056,959 shares of First United Common Stock reserved for
issuance upon exercise of the option (the "BancorpSouth Option") to be issued to
BancorpSouth pursuant to the Stock Option Agreements. There are no shares of
First United Preferred Stock issued or outstanding, held in First United's
treasury or reserved for issuance upon exercise of outstanding stock options or
otherwise. All of the issued and outstanding shares of First United 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 (i) the BancorpSouth Option, and (ii) options outstanding under the First
United Option Plans to purchase a total of 415,114 shares of First United Common
Stock (the "Plan Options"), First United 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 First
United Common Stock or First United Preferred Stock or any other equity security
or Capital Stock of First United or any securities representing the right to
purchase or otherwise receive any shares of First United Common Stock or any
other equity security or Capital Stock of First United. Set forth in Section
4.2(a) of the First United Disclosure Schedules is a complete and correct list,
for each of the Plan 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) Except as set forth in Section 4.2(b) of First United Disclosure
Schedule, First United owns, directly or indirectly, all of the issued and
outstanding shares of the capital stock and equity securities of each of First
United's Subsidiaries, free and clear of all liens, charges, encumbrances and
security interests whatsoever, and all of such shares 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. First United owns 51% of the
outstanding membership interests of First United Insurance, free and clear of
all liens,
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charges, encumbrances and security interests whatsoever, and all of such
membership interests are duly authorized validly issued and are fully paid,
nonassessable and free of preemptive rights, with no personal liability
attaching to the ownership thereof. First United'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 First United'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 First
United's Subsidiaries. There are no outstanding subscriptions, options,
warrants, calls, commitments or agreements of any character by which First
United or any of its Subsidiaries will be bound calling for the purchase or
issuance of any shares of the capital stock or equity securities of any of First
United's Subsidiaries.
4.3. Authority; No Violation.
(a) First United has full corporate power and authority to execute and
deliver this Agreement and the Stock Option Agreements and, upon the receipt of
requisite approval by the shareholders of First United of this Agreement, to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the Stock Option Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly and validly approved
by the Boards of Directors of First United. The Board of Directors of First
United has directed that this Agreement and the transactions contemplated hereby
be submitted to First United's shareholders for approval at a meeting of such
shareholders and First United has approved, or promptly after the date hereof
and prior to the Closing Date will approve, this Agreement and the transactions
contemplated hereby, and the Board has directed officers of First United to so
approve this Agreement and the transactions contemplated herein in its capacity
as the sole shareholder of each of the First United Banks. Except for the
adoption of this Agreement by the requisite vote of First United's shareholders,
no other proceedings on the part of First United or its Subsidiaries are
necessary to approve this Agreement and the Stock Option Agreements and to
consummate the transactions contemplated hereby and thereby, except for the
approval, which will occur promptly after the date hereof, of this Agreement by
the board directors of each of First United's Subsidiaries as set forth in
Section 6.3 herein. This Agreement and the Stock Option Agreements have been
duly and validly executed and delivered by First United, and this Agreement
constitutes a valid and binding obligation of First United, enforceable against
First United 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 or the Stock
Option Agreements by First United, nor the consummation by First United of the
transactions contemplated hereby or thereby, nor compliance by First United with
any of the terms or provisions hereof or thereof, will (i) violate any provision
of the Articles of Incorporation or Bylaws of First United or the articles of
incorporation, bylaws or similar governing documents of any of First United'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
First United 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, except as provided in Section 4.14, 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 (except as provided in Section 4.14),
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 First United 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 First United 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.
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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 OCC, 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 joint proxy statement relating to the respective
meetings of shareholders of First United and BancorpSouth 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 First United, (e) the filing of the Articles of Merger with,
as applicable, the OCC, the Mississippi Secretary, the Arkansas Secretary, the
Mississippi Department, the Arkansas Department, the Texas Department and the
Louisiana 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 First United of this Agreement and the Stock Option Agreements and (ii) the
consummation by First United and its Subsidiaries of the Merger and the other
transactions contemplated hereby and thereby.
4.5. Reports. First United 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, 1994 with (i) the Federal Reserve Board, (ii) the FDIC, (iii) any Federal
Reserve Bank, (iv) the OCC, (v) any state banking commissions, including without
limitation the Arkansas Department, the Texas Department and the Louisiana
Department, or any other state regulatory authority (each a "State Regulator"),
(vi) the SEC, and (vii) any self-regulatory organization ("SRO") (collectively,
the "Regulatory Agencies"), and have paid all fees and assessments due and
payable in connection therewith. Except for normal examinations conducted by a
Regulatory Agency in the regular course of the business of First United and its
Subsidiaries, no Regulatory Agency has initiated any proceeding or, to the
knowledge of First United, investigation into the business or operations of
First United or any of its Subsidiaries since December 31, 1994. 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
First United or any of its Subsidiaries that cannot be resolved with reasonable
effort and within a reasonable time.
4.6. Financial Statements.
(a) The consolidated financial statements of First United and its
subsidiaries (the "First United Financial Statements"), including consolidated
statements of condition, statements of earnings, changes in shareholders' equity
and cash flows; SEC Reports and related notes, included in the First United SEC
Reports (as defined in this section below) fairly present the consolidated
financial position of First United and its Subsidiaries as of the respective
date 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
First United and its Subsidiaries for the respective fiscal periods or as of the
respective dates therein set forth; each of such First United Financial
Statements (including the related notes, where applicable) complies with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto; and each of such First United Financial
Statements (including the related notes, where applicable) has been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, except as indicated in the notes thereto
or, in the case of unaudited statements, as permitted by SEC Form 10-Q. The
books and records of First United and its Subsidiaries have been, and are being,
maintained in accordance with GAAP and any other applicable legal and accounting
requirements.
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(b) First United's Annual Reports on Form 10-K for the fiscal years
ended December 31, 1999, 1998, 1997, 1996 and 1995, and all other reports,
registration statements, definitive proxy statements or information statements
filed by First United or any of its Subsidiaries subsequent to December 31, 1994
under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or under the
securities regulations of the SEC, in the form filed (collectively, the "First
United SEC Reports") with the SEC as of the date filed, (i) complied in all
material respects as to form with the applicable requirements under the
Securities Act or the Exchange Act, as the case may be, and (ii) did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Except as described in Section 4.6(b) of the First United Disclosure Schedules,
First United has timely filed all First United SEC Reports and other documents
required to be filed by it under the Securities Act and the Exchange Act, and,
as of their respective dates, all First United SEC Reports complied with the
published rules and regulations of the SEC with respect thereto.
4.7. Broker's Fees. Except for Stephens Inc., the fees of which are set
forth in that certain agreement with First United dated as of April 12, 2000,
and Stifel Nicholas & Co., the fees of which are set forth in that certain
agreement with First United dated as of April 13, 2000, true and correct copies
of which agreements have been provided to BancorpSouth, neither First United 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 or the Stock Option Agreements.
4.8. Absence of Certain Changes or Events.
(a) Except as disclosed in any First United SEC Report filed with the
SEC prior to the date of this Agreement, since December 31, 1999, 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 First United.
(b) Except as disclosed in any First United SEC Report filed with the
SEC prior to the date of this Agreement, since December 31, 1999, First United
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 First United Disclosure Schedule sets forth a
true and correct list of all stock options granted since December 31, 1999.
Except as set forth in Section 4.8(c) of the First United Disclosure Schedule,
neither First United 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 December 31, 1999, granted any severance or 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. Except as set forth in a First United SEC Report or
as disclosed pursuant to Section 4.15, listed in Section 4.9 of the First United
Disclosure Schedule are all pending or, to First United's knowledge, threatened,
legal, administrative, arbitral or other proceedings, claims, actions or
governmental or regulatory investigations of any nature against First United or
any of its Subsidiaries or challenging the validity or propriety of the
transactions contemplated by this Agreement or the Stock Option Agreements,
other than regularly scheduled examinations and similar routine investigations
made by bank regulatory officials in the course of their supervision of First
United or any of its Subsidiaries. Except as set forth in a First United SEC
Report or as disclosed pursuant to Section 4.15, neither First United nor any of
its Subsidiaries is a party to any, and there are no pending or, to First
United's knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against First United or any of its Subsidiaries or challenging the
validity or propriety of the
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transactions contemplated by this Agreement or the Stock Option Agreements,
other than regularly scheduled examinations and similar routine investigations
made by bank regulatory officials in the course of their supervision of First
United or any of its Subsidiaries, which has had, or could reasonably be
expected to have, a Material Adverse Effect with respect to First United. There
is no injunction, order, judgment, decree or unique regulatory restriction
imposed upon First United, any of its Subsidiaries or the assets of First United
or any of its Subsidiaries.
4.10. Taxes.
(a) Each of First United and its Subsidiaries has (i) duly and timely
filed (including applicable extensions granted) all Tax Returns (as defined in
this Section below) required to be filed at or prior to the Effective Time, and
such Tax Returns are true and correct, and (ii) paid in full or made adequate
provision in the financial statements of First United (in accordance with GAAP)
for all Taxes (as defined in this Section below) shown to be due on such Tax
Returns. Neither First United nor any of its Subsidiaries has requested any
extension of time within which to file any Tax Returns in respect of any fiscal
year which have not since been filed and no request for waivers of the time to
assess any Taxes are pending or outstanding, except with respect to Tax Returns
for the year ended December 31, 1999. With respect to each taxable period of
First United and its Subsidiaries, the federal and state income Tax Returns of
First United and its Subsidiaries have either been audited by the Internal
Revenue Service 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 First United Disclosure Schedule.
(b) For the purposes of this Agreement, "Taxes" shall mean all taxes,
charges, fees, levies, penalties or other assessments imposed by any United
States 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. For purposes of this Agreement, "Tax Return"
shall mean any return, report, information return or other document (including
any related or supporting information) with respect to Taxes.
4.11. Employees.
(a) Section 4.11(a) of First United Disclosure Schedule sets forth a
true, complete and correct list (all of which are collectively referred to as
the "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, (unless a determination letter
was obtained on termination and if it is a defined benefit plan the termination
was a standard termination under ERISA Section 4041(b)) maintained or
contributed to by First United or an ERISA Affiliate (as hereinafter defined),
or (ii) with respect to which First United or any ERISA Affiliate has any
obligations to any current or former officer, Employee, service provider, or the
dependents of any thereof, and regardless of whether funded, or (iii) which
could result in the imposition of 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 First United or any ERISA Affiliate.
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(b) First United has heretofore provided to BancorpSouth, or will
provide to BancorpSouth within seven days following the date hereof, with
respect to each of the Plans true and correct copies of each of the following
documents, as applicable: (i) the Plan document; (ii) the actuarial report, if
any, for such Plan for each of the last three years, (iii) the most recent
determination letter from the Internal Revenue Service for such Plan, (iv) the
Internal Revenue Service Form 5500 annual reports for such Plan for each of the
last three years, and (v) the most recent summary plan description and related
summaries of material modifications.
(c) To the knowledge of First United, there have been no prohibited
transactions or breaches of fiduciary duty with respect to the Plans. To the
knowledge of First United, each of the Plans is in compliance with the
applicable provisions of the Code and ERISA; each of the Plans intended to be
"qualified" within the meaning of Section 401(a) of the Code has received a
favorable determination letter from the IRS and to the knowledge of First
United, nothing has occurred which could reasonably be expected to result in the
revocation of such letter; no Plan has an accumulated or waived funding
deficiency within the meaning of Section 412 of the Code; neither First United
nor any ERISA Affiliate has incurred, directly or indirectly, any liability to
or on account of a Plan pursuant to Title IV of ERISA (other than PBGC
premiums); to the knowledge of First United no proceedings have been instituted
to terminate any Plan that is subject to Title IV of ERISA; no "reportable
event," as such term is defined in Section 4043(c) of ERISA, has occurred with
respect to any Plan (other than a reportable event with respect to which the
thirty day notice period has been waived); no condition exists that presents a
material risk to First United of incurring a liability to or on account of a
Plan pursuant to Title IV of ERISA; no Plan is a multiemployer plan (within the
meaning of Section 4001(a)(3) of ERISA) and no Plan is a multiple employer plan
as defined in Section 413 of the Code; and there are no pending, or to the
knowledge of First United, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the Plans or any trusts
related thereto.
(d) To the knowledge of First United, no written or oral
representations have been made to any Employee or former Employee of First
United promising or guaranteeing any employer payment or funding, and no Plans
provide, for the continuation of medical, dental, life or disability insurance
coverage for any former Employee of First United for any period of time beyond
the end of the current plan year (except to the extent of coverage required
under Title I, Part 6, of ERISA). Except as set forth in Section 4.14(a) of the
First United Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement will not accelerate the time of vesting, of
payment, or increase the amount, of compensation to any Employee, officer,
former Employee or former officer of First United. No Plans or other contracts
or arrangements provide for payments that would be triggered by the consummation
of the transactions contemplated by this Agreement that would subject any person
to excise tax under Section 4999 of the Code (i.e., "golden parachute" taxes).
All compensation amounts that have been paid or are payable are or will become
deductible by First United or BancorpSouth pursuant to Section 162 of the Code.
(e) For the purpose of this Section 4.11, the term "ERISA Affiliate"
shall mean (i) any related company or trade or business that is required to be
aggregated with First United under Code Sections 414(b), (c), (m) or (o); (ii)
any other company, entity or trade or business that has adopted or has ever
participated in any Plan; and (iii) any predecessor or successor company or
trade or business of First United or any entity described in 4.11(f)(i) and
(f)(ii).
(f) For the purpose of this Section 4.11, the term "Employee" shall be
considered to include individuals rendering personal services to First United as
independent contractors and leased employees as defined in Code Section 414(n)
and the regulations promulgated pursuant thereto.
(g) No lien, security interests or other encumbrances exist with
respect to any of the assets of First United, which were imposed pursuant to the
terms of the Code or ERISA and to the knowledge of First United no condition
exists or could occur that would result in the imposition of such liens,
security interests or encumbrances arising from or relating to the Plans.
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<PAGE> 22
4.12. First United Information. The information relating to First United and
its Subsidiaries which is provided to BancorpSouth by First United or its
representatives for inclusion in the Proxy Statement and the S-4, or in any
other document filed with any other regulatory agency in connection herewith,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading. The S-4 and the Proxy
Statement (except for such portions thereof that relate only to BancorpSouth or
any of its Subsidiaries) will comply with the provisions of the Securities Act,
the Exchange Act and the rules and regulations thereunder.
4.13. Compliance with Applicable Law. First United and each of its
Subsidiaries hold, and have at all times held, all licenses, franchises, permits
and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and have complied with and are not in
default in any material respect under any, applicable law, statute, order, rule,
regulation, policy and/or guideline of any Governmental Entity relating to First
United or any of its Subsidiaries, and neither First United nor any of its
Subsidiaries has received notice, and First United does not know, of any
violations of any of the above.
4.14. Certain Contracts.
(a) Set forth in Section 4.14(a) of the First United Disclosure
Schedule is a list of any contract or agreement (whether written or oral) to
which, First United or any of its Subsidiaries is a party to or bound by any
contract or agreement (whether written or oral) (i) with respect to the
employment of any employees, officers, directors or consultants, (ii) which,
upon the consummation of the transactions contemplated by this Agreement, will
(either alone or upon the occurrence of any additional acts or events) result in
any payment or benefits (whether of severance pay or otherwise) becoming due, or
the acceleration or vesting of any rights to any payment or benefits, from
BancorpSouth, First United, the Surviving Corporation or any of their respective
Subsidiaries to any employee, officer, director or consultant thereof, (iii)
which is a material contract (as defined in Item 601(b)(10) of Regulation S-K of
the SEC) to be performed after the date of this Agreement that has not been
filed or incorporated by reference in the First United SEC Reports, (iv) which
is not terminable on 90 days or less notice involving the payment of more than
$100,000 per annum, or (v) which materially restricts the conduct of any line of
business by First United or any of its Subsidiaries. Each contract, arrangement,
commitment or understanding of the type described in this Section 4.14(a) is
referred to herein as a "First United Contract." First United has previously
provided to BancorpSouth true and correct copies of each First United Contract.
(b) Each First United Contract described in clause (iii) of Section
4.14(a) is valid and binding and in full force and effect with respect to the
obligations of First United or its Subsidiaries and, to the knowledge of First
United, is valid and binding and in full force and effect with respect to the
obligations of the counterparties thereto. First United and each of its
Subsidiaries has performed all obligations required to be performed by it to
date under each First United Contract described in clause (iii) of Section
4.14(a). Except as set forth in Section 4.14(b) of the First United Disclosure
Schedules, no event or condition exists which constitutes or, after notice or
lapse of time or both, would constitute, a default on the part of First United
or any of its Subsidiaries under any First United Contract described in clause
(iii) of Section 4.14(a). No other party to any First United Contract described
in clause (iii) of Section 4.14(a) is, to the knowledge of First United, in
default in any respect thereunder.
4.15. Agreements with Regulatory Agencies. Neither First United nor any of
its Subsidiaries is subject to any cease-and-desist or other order issued by, or
is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of (each, a "Regulatory Agreement"), any Regulatory Agency or
other Governmental Entity that restricts the conduct of its business or that in
any manner relates to its capital adequacy, its credit policies, its management
or its business, nor has First United or any of its Subsidiaries been advised by
any
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<PAGE> 23
Regulatory Agency or other Governmental Entity that it is considering issuing or
requesting any Regulatory Agreement.
4.16. Business Combination Provision; Takeover Laws. First United, its
Subsidiaries, and this Agreement, the Stock Option Agreements and the
transactions contemplated hereby and thereby, are not subject to or are exempt
from, the requirements of any "moratorium", "control share", "fair price" or
other anti-takeover laws and regulations (collectively, "Takeover Laws").
4.17. Environmental Matters.
(a) Except as disclosed in Section 4.17 of the First United Disclosure
Schedules, each of First United and its Subsidiaries and, to the knowledge of
First United, each of the Participation Facilities and the Loan Properties (each
as defined in this Section below), are in compliance with all applicable
federal, state and local laws, including common law, regulations and ordinances,
and with all applicable decrees, orders and contractual obligations relating to
pollution or the discharge of, or exposure to, Hazardous Materials (as
hereinafter defined) in the environment or workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or, to the
knowledge of First United, threatened, before any Governmental Entity or other
forum in which First United, any of its Subsidiaries, any Participation Facility
or any Loan Property, has been or, with respect to threatened proceedings, may
be, named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Laws, or (ii) relating to the release,
threatened release or exposure to any Hazardous Material whether or not
occurring at or on a site owned, leased or operated by First United or any of
its Subsidiaries, any Participation Facility or any Loan Property;
(c) Except as disclosed in Section 4.17 of the First United Disclosure
Schedules, to the knowledge of First United, during the period of (i) First
United's or any of its Subsidiaries' ownership or operation of any of their
respective current or former properties, (ii) First United's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(iii) First United's or any of its Subsidiaries' interest in a Loan Property,
there has been no release of Hazardous Materials in, on, under or affecting any
such property. To the knowledge of First United, prior to the period of (i)
First United's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (ii) First United's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(iii) First United's or any of its Subsidiaries' interest in a Loan Property,
there was no release of Hazardous Materials in, on, under or affecting any such
property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this Section 4.17:
(i) "Hazardous Materials" means any chemicals, pollutants, contaminants, wastes,
toxic substances, petroleum or other regulated substances or materials, (ii)
"Loan Property" means any property in which First United or any of its
Subsidiaries holds a security interest, and, where required by the context, said
term means the owner or operator of such property; and (iii) "Participation
Facility" means any facility in which First United or any of its Subsidiaries
participates in the management and, where required by the context, said term
means the owner or operator of such property.
4.18. Approvals. First United knows of no reason why all regulatory approvals
required for the consummation of the transactions contemplated hereby
(including, without limitation, the Holding Company Merger and each of the Bank
Mergers) should not be obtained.
4.19. Insurance. First United and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as First United's management
reasonably has determined to be prudent in accordance with industry practices.
All of such policies are in full force and effect; First United and its
Subsidiaries are not in material default thereunder; and all claims thereunder
for which a basis is known, or reasonably should be known, by First United have
been filed in due and timely fashion.
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<PAGE> 24
4.20. Year 2000. The mission critical computer software operated by First
United and/or any of its Subsidiaries is currently capable of providing
uninterrupted millennium functionality to record, store, process and present
calendar dates falling on or after January 1, 2000 in substantially the same
manner and with substantially the same functionality as such mission critical
software records, stores, processes and presents such calendar dates falling on
or before December 31, 1999. Neither First United nor any of its Subsidiaries
have experienced any disruptions, computer or equipment failures or
malfunctions, work stoppages or similar events related to the Year 2000. Neither
First United nor any of its Subsidiaries has received, nor to its knowledge are
there facts that would reasonably be expected to form the basis for the issuance
of, a "Year 2000 Deficiency Notification Letter" (as such term is employed in
the Federal Reserves Supervision and Regulatory Letter No. SR 98-3 (SUP), dated
March 4, 1998) or similar notice from any state banking authority.
4.21. Accounting for the Merger; Reorganization. First United has no reason
to believe that the Merger will fail to qualify (i) for pooling of interests
method of accounting under GAAP or (ii) as a reorganization under Section 368(a)
of the Code.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BANCORPSOUTH
Subject to Article III, BancorpSouth hereby represents and warrants to
First United as follows:
5.1. Corporate Organization.
(a) BancorpSouth is a corporation duly organized, validly existing and
in good standing under the laws of the State of Mississippi. BancorpSouth 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, and 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.
BancorpSouth is duly registered as a bank holding company under the BHC Act. The
Amended and Restated Articles of Incorporation and Bylaws of BancorpSouth (the
"BancorpSouth Governing Documents"), copies of which have previously been made
available to First United, are true and correct copies of such documents as in
effect as of the date of this Agreement.
(b) BancorpSouth Bank is a Mississippi state bank validly existing and
in good standing. The deposit accounts of BancorpSouth Bank are insured by the
FDIC through the BIF or Savings Association Insurance Fund to the fullest extent
permitted by law, and all premiums and assessments required in connection
therewith have been paid when due. Each of BancorpSouth's other Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each Subsidiary of BancorpSouth 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, and 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.
The Amended and Restated Articles of Incorporation and Bylaws of BancorpSouth
Bank (the "BancorpSouth Bank Governing Documents"), copies of which have
previously been made available to First United, are true and correct copies of
such documents as in effect as of the date of this Agreement.
(c) The minute books of BancorpSouth and each of its Subsidiaries
contain true and correct records of all meetings and other corporate actions
held or taken since December 31, 1994 (or the date of incorporation if later) of
their respective shareholders and Boards of Directors (including committees of
their respective Boards of Directors).
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<PAGE> 25
5.2. Capitalization.
(a) The authorized capital stock of BancorpSouth consists of
500,000,000 shares of BancorpSouth Common Stock. As of April 14, 2000,
57,304,252 shares of BancorpSouth Common Stock were issued, 794,575 shares of
BancorpSouth Common Stock were held in BancorpSouth's treasury and 56,509,677
shares of BancorpSouth Common Stock were outstanding. As of the date of this
Agreement, no shares of BancorpSouth Common Stock were reserved for issuance,
except shares reserved for issuance upon exercise of the option to be issued to
First United pursuant to the Stock Option Agreements (the "First United
Option"), employee benefit plans, stock option plans and BancorpSouth's
shareholder rights plan pursuant to which holders of BancorpSouth Common Stock
are granted certain attached rights that are exercisable under certain
circumstances (the "BancorpSouth Rights"). All of the issued and outstanding
shares of BancorpSouth Common Stock have been duly authorized and validly issued
and are fully paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. Except for the plans and
arrangements referred to above with respect to reserved shares and
BancorpSouth's dividend reinvestment plan, BancorpSouth 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 BancorpSouth Common Stock or any other equity securities of BancorpSouth or
any securities representing the right to purchase or otherwise receive any
shares of BancorpSouth Common Stock. The shares of BancorpSouth Common Stock to
be issued pursuant to the Merger will be duly authorized and validly issued and,
at the Effective Time, all such shares will be fully paid, nonassessable and
free of preemptive rights, with no personal liability attaching to the ownership
thereof.
(b) Exhibit 21 to BancorpSouth's Annual Report on Form 10-K for the
year ended December 31, 1999 sets forth a true and correct list of all material
Subsidiaries of BancorpSouth as of the date of this Agreement. BancorpSouth
owns, directly or indirectly, all of the issued and outstanding shares of
capital stock of each of the Subsidiaries of BancorpSouth, free and clear of all
liens, charges, encumbrances and security interests whatsoever, and all of such
shares are duly authorized and validly issued and are fully paid, nonassessable
and free of preemptive rights, with no personal liability attaching to the
ownership thereof. No Subsidiary owned as of the date hereof by BancorpSouth has
or is bound by any outstanding subscriptions, options, warrants, calls,
commitments or agreements of any character with any party that is not a direct
or indirect Subsidiary of BancorpSouth calling for the purchase or issuance of
any shares of capital stock or any other equity security of such Subsidiary or
any securities representing the right to purchase or otherwise receive any
shares of capital stock or any other equity security of such Subsidiary.
5.3. Authority; No Violation.
(a) BancorpSouth has full corporate power and authority to execute and
deliver this Agreement and the Stock Option Agreements and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Stock Option Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly and validly approved
by the Board of Directors of BancorpSouth. The Board of Directors of
BancorpSouth has directed that this Agreement and the transactions contemplated
hereby be submitted to BancorpSouth's shareholders for approval at a meeting of
such shareholders and BancorpSouth has approved, or promptly after the date
hereof and prior to the Closing Date will approve, this Agreement and the
transactions contemplated hereby, and the Board has directed officers of
BancorpSouth to so approve this Agreement and the transactions contemplated
herein in its capacity as the sole shareholder of the BancorpSouth Bank. Except
for the adoption of this Agreement by the requisite vote of BancorpSouth's
shareholders, no other corporate proceedings on the part of BancorpSouth or the
BancorpSouth's Subsidiaries are necessary to approve this Agreement and the
Stock Option Agreements and to consummate the transactions contemplated hereby
and thereby, except for the approval, which will occur after the date hereof, of
this Agreement by the board of directors of each of First United's Subsidiaries
as set forth in Section 6.3 herein. Each of this Agreement and the Stock Option
Agreements has been duly and validly executed and delivered by BancorpSouth and
constitutes a valid and binding obligation of BancorpSouth, enforceable against
BancorpSouth in accordance with its terms, except as enforcement may be limited
by general
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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 or the Stock
Option Agreements by BancorpSouth, nor the consummation by BancorpSouth of the
transactions contemplated hereby or thereby, nor compliance by BancorpSouth with
any of the terms or provisions hereof or thereof, will (i) violate any provision
of the BancorpSouth Governing Documents or the BancorpSouth Bank Governing
Documents, or (ii) assuming that the consents and approvals referred to in
Section 5.4 are duly obtained, (A) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to
BancorpSouth 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 BancorpSouth 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
BancorpSouth 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.
5.4. Consents and Approvals. Except for (a) the filing of applications and
notices, as applicable, with the Federal Reserve Board under the BHC Act, the
FDIC, the FTC, and the DoJ, and approval of such applications and notices, (b)
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 SEC of the S-4, (d) the approval of this Agreement by the
requisite vote of the shareholders of BancorpSouth, (e) the filing of the
Articles of Merger with the OCC, the Mississippi Secretary, the Arkansas
Secretary, the Mississippi Department, the Arkansas Department, the Texas
Department and the Louisiana Department, (f) such filings and approvals as are
required to be made or obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of the shares of BancorpSouth
Common Stock pursuant to this Agreement and (g) approval for listing of the
BancorpSouth Common Stock to be issued in the Merger on the NYSE, no consents or
approvals of or filings or registrations with any Governmental Entity or with
any third party are necessary in connection with (i) the execution and delivery
by BancorpSouth of this Agreement and the Stock Option Agreement and (ii) the
consummation by BancorpSouth and BancorpSouth Bank of the Merger and the other
transactions contemplated hereby.
5.5. Reports. BancorpSouth 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, 1994 with any Regulatory Agency, and have paid all fees and assessments due
and payable in connection therewith. Except for matters disclosed pursuant to
Section 5.15 and normal examinations conducted by a Regulatory Agency in the
regular course of the business of BancorpSouth and its Subsidiaries, no
Regulatory Agency has initiated any proceeding or, to the knowledge of
BancorpSouth, investigation into the business or operations of BancorpSouth or
any of its Subsidiaries since December 31, 1994. Except for matters disclosed
pursuant to Section 5.15, there is no unresolved violation, criticism, or
exception by any Regulatory Agency with respect to any report or statement
relating to any examinations of BancorpSouth or any of its Subsidiaries.
5.6. Financial Statements; SEC Reports.
(a) The consolidated financial statements of BancorpSouth and its
subsidiaries (the "BancorpSouth Financial Statements"), including consolidated
statements of condition, statements of earnings, changes in shareholders' equity
and cash flows; SEC Reports and related notes, included in the BancorpSouth SEC
Reports (as defined in this section below) fairly present the consolidated
financial position of BancorpSouth and its Subsidiaries as of the respective
date thereof, and fairly present (subject, in the case of the unaudited
statements, to recurring audit adjustments normal in
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nature and amount) the results of the consolidated operations and consolidated
financial position of BancorpSouth and its Subsidiaries for the respective
fiscal periods or as of the respective dates therein set forth; each of such
BancorpSouth Financial Statements (including the related notes, where
applicable) complies with applicable accounting requirements and with the
published rules and regulations of the SEC with respect thereto; and each of
such BancorpSouth 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 or, in the
case of unaudited statements, as permitted by SEC Form 10-Q. The books and
records of BancorpSouth and its Subsidiaries have been, and are being,
maintained in accordance with GAAP and any other applicable legal and accounting
requirements.
(b) BancorpSouth's Annual Reports on Form 10-K for the fiscal years
ended December 31, 1999, 1998, 1997, 1996 and 1995, and all other reports,
registration statements, definitive proxy statements or information statements
filed by BancorpSouth or any of its Subsidiaries subsequent to December 31, 1994
under the Securities Act, or under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, or under the securities regulations of the SEC, in the form filed
(collectively, the "BancorpSouth SEC Reports") with the SEC as of the date
filed, (i) complied in all material respects as to form with the applicable
requirements under the Securities Act or the Exchange Act, as the case may be,
and (ii) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. BancorpSouth has timely filed all BancorpSouth SEC Reports
and other documents required to be filed by it under the Securities Act and the
Exchange Act, and, as of their respective dates, all BancorpSouth SEC Reports
complied with the published rules and regulations of the SEC with respect
thereto.
5.7. Broker's Fees. Except for Salomon Smith Barney, Inc. and J.P. Morgan
Securities Inc., neither BancorpSouth nor any Subsidiary of BancorpSouth, 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 or the
Stock Option Agreements.
5.8. Absence of Certain Changes or Events. Except as disclosed in any
BancorpSouth SEC Report filed with the SEC prior to the date of this Agreement,
since December 31, 1999, BancorpSouth and its Subsidiaries have carried on their
respective businesses in the ordinary course consistent with their past
practices.
5.9. Legal Proceedings. Except as set forth in a BancorpSouth SEC Report or
as disclosed pursuant to Section 5.15 hereto, neither BancorpSouth nor any of
its Subsidiaries is a party to any and there are no pending or, to
BancorpSouth's knowledge, threatened, legal, administrative, arbitral or other
proceedings, claims, actions or governmental or regulatory investigations of any
nature against BancorpSouth or any of its Subsidiaries or challenging the
validity or propriety of the transactions contemplated by this Agreement or the
Stock Option Agreements, other than regularly scheduled examinations and similar
routine investigations made by bank regulatory officials in the course of their
supervision of BancorpSouth or any of it Subsidiaries. There is no injunction,
order, judgment, decree or regulatory restriction imposed upon BancorpSouth, any
of its Subsidiaries or the assets of BancorpSouth or any of its Subsidiaries.
5.10. Taxes. Except as set forth in Section 5.10 of the BancorpSouth
Disclosure Schedule, each of BancorpSouth and its Subsidiaries has (i) duly and
timely filed (including applicable extensions granted) all Tax Returns required
to be filed at or prior to the Effective Time, and such Tax Returns are true and
correct, and (ii) paid in full or made adequate provision in the financial
statements of BancorpSouth (in accordance with GAAP) for all Taxes shown to be
due on such Tax Returns. Except as set forth in Section 5.10 of the BancorpSouth
Disclosure Schedule, as of the date hereof, neither BancorpSouth nor any of its
Subsidiaries has requested any extension of time within which
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to file any Tax Returns in respect of any fiscal year which have not since been
filed and no request for waivers of the time to assess any Taxes are pending or
outstanding.
5.11. Employees.
(a) Section 5.11(a) of the BancorpSouth Disclosure Schedule sets forth
a true, complete and correct list of each (i) deferred compensation plan,
incentive compensation plan, equity compensation plan, "welfare" plan, fund or
program (within the meaning of Section 3(1) of the ERISA); (ii) "pension" plan,
fund or program (within the meaning of Section 3(2) of ERISA); (iii) each
employment, termination or severance agreement; and (iv) other employee benefit
plan, fund, program, agreement or arrangement, in each case, that is sponsored,
maintained or contributed to or required to be contributed to as of the date of
this Agreement (the "BancorpSouth Plans") by BancorpSouth, any of its
Subsidiaries or by any trade or business, whether or not incorporated (a
"BancorpSouth ERISA Affiliate"), all of which together with BancorpSouth would
be deemed a "single employer" within the meaning of Section 4001 of ERISA, for
the benefit of any employee or former employee of BancorpSouth, any Subsidiary
or any BancorpSouth ERISA Affiliate.
(b) Except as disclosed in Section 5.11(b) of the BancorpSouth
Disclosure Schedule, to BancorpSouth's knowledge, each of the BancorpSouth Plans
is in compliance with the applicable provisions of the Code and ERISA; each of
the BancorpSouth Plans intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter from the IRS
and to the knowledge of BancorpSouth, nothing has occurred which could
reasonably be expected to result in the revocation of such letter; no
BancorpSouth Plan has an accumulated or waived funding deficiency within the
meaning of Section 412 of the Code; neither BancorpSouth nor any BancorpSouth
ERISA Affiliate has incurred, directly or indirectly, any liability to or on
account of a BancorpSouth Plan pursuant to Title IV of ERISA (other than PBGC
premiums); to the knowledge of BancorpSouth no proceedings have been instituted
to terminate any BancorpSouth Plan that is subject to Title IV of ERISA; no
"reportable event," as such term is defined in Section 4043(c) of ERISA, has
occurred with respect to any BancorpSouth Plan (other than a reportable event
with respect to which the thirty day notice period has been waived); and no
condition exists that presents a material risk to BancorpSouth of incurring a
liability to or on account of a BancorpSouth Plan pursuant to Title IV of ERISA;
no BancorpSouth Plan is a multiemployer plan (within the meaning of Section
4001(a)(3) of ERISA and no BancorpSouth Plan is a multiple employer plan as
defined in Section 413 of the Code; and there are no pending, or, to the
knowledge of BancorpSouth, threatened or anticipated claims (other than routine
claims for benefits) by, on behalf of or against any of the BancorpSouth Plans
or any trusts related thereto.
5.12. BancorpSouth Information. The information relating to BancorpSouth and
its Subsidiaries to be contained in the Proxy Statement and the S-4, or in any
other document filed with any other regulatory agency in connection herewith,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not misleading. The S-4 and the Proxy
Statement (except for such portions thereof that relate only to First United or
any of its Subsidiaries) will comply with the provisions of the Securities Act,
the Exchange Act and the rules and regulations thereunder.
5.13. Compliance with Applicable Law. BancorpSouth and each of its
Subsidiaries holds, and has at all times held, all licenses, franchises, permits
and authorizations necessary for the lawful conduct of their respective
businesses under and pursuant to all, and other than matters addressed by
Section 5.15 have complied with and are not in default in any respect under any,
applicable law, statute, order, rule, regulation, policy and/or guideline of any
Governmental Entity relating to BancorpSouth or any of its Subsidiaries and
neither BancorpSouth nor any of its Subsidiaries knows of, or has received
notice, and BancorpSouth does not know, of any violations of any of the above.
5.14. Ownership of First United Common Stock; Affiliates and Associates. As
of the date hereof, neither BancorpSouth nor any of its affiliates or associates
(as such terms are defined under the Exchange Act) (i) beneficially owns,
directly or indirectly, or (ii) is a party to any agreement,
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arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of First United (other than Trust
Account Shares and DPC Shares).
5.15. Agreements with Regulatory Agencies. Neither BancorpSouth nor any of
its Subsidiaries is subject to any cease-and-desist or other order issued by, or
is a party to any written agreement, consent agreement or memorandum of
understanding with, or is a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, or has adopted any board resolutions
at the request of (each, a "BancorpSouth Regulatory Agreement"), any Regulatory
Agency or other Governmental Entity that restricts the conduct of its business
or that in any manner relates to its capital adequacy, its credit policies, its
management or its business, nor has BancorpSouth or any of its Subsidiaries been
advised by any Regulatory Agency or other Governmental Entity that it is
considering issuing or requesting any BancorpSouth Regulatory Agreement.
5.16. Approvals. BancorpSouth knows of no reason why all regulatory approvals
required for the consummation of the transactions contemplated hereby
(including, without limitation, the Holding Company Merger and each of the Bank
Mergers) should not be obtained.
5.17. Environmental Matters.
(a) Except as disclosed in Section 5.17 of the BancorpSouth Disclosure
Schedules, each of BancorpSouth and its Subsidiaries and, to the knowledge of
BancorpSouth, each of the Participation Facilities and the Loan Properties (each
as defined in this Section below), are in compliance with all applicable
federal, state and local laws, including common law, regulations and ordinances,
and with all applicable decrees, orders and contractual obligations relating to
pollution or the discharge of, or exposure to, Hazardous Materials (as
hereinafter defined) in the environment or workplace ("Environmental Laws");
(b) There is no suit, claim, action or proceeding, pending or, to the
knowledge of BancorpSouth, threatened, before any Governmental Entity or other
forum in which BancorpSouth, any of its Subsidiaries, any Participation Facility
or any Loan Property, has been or, with respect to threatened proceedings, may
be, named as a defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Laws, or (ii) relating to the release,
threatened release or exposure to any Hazardous Material whether or not
occurring at or on a site owned, leased or operated by BancorpSouth or any of
its Subsidiaries, any Participation Facility or any Loan Property;
(c) Except as disclosed in Section 5.17 of the BancorpSouth Disclosure
Schedules, to the knowledge of BancorpSouth, during the period of (i)
BancorpSouth's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (ii) BancorpSouth's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(iii) BancorpSouth's or any of its Subsidiaries' interest in a Loan Property,
there has been no release of Hazardous Materials in, on, under or affecting any
such property. To the knowledge of BancorpSouth, prior to the period of (i)
BancorpSouth's or any of its Subsidiaries' ownership or operation of any of
their respective current or former properties, (ii) BancorpSouth's or any of its
Subsidiaries' participation in the management of any Participation Facility, or
(iii) BancorpSouth's or any of its Subsidiaries' interest in a Loan Property,
there was no release of Hazardous Materials in, on, under or affecting any such
property, Participation Facility or Loan Property; and
(d) The following definitions apply for purposes of this Section 5.17:
(i) "Hazardous Materials" means any chemicals, pollutants, contaminants, wastes,
toxic substances, petroleum or other regulated substances or materials, (ii)
"Loan Property" means any property in which BancorpSouth or any of its
Subsidiaries holds a security interest, and, where required by the context, said
term means the owner or operator of such property; and (iii) "Participation
Facility" means any facility in which BancorpSouth or any of its Subsidiaries
participates in the management and, where required by the context, said term
means the owner or operator of such property.
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5.18. Insurance. BancorpSouth and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as BancorpSouth's management
reasonably has determined to be prudent in accordance with industry practices.
All of such policies are in full force and effect; BancorpSouth and its
Subsidiaries are not in material default thereunder; and all claims thereunder
for which a basis is known, or reasonably should be known, by BancorpSouth have
been filed in due and timely fashion.
5.19. Accounting for the Merger; Reorganization. BancorpSouth has no reason
to believe that the Merger will fail to qualify (i) for pooling of interests
method of accounting under GAAP or (ii) as a reorganization under Section 368(a)
of the Code.
ARTICLE VI. COVENANTS RELATING TO CONDUCT OF BUSINESS
6.1. Covenants of First United. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement and the Stock Option Agreements or
with the prior express written consent of BancorpSouth, First United and its
Subsidiaries shall carry on their respective businesses in the ordinary course
consistent with past practice. Without limiting the generality of the foregoing,
and except as set forth in Section 6.1 of the First United Disclosure Schedule
or as otherwise contemplated by this Agreement and the Stock Option Agreements
or as expressly consented to in writing in advance by BancorpSouth, First United
shall not, and shall not permit any of its Subsidiaries to:
(a) declare or pay any dividends on, or make other distributions in
respect of, any of its capital stock during any period, other than dividends
distributions by a Subsidiary of First United to First United; provided,
however, that First United may declare and pay regular quarterly cash dividends
in a manner consistent with, and with usual and regular record and payment dates
in accordance with, past practice, except that the amount of such dividends may
be adjusted to reflect the payout that would have been received with respect to
First United Common Stock on a pro forma basis, taking into account the Exchange
Ratio and the amount of cash dividends declared and paid by BancorpSouth during
the same period,;
(b) (i) repurchase, redeem or otherwise acquire (except for the
acquisition of Trust Account Shares and DPC Shares, as such terms are defined in
Section 1.4(b) hereof) any shares of the capital stock of First United or any
Subsidiary of First United, or any securities convertible into or exercisable
for any shares of the capital stock of First United or any Subsidiary of First
United, except for purchases of First United Common Stock pursuant to First
United's employee stock ownership plan (the "ESOP") and, subject to the terms
and conditions of this Agreement, consistent with First United's past practice,
(ii) split, combine or reclassify any shares of its capital stock, or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for, shares of its capital stock, or (iii) issue, deliver
or sell, or authorize or propose the issuance, delivery or sale of, any shares
of its capital stock or any securities convertible into or exercisable for, or
any rights, warrants or options to acquire, any such shares, or enter into any
agreement with respect to any of the foregoing, other than pursuant to the ESOP
consistent with past practice, except, in the case of clauses (ii) and (iii),
for the issuance of First United Common Stock (A) upon the exercise or
fulfillment of rights or options issued or existing pursuant to the First United
Option Plans all to the extent outstanding and in existence on the date of this
Agreement and in accordance with their current terms or (B) pursuant to the
Stock Option Agreements;
(c) amend its Articles of Incorporation, Bylaws or other similar
governing documents;
(d) directly or indirectly, (i) solicit, initiate, encourage,
facilitate, entertain or accept any Acquisition Proposal (as defined in this
subsection below), or (ii) participate or engage in any discussions or
negotiations with any person or entity other than BancorpSouth or BancorpSouth
Bank relating or with respect to any Acquisition Proposal, or (iii) provide any
nonpublic information to any person or entity other than BancorpSouth or
BancorpSouth Bank relating or with respect to
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any Acquisition Proposal, or (iv) make any Acquisition Proposal to any person or
entity other than BancorpSouth and BancorpSouth Bank, or (v) enter into any
agreement with respect to any Acquisition Proposal, or (vi) otherwise facilitate
any effort or attempt to make an Acquisition Proposal, or (vii) authorize or
permit any of its officers, directors, employees, representatives or agents to
do any of the foregoing; provided, however, that in response to an unsolicited,
bona-fide written Acquisition Proposal, First United after giving notice of such
to BancorpSouth, may do the following if the Board of Directors of First United
determines in good faith that it must do so to comply with its fiduciary duties:
(i) communicate information about such Acquisition Proposal to First United's
shareholders if required under applicable law, and (ii) authorize and permit its
officers, directors, employees, representatives, investment bankers, attorneys,
accountants, financial advisors, or agents to, (A) participate or engage in such
discussions or negotiations, or (B) provide or cause to be provided nonpublic
information. First United will immediately cease and cause to be terminated as
of the date of this Agreement any existing activities, discussions or
negotiations previously or currently conducted with any persons or entities
other than BancorpSouth and BancorpSouth Bank with respect to any Acquisition
Proposal or any of the foregoing. First United will notify BancorpSouth
immediately if any Acquisition Proposal is received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, First United, and First United will promptly
(within 24 hours) inform BancorpSouth in writing of all of the relevant details
with respect to the foregoing, including the material terms and conditions of
such request or Acquisition Proposal and the identity of the person or group
making such request or proposal. First United will keep BancorpSouth fully
informed of the status and details (including amendments or proposed amendments)
of any such request or Acquisition Proposal. For purposes of this Agreement,
"Acquisition Proposal" shall mean any tender or exchange offer, proposal for a
merger, consolidation or other business combination involving First United or
any Subsidiary of First United or any proposal, inquiry or offer to acquire in
any manner all or 10% or greater equity interest in, or all or a substantial
portion of the assets of, First United or any Subsidiary of First United, other
than the transactions contemplated or permitted by this Agreement and the Stock
Option Agreements;
(e) make any capital expenditures other than those which are (i) set
forth in Section 6.1 of the First United Disclosure Schedule or (ii) are made in
the ordinary course of business or are necessary to maintain existing assets in
good repair, and in any event are in an amount of no more than $250,000 in the
aggregate, or except as necessary to comply with applicable regulatory
guidelines or requirements;
(f) enter into any new line of business, except for Internet banking;
(g) acquire or agree to acquire, by merging or consolidating with, or
by purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
limited liability company, association or other business organization or entity
or division thereof, or otherwise acquire any assets, which would be material,
individually or in the aggregate, to First United, or which could reasonably be
expected to impede or delay consummation of the Merger, other than in connection
with foreclosures, settlements in lieu of foreclosure or troubled loan or debt
restructurings in the ordinary course of business consistent with past
practices;
(h) except as contemplated by Article III hereof, take any action that
is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this Agreement being or becoming
untrue, or in any of the conditions to the Merger set forth in Article VIII not
being satisfied;
(i) change its methods of accounting in effect at December 31, 1999,
except as required by changes in GAAP or regulatory accounting principles as
concurred to by First United's independent auditors;
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(j) except as set forth in Section 7.7 hereof, as required by
applicable law or as required to maintain qualification pursuant to the Code,
(i) adopt, amend, or terminate any employee benefit plan (including, without
limitation, any Plan) or any agreement, arrangement, plan or policy between
First United or any Subsidiary of First United and one or more of its current or
former directors, officers or employees, except that First United may amend its
1994 Equity Participation Plan to delete the provision thereof regarding
termination of options granted under such plan in the event that the options are
unexercised at the effective time of a change in control of First United, (ii)
except for normal increases in the ordinary course of business consistent with
past practice or except as required by applicable law, increase in any manner
the cash compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any Plan or agreement as in effect as of the
date hereof, or (iii) grant or award any stock options, stock appreciation
rights, restricted stock, restricted stock units or performance units or shares;
(k) take or permit to be taken any action which would disqualify the
Merger as a pooling of interests for accounting purposes or a reorganization
under Section 368(a) of the Code;
(l) other than activities in the ordinary course of business consistent
with past practice, sell, lease, encumber, assign or otherwise dispose of, or
agree to sell, lease, encumber, assign or otherwise dispose of, any of its
material assets, properties or other rights or agreements;
(m) other than in the ordinary course of business consistent with past
practice, incur any indebtedness for borrowed money or assume, guarantee,
endorse or otherwise as an accommodation become responsible for the obligations
of any other individual, corporation or other entity;
(n) file any application to relocate or terminate the operations of any
banking office of it or any of its Subsidiaries;
(o) create, renew, amend or terminate or give notice of a proposed
renewal, amendment or termination of, any material contract, agreement or lease
for goods, services or office space to which First United or any of its
Subsidiaries is a party or by which First United or any of its Subsidiaries or
their respective properties is bound, other than the renewal in the ordinary
course of business of any lease the term of which expires prior to the Closing
Date, or amend or waive the provisions of any confidentiality or standstill
agreement to which First United or any of its affiliates is a party as of the
date hereof;
(p) take any action or enter into any agreement that could reasonably
be expected to jeopardize or materially delay the receipt of any Requisite
Regulatory Approval (as defined in Section 8.1(c));
(q) enter or commit to enter into any new loans in an original
principal amount in excess of $2,500,000, or renew, or commit to renew, any
existing loans in a principal amount in excess of $4,000,000; or
(r) agree or commit to do any of the foregoing.
6.2. Covenants of BancorpSouth. During the period from the date of this
Agreement and continuing until the Effective Time, except as expressly
contemplated or permitted by this Agreement and the Stock Option Agreements or
with the prior express written consent of First United, BancorpSouth and its
Subsidiaries shall carry on their respective businesses in the ordinary course
consistent with past practice. Without limiting the generality of the foregoing,
and except as set forth in Section 6.2 of the BancorpSouth Disclosure Schedule
or as otherwise contemplated by this Agreement and the Stock Option Agreements
or as expressly consented to in writing in advance by First United, BancorpSouth
shall not, and shall not permit any of its Subsidiaries to:
(a) except as contemplated by Article III hereof, take any action that
is intended or may reasonably be expected to result in any of its
representations and warranties set forth in this
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Agreement being or becoming untrue, or in any of the conditions to the Merger
set forth in Article VIII not being satisfied;
(b) take any action or enter into any agreement that could reasonably
be expected to jeopardize or materially delay the receipt of any Requisite
Regulatory Approval;
(c) change its methods of accounting in effect at December 31, 1999,
except in accordance with changes in GAAP or regulatory accounting principles as
concurred to by BancorpSouth's independent auditors;
(d) take or permit to be taken any action which would disqualify the
Merger as a pooling of interests for accounting purposes or a reorganization
under Section 368(a) of the Code;
(e) amend its Restated Articles of Incorporation, Bylaws or other
similar governing documents;
(f) acquire or agree to acquire, by merging or consolidating with, or
by purchasing a substantial equity interest in or a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
limited liability company, association or other business organization or entity
or division thereof, or otherwise acquire any assets, which would be material,
individually or in the aggregate, to BancorpSouth, or which could reasonably be
expected to impede or delay consummation of the Merger, other than in connection
with foreclosures, settlements in lieu of foreclosure or troubled loan or debt
restructurings in the ordinary course of business consistent with past
practices;
(g) other than activities in the ordinary course of business consistent
with past practice, sell, lease, encumber, assign or otherwise dispose of, or
agree to sell, lease, encumber, assign or otherwise dispose of, any of its
material assets, properties or other rights or agreements; or
(h) agree or commit to do any of the foregoing.
6.3. Mutual Covenant. Each of First United and BancorpSouth shall cause the
boards of directors of each of First United's Subsidiaries and BancorpSouth
Bank, respectively, to consider and act to approve this Agreement promptly after
the date hereof and prior to the Closing Date.
ARTICLE VII. ADDITIONAL AGREEMENTS
7.1. Regulatory Matters.
(a) BancorpSouth and First United shall promptly prepare and file with
the SEC the Proxy Statement, and BancorpSouth shall promptly prepare and file
with the SEC the S-4, in which the Proxy Statement will be included as a
prospectus. Each of First United and BancorpSouth shall use its reasonable best
efforts to have the S-4 declared effective under the Securities Act as promptly
as practicable after such filing, and each of First United and BancorpSouth
shall thereafter mail the Proxy Statement to its respective shareholders as
promptly as practicable. BancorpSouth shall also use its reasonable best efforts
to obtain all necessary state securities law or "Blue Sky" permits and approvals
required to carry out the transactions contemplated by this Agreement.
(b) The parties hereto shall cooperate with each other and use their
reasonable best efforts to promptly prepare and file all necessary
documentation, to effect all applications, notices, petitions and filings, and
to obtain as promptly as practicable all permits, consents, approvals and
authorizations of all third parties and Governmental Entities which are
necessary or advisable to consummate the transactions contemplated by this
Agreement (including, without limitation, the Holding Company Merger and the
Bank Mergers). First United and BancorpSouth shall have the right to review in
advance, and to the extent practicable each will consult the other on, in each
case
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subject to applicable laws relating to the exchange of information, all the
information relating to First United or BancorpSouth, as the case may be, and
any of their respective Subsidiaries, which appears in any filing made with, or
written materials submitted to, any third party or any Governmental Entity in
connection with the transactions contemplated by this Agreement. In exercising
the foregoing right, each of the parties hereto shall act reasonably and as
promptly as practicable. The parties hereto agree that they will consult with
each other with respect to the obtaining of all permits, consents, approvals and
authorizations of all third parties and Governmental Entities necessary or
advisable to consummate the transactions contemplated by this Agreement and each
party will keep the other apprised of the status of matters relating to
completion of the transactions contemplated herein.
(c) BancorpSouth and First United shall, upon request, furnish each
other with all information concerning themselves, their Subsidiaries, directors,
officers and shareholders and such other matters as may be reasonably necessary
or advisable in connection with the Proxy Statement, the S-4 or any other
statement, filing, notice or application made by or on behalf of BancorpSouth,
First United or any of their respective Subsidiaries to any Governmental Entity
in connection with the Merger and the other transactions contemplated by this
Agreement.
(d) BancorpSouth and First United shall promptly furnish each other
with copies of written communications received by BancorpSouth or First United,
as the case may be, or any of their respective Subsidiaries, Affiliates or
Associates (as such terms are defined in Rule 12b-2 under the Exchange Act as in
effect on the date of this Agreement) from, or delivered by any of the foregoing
to, any Governmental Entity in respect of the transactions contemplated hereby.
7.2. Access to Information.
(a) Upon reasonable notice and subject to applicable laws relating to
the exchange of information, each party shall, and shall cause each of its
Subsidiaries to, afford to the officers, employees, accountants, attorneys,
financial advisors and other representatives (each, a "Representative") of the
other party, access during normal business hours during the period prior to the
Effective Time to all its properties, books, contracts, commitments, records,
officers, employees, accountants, counsel and other representatives and, during
such period, it shall, and shall cause its Subsidiaries to, make available to
the other party all information concerning its business, properties and
personnel as the other party may reasonably request. In addition, First United
and each of its Subsidiaries shall permit a Representative of BancorpSouth to
have access to the premises and observe the operations of First United or any of
its Subsidiaries, as the case may be, without interfering with the operations of
First United or any of its Subsidiaries and only during normal business hours
and to attend each meeting of their respective Boards of Directors and
committees thereof (other than during discussions regarding this Agreement, the
Stock Option Agreements and the transactions contemplated hereby and thereby).
Neither party nor any of its Subsidiaries shall be required to provide access to
or to disclose information where such access or disclosure would reasonably
violate or prejudice the rights of its customers or its relationship with such
customers, reasonably jeopardize any attorney-client privilege or contravene any
law, rule, regulation, order, judgment, decree, fiduciary duty or binding
agreement entered into prior to the date of this Agreement. Such party shall
identify the nature of the limitation on access and disclosure, and the parties
hereto will make appropriate substitute disclosure arrangements under
circumstances in which the restrictions of the preceding sentence apply.
(b) All information furnished pursuant to Section 7.2(a) shall be
subject to, and the parties shall hold all such information in confidence in
accordance with, the provisions of the confidentiality agreement, dated as of
April 11, 2000 (the "Confidentiality Agreement"), between BancorpSouth and First
United.
(c) Notwithstanding anything in the Confidentiality Agreement or any
other agreement to the contrary, no provision of the Confidentiality Agreement
or investigation by either of the parties or their respective representatives
shall affect the representations, warranties, covenants or
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agreements of the other set forth herein and the parties shall remain
responsible to the extent provided herein, subject to Section 10.2.
7.3. Shareholder Meetings. Each of First United and BancorpSouth shall take
all steps in accordance with applicable law necessary to duly call, give notice
of, convene and hold a meeting of its respective shareholders to be held as soon
as is reasonably practicable after the date on which the S-4 becomes effective
for the purpose of voting upon the approval and adoption of this Agreement. Each
of First United and BancorpSouth will, through its respective Board of
Directors, recommend to its respective shareholders approval of this Agreement
and the transactions contemplated hereby and such other matters as may be
submitted to its respective shareholders in connection with this Agreement;
provided, however, that each of First United's and BancorpSouth's respective
Boards of Directors may submit this Agreement and the transactions contemplated
herein to its respective shareholders for approval without recommendation
pursuant to Section 4-27-1103 of the ABCA and Section 79-4-11.03 of the MBCA,
respectively, if such Board of Directors determines in good faith that it must
do so in order to comply with its fiduciary duties.
7.4. Legal Conditions to Merger. Each of BancorpSouth and First United
shall, and shall cause its Subsidiaries to, use their reasonable best efforts
(a) to take, or cause to be taken, all actions necessary, proper or advisable to
comply promptly with all legal requirements which may be imposed on such party
or its Subsidiaries with respect to the Merger and, subject to the conditions
set forth in Article VIII hereof, to consummate the transactions contemplated by
this Agreement and (b) to obtain (and to cooperate with the other party to
obtain) any consent, authorization, order or approval of, or any exemption by,
any Governmental Entity and any other third party which is required to be
obtained by First United or BancorpSouth or any of their respective Subsidiaries
in connection with the Merger and the other transactions contemplated by this
Agreement, and to comply with the terms and conditions of such consent,
authorization, order or approval.
7.5. Affiliates. First United shall use its reasonable best efforts to cause
each director, executive officer and other person who is an "affiliate" (for
purposes of Rule 145 under the Securities Act, and for purposes of qualifying
the Merger for pooling of interests accounting treatment) of such party to
deliver to BancorpSouth, as soon as practicable after the date of this
Agreement, a written agreement, in the form of Exhibit 7.5.
7.6. NYSE Listing. BancorpSouth shall make all filings required of it to
cause the shares of BancorpSouth Common Stock to be issued in the Merger to be
approved for listing on the NYSE, subject to official notice of issuance, as of
the Effective Time.
7.7. Employee Benefit Plans; Existing Agreements.
(a) As of the Effective Time, to the extent permissible under the terms
of the BancorpSouth Plans, the employees of First United and its Subsidiaries
(the "First United Employees") shall be eligible to participate in
BancorpSouth's employee benefit plans in which similarly situated employees of
BancorpSouth or BancorpSouth Bank participate, to the same extent as similarly
situated employees of BancorpSouth or BancorpSouth Bank (it being understood
that inclusion of First United Employees in BancorpSouth's employee benefit
plans may occur at different times with respect to different plans).
(b) With respect to each BancorpSouth Plan that is an "employee benefit
plan," as defined in Section 3(3) of ERISA, for purposes of determining
eligibility to participate, vesting, and entitlement to benefits, including for
severance benefits and vacation entitlement (but not for accrual of pension
benefits) service with First United (or predecessor employers to the extent
First United provides past service credit) shall be treated as service with
BancorpSouth; provided, however, that such service shall not be recognized to
the extent that such recognition would result in a duplication or increase of
benefits. Such service also shall apply for purposes of satisfying any waiting
periods,
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evidence of insurability requirements, or the application of any preexisting
condition limitations. Each BancorpSouth Plan shall waive pre-existing condition
limitations to the same extent waived under the applicable First United Plan.
First United Employees shall be given credit for amounts paid under a
corresponding benefit plan during the same period for purposes of applying
deductibles, copayments and out-of-pocket maximums as though such amounts had
been paid in accordance with the terms and conditions of the BancorpSouth Plan.
(c) As of the Effective Time, except as otherwise agreed, BancorpSouth
shall assume and honor and shall cause the appropriate Subsidiaries of
BancorpSouth to assume and to honor in accordance with their terms all
employment, severance and other compensation agreements and arrangements
existing prior to the execution of this Agreement which are between First United
or any of its Subsidiaries and any director, officer or employee thereof and
which have been disclosed in the First United Disclosure Schedule.
(d) BancorpSouth and First United agree to cooperate and take all
reasonable actions to effect the merger of any employee benefit plan that is
intended to be qualified under Section 401(a) of the Code into the appropriate
tax-qualified retirement plan of BancorpSouth after the Merger is completed, so
that such plan merger satisfies the requirements of Section 414(l) of the Code;
provided, however, that BancorpSouth shall not be obligated to effect such a
merger of a plan unless such plan is fully funded under Section 412 of the Code
and Section 302 of ERISA, to the extent applicable, and the merger would not
jeopardize the tax-qualified status of any BancorpSouth Plan.
(e) If requested by BancorpSouth, prior to the Effective Time, First
United shall freeze, terminate, amend or take other action with respect to any
Plan that BancorpSouth, in its sole discretion, deems advisable and not
inconsistent with this Agreement, and provide all required notices to
participants and appropriate governmental agencies.; provided, that First United
may nevertheless freeze its defined benefit pension plan even without any such
request by BancorpSouth.
7.8. Indemnification of First United Directors and Officers.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether civil, criminal or administrative,
including, without limitation, any such claim, action, suit, proceeding or
investigation in which any person who is now, or has been at any time prior to
the date of this Agreement, or who becomes prior to the Effective Time, a
director or officer of First United or any of its Subsidiaries (the "Indemnified
Parties") is, or is threatened to be, made a party based in whole or in part on,
or arising in whole or in part out of, or pertaining to (i) the fact that he or
she is or was a director or officer of First United, any of the Subsidiaries of
First United or any of their respective predecessors or affiliates or (ii) this
Agreement or any of the transactions contemplated hereby, whether in any case
asserted or arising before or after the Effective Time, the parties hereto agree
to cooperate and use their best efforts to defend against and respond thereto.
It is understood and agreed that after the Effective Time, BancorpSouth shall
indemnify and hold harmless, as and to the extent permitted by law, each such
Indemnified Party against any losses, claims, damages, liabilities, costs,
expenses (including reasonable attorney's fees and expenses in advance of the
final disposition of any claim, suit, proceeding or investigation to each
Indemnified Party to the fullest extent permitted by law upon receipt of any
undertaking required by applicable law), judgments, fines and amounts paid in
settlement in connection with any such threatened or actual claim, action, suit,
proceeding or investigation. In the event of any such threatened or actual
claim, action, suit, proceeding or investigation (whether asserted or arising
before or after the Effective Time), the Indemnified Parties may retain counsel
reasonably satisfactory to them after consultation with BancorpSouth; provided,
however, that (1) BancorpSouth shall have the right to assume the defense
thereof and upon such assumption BancorpSouth shall not be liable to any
Indemnified Party for any legal expenses of other counsel or any other expenses
subsequently incurred by any Indemnified Party in connection with the defense
thereof, except that if BancorpSouth elects not to assume such defense or if
counsel for the Indemnified Parties reasonably advises that there are issues
which raise conflicts of interest between BancorpSouth and the Indemnified
Parties, the Indemnified Parties may retain counsel
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reasonably satisfactory to them after consultation with BancorpSouth, and
BancorpSouth shall pay the reasonable fees and expenses of such counsel for the
Indemnified Parties, (2) BancorpSouth shall in all cases be obligated pursuant
to this paragraph to pay for only one firm of counsel for all Indemnified
Parties (unless an ethical conflict of interest arises for such firm of counsel
in representing all Indemnified Parties), (3) BancorpSouth shall not be liable
for any settlement effected without its prior written consent (which consent
shall not be unreasonably withheld) and (4) BancorpSouth shall have no
obligation hereunder to any Indemnified Party when and if a court of competent
jurisdiction shall ultimately determine, and such determination shall have
become final and nonappealable, that indemnification of such Indemnified Party
in the manner contemplated hereby is prohibited by applicable law. Any
Indemnified Party wishing to claim Indemnification under this Section 7.8, upon
learning of any such claim, action, suit, proceeding or investigation, shall
promptly notify BancorpSouth thereof, provided that the failure to so notify
shall not affect the obligations of BancorpSouth under this Section 7.8 except
to the extent such failure to notify materially prejudices BancorpSouth.
BancorpSouth's obligations under this Section 7.8 shall continue in full force
and effect without time limit from and after the Effective Time.
(b) BancorpSouth shall cause each person serving as a director or
officer of First United immediately prior to the Effective Time to be covered
for a period of three years from the Effective Time by the directors' and
officers' liability insurance policy maintained by First United (provided that
BancorpSouth may substitute therefor policies of at least the same coverage and
amounts containing terms and conditions which are not less advantageous than
such policy) with respect to acts or omissions occurring prior to the Effective
Time which were committed by such officers and directors in their capacity as
such; provided, however, that in no event shall BancorpSouth be required to
expend on an annual basis more than 150% of the current amount expended by First
United (the "Insurance Amount") to maintain or procure insurance coverage, and
further provided that if BancorpSouth is unable to maintain or obtain the
insurance called for by this Section 7.8(b), BancorpSouth shall use all
reasonable efforts to obtain as much comparable insurance as is available for
the Insurance Amount.
(c) In the event BancorpSouth or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger,
or (ii) transfers or conveys all or substantially all of its properties and
assets to any person, then, and in each such case, to the extent necessary,
proper provision shall be made so that the successors and assigns of
BancorpSouth assume the obligations set forth in this section.
(d) The provisions of this Section 7.8 are intended to be for the
benefit of, and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
7.9. Additional Agreements. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement or to vest the Surviving Corporation with full title to all
properties, assets, rights, approvals, immunities and franchises of any of the
parties to the Merger, the proper officers and directors of each party to this
Agreement and their respective Subsidiaries shall take all such necessary action
as may be reasonably requested by BancorpSouth.
7.10. Coordination of Dividends. After the date of this Agreement each of
BancorpSouth and First United shall coordinate with the other the declaration of
any dividends in respect of First United Common Stock and the record dates and
payments dates relating thereto, it being the intention of the parties that the
holders of First United Common Stock may (to the extent allowed by law and
declared) receive one, but not more than one, dividend for any calendar quarter
or other period with respect to their shares of First United Common Stock and
any shares of BancorpSouth Common Stock any holder of First United Common Stock
receives in exchange thereof in the Merger.
7.11. Stock Option Agreements. Contemporaneously with the execution and
delivery of this Agreement, First United and BancorpSouth shall execute and
deliver the Stock Option Agreements.
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7.12. Publication of Combined Results. As soon as reasonably practicable
after the date that at least 30 days of combined financial results of First
United and BancorpSouth are available and in conjunction with BancorpSouth's
quarterly press releases regarding, among other things, its earnings in the
previous quarter, BancorpSouth shall publish such results by press release or
the making of an appropriate filing under the Exchange Act.
7.13. Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, each of BancorpSouth and First United agrees to use its respective
reasonable best efforts in good faith to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary, proper or
desirable, or advisable under applicable laws, so as to permit consummation of
the Merger as promptly as practicable and otherwise to enable consummation of
the transactions contemplated hereby and shall cooperate fully with the other
party hereto to that end.
7.14. BancorpSouth Board of Directors. The initial Board of Directors of the
Surviving Corporation shall be comprised of 13 members, nine of which shall be
the directors of BancorpSouth as of the Effective Time (the "Initial
BancorpSouth Directors") and four of which shall be directors of First United as
of the Effective Time who are designated therefor by First United (the "Initial
First United Directors"). The Initial BancorpSouth Directors shall serve in the
classes to which they were elected or appointed and the Initial First United
Directors shall be appointed to fill classes designated as equally as possible
given existing vacancies. If any of the Initial First United Directors shall
fail for any reason to serve the initial term to which he was appointed, the
nominating committee of the Surviving Corporation shall first consider nominees
for that vacancy nominated by a majority of the remaining Initial First United
Directors. The initial Board of Directors of the Surviving Bank shall be
comprised of the members of the Board of Directors of BancorpSouth Bank as of
the Effective Time, the Initial First United Directors and three other directors
of First United as of the Effective Time who are designated therefor by First
United (the "Initial First United Bank Directors"). It is anticipated that two
additional members will be elected to the Board of Directors of the Surviving
Corporation at the annual meeting of shareholders to be held in 2001, and the
nominating committee of the Surviving Corporation will nominate one of the
Initial First United Bank Directors as a candidate for one of those positions.
7.15. First United-Texas Subsidiary Merger. Prior to the Closing, First
United shall cause First United-Texas to be merged with and into First United.
ARTICLE VIII. CONDITIONS PRECEDENT
8.1. Conditions to Each Party's Obligation To Effect the Merger. The
respective obligation of each party to effect the Merger shall be subject to the
satisfaction at or prior to the Effective Time of the following conditions:
(a) Shareholder Approvals. This Agreement shall have been approved and
adopted by the requisite votes of the shareholders of First United and the
shareholders of BancorpSouth under applicable law.
(b) Listing of Shares. The shares of BancorpSouth Common Stock which
shall be issued to the shareholders of First United upon consummation of the
Merger shall have been authorized for listing on the NYSE, subject to official
notice of issuance.
(c) Other Approvals. All regulatory approvals required to consummate
the transactions contemplated hereby (including the Merger) shall have been
obtained and shall remain in full force and effect and all statutory waiting
periods in respect thereof shall have expired (all such approvals and the
expiration of all such waiting periods being referred to herein as the
"Requisite Regulatory Approvals").
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(d) S-4. The S-4 shall have become effective under the Securities Act
and no stop order suspending the effectiveness of the S-4 shall have been issued
and no proceedings for that purpose shall have been initiated or threatened by
the SEC.
(e) No Injunctions or Restraints; Illegality. No order, injunction or
decree issued by any court or agency of competent jurisdiction or other legal
restraint or prohibition (an "Injunction") preventing the consummation of the
Merger shall be in effect. No statute, rule, regulation, order, injunction or
decree shall have been enacted, entered, promulgated or enforced by any
Governmental Entity which prohibits, restricts or makes illegal consummation of
the Merger.
(f) Pooling Treatment. KPMG LLP, certified public accountants for
BancorpSouth, shall have delivered a letter dated the Effective Time and
addressed to BancorpSouth, to the effect that the Merger will qualify for
pooling of interests accounting treatment under applicable accounting standards
if consummated in accordance with this Agreement. Arthur Andersen LLP, certified
public accountants for First United, shall have delivered a letter dated the
Effective Time and addressed to First United, to the effect that First United is
a poolable entity under applicable accounting standards. First United shall use
its best efforts to procure drafts of such letters from its accountants and
provide them to BancorpSouth and its respective counsel no later than 10
business days prior to the Closing Date.
8.2. Conditions to Obligations of BancorpSouth. The obligation of
BancorpSouth to effect the Merger is also subject to the satisfaction or waiver
by BancorpSouth at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties
of First United set forth in Sections 4.2 and 4.7 of this Agreement shall be
true and correct in all respects without giving effect to Section 3.2 of this
Agreement, and those set forth elsewhere in this Agreement shall be true and
correct after giving effect to Section 3.2, in each case as of the date of this
Agreement and (except to the extent such representations and warranties speak
only as of an earlier date) as of the Closing Date as though made on and as of
the Closing Date. BancorpSouth shall have received a certificate signed on
behalf of First United by the Chief Executive Officer and the Chief Financial
Officer of First United to the foregoing effect.
(b) Performance of Obligations of First United. First United shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and BancorpSouth shall
have received a certificate signed on behalf of First United by the Chief
Executive Officer and the Chief Financial Officer of First United to such
effect.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. BancorpSouth shall have received an opinion
from Waller Lansden Dortch & Davis, PLLC, counsel to BancorpSouth
("BancorpSouth's Counsel"), in form and substance reasonably satisfactory to
BancorpSouth, dated the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such opinion which
are consistent with the state of facts existing at the Effective Time, the
Merger will be treated as a reorganization within the meaning of Section 368(a)
of the Code and that BancorpSouth and First United will each be a party to that
reorganization. In rendering such opinion, BancorpSouth's Counsel may require
and rely upon representations and covenants, including those contained in
certificates of officers of BancorpSouth, First United and others, reasonably
satisfactory in form and substance to such counsel. BancorpSouth and First
United will cooperate with each other and BancorpSouth's Counsel in executing
and delivering to BancorpSouth's Counsel customary representations letters in
connection with such opinion.
(e) Fairness Opinion. Prior to mailing the Proxy Statement,
BancorpSouth shall have received an opinion from Salomon Smith Barney, Inc. or
other financial advisor reasonably
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satisfactory to BancorpSouth to the effect that as of the date thereof and based
upon and subject to the matters set forth therein, the Exchange Ratio is fair to
the shareholders of BancorpSouth from a financial point of view.
8.3. Conditions to Obligations of First United. The obligation of First
United to effect the Merger is also subject to the satisfaction or waiver by
First United at or prior to the Effective Time of the following conditions:
(a) Representations and Warranties. The representations and warranties
of BancorpSouth set forth in this Agreement shall be true and correct after
giving effect to Section 3.2 of this Agreement as of the date of this Agreement
and (except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on and as of the Closing
Date. First United shall have received a certificate signed on behalf of
BancorpSouth by the Chief Executive Officer and the Chief Financial Officer of
BancorpSouth to the foregoing effect.
(b) Performance of Obligations of BancorpSouth. BancorpSouth shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date, and First United shall
have received a certificate signed on behalf of BancorpSouth by the Chief
Executive Officer and the Chief Financial Officer of BancorpSouth to such
effect.
(c) No Pending Governmental Actions. No proceeding initiated by any
Governmental Entity seeking an Injunction shall be pending.
(d) Federal Tax Opinion. First United shall have received an opinion
from Mitchell, Williams, Selig, Gates & Woodyard, PLLC ("First United's
Counsel"), or other counsel reasonably satisfactory to First United, in form and
substance reasonably satisfactory to First United, dated the Effective Time,
substantially to the effect that, on the basis of facts, representations and
assumptions set forth in such opinion which are consistent with the state of
facts existing at the Effective Time, the Merger will be treated as a
reorganization within the meaning of Section 368(a) of the Code and that
BancorpSouth and First United will each be a party to that reorganization. In
rendering such opinion, First United's Counsel may require and rely upon
representations and covenants, including those contained in certificates of
officers of BancorpSouth, First United and others, reasonably satisfactory in
form and substance to such counsel. BancorpSouth and First United will cooperate
with each other and First United's Counsel in executing and delivering to First
United's Counsel customary representations letters in connection with such
opinion.
(e) Fairness Opinion. Prior to the mailing of the Proxy Statement,
First United shall have received opinions from Stephens Inc. and from Stifel
Nicholas & Co. to the effect that as of the date thereof and based upon and
subject to the matters set forth therein, the Exchange Ratio is fair to the
shareholders of First United from a financial point of view.
ARTICLE IX. TERMINATION AND AMENDMENT
9.1. Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the matters presented in
connection with the Merger by the shareholders of both First United and
BancorpSouth:
(a) By mutual consent of First United and BancorpSouth in a written
instrument, if the Board of Directors of each so determines by a vote of a
majority of the members of its entire Board;
(b) By either BancorpSouth or First United upon written notice to the
other party (i) 60 days after the date on which any request or application for a
Requisite Regulatory Approval shall have been denied or withdrawn at the request
or recommendation of the Governmental Entity which must grant such Requisite
Regulatory Approval, unless within the 60-day period following such
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denial or withdrawal a petition for rehearing or an amended application has been
filed with the applicable Governmental Entity; provided, however, that no party
shall have the right to terminate this Agreement pursuant to this Section
9.1(b)(i) if such denial or request or recommendation for withdrawal shall be
due to the failure of the party seeking to terminate this Agreement to perform
or observe the covenants and agreements of such party set forth herein or (ii)
if any Governmental Entity of competent jurisdiction shall have issued a final
nonappealable order enjoining or otherwise prohibiting the Merger;
(c) By either BancorpSouth or First United upon written notice to the
other party if the Merger shall not have been consummated on or before December
31, 2000, unless the failure of the Closing to occur by such date shall be due
to the failure of the party seeking to terminate this Agreement to perform or
observe the covenants and agreements of such party set forth herein;
(d) By either BancorpSouth or First United upon written notice to the
other party (provided that a party may not terminate if it is in material breach
of any of its obligations under Section 7.3) if any approval of the respective
shareholders of First United or BancorpSouth required for the consummation of
the Merger shall not have been obtained by reason of the failure to obtain the
required vote at a respective duly held meeting of such shareholders or at any
adjournment or postponement thereof;
(e) By either BancorpSouth or First United upon written notice to the
other party (provided that the terminating party is not then in breach of any
representation or warranty (after giving effect to Section 3.2) or material
breach of any covenant or other agreement contained herein) in the event of
either: (i) if any of the representations or warranties set forth in this
Agreement on the part of the other party hereto shall be or become untrue or
incorrect (after giving effect to Section 3.2 hereof as provided in Article
VIII), and such representation is either incapable, by its nature, of being
cured or is not cured within 30 calendar days following the giving of written
notice thereof to the party making such representation; or (ii) a material
breach by the other party of any of the covenants or agreements contained in
this Agreement, and such breach is either incapable, by its nature, of being
cured or is not cured within 30 calendar days following the giving of written
notice thereof to such other party;
(f) By First United upon written notice to BancorpSouth if
BancorpSouth's Board of Directors shall have failed to recommend in the Proxy
Statement that BancorpSouth's shareholders approve and adopt this Agreement, or
BancorpSouth's Board of Directors shall have withdrawn, modified or changed, in
a manner adverse to First United, its approval or recommendation of this
Agreement and the transactions contemplated hereby;
(g) By BancorpSouth upon written notice to First United if First
United's Board of Directors shall have failed to recommend in the Proxy
Statement that First United's shareholders approve and adopt this Agreement, or
First United's Board of Directors shall have withdrawn, modified or changed, in
a manner adverse to BancorpSouth, its approval or recommendation of this
Agreement and the transactions contemplated hereby, or if First United enters
into any letter of intent, agreement in principle, or acquisition or similar
agreement related or with respect to any Acquisition Proposal.
(h) By either party in writing prior to May 8, 2000 unless waived
earlier by the express mutual written consent of First United and BancorpSouth,
if the Board of Directors of such party by a majority vote of its entire Board
determines in its reasonable good faith judgment through such party's own review
or based upon disclosures made by the other party (including the Disclosure
Schedules) that the assets, liabilities, business, financial condition, and
results of operations of the other party and its Subsidiaries, taken as a whole,
are materially and adversely different from the terminating party's reasonable
expectations of such matters as of the date of this Agreement based solely upon
the other party's most recent annual report on Form 10-K filed with the SEC and
without considering any other representation, warranty or other disclosure.
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(i) by the Board of Directors of First United, if it determines by a
vote of a majority of the members of its entire Board at any time during the
ten-day period commencing two days after the Determination Date, if both of the
following conditions are satisfied:
(1) the Average Closing Price shall be twenty percent (20%) less
than the Starting Price; and
(2) the BancorpSouth Ratio shall be less than 0.80 times the
Index Ratio;
subject, however, to the following: If the First United Board of Directors
elects to so terminate this Agreement pursuant to this Section 9.1(i), it shall
give prompt written notice thereof to BancorpSouth; provided, that such notice
of election to terminate may be withdrawn at any time within the aforementioned
ten-day period. During the five-day period commencing with its receipt of such
notice, BancorpSouth shall have the option to elect to increase the Exchange
Ratio to equal the lesser of (i) the quotient obtained by dividing (1) the
product of 0.80, the Starting Price and the Exchange Ratio (as then in effect)
by (2) the Average Closing Price, and (ii) the quotient obtained by dividing (1)
the product of the Index Ratio and the Exchange Ratio (as then in effect) by (2)
the BancorpSouth Ratio. If BancorpSouth makes an election contemplated by the
preceding sentence, within such five-day period, it shall give prompt written
notice to First United of such election pursuant to this Section 9.1(i) and this
Agreement shall remain in effect in accordance with its terms (except as the
Exchange Ratio shall have been so modified), and any references in this
Agreement to "Exchange Ratio" shall thereafter be deemed to refer to the
Exchange Ratio as adjusted pursuant to this Section 9.1(i).
For purposes of this Section 9.1(i), the following terms shall have the
meanings indicated:
"Average Closing Price" shall mean the average of the daily last sales
prices of BancorpSouth Common Stock as reported on the NYSE (as reported by The
Wall Street Journal or, if not reported thereby, another authoritative source as
chosen by BancorpSouth) for the 20 consecutive full trading days in which such
shares are traded ending at the closing of trading on the Determination Date.
"Average Index Price" shall mean the average of the daily Index Price
for the 20 consecutive full trading days ending at the closing of trading on the
Determination Date.
"BancorpSouth Ratio" shall mean the quotient of the Average Closing
Price divided by the Starting Price.
"Determination Date" shall mean the date on which the last consent of
the applicable federal and state regulatory authorities shall be received.
"Index Group" shall mean the bank holding companies listed below, the
common stocks of all of which shall be publicly traded and as to which there
shall not have been, since the Starting Date and before the Determination Date,
any public announcement of a proposal for such company to be acquired or for
such company to acquire another company or companies in transactions with a
value exceeding 75% of the acquiror's market capitalization. In the event that
any such company or companies are removed from the Index Group, the weights
(which shall be determined based upon the number of outstanding shares of common
stock) shall be redistributed proportionately for purposes of determining the
Index Price. The bank holding companies and the weights attributed to them are
as follows:
<TABLE>
<CAPTION>
HOLDING COMPANY WEIGHTING (%)
- --------------- -------------
<S> <C>
Fulton Financial Corporation ............................... 7.5
M&T Bank Corporation ....................................... 0.8
City National Corporation .................................. 5.2
Centura Banks, Inc. ........................................ 3.1
</TABLE>
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<PAGE> 43
<TABLE>
<S> <C>
Cullen/Frost Bankers, Inc. ................................. 5.8
Old National Bancorp ....................................... 5.2
Wilmington Trust Corporation ............................... 3.5
Commerce Bancorp, Inc. ..................................... 3.3
UMB Financial Corporation .................................. 2.4
Westamerica Bancorporation ................................. 4.0
Valley National Bancorp .................................... 6.5
TCF Financial Corporation .................................. 9.0
Park National Corporation .................................. 1.1
Mercantile Bankshares Corporation .......................... 7.5
Commerce Bancshares, Inc. .................................. 6.7
First Financial Bancorp. ................................... 5.1
First Virginia Banks, Inc. ................................. 5.3
TrustCo Bank Corp of NY .................................... 5.8
United Bankshares, Inc. .................................... 4.6
Trustmark Corporation ...................................... 7.6
=====
TOTAL....................................................... 100.0
</TABLE>
"Index Price" on a given date shall mean the sum of the following: the
closing sales price of a share of common stock of each company comprising the
Index Group (as reported for such date on the consolidated transaction reporting
system for the stock exchange or market on which such common stock is
principally traded), multiplied by the applicable weighting for such common
stock.
"Index Ratio" shall mean the quotient of the Average Index Price
divided by the Index Price on the Starting Date.
"Starting Price" shall the greater of (i) $15.50, and (ii) the closing
sales price of BancorpSouth Common Stock on the Starting Date, as reported on
the NYSE (as reported by The Wall Street Journal or, if not reported thereby,
another authoritative source as chosen by BancorpSouth). The Starting Price
shall be equitably adjusted to take into effect any stock dividend,
reclassification, recapitalization, split up, combination, exchange of shares,
or similar transaction between the date of this Agreement and the Determination
Date.
"Starting Date" shall mean April 17, 2000.
9.2. Effect of Termination. In the event of termination of this Agreement by
either BancorpSouth or First United as provided in Section 9.1, this Agreement
shall forthwith become void and have no effect except (i) Sections 7.2(b), 9.2
and 10.3 shall survive any termination of this Agreement and (ii) that
notwithstanding anything to the contrary contained in this Agreement, no party
shall be relieved or released from any liabilities or damages arising out of its
breach of any provision of this Agreement, it being understood and agreed,
however, that a termination pursuant to Section 9.1(h) above shall not give rise
to any liability or damages for termination.
9.3. Amendment. Subject to compliance with applicable law, this Agreement
may be amended by the parties hereto, by action taken or authorized by their
respective Boards of Directors, at any time before or after approval of the
matters presented in connection with the Merger by the respective shareholders
of First United and BancorpSouth; provided, however, that after any approval of
the transactions contemplated by this Agreement by a party's shareholders, there
may not be, without further approval of such shareholders, any amendment of this
Agreement which reduces the amount or changes the form of the consideration to
be delivered to such shareholders hereunder other than as contemplated by this
Agreement. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
9.4. Extension; Waiver. At any time prior to the Effective Time, each of the
parties hereto, by action taken or authorized by its Board of Directors, may, to
the extent legally allowed, (a) extend the time for the performance of any of
the obligations or other acts of the other party hereto, (b)
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<PAGE> 44
waive any inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions of the other party contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in a written instrument signed on behalf
of such party, but such extension or waiver or failure to insist on strict
compliance with an obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
ARTICLE X. GENERAL PROVISIONS
10.1. Closing. Subject to the terms and conditions of this Agreement, the
closing of the Merger (the "Closing") will take place at 10:00 a.m. (Central
Time) on the first day which is at least two business days after the
satisfaction or waiver (subject to applicable law) of the last to occur of the
conditions set forth in Article VIII hereof (other than those conditions which
relate to actions to be taken at the Closing) (the "Closing Date"), at the
offices of Waller Lansden Dortch & Davis, PLLC, 511 Union Street, Suite 2100,
Nashville, Tennessee 37219, or at such other time, date and place as is agreed
to by the parties hereto.
10.2. Nonsurvival of Representations, Warranties and Agreements. None of the
representations, warranties, covenants and agreements in this Agreement or in
any instrument delivered pursuant to this Agreement (other than Section 10.3
hereof and pursuant to the Stock Option Agreements, which shall terminate in
accordance with its terms) shall survive the Effective Time, except for those
covenants and agreements contained herein and therein which by their terms apply
in whole or in part after the Effective Time.
10.3. Expenses. All costs and expenses, including legal, accounting and
financial advisory fees and expenses, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring
such costs and expenses. Without limiting the foregoing, each party hereto shall
be solely responsible for the compensation, if any, owed to its respective
financial advisor.
10.4. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), mailed by registered or certified mail (return receipt requested)
or delivered by an express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
<TABLE>
<S> <C>
(a) if to BancorpSouth, to: BancorpSouth, Inc.
One Mississippi Plaza
Tupelo, Mississippi 38804
Attention: Chief Executive Officer
Facsimile: (662) 680-2006
with a copy (which shall not Waller Lansden Dortch & Davis,
constitute notice) to: A Professional Limited Liability Company
511 Union Street, Suite 2100
Nashville, Tennessee 37219
Attention: Ralph W. Davis, Esq.
Facsimile: (615) 244-6804
and
</TABLE>
40
<PAGE> 45
<TABLE>
<S> <C>
(b) if to First United, to: First United Bancshares, Inc.
Main and Washington Streets
El Dorado, Arkansas 71730
Attention: Chief Executive Officer
Facsimile: (870) 863-3181
with a copy (which shall not
constitute notice) to: Mitchell, Williams, Selig, Gates &
Woodyard, PLLC
425 West Capitol Avenue, Suite 1800
Little Rock, Arkansas 72201
Attention: Hermann Ivester, Esq.
Facsimile: (501) 688-8807
</TABLE>
10.5. Interpretation.
(a) In this Agreement, unless a contrary intention appears, (i) the
words "herein," "hereof" and "hereunder" and other words of similar import refer
to this Agreement as a whole and not to any particular Article, Section or other
subdivision, and (ii) when a reference is made in this Agreement to Articles,
Sections, Exhibits or Schedules, such reference shall be to an Article, Section
of or Exhibit or Schedule to this Agreement, as applicable. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrases "the date
of this Agreement", "the date hereof" and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to April 16, 2000. Unless
the context otherwise requires, when used in this Agreement, (i) the singular
shall include the plural, the plural shall include the singular, and all nouns,
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine or neuter, as the identity of the person or persons may require, and
(ii) the term "or" shall mean "and/or." For purposes of this Agreement,
"knowledge" means, with respect to an individual, such individual is actually
aware, after reasonable inquiry, of the particular fact, matter, circumstance or
other item, and, with respect to any party, entity or other person other than an
individual, any individual who is serving as a director, chairman, chief
executive officer, president, chief operating officer, chief financial officer,
chief accounting officer, controller, chief credit officer, general counsel,
senior or executive vice president, or regional chairman of such party, entity
or other person or other officer, regardless of title, thereof charged with or
responsible for the oversight of a particular area, department or function to
which the subject matter relates, has or at any time had "knowledge" of such
fact, matter, circumstance or other item. References to any document (including
this Agreement) are references to that document as amended, consolidated,
supplemented, novated or replaced by the parties from time to time. References
to any party to this Agreement shall include references to its respective
successors and permitted assigns. References to law are references to that law
as amended, consolidated, supplemented or replaced from time to time, and shall
include references to any constitutional provision, treaty, decree, convention,
statute, act, regulation, rule, ordinance, subordinate legislation, rule of
common law and of equity and judgment and shall include the requirements of any
applicable stock exchange. References to a judgment shall include references to
any order, injunction, decree, determination or award of any court or tribunal.
References to any Governmental Entity or Regulatory Agency include any successor
to that Governmental Entity or Regulatory Agency.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The parties hereto have each negotiated the
terms hereof, reviewed this Agreement carefully, and discussed it with their
respective legal counsel. It is the intent of the parties that each word, phrase
and sentence and other part hereof shall be given its plain meaning. No
provision of this Agreement shall be interpreted or construed against any party
hereto solely because such party or its legal representative drafted such
provision.
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<PAGE> 46
10.6. Defined Terms. Certain terms used in this Agreement have the meanings
ascribed thereto herein, and shall be applicable to the singular and the plural
forms of such terms, except as otherwise provided herein.
10.7. Counterparts. This Agreement may be executed in counterparts, all of
which shall be considered one and the same instrument and shall become effective
when counterparts have been signed by each of the parties and delivered to the
other party hereto, it being understood that all parties need not sign the same
counterpart.
10.8. Entire Agreement. This Agreement (including the schedules, exhibits,
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, other than the
Stock Option Agreements and the Confidentiality Agreement.
10.9. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Mississippi, without regard to the
conflicts of laws principles of any jurisdiction. The parties agree that the
venue for resolution of any dispute arising out of this Agreement shall be a
court of competent jurisdiction in Mississippi or Arkansas.
10.10. Enforcement of Agreement. The parties hereto agree that irreparable
damage would occur in the event that the provisions contained in this Agreement
were not performed in accordance with its specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions thereof in any court of the United States
or any state having jurisdiction, without having to post bond therefor or prove
actual damages, this being in addition to any other remedy to which they are
entitled at law or in equity.
10.11. Severability. Any term or provision of this Agreement or Stock Option
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement or affecting the validity or enforceability of
any of the terms or provisions of this Agreement in any other jurisdiction. If
any provision of this Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as is enforceable.
10.12. Publicity. Except as otherwise required by law or the rules of the NYSE
and the Nasdaq Stock Market, so long as this Agreement is in effect, neither
BancorpSouth nor First United shall, or shall permit any of its Subsidiaries to,
issue or cause the publication of any press release or other public announcement
with respect to, or otherwise make any public statement concerning, the
transactions contemplated by this Agreement without the consent of the other
party, which such consent shall not be unreasonably withheld or delayed.
10.13. Assignment; Successors; Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns. Except
as otherwise expressly provided herein, this Agreement (including the documents
and instruments referred to herein) is not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
[THE FOLLOWING PAGE IS THE SIGNATURE PAGE.]
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<PAGE> 47
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written for themselves and their respective
Subsidiaries.
BANCORPSOUTH, INC.
By: /s/ Aubrey B. Patterson
------------------------------------
Aubrey B. Patterson
Chairman and Chief Executive Officer
FIRST UNITED BANCSHARES, INC.
By: /s/ James V. Kelley
------------------------------------
James V. Kelley
Chairman and Chief Executive Officer
43
