<PAGE> 1
EXHIBIT 5.1
October 20, 2000
The Board of Directors
Southside Bancshares, Inc.
1201 South Beckham
Tyler, Texas 75701
Re: Southside Bancshares, Inc.
Registration Statement on Form S-2
File Nos. 333-47974 and 333-47974-01
Ladies and Gentlemen:
We have acted as counsel to Southside Bancshares, Inc., a Texas
corporation (the "Company") and Depositor of Southside Capital Trust II, a
Delaware statutory business trust (the "Trust"), in connection with the
preparation of a Registration Statement on Form S-2 (the "Registration
Statement") filed by the Company and the Trust with the Securities and Exchange
Commission relating to (i) the proposed issuance by the Trust of $15,000,000
aggregate Liquidation Amount of the Trust's ___% Convertible Cumulative Trust
Preferred Securities due December 31, 2030 (the "Convertible Preferred
Securities") registered under the Securities Act of 1933, as amended (the
"Securities Act"); (ii) the Company's ___% Convertible Subordinated Deferrable
Interest Debentures (the "Convertible Subordinated Debentures") registered under
the Securities Act; and (iii) the Company's guarantee (the "Guarantee"), which
guarantees the payment of Distributions and payments on liquidation or
redemption of the Convertible Preferred Securities, registered under the
Securities Act. The Convertible Preferred Securities are issuable under an
Amended and Restated Trust Agreement to be entered into (the "Trust Agreement")
between the Company, as Depositor, Wilmington Trust Company, a Delaware trust
company, as Delaware Trustee and as Property Trustee, and Sam Dawson, an
individual, and Lee A. Gibson, an individual, each an Administrative Trustee;
the Convertible Subordinated Debentures are issuable under an Indenture to be
entered into (the "Indenture") between the Company and Wilmington Trust Company
as Trustee; and the Guarantee relates to the Guarantee Agreement to be entered
into (the "Guarantee Agreement") between the Company and Wilmington Trust
Company, as Guarantee Trustee.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate of
trust filed by the Trust with the Secretary of State of the State of Delaware on
October 12, 2000; (ii) the form of the Trust Agreement; (iii) the form of the
<PAGE> 2
The Board of Directors
October 20, 2000
Page 2
Convertible Preferred Securities; (iv) the form of the Guarantee Agreement; (v)
the form of the Convertible Subordinated Debentures; (vi) the form of the
Indenture, in each case in the form filed as an exhibit to the Registration
Statement; and (vii) the Registration Statement. We have also examined originals
or copies, certified or otherwise identified to our satisfaction, of such other
documents, certificates and records and have reviewed such questions of law as
we have considered necessary and appropriate for the purposes of our opinions
set forth below.
In rendering our opinions, we have assumed, without investigation, the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures and the conformity to authentic originals of all documents
submitted to us as copies. We have also assumed the legal capacity for all
purposes relevant hereto of all natural persons and, with respect to all parties
to agreements or instruments relevant hereto other than the Company and the
Trust, that such parties had the requisite power and authority (corporate or
otherwise) to execute, deliver and perform such agreements or instruments, that
such agreements or instruments have been duly authorized by all requisite action
(corporate or otherwise), executed and delivered by such parties and that such
agreements or instruments are the valid, binding and enforceable obligations of
such parties. In addition, we have assumed that the Trust Agreement, the
Convertible Preferred Securities, the Guarantee, the Convertible Subordinated
Debentures and the Indenture, when executed, will be executed in substantially
the form reviewed by us. As to questions of fact material to our opinions, we
have relied upon certificates of officers of the Company and the Trust and of
public officials. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in the Trust Agreement, the Indenture
and the Guarantee Agreement, as applicable.
Based on the foregoing, we are of the opinion that:
(1) The Convertible Subordinated Debentures have been duly authorized
by all requisite corporate action and, when executed and authenticated as
specified in the Indenture and delivered and paid for in the manner described in
the Registration Statement, the Convertible Subordinated Debentures will
constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms.
(2) The Guarantee has been duly authorized by all requisite corporate
action and, when duly executed as specified in the Guarantee Agreement and
delivered in the manner described in the Registration Statement, the Guarantee
will constitute the valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
<PAGE> 3
The Board of Directors
October 20, 2000
Page 3
(3) The shares of common stock issuable upon conversion of the
Convertible Subordinated Debentures have been reserved for issuance and upon
issuance in accordance with the terms of the Convertible Subordinated
Debentures will be duly and validly issued and outstanding, and will be fully
paid and nonassessable.
The opinions set forth above are subject to the following
qualifications and exceptions:
The enforceability of the operative documents, or any provision thereof
may be limited by and/or subject to bankruptcy (including, without limitation,
executory contracts provisions), insolvency, reorganization, receivership,
moratorium, fraudulent transfer or conveyance, or other laws affecting the
rights and remedies of creditors generally, or similar federal or state laws, by
general equity principles, by rules of law governing specific performance,
appointment of receivers, injunctive relief and other equitable remedies, and by
remedies or the exercise of certain rights including, without limitation,
commercial reasonableness or conscionability, reasonable notice of disposition,
specific performance, or enforcement, limitation on sale or encumbrance
provisions, waivers or eliminations of rights such as statutory rights of
redemption, or of jury trial, separation or aggregation of property at
foreclosure or enforced sale, application of sale or judgment proceeds, and
multiplicity, inconsistency, waiver or omission or delay in the enforcement of
remedies.
This opinion is rendered only with respect to the laws of the State of
Texas, the federal laws of the United States of America and the General
Corporation Law of the State of Delaware. With respect to matters of Delaware
trust law, we are relying upon the opinion of Richards, Layton & Finger, P.A.,
Wilmington, Delaware, special counsel to the Company and the Trust.
The opinions expressed above concern only the effect of laws as now in
effect and are rendered as of the date hereof. We undertake no, and hereby
disclaim any, obligation to revise or supplement this opinion should such laws
be changed by legislative action, judicial decision, or otherwise after the date
of this opinion, or if we become aware of any facts that might change the
opinions expressed above after the date of this letter.
We hereby consent to your filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the caption
"Validity of Securities" contained in the Prospectus included therein.
Very truly yours,
/s/ Jenkens & Gilchrist, a Professional Corporation
